Expanded Panel at Odds Over Statutory Interpretation of § 315(c)

Yesterday, the Patent Trial & Appeal Board (PTAB) issued a rare expanded panel Order in Target Corp. v. Destination Maternity Corp., (IPR2014-00508) (here). In the Order, a divided panel denied issue joinder under 35 U.S.C. § 315(c) as a matter of law (i.e., the joining of two petitions of a same petitioning party). The decision is especially surprising given the fact that 315(c) has been interpreted by the PTAB as permitting such joinder practices to date.

The Order is not designated precedential, or even informative — for this reason, it is especially troubling. Such a deeply divided panel of well respected APJs potentially tarnishes the Board’s reputation with the public as a predictable and consistent forum. This is because it may foster the perception that panel assignment may be outcome determinative. Moreover, if the majority view is adopted it could increase litigation gamemanship known to frustrate the ability of patent challengers to effectively utilize the PTAB.
 

At the heart of the debate is simple statutory construction, and primarily, what is meant by “any person.”

(c) Joinder.— If the Director institutes an inter partes review, the Director, in his or her discretion, may join as a party to that inter partes review any person who properly files a petition under section 311 that the Director, after receiving a preliminary response under section 313 or the expiration of the time for filing such a response, determines warrants the institution of an inter partes review under section 314.

In this case, Target, filed a second petition outside of their 12-month window to attack a claim that was excluded from the Trial Order of an earlier, timely filed petition (argued as being caused by the patentee’s failure to provide requested materials in litigation discovery). Since joinder is a codified exception to the 12-month window, absent joinder, the claim could not be attacked with a second “stand-alone” petition. The majority denied joinder in view of their statutory construction, and found the petition to be time barred under 35 U.S.C. § 315(b).

In rationalizing the about-face, the majority focuses on the language “a person may join as a party,” arguing that if a petitioner is already a party to an ongoing IPR, it cannot  “join as a party” — becasue it already is a party. The majority further notes that its read of the statute would reduce the burden on the PTAB by limiting the scope of IPRs to party-joinder only, and, reduce potential harassment of patentees by foreclosing 315(c) as a side-step to the 12-month window. The dissent, on the other hand, emphasized that such an interpretation of 315(c) reads the word “any person” out of the statute.

Without taking sides as to the debate over statutory construction, the big picture goals of the America Invents Act (AIA) are worth revisiting. The primary driver behind the creation of IPR, PGR and CBM was the need for a low-cost alternative to costly patent litigation. Post-grant PTAB patent proceedings were designed to force such disputes, especially those involving NPEs, to the expert agency.

Simply stated, petitioner’s don’t look to file follow-on petitions for harassment purposes. The limited number of cases in which issue joinder has occurred (5 total, others pending) bear that out. Instead, such joinder filings are necessitated by one limited circumstance:

1.  A claim is pursued in the second filing is not part of the Trial Order in the first.

The absence of the claim from the first trial occurs as a result of two fact patterns : (1) the first petition deliberately omitted a claim; or (2) the first petition was unsuccessful as to a claim.

As I emphasized eighteen months ago, the reason for excluding claims from a petition is often the result of patentee gamesmanship. For example, a complaint is filed alleging infringement of claims 1-10. After the 12 month IPR window has passed, and the IPR for claims 1-10 timely filed, the patentee (usually an NPE), files an amended complaint adding claims 11-20. When the motion to stay pending IPR is argued, the patentee emphasizes that claims 11-20 are not part of the IPR. In other words, there is no reason to wait as trial will be necessary regardless of the IPR outcome. The majority decision, if adopted, would encourage that gamesmanship, and at the same time, force petitioners to attack all claims of every patent asserted against them. If this tactic is unwittingly encouraged, the PTAB will face higher claim counts (i.e., more complex proceedings) and unnecessarily raise costs for petitioners.

The second situation, where the first petition simply fails as to a given claim, can be analyzed on a case-by-case basis. The statute provides this discretion to deny unwarranted second-bite at the apple petitions. In that discretion, the PTAB has all the power necessary to guard against patentee harassment. It is also worth noting that other statutory controls exist to preclude harrassment, statutory estoppel the most significant, and 35 USC § 325 (d) being another (ability to deny same or substantially the same issues).   

