–Pick a Winner–
The revised version of S. 515 has introduced provisions that will serve to preclude the instituting or maintaining of an inter partes review or post-grant review proceeding under certain circumstances. These circumstances are set forth in proposed changes to §§ 315 and 325 in title 35 of the United States Code.
§§ 315 and 325 provide that an inter partes review or post-grant review may not be instituted or maintained if the petitioner or real party in interest has filed a civil action challenging the validity of a claim of the patent. In other words, you cannot file a Declaratory Judgment and seek to prove invalidity at the USPTO at the same time. Moreover, an inter partes review or post-grant review may not be instituted if the petition requesting the proceeding is filed more than 3 months after the date on which the petitioner, real party in interest, or his privy is required to respond to a civil action alleging infringement of the patent. Thus, you cannot answer a complaint for infringement and then seek to prove invalidity at the USPTO at the same time; you must file at the earliest possible time before answering. Thus, the new post grant provisions are really designed to be alternatives to litigation, not after thoughts after losing at trial. If filed before an Answer, and the PTO can finish within the 12-18 month time frame as promised, perhaps a stay of litigation may become even more commonplace (ITC withstanding).
Inter Partes Review or Post Grant Review, Not Both
A Post-Grant review may not be initiated if the petition is filed outside of the first 9 months after the grant of the original patent. Likewise, Inter Partes review cannot be filed until after the initial 9 month period for Post-Grant Review. These prohibitions do not reset upon filing of a reissue, unless the claims are broadened.
The petitioner in an inter partes review or post-grant review, or his real party in interest or privy, may not request or maintain a proceeding before the Office with respect to a claim on any ground that the petitioner raised or reasonably could have raised during an inter partes review or post-grant review of the claim that resulted in a final written PTAB decision under 318(a) or 328(a). The petitioner in an inter partes review or post-grant review, or his real party interest or privy, may not assert in a civil action arising in whole or in part under section 1338 of title 28 or a proceeding before the International Trade Commission that a claim in a patent is invalid on any ground that the petitioner (1) raised or reasonably could have raised during an inter partes review of the claim that resulted in a final PTAB decision under 318(a), or (2) raised during a post-grant review that resulted in a final PTAB decision under 328(a).
These changes to S. 515 provide greater balance between the interests of patent owners and third party challengers. The patent owners will need to defend their patents on one less battle ground, while new opportunities are provided to third party challengers to attack granted patents in the USPTO on any patentability condition.
Assuming S.515 Were Passed in Present Form, Where Would this Leave Patent Litigation?
While patent reexamination is quite commonplace as a defensive tactic today, the new proceedings will introduce significant uncertainty, at least in the short term.
With the standards for invalidity being slightly higher in the proposals for Inter Partes Review and Post Grant Review, relative to current reexamination standards, it remains to be seen whether or not the new options would be equally embraced over traditional litigation. To be sure, it would seem logical that either Inter Partes Review or Post Grant Review be attempted prior to defending against a patent in court, for cost savings and differences in burdens of proof alone. Yet there is a significant amount of uncertainty with regard to the USPTO being able to successfully pull off such a significant undertaking, and able to conclude the proceedings within 12-18 months as required by statute. Likewise, with the condensed time line and expanded discovery options proposed, it is unclear whether or not the cost savings will be at all significant as compared to the district court.
Certainly the ITC has proven that a highly contentious and technical administrative proceeding can be effectively processed and concluded within a short time frame. Of course, the cost of conducting an ITC proceeding is very significant. Further, if the USPTO stumbles out of the gate, doubt may dissuade the public from embracing the new options. One need only look back at how patent reexamination was viewed prior to the creation of the CRU to appreciate the potential for creating prejudice in the public.
Questions on implementation that need answering include:
-How can the BPAI, currently handling a backlog of roughly 20,000 appeals be quickly and effectively transformed to handle these proceedings as a Patent Trial and Appeal Board? (Does it make sense to give a terminally ill patient a face lift?)
-Where is the horsepower coming from for the PTAB, new hires?
-How is the USPTO going to fund the staff necessary to handle the seeming expansion of the Board and accelerated scheduling?
-What will become of the expertise and procedural knowledge built up in the CRU?
With the Congress leaving much of the implementation details to the Director, the USPTO may be faced with a monumental task should this legislation pass.