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October 24, 2013

Pillsbury Winthrop Shaw Pittman LLP

AIA Flood IPRs: Year in Review presented by Pat Doody

1 | AIA Flood | IPRs: Year in Review

Post Grant Proceedings - A Year in Review

Reflections on the First Year of Post Grant Proceedings

Top 5 Do’s and Don’ts

Innovation Act proposed changes

Interesting Statistics


Reflections on the First Year

483 Petitions for IPR filed

53 Petitions for CBM Review Filed Both accurately predicted by PTO (460 IPR and 50 CBM – 77 Fed. Reg. 48724,

No. 157 (Aug. 14, 2014))

As of August 30, 2013, only 40 Supplemental Examination Requests were filed Substantially under the 1,430 requests predicted by the PTO – 77 Fed. Reg.

28828-48853, No. 157 (Aug. 14, 2014))


Top 5 Do’s

1. File a Petition Proposing Fewer than 10 Grounds of Rejection Preferably should assert fewer than 5 proposed grounds.

The PTAB is only granting trial on a little more than 30% of the proposed grounds, so if you want to propose more, you should consider filing multiple petitions.

If you file a petition and one or more proposed grounds of rejection are denied as cumulative, consider filing a request for reconsideration (you cannot appeal the PTAB’s decision to institute trial) to have the PTAB reconsider its denial. Establish a record that the grounds that were denied might not fall into the category of grounds that “reasonably could have been raised,” thus possibly precluding estoppel on those grounds.


Top 5 Do’s

2. File a Patent Owner Preliminary Response Statistics reveal that the PTAB has denied trial far more frequently

when the patent owner files a preliminary response (PTAB denied trial in 15% of cases in which patent owner filed a preliminary response compared to only 6% when no preliminary response was filed).

May save the patent owner money in the long run by simplifying the issues, and it forces the patent owner to begin focusing on its strategy much sooner than if no preliminary response were filed.


Top 5 Do’s

Some Reasons Not to File Patent Owner Preliminary Response If it is likely that Petitioner Failed to Address Claim limitation Settlement Might not want to provide Petitioner with rebuttal position too early As a general rule the patent owner should file a preliminary response Preliminary responses are filed about 80% of the time


Top 5 Do’s

3. Present Focused Arguments

In nearly every representative order or decision by the PTAB in which they exercise discretion in how to manage the trial, the PTAB has cited the one-year statutory requirement to complete trial as the basis for limiting discovery, amendments, motions, arguments, exhibits, etc. (see 35 U.S.C. §316(b) – PTO considers “efficient administration of the Office” in prescribing regulations)

Practitioners therefore should file each paper with the goal of making it as easy as possible on the PTAB to consider its arguments and grant the relief requested

PTAB has denied trial on numerous occasions where petitioner presents convoluted combinations of art


Top 5 Do’s

4. Request Specific Documents for Additional Discovery If the proceeding is being conducted in parallel with district court

litigation in which some discovery has occurred, then the parties should have some familiarity with documents, and should request production of specific documents.

The PTAB will not allow general discovery requests similar to those typically requested in civil litigation


Top 5 Do’s

5. Retain an Expert Most petitions are supported by expert testimony, (about 86%) and

consequently expert testimony should be used to rebut the opposing party’s testimony

The PTAB encourages experts to testify with respect to what the prior art teaches, and expects to receive expert testimony.

Any evidence or experimental data, even if present in the patent, must be presented through a declarant, preferably a retained expert (Rule 42.61(c)).

Be careful in selection of your expert. The expert should be qualified as a person of ordinary skill in the art, must provide supporting data for any results obtained (at least two petitions have been denied because of this), and should be amenable to cross-examination


Top 5 Don’ts

1. File a Petition Proposing Numerous Grounds and/or Convoluted Obviousness Rejections

If more than 10 grounds can be proposed, consider filing multiple petitions because the PTAB likely will only consider 3-5 of the proposed grounds

Our statistics show that many practitioners are already doing this, with about 20% of CBMs and a little over 28% of IPRs, (based on a sampling of 200 IPR proceedings) being filed on the same patent, mostly by the same petitioner

The PTAB typically grants trial only with respect to anticipation (39% granted), or obviousness (27% granted) based on 2 or 3 documents. Multiple document obviousness rejections that require convoluted arguments and combinations usually are denied


Top 5 Don’ts

2. Treat Post Grant Proceedings Like Litigation The standard for invalidity is lower (reasonable likelihood of prevailing

vs. clear and convincing evidence), claim construction is broader (broadest reasonable interpretation), and the scope of discovery is significantly reduced in post grant proceedings.

The PTAB is comprised mostly of patent attorneys who typically will be familiar with the technology, so they are more likely to be convinced by technical distinctions than a district court judge (or jury), and less impressed with flashy presentations


Top 5 Don’ts

3. Seek to Significantly Amend the Claims Even if intervening rights is not an issue, the PTAB is reluctant to

consider significant amendments, encourages patent owners to file reissues or reexaminations to significantly amend the claims, and typically will only consider a one-to-one correspondence between substitute claims and issued claims.

The Patent Owner must be careful, however, to avoid the estoppel effect on the patent owner in other proceedings within the United States Patent and Trademark Office (PTO).