To the extent any ambiguity exists in 315(c), I would submit that the PTAB should follow an interpretation that permits issue joinder. In dong so, the PTAB would account for current tactics of abusive litigants, and, enable petitioners to provide focused, lower-cost filings that comport with the goals and spirit of the AIA. Given the limited time for issue joinder (30 days), the experience of the PTAB that such practice is relatively uncommon, and the discretion provided by the statute to deny joinder where factually warranted, such an interpretation of 315(c) would be the more mission oriented path.

Trial Section Management Roles Formalized

Yesterday, the USPTO announced the appointments of Judge Scott Boalick to the position of Vice Chief Administrative Patent Judge and Adam Ramsey to the position of Board Executive.

Judge Boalick had been acting Vice Chief for the past year, this appointment simply formalizes that role. As Board Executive, Mr. Ramsey will be responsible for oversight of PTAB administration, information technology, hearings operations, data analysis, and the Office of the Chief Clerk. As the trial section grows, management of the administrative effort is critical.

Public Comments
As pointed out last week, although the date for comments on the pending RFC has been moved, some early submissions are posted. (here). So far, the submissions range from bar associations arguing to outlaw the use of BRI altogether, to self-serving arguments of those hoping to lobby the Board on a narrow issue they are facing in a pending proceeding. Let’s hope for more responsive submissions in the weeks ahead.

Is Patentee Evidence Too Much Additional Work for the Board?

As discussed previously, the USPTO has issued a Request for Information (RFI) entitled, Request for Comments on Trial Proceedings Under the America Invents Act Before the Patent Trial & Appeal Board. The RFI poses 17 questions, two of which were addressed in previous posts. Namely: Is there any circumstance where a broadest reasonable claim interpretation (BRI) should not be used for an unexpired patent? (here); and, Should any changes be made to motion to amend practice? (here)

Next up is the third query of the list:
3. Should new testimonial evidence be permitted in a Patent Owner Preliminary Response? If new testimonial evidence is permitted, how can the Board meet the statutory deadline to determine whether to institute a proceeding while ensuring fair treatment of all parties?

Before tackling this issue, let’s consider the rationale behind the preliminary response.

In the days of inter partes patent reexamination, there was no opportunity for a patentee to submit comments to the USPTO prior to the reexamination order. Instead, the examiner reviewed only the reexamination request of the patent challenger prior to deciding the propriety of reexamination. Patentees decried this system as unfair. That is, they argued that had they been able to present their positions to the examiner, the years-long reexamination proceeding could have been avoided. In response to this criticism, Congress provided a preliminary response mechanism for the post-grant patent challenges of the America Invents Act (AIA,.

When implementing this preliminary response mechanism, the Patent Trial & Appeal Board (PTAB) determined that preliminary responses should not include new testimonial evidence. Patentees complained that this system was still unbalanced as AIA petitions are almost always accompanied by supporting evidentiary declarations from petitioners (e.g., testimony on the scope and content of the art from one skilled in the relevant art). Justifying this imbalance, the PTAB explained that the trail only begins upon institution, not before. And, more importantly, that the preliminary response could not include new evidence to ensure the Board meet its statutory deadline for institution. 35 U.S.C §315(b).

Now, the PTAB is reconsidering this imbalance as part of the broader effort to refine these important alternatives to patent litigation.

As noted in the question reproduced above, the concern of the PTAB is that allowing such evidence from patentees, while clearly “fairer,” would create additional work that may degrade the Board’s inability to meet their deadline for institution. This concern is significant given the volume of filings being submitted to the PTAB. The Board must issue a decision within 3 months from the time of submission of the preliminary response, by statute. Simply allowing such submissions in the interests of fairness (and the 100s of additional pages of declarations that would come in the door) is just not administratively feasible.

There is a strong public interest in maintaining the current quality and speed of PTAB Trial Orders. As such, likely options are those that would provide for a more balanced preliminary proceeding, but, at the same time, would not materially increase the Board’s workload.

