Post Grant Timeline Released by USPTO

While the USPTO will publish the last of the Post Grant related rule packages today, the Federal Register notices yesterday provided the rules of practice before of the new Patent Trial & Appeal Board (PTAB).

Practice Guide For Proposed Trial Rules (here)

Rules of Practice for Trials Before the Patent Trial & Appeal Board and Judicial Review of Patent Trail and Appeal Board Decisions (here)

The USPTO provided the graphical illustration of the IPR/PGR timeline reproduced below:

As illustrated in the timeline, a maximum of 12 months is allocated for an IPR/PGR proceeding. Of course, the 12 month timeline may be extended 6 months if the USPTO can show cause. Oddly, the Patent Owner is expected to submit amendments prior to the close of discovery. So, for example, if the Patent Owner is seeking discovery as to secondary indicia of non-obviousness to avoid amendment, by the time that evidence is secured (or not) the opportunity to amend the claims may be lost as a matter of right.

Click to Enlarge

post grant timeline

USPTO Fee Setting Proposal Urges Huge Increases in Fees

Along with the post grant rule packages released Tuesday, the USPTO published proposed rules for adjusting all of its fees under its new fee setting authority set forth in the America Invents Act (AIA).

As explained last week, the new USPTO fee setting authority will permit the USPTO to revise the fees set by Congress under 35 U.S.C. §§ 41 (a) and (b) based on the aggregate costs of funding the USPTO. This essentially will permit the USPTO to incentivize and disencentivize applicant, patent owner and third party behavior by setting the fees at low or high levels to encourage certain activities while discouraging others.

When reviewing the newly proposed fees for RCEs, a practice the USPTO tried to all but outlaw a few years back, it can be argued that the Office is purposefully pursuing a cost prohibitive control. The current RCE fee (large entity) is $930. The Office now proposes to raise this fee, near doubling it, to $1700. 

The newly proposed fee schedule is found (here)

Surely, the Office may be able to legitimately make the case that, cost wise, this is what the agency must charge to recover its expenses. Yet, with the Office consistently collecting a surplus of fees over the years it is hard to imagine that this degree of escalation is necessary, aside from providing a punitive control mechanism designed to influence applicant behavior.

This same shifting of fees to extreme levels is found in another unpopular practice internal to the Office, namely, appeals. While an ex parte appeal can presently be pursued for $1240 (large entity), the Office now proposes to add an altogether new fee $2500 on top of the current expense, for a total of $4000 to pursue an appeal. (The new $2500 fee would become due should an applicant desire to continue the appeal beyond the Examiner Answer).

Many would argue that the increasing rate of RCE filings as well as that of appeals are a direct reflection of other inefficiencies in the patent examination process that are beyond the control of applicants. As such, pursuing these avenues during prosecution have become necessary evils. Punishing applicants with increased fees for availing themselves of these mechanisms seems to indicate an intention of the Office to simply kill the patient rather than remedy their disease.

PTAB & Post Grant Proceedings Detailed by USPTO

In advance of the printing in the Federal Register later this week, the USPTO has released its proposed rules for the contested case provisions, i.e., inter partes review, post grant review, the transitional program for covered business methods, and derivation. The documents appearing below are not the official Federal Register publications of those proposed rules. The official Federal Register publications will follow later this week on February 9 and 10, 2012. Publication of the proposed rules in the Federal Register will begin the sixty-day public comment period for the proposed rules.

Links to the various rule sets are found below:

Proposed Rules for Trials before the Patent Trial and Appeal Board (aka Proposed Umbrella Rules)

Practice Guide for Proposed Trial Rules

Proposed Rules for Post Grant Review

Proposed Rules for Inter Partes Review

Proposed Rules for the Transitional Program for Covered Business Methods

Proposed Rules for the Definition of Technological Invention

Proposed Rules for Derivation

Quick facts are as follows;

Fee to file a request for IPR $27,200 (less than 20 claims)

Fee to file PGR, or Transitional Program for Covered Business Method Patents (TPCBM) ($47,100)

Technological invention is defined under TPCBM as:

In determining whether a patent is for a technological invention solely for purposes of the Transitional Program for Covered Business Methods (section 42.301(a)), the following will be considered on a case-by-case basis: whether the claimed subject matter as a whole (1) recites a technological feature that is novel and unobvious over the prior art; and (2) solves a technical problem using a technical solution.

Both IPR and PGR will allow for pro hace vice appearance of non-registered practitioners, but is at the discretion of the Board based on the applicants qualifications.

More detailed analysis of these packages will follow in the days to come.

Cost Burdens of Post Grant Proceedings Drive Increased Fee Determinations

As discussed last week, the USPTO is proposing a significant increase to the fee for ex parte patent reexamination (EXP). Likewise, the new supplemental examination (SE) fee, should prosecution be required, is on the order of $21K. (supplemental examination fee, plus corresponding reexamination fee)

The rules package for Post Grant Review (PGR) and Inter Partes Review were expected last week (if not before). However, these packages were delayed by OMB, which has identified them as significant rule making. It is expected that the rules for PGR and IPR will publish this week. The fees for these new proceedings will be estimated based on the same analysis applied to EXP and SE and are expected to be in the $40-50k range.