Rule 42.73(d)(3)(i) precludes a patent owner whose claim is canceled during a post grant proceeding from obtaining a claim in any other patent that is not patentably distinct from the finally refused or canceled claim


Top 5 Don’ts

4. Wait the One Year Period to File Petition The statute permits filing an Inter Partes Review within one year from

the filing of a complaint alleging patent infringement (35 U.S.C. §315(b)).

If petitioners wait the full year, file the petition and it is denied for technical reasons, or other reasons that could have been fixed, the petitioner may be precluded from filing another petition after the one year date


Top 5 Don’ts

5. Expect Significant Discovery The PTAB routinely denies blanket discovery requests, and uses the interests

of justice standard in Inter Partes Review, and the good cause standard in Post Grant Reviews (and CBMs) when deciding motions for additional discovery

The PTAB has issued orders in which it has quoted Senator Kyl’s remarks in the legislative history that the “PTO will be conservative in its grant of discovery”

The party requesting the discovery has the burden in establishing entitlement to the requested relief.

The PTAB considers 5 factors to be important in determining whether the interests of justice standard was met when seeking additional discovery in the IPR – see Garmin v. Cuozzo, IPR2012-00001, paper No. 20 for guidance


Innovation Act

Innovation Act introduced on October 23, 2013 Revising Post Grant Review Estoppel Provision 35 U.S.C. §325(e) to

delete “or reasonably could have raised.” This will allow a petitioner to challenge a patent in a post grant review proceeding, and then challenge that patent later in an IPR on other grounds, even if they “reasonably could have been raised in the PGR

Claim Construction – Proposed revisions to 35 U.S.C. § § 316(a) and 326(a) to require any claim of a patent shall be construed as such claim would be in a civil action, and if a court has already construed the claim, the PTO “shall consider such claim construction.”


Innovation Act

Proposed changes to CBM CBM will now only apply to patents that are not subjected to the first

inventor to file provisions (since those that are subject to the first inventor to file provisions are subject to Post Grant Review;

Delete the sunset provision in the AIA



We have compiled statistics on all IPRs and CBMs filed from September 16, 2012 through September 16, 2013

The PTO provides its own statistics on Post Grant Reviews http://www.uspto.gov/ip/boards/bpai/stats/aia_trial_statistics.jsp

PTO statistics, as of 10/17/2013

FY Total IPR CBM DER 2012 25 17 8 2013 563 514 48 1 2014 61 46 15

Cumulative 649 577 71 1

Number of AIA Petitions

http://www.uspto.gov/ip/boards/bpai/stats/aia_trial_statistics.jsp



PTO statistics, as of 10/17/2013

Disposals

Trials Instituted Joinders Denials

Total No. of Decisions on Institution Settlements

Final Written Decisions* Other**

IPR FY13 168 10 25 203 38 1 2

FY14 8 2 10 4

CBM FY13 14 3 17 3 1

FY14 2 2 4 1

AIA Trials Instituted/Disposals

IPRs Bringing Increased Risk?

Based on first-year results, an IPR filing is more than twice as likely to be denied than under the previous Inter Partes Reexamination System


The Return Volley

IPRs in which a Preliminary Response has been filed by the patent owner have been denied 15% of the time

Without a Preliminary Response, the denial rate is only 6%


The spread among technology sectors for IPR filings is nearly identical to the spread for Inter Partes Reexaminations


Fewer grounds per filing—the new normal?

The number of grounds per filing has been declining since the program’s inception, from an average of 10 grounds for the first 50 IPRs to 7.5 grounds for the 50 most recent IPRs

This may be a response to the increased likelihood of an outright denial. Only 32% of proposed grounds have been granted in IPRs to date. We are now seeing multiple filings for one patent or patent family, likely to mitigate the risk of denial.


Parallel Litigation

A large percentage of post-grant proceedings are filed with parallel patent infringement litigation matters.

This trend has only accelerated with the advent of IPRs.



Fast Facts

In the first year, 483 petitions for Inter Partes Review were filed, and 53 petitions for Covered Business Method Review were filed. The number of filings were accurately predicted by the Patent Office when it promulgated its final rules, in which the PTO estimated about 460 IPR petitions would be filed and about 50 petitions for CBM would be filed. (Federal Register, Vol. 77, No. 157, pg. 48724)


Fast Facts

Many petitioners file multiple petitions on the same patent—in the first year, the total number of patents with multiple IPRs filed against them was 53, involving 120 IPRs; the same company was involved in 46 and different companies were involved in 13 (for some, there were multiple IPRs filed by the same company, and by a different company, so there is some overlap)


Fast Facts

The frequency of multiple IPRs filed by the same company against the same patent has increased, most likely due to the fact that practitioners are learning that the PTAB has denied trial on a number of proposed grounds. In the first 6 months, there were a total of 7 multiple IPRs filed on or about the same date by the same company against the same patent, whereas in the last 6 months, there were 18, with 7 filed in the month of September. There were 18 multiple IPRs filed by the same company but on dates that differed by more than a month

October 24, 2013

Pillsbury Winthrop Shaw Pittman LLP

What’s Next? Contact Pillsbury’s Intellectual Property team or visit www.pillsburylaw.com/post-grant-proceedings to learn more. Pat Doody 703-770-7755 [email protected]