Some such options include:

1. Limited Declaration Option – The Board could offer a “page sharing” option. That is, a preliminary response in IPR is limited to 60 pages in total. A targeted preliminary response addressing key issues only (claim construction, inherency, combinability, etc.) might be 20-25 pages. In such a case, a 35-40 page supporting declaration would “share” the remaining pages allocated to the patentee. With such an option, the Board would still be reviewing 60 pages of patentee content. While certainly not the same as the petitioner’s unlimited declaration, the ability to target key issues (what most such submissions do anyway) would be enhanced by new testimonial evidence.

2. Patentee Observation Option – The patentees discovery period begins after institution. If the patentee had the option of moving this period to the preliminary proceeding, they could depose the petitioner’s declarant and submit observations in lieu of a full blown declaration of an altogether new declarant. To offset the additional materials to be reviewed, as in option 1 above, the PTAB might consider limiting the response under this option to 40 pages + 20 pages of observations (IPR); 60 pages + 20 pages of observations (PGR).  While the patentee would not gain a full declaration, the focused observations would allow some procedural re-balancing without overburdening the Board with additional declaration materials.  

It may be with option 2 that patentees would prefer to await trial institution rather than expend the resources before trial, or lose the benefit of the PTAB’s Order prior to deposition, for that reason, Option 1 would likely be favored by patentees. 

Any change to existing practices PTAB must maintain the integrity of a system that has become a welcomed alternative to the high cost of patent litigation.

Setting the Level of Skill May be Critical in Niche Arts

The obviousness of a claimed invention is assessed from the perspective of a hypothetical person of ordinary skill in the art (POSITA). For this reason, the degree of skill present in a given art is often contested by parties to a patent litigation. Often times, patent challengers assert a higher level of skill, which favors an obviousness determination. Conversely, patentees advance a lesser level of skill, militating in favor of patent validity. Yet, outside of highly specialized fields, such disputes are of rare consequence in the predictable arts.

The USPTO’s Patent Trial & Appeal Board (PTAB) rarely pronounces a precise level of skill, instead relying on In re GPAC Inc., 57 F.3d 1573, 1579 (Fed. Cir. 1995) (determining that the Board did not err in adopting the approach that the level of skill in the art was best determined by references of record). Given this, patent challengers in the predictable art rarely give much thought to advancing a precise level of skill in their post-grant challenges.

As made clear last week by the Court of Appeals for the Federal Circuit (CAFC), setting the level of skill could be especially important for art subject to a non-analogous art attack.

In Scientific Plastic Products, Inc. v. Biotage AB (CAFC 2014), the CAFC considered a non-analagous art argument of the patentee. The disputed aspect of the claimed invention related to the threaded connections of a polymer cap of a Low Pressure Liquid Chromoatology (LPLC) cartridge. The patentee argued that the art identified for teaching this critical feature related to “soda pop” and that one of ordinary skill in the LPLC art would not look to soda pop related technology to solve the problem of LPLC cartridge leakage. 

In a divided panel, the majority (Newman, Wallach) explain that:

The analogous art inquiry is a factual one, requiring inquiry into the similarities of the problems and the closeness of the subject matter as viewed by a person of ordinary skill.
 
Here, the [primary] and [secondary] references address the problem of providing a fluid tight seal at elevated pressures, between a container and a re-sealable cap. This is sufficiently close to the problem addressed by the claimed invention; substantial evidence supports the Board’s finding that [the primary] and [the secondary references] are available as prior art.
(Emphasis added)

The dissent, authored by Judge Moore, emphasized the ongoing dispute over the level of skill, and the absence of a finding by the Board in this regard.