For a step-by-step explanation of the USPTO’s fee calculation process, and perhaps a preview of PGR and IPR fee determinations click here.

PLI-Logo

Day Long Webcast February 3, 2012

Last call for Friday’s CLE program entitled “Post-Grant Proceedings 2012 – The New Patent Litigation.”  This year, while currently available post grant proceedings will certainly be covered, the program will focus on the many changes of the AIA, how these proceedings will impact patent litigation, and the progress of the USPTO rule making and implementation efforts. 

Scheduled Speakers include:

–Chief Judge James D. Smith of the Board of Patent Appeals & Interferences (soon to be Patent Trial & Appeal Board (PTAB)). Judge Smith will provide an update on the implementation and rule making efforts necessary to transform the BPAI into the PTAB.

–Director of the Central Reexamination Unit (CRU), Ms. Irem Yucel will also participate in a panel discussion with Judge Smith to provide an update on the efforts of the CRU to adapt to the changes of the AIA and where this unit will fit into the USPTO equation going forward.

–Director of the Office of Patent Legal Administration (OPLA), Brian Hanlon will provide an update on reexamination practice and petition handling, and other aspects of OPLA efforts to implement the post grant aspects of the AIA.

For more information on this program, including how to attend in person (New York) or to register for the webcast, please visit the PLI information page (here)

Advancing Inter Partes Reexaminations Cited to CAFC

When faced with the assertion of a patent of dubious validity, prospective defendants increasingly resort to patent patent reexamination. Once a suit is filed, the opportunity to obtain a stay of an ongoing district court infringement action pending a parallel patent reexamination is a major benefit of the USPTO proceeding. Courts have the inherent power to manage their dockets, including the authority to stay patent infringement litigation pending the conclusion of a USPTO patent reexamination. A stay of the court proceeding enables defendants to halt, or altogether avoid cost prohibitive litigation discovery, which can be rather lengthy and painful.

For this reason, patent reexamination parallel to a district court is often initiated in an attempt to stay the more cost prohibitive court proceeding. In deciding whether or not to stay the court proceeding the courts look to many factors. (See factor based analysis here) 

If the Court proceeding is not stayed, both proceeding will proceed on parallel tracks. Should the Court proceeding continue on to the CAFC, can you try to persuade the appellate court to stay the proceeding pending the outcome of the reexamination?

This situation was considered by the CAFC yesterday in Synqor Inc., v. Artesyn Technologies Inc., et al. At issue in the appeal are five patents relating to power converter circuitry. While the suit has been pending, inter partes patent reexaminations were initiated by the defendants at the USPTO. While the court upheld the validity of the patents, to date, the reexaminations proceedings have been quite unfavorable to the Patent Holder.

In considering whether or not to stay the appeal, the CAFC explained:

The power of the Court to stay proceedings is incidental to its inherent power to control the disposition of the cases on its docket. See Landis v. North Am. Co., 299 U.S. 248, 254 (1936). Here, we cannot say the appellants have shown that staying proceedings for such a lengthy period of time is warranted. [Defendants] reliance on this court’s decision in Standard Havens Prpds., Inc. v. Gencor Indus., 996 F.2d 1236 (Fed. Cir. 1993) to support a contrary conclusion is unpersuasive.

This court in Standard Havens directed the district court to stay its damages proceedings until the PTO reexamination proceeding became final. In that case, the PTO’s proceedings were complete and the decision of the BPAI was on appeal before another district court. Here, however, the court is being asked to stay proceedings at the relative end of the litigation process pending a lengthy administrative process that even the appellants predict will take at least 10-14 months to complete. Under these circumstances, we deem it appropriate to deny the motions to stay.

Going forward, with the accelerated schedule of Inter Partes Review & Post Grant Review (12-18 months in total), the ability to stay court procedings pending USPTO proceedings is likely to be greatly enhanced.

Disclaimer Results in Reversal of $56 Million Dollar Damage Award

As previously discussed, the CAFC has agreed to reconsider Marine Polymer Technologies, Inc. v. HemCon, Inc. (here) en banc. The Court will reconsider whether or not intervening rights are created for a claim that is not literally amended in a post grant proceeding by a change in verbiage, but instead, by operation of prosecution disclaimer on the part of the Patentee. (earlier post here)

Interestingly, last week the Court considered a somewhat similar circumstance of claims that were confirmed in patent reexamination without amendment in Krippelz v. Ford Motor Company (here). In Krippelz, the Court considered an automotive mirror that emitted a “conical beam of light.” In patent reexamination the Patentee made statements pertaining to the shape of a light beam and it’s relation to reflecting elements, thus disclaiming arrangements that did not include these critical features. Based on these statements, the Court found that the Patentee disclaimed an interpretation of this language that could have impacted the Court’s claim construction, and as a result found the claims invalid.

The court’s application of prosecution disclaimer in Krippelz is straightforward, but an interesting contrast to the arguably innapropriate application of disclaimer in Marine Polymer.

As a reminder amicus briefing in Marine will be completed February 10th.

