PTAB Amendment Pilot Effective Today
Today, the Patent Trial & Appeal Board (PTAB) published the final Pilot Program for Motions to Amend in the Federal Register (here). The Pilot will run for one year, and is applicable to all AIA trial proceedings instituted going forward. (i.e., proceedings instituted before 3/15 are ineligible). The published Pilot carries forward the main idea of the initial RFC — feedback to the Patent Owner on its Motion to Amend prior to final decision — but, offers notable revisions in procedural timing and options as compared to the RFC.
As revised, those Patent Owners inclined to amend before the PTAB, may find the Pilot to offer strategic advantages beyond mere feedback.
Before discussing the Pilot, it is important to remember that amendment is not a practical option for the majority of patentees before the PTAB given litigation realities. For this reason, amendment, will never be commonplace in IPR (e.g., 10-15%) regardless of the perceived favorability of the PTAB amendment process. (likely higher % in PGR where patents are considered close to the time of original issuance).
Turning back to the original RFC, there was much for Petitioners and Patent Owners to dislike about it (image below). The top sequence shows the typical AIA trial schedule, the bottom showing the proposed revisions of the RFC.
As you can see, the RFC Motion to Amend process started within 1.5 months of institution. This is less than ideal for a Patent Owner trying to depose the petitioner’s expert and prepare it’s own trial response in the same time frame. The RFC would have forced the Patent Owner to address claim construction issues, and have its MTA declarant deposed before its full trial response was even filed. All of this to get feedback from the Board 2.5 months later (grey ellipse), that given historic statistics, is likely to be negative. Factoring in the additional costs associated with all of this, I, like many others, was not a fan of the RFC.
The Pilot tackles, some, but not all of the drawbacks of the RFC (Pilot shown below).
The first revision you will notice is that the front-end has been synced with traditional briefing events. So, the Patent Owner would, as has been the normal practice to date, file any MTA along with its trial response. If the Patent Owner desires feedback from the Board, it can request preliminary guidance in its MTA, but there is no requirement to request such. If the Patent Owner decides it does not want to amend again in view of the guidance or the opposition, the schedule is closely aligned with the current default scheduling order. (Note: the Patent Owner can opt out of the Pilot altogether, and follow traditional amendment procedures). Yet, as I will explain, any Patent Owner that is serious about amendment will not only opt for the Pilot, but will follow its Revised Motion to Amend schedule (rMTA) illustrated below due to its strategic benefits.
As can be seen by a quick comparison of the above Pilot rMTA timeline to the Pilot MTA, an rMTA would require the Board to issue a Revised Scheduling Order to move the oral hearing a month (10-month mark). Moving the hearing back a month allows for additional rMTA briefing. The rMTA permits the Patent Owner to submit a second amendment to address feedback of the Board Guidance, and/or, perhaps more significantly, the Petitioner Opposition to the MTA. (The Pilot explains that the Board guidance is likely to be very “short” and focused as compared to the Decision to Institute or Final Written Decision).
There are a number of strategic reasons why a Patent Owner would desire the rMTA sequence over other options — aside from the straightforward second bite at the apple.
First, the petitioner has 12 weeks from the first MTA to the time of its opposition. In this time frame, prior art searching is done, and unpatentability and supporting testimony are developed. Once filing an rMTA, the Petitioner’s time to develop its opposition is halved, but the work remains the same. Six weeks is not sufficient time for a comprehensive search (professional searches typically span weeks even when expedited) and second opposition. Likewise there is no room in the rMTA schedule for adjusting dates as Petitioner is briefing up to a week before the oral hearing. Realizing this, a crafty Patent Owner is likely to use the MTA as its “opening bid” (i.e., not the narrowest language it could present) to smoke out the best arguments and prior art from petitioner, then present its “best offer” during the Petitioner time crunch to limit the effectiveness of the opposition, and keep the petitioner busy at a time when it should be preparing for the oral hearing.
Of course, the Board has the flexibility to extend the trial up to 6 months. But, to date, the Board has not done so as a matter of course. Yet, under the rMTA schedule, Petitioners will be forced to request extensions as a matter of course. This is because there are some that believe that 315(e) estoppel will apply to amended claims. In order to preserve an argument for the district courts that estoppel should not apply since a comprehensive defense was not possible, Petitioners will be compelled to create a record by seeking extensions. If extensions are to be granted freely, my preference remains to separate the amendment phase to the extension period.
At the end of the day, given the minimal changes that Patent Owners are offering via amendment, even the rMTA option may not advance the needle in any significant regard. But, amendment cases will certainly be busier, and now, perhaps unnecessarily, more expensive.