The Board found the claims obvious without resolving the level of skill in the art. . . . It is axiomatic that this is a “basic factual inquir[y]” required of any obviousness determination. Graham v. John Deere Co., 383 U.S. 1, 17 (1966). In most cases, there is no dispute over the level of the skilled artisan. But in this case, the parties contested this factual issue throughout the proceedings, and inexplicably the Board never resolved it. .  . .   . The parties still dispute this issue on appeal. Compare Appellant’s Br. 21 (“A chemist analyzing organic compounds would not look to soda-pop bottles to solve problems with flash chromatography cartridges.”) (emphasis added), with Appellee’s Br. 28–29 (“SPP[] mischaracterizes the relevant person of ordinary skill to whom knowledge of analogous art would be attributable . . . . [T]he relevant person of ordinary skill in the art . . . would include a designer . . . skilled in mechanical engineering.”) 
The takeaway from this case is that for mechanical arts subject to non-analogous art attack, or even covered business method petitions, which often times combine differing areas applications with technology, the asserted definition of a POSITA may prove critical to the ultimate success of the petition.

USPTO Extends RFC Comment Period to October 16, 2014.

In an email announcement today, the USPTO extended the comment period for Request for Comments on Trial Proceedings Under the America Invents Act Before the Patent Trial & Appeal Board from September 16th (tomorrow) to October 16th. The USPTO published a request for comments in the Federal Register on June 27, 2014, seeking public comment on all aspects of the new administrative trial proceedings, including the administrative trial proceeding rules and trial practice guide.

As the summer vacation season complicated the ability of many stakeholders to respond to the complex issues of the RFC in time, the extension is a welcomed relief.

PTAB Claim Analysis Can Serve as Persuasive Authority

Inter Partes Review (IPR), Post-Grant Review (PGR) and Covered Business Method (CBM) proceedings of the Patent Trial & Appeal Board (PTAB) begin with a Trial Order that includes substantial guidance on matters of claim construction. Typically, key terms at issue in the proceeding are expressly construed by the panel of administrative patent judges (APJs). While such constructions are not binding on a parallel litigation proceeding due to the use of a different claim construction rubric by the USPTO, in some circumstances such findings can be devastating to a litigation campaign — well in advance of the typical Markman Order.

For example, in many cases involving non-practicing entities (NPE), an overly broad claim construction is advanced for the purpose of capturing the products/processes of an entire industry. At the PTAB, the broadest reasonable interpretation is applied. Naturally, if the PTAB does not agree with the NPEs claim interpretation (some 5-6 months after petition filing), such is strong evidence that the plaintiff’s claim scope is over-reaching. In fact, the CAFC has found the USPTO’s “broadest reasonable interpretation” to be persuasive evidence in this regard. See St. Clair Intellectual Property Consultants, Inc. v. Canon Inc., (Fed. Cir. 2011, non-precedential)

In other contexts, such as ascertaining the proper support for a claim term under 35 U.S.C § 112, the analysis of the PTAB’s technically trained judges can amplify perceived ambiguities. 

Yesterday, the CAFC leveraged the PTAB’s 112 analysis on subjective claim terminology in Interval Licensing LLC v. AOL, Inc. (Fed. Cir. 2014) (here). In Interval, the Court reviewed the specification of the subject patent for support for the claim terminology “in an unobtrusive manner.”  The patentee argued that a wallpaper embodiment of the specification provided the objective boundaries of the subjective scope, but that a screensaver embodiment should be excluded from the analysis. In reviewing this issue the Court pointed to a concurrent patent reexamination record and a statement made during an oral hearing at the PTAB.

The statements of Interval, and the responses of the USPTO, reflect considerable uncertainty about which embodiments were tied to the “unobtrusive manner” language. . . .[I]n a recent decision addressing the scope and validity of the ‘314 patent, the Patent Trial and Appeal Board . . .concluded that, in light of “the ambiguous nature” of the specification, “the claim term ‘unobtrusive manner’ includes the screensaver embodiment.”After reviewing the specification and prosecution history, we find that the “unobtrusive manner” phrase has too uncertain a relationship to the patents’ embodiments.

In a footnote, the CAFC cited to the transcript of the PTAB oral argument. 

At the hearing before the Board, counsel for Interval acknowledged the lack of clarity in column 3 of the specification: “I would say in this summary location within the specification [the drafters] were a little bit less precise, a little bit sloppy here . . . it might seem less precise or even possibly contradictory. . . . My point is simply that at best it’s ambiguous.”