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USPTO Fee Structure to Discourage Conduct?

It is expected that the rules to implement post-grant review (PGR), inter partes review (IPR) and transitional business methods post-grant review (TBMP) proceedings will be printed in the Federal Register this coming Tuesday. Included in the new rules will be the filing fees associated with these new proceedings. By statute these filing fees must be set to recover the average actual costs to the USPTO to conduct these proceedings.

As demonstrated in last week’s rule package for supplemental examination, the average aggregate cost can be significantly higher than present fee levels. The proposed rules issued last week set a fee of $ 5,180 to request supplemental examination and another $16,000 for the resulting ex parte reexamination should the supplemental examination request raise a substantial new question of patentability (SNQ). It is expected that Tuesday’s rule package for PGR, IPR and TBMP will set fee levels in excess of $ 40,000. But, such fee levels may have an unfortunate chilling effect on those interested in using these new post grant patent proceedings.

Interestingly, in February 2012, the USPTO will be publishing proposed rules for adjusting all of its fees under its new fee setting authority set forth in the America Invents Act (AIA). Continue Reading New USPTO Fee Setting to Drive Filing Behaviors?

New Mechanism to Cleanse Inequitable Conduct

Yesterday, the USPTO issued a Notice of Proposed Rule Making to outline the procedures for conducting supplemental examination (here). (See the earlier discussion on the related changes to patent reexamination fees provided by this Notice).

As a reminder, the America Invents Act provided supplemental examination (SE) as a mechanism to cure inequitable conduct before the USPTO. Upon submission of SNQs that explain potential issues for supplemental examination, the Office may initiate a type of “re-examination” that follows the procedures for ex parte patent reexamination with some modification. In essence this proceeding was based on a “but for” theory later adopted in Therasense.

In addition to proposing a steep price to initiate SE and conduct the related reexamination proceeding, (roughly $22K) the Office has outlined the rules for conducting supplemental examination.

Notable provisions are as follows:

-A request for SE is limited to a maximum of 10 “items of information.” (additional filings may be pursued in parallel)

-Only the owner of a patent may pursue SE.

-The Office will consider SE requests within 90 days of submission in the same manner as patent reexamination.

-A mapping of means or step-plus-function claims relative to the patent specification for any such claim to be examined.

-A mapping of specification support for claims called into question by the presentation of a 112 or 101 based SNQ.

-Explanation of documents, and transcripts of any audio/vide0 submissions are required. (SE is not limited to patents or printed publications).

-No amendments or interviews are permitted in SE. (i.e., within first 90 days of filing)

-The SE proceeding concludes with a determination that an SNQ exists, or not. Should an SNQ be identified, ex parte patent reexamination is conducted in the usual manner with the exception that there is no Patent Owner Statement permitted and the  proceeding will not be limited to patents and printed publications.

Curiously, the Notice predicts that all owner initiated ex parte patent reexamination filings will be filed as SE requests going forward. The thinking being that the added benefit of inequitable conduct protection will be a driving force for filers. However, after Therasense, and in view of the fact that SE is not limited to patents and printed publications, and in some respects requires much more detail as to claim mappings, etc., this prediction seems more than a bit optimistic.

Although not outlined in the Notice, the Office has stated publicly that SE will be conducted by the examiners of the Central Reexamination Unit (CRU).

For more information on this topic as well as ethical implications, I will be guest speaking together with Professor Lisa Dolak on February 14th. (Strafford Legal Webinar, register here)

Proposed Rule Package to Significantly Hike Fees

As mentioned on Monday, the proposed rule package for supplemental examination is expected this week; in fact, it will publish tomorrow. In addition to the expected rule package on the new supplemental examination proceeding, the USPTO has included proposed revisions to existing patent reexamination fees.

The existing fee for requesting ex parte patent reexamination is $2520. The Notice proposes to raise this fee, to account for actual agency costs for conducting the proceeding, to a whopping $17,750. The notice also raises the fees for filing a petition (using the same justification) in either ex parte or inter partes patent reexamination to $1932. This new fee will apply to any petition filed under Rules 181,182, or 183. (The petition fee increase excludes extensions of time and some other minor petitions). Current fees are on the order of $200-$400. It may be that the increase in petition fees will help reign in the abusive practices currently plaguing the Office.

Certainly the Office should raise reexamination fees as they are presently quite low, but the jump to the proposed levels, especially as it relates to the hefty request fees, is unlikely to be received very favorably by the public.

The fee for filing a request for supplemental examination, and the corresponding reexamination that follows will cost filers. $21,296 ($5,180 for the request and $16,116 for the reexamination, if instituted). The Office is also charging extra for the review of documents that exceed 20 and 50 pages; an extra $166 for the former and $282 for the latter.

As I mentioned months back, the rumored cost of Inter Partes Review and Post Grant Review is upward of $48K per filing. Looking at these revisions to patent reexamination filing fees, one can expect higher fees for these more labor intensive office proceedings.

Tomorrow’s Federal Register will detail these fee changes and the rules for supplemental examination. Attached is a copy of the rules that will publish tomorrow (here)…more thoughts tomorrow.