In the hearing explanation noted above, patentee was hoping to divorce the language of column 3 from the analysis by labeling it as ambiguous (since it arguably showed a connection to the screensaver embodiment). The patentee also cancelled claims that seemed to also show a connection to the screensaver embodiment. (Note: 112 was not at issue in the patent reexamination directly,support was analyzed only as it related to claim interpretation)

Interestingly, the Courts apply the more forgiving Nautilus standard for 112 as opposed to that pronounced in Ex parte Miyazaki and, more recently In re Packard (CAFC 2014) for the USPTO. Had the terminology not been subjective (i.e., requiring objective boundaries for the recited standard of degree), and the question just whether one or both of the screensaver or wallpaper embodiments were covered by the claim, the CAFC may have found that degree of ambiguity still “reasonably certain.” On the other hand, under Packard, a standard that favors amendment, the PTAB would have found such different interpretations as failing to “particularly point out and distinctly claim” the invention— but, that disparity in 112 standards is left for a PGR or CBM decision to come.

Many perceive the value of PTAB filings solely as a vehicle to stay a parallel court proceeding. Cases like Interval prove that view to be especially short-sighted.

PTAB Speed Increases Likelihood of Amendment 

Prior to passage of the America Invents Act (AIA), patent reexamination was the only option available for patent challengers at the USPTO. But, patent reexamination lasted for years through appeal, especially inter partes patent reexaminations. For this reason, outside of those few patent disputes where the co-pending litigation was stayed, the reexamination became just another battle of attrition. As litigation costs mounted accused infringers were forced to settle independent of reexamination progress.

For non-practicing entities (NPEs) losing the patent at the end of a 5-7 year reexamination battle was less of a concern after extracting business value from the patent. So, even where the reexamination produced compelling evidence of unpatentability, amendment of originally issued claims was relatively uncommon. This is because amending original claims created obvious intervening rights problems, and might increase the chance of a litigation stay. NPEs preferred losing slowly to a claim amendment that would prevent monetization over several years of reexamination processing and appeals. 

The AIA not only broke the attrition model at the USPTO with its speed, but is forcing amendments of original claims at a much higher rate than in patent reexamination. There has been a significant focus on amendment practice before the PTAB. as such motions have rarely succeeded. For this reason, the PTAB is seeking feedback on motion to amend practice, the Request for Comments on Trial Proceedings Under the America Invents Act Before the Patent Trial & Appeal Board asks:

2. What modifications, if any, should be made to the Board’s practice regarding motions to amend?

As background, there have been 66 motions to amend filed at the PTAB to date, roughly 50% of the final decisions to date. (5 CBM, 61 IPRs). The current success rate (where patent owner tried to substitute new claims as opposed to simple claim cancellation) is 4.1%.  In other words, 95.9% such motions were denied. Clearly such statistics create a public relations issue for the PTAB as being anti-patent. In fairness to the PTAB, the anti-patent label is unfair since the story behind this statistic is far more complex. That said, modifications are in order to drive this statistic to a more reasonable balance.

I have discussed some of the recommendations below in a previous post.

-Extend the Trial Schedule 6 Months to Allow for Motion to Reissue
35 U.S.C § 316 (a)(11) allows the PTAB to, for good cause shown, extend the 1-year statutory deadline by not more than 6 months. While it is important to keep AIA patent challenges on the fast track for the reasons noted above, where amendment is desired, the extra time might allow the PTAB to leverage additional agency resources. For example, many patentees are now resorting to ex parte reexamination and patent reissues to amend. The office is already doing this work, and it is inefficient as a dual track system. An alternative track to a motion to amend could be a motion to reissue the claims. With the Central Reexamination Unit (CRU) now exclusively handling reissue, given this 6 months of time, this unit might be able to operate in the same manner as a staff attorney of the ITC. An examination of the claims would be performed with a recommendation from the CRU on patentability. If an examination is performed by the CRU, the motion could be simplified as only needing to show cause for the extended schedule. (as opposed to demonstrating patentability outright). The limited number of claim substitutions would still hold, as would the need to demonstrate support for the proposed changes. Oppositions to this motion as an alternative to a motion to amend might be based on a co-pending litigation that is not stayed (stayed litigation would militate in favor of granting the patentee motion). Petitioner opposition to the CRU recommendation would replace or supplement the current opposition filing. A motion to reissue would permit patentees to have their amendment substantively examined, and any denial would be based on the merits as opposed to rigid motion formalities.

– Allow claims to accompany the motion as an appendix (i.e., so that page count is not impacted)
Current motion to amend practice could be improved by relaxing some formalities that constrain the ability to fully develop the motion, such as page limits. This solution is straight forward enough. Given the 1-for-1 requirement for substituted vs. cancelled claims, not counting the pages of actual claim text toward the 15 page limit for the Motion to Amend is unlikely to adversely impact PTAB scheduling/workload and would free up additional pages for substantive discussion. 

– Allow the patentee flexibility in page allocation across filings
The typical contingent amendment filing in an IPR includes 75 pages (60 page response + 15 page motion to amend). If a patentee were, for example, able to use 40 pages for the response and 35 pages for their amendment (75 total), the PTAB would likely see increased efficiency by way of fewer conference calls on the topic of page limits and their workload would not increase. To be sure, patentees will argue that the full 60 pages are needed for the patent owner response. Yet, such is rarely the case where a serious attempt at amendment is pursued.

– Rescind/Modify Rule 42.73(d)(3)(i)
This “patentee estoppel” forecloses all patentably indistinct amendments before the USPTO once an adverse judgement is entered in a PTAB post grant patent challenge. Absent changes to motion to amend practice this rule is especially problematic for patentees with large continuation application portfolios. The PTAB should consider rescinding this rule. It is arguably beyond their rule making ability and will inevitably lead to litigation in the short term. Likewise, coupled with the current statistics, patentees consider it to be adding insult to injury.

Requests for Comment Touch Upon Claim Construction Standards at the PTAB

Back in June, the USPTO issued a Request For Information (RFI) in the Federal Register. The Notice, entitled, Request for Comments on Trial Proceedings Under the America Invents Act Before the Patent Trial & Appeal Board posed 17 questions for consideration by those stakeholders involved in the patent challenge proceedings of the America Invents Act (AIA). Responses are due to the USPTO on September 16th, and, will be considered by the agency for the purpose of optimizing AIA trial proceedings going forward.

Over the next two weeks, I will explore the issues driving these queries as well as proposals for resolving problem areas. First up, is the question directed to claim construction, that is:

1. Under what circumstances, if any, should the Board decline to construe a claim in an unexpired patent in accordance with its broadest reasonable construction in light of the specification of the patent in which it appears?

This question presents an issue that the PTAB has grappled with in several proceedings to date. Namely, given that expired patents are interpreted under a Phillips v. AWH standard rather than the traditional Broadest Reasonable Interpretation (BRI), should the Board, in certain situations, decline to apply BRI in favor of Phillips. For example, if a petition is filed in September of 2014 on a patent that is set to expire in August of 2015 (the middle of any PTAB trial that would follow) should the Board adopt a practice that would interpret such patents under Phillips instead of BRI? Another example would be where the unexpired term is disclaimed in the middle of a proceeding, should that change BRI practices?

Unfortunately, the USPTO is unlikely to get meaningful feedback on this question. This is because many are viewing this question as an invitation to challenge the use of BRI in any PTAB trial proceeding.  

The PTAB cannot adopt a Phillips claim analysis for AIA trial proceedings as doing so would create absolute chaos. Patent reexamination, supplemental examination, and patent reissue proceedings are becoming increasingly related to post-grant trial proceedings. Applying different claim construction standards (at least in theory) to the same claims would foster nothing but inconsistency and confusion. Couple this with the increase in patent reexamination speed (as a result of the drop in demand since the AIA) and the movement of patent reissue to the Central Reexamination Unit (CRU) for increased speed/efficiency, and these potential inconsistencies could be before the Board for decision within the same time frame — a perfect storm.

As to the feedback the USPTO is seeking with this question, practically speaking, any patent challenged within 3 years of expiration might be optionally accorded an expired patent claim construction. This is because although amendment may still be possible 8-10 months post-petition filing, subsequent appeal to the CAFC may expend the remainder of the enforceable term, rendering any such amendment moot. (i.e., the amended claim would not issue prior to expiration as a result of the appeal). Of course, this same treatment would need to carry over to reexamination/supplemental examination/reissue. As to disclaimer of patent term, such rare occurrences could be required of patentees in AIA proceedings pre-institution so that constructions need not be switched mid-proceeding. 

The justification for the use of BRI at the USPTO is the ability to amend. Yet, critics are quick to point out that amendment is practically impossible before the PTAB, and, therefore, Phillips should be applied instead. The common-sense solution here is to address the amendment process, which is the next issue to explore in this series.

Fall 2014 Preview

With the summer vacation months behind us, the USPTO approaches the close of their fiscal year on September 30th. The end of the fiscal year is always a busy time for the agency. Both examiners and administrative patent law judges (APJs) will be focusing on finalizing their production quotas for the year. Historically, workflow from the agency peaks in September.

This month, the Patent Trial & Appeal Board (PTAB) will accept its 2000th post-grant trial petition. As I pointed out previously, this two year volume of filings has already exceeded the previous 13 year history of inter partes reexamination. September and October filings are expected to reach 200 petitions per month.

aia statistics 082814

With increased hirings, the AIA trial section will become the largest section of the PTAB in October.

In addition to dealing with the rising workflow, this fall the PTAB will also work to refine post-grant trial practices based on public feedback. Public comments responsive to the June Federal Register Notice, entitled: Request for Comments on Trial Proceedings Under the America Invents Act Before the Patent Trial & Appeal Board, are due on September 16th. A rule package implementing proposed changes is expected to issue thereafter.

Later this week I will begin walking through each of the issues presented for discussion by the PTAB in the Request for Comments. 

AIA Trials Drive PTAB Growth to 235+ Judges

The Patent Public Advisory Committee (PPAC) held its quarterly meeting last week at USPTO headquarters in Alexandria Virginia. Updates from the USPTO included a report from the Patent Trial & Appeal Board (PTAB) on appeal and AIA trial proceedings. Much of the report was directed to the subject of the recent Federal Register Notice seeking comment on AIA trial proceedings, however, there were some updates of note.

The PTAB reports that come October the AIA Trial Section will be the largest section of the Board. To put this growth in perspective, the Board was comprised of 70 judges, total, in 2011. The AIA Trial Section is already at 85 judges, and growing. (Other sections of the Board include patent interferences, patent reexamination appeals, ex parte application appeals, and management). The Board is expecting to reach 235+ total judges by October. The boost of judges to the trial section is necessary to decide the growing influx of AIA challenges within the 12-month statutory mandate.

Of course, it wont be long before ex parte appellants, especially small/independent inventors, use this growth on the post-grant side as a rallying cry of unfairness. In other words, in the face of a 25,000+ ex parte application appeal backlog the agency is throwing more bandwidth at “killing patents.”  Not a fair or accurate criticism, but one that is fully expected in the months ahead.

In other PTAB news, the Board noted the recent designation of a precedential decision, and several informational.
Precedential Opinion
–Securebuy, LLC v. CardinalCommerce Corporation (CBM 2014-00035)

Informative Opinions
–International Flavors and Fragrances Incorporated v. The United States of America (IPR 2013-00124)
–Idle Free Systems, Incorporated v. Bergstrom, Incorporated (IPR 2012-00027)
–Garmin International, Incorporated v. Cuozzo Speed Technologies LLC (IPR 2012-00001)

To date, the above 2012-13 decisions have been treated as de facto “informational” by PTAB panels. As such, the recent designation of such as informational is not a significant event. Garmin, on the other hand, is applied in a more precedential manner, but is only designated as “informational.” This may be a reflection of the difficulties of designating an opinion as precedential (requires a majority vote) as the trial section grows in size. On the other hand, since additional discovery is always a hot topic, the PTAB may be keeping their options open until after the public has had a chance to respond to the outstanding Federal Register Notice.