PRESENTATION TITLE

1

America Invents Act: The Practical Effects of the New USPTO

Post-Grant Proceedings

Wab Kadaba

February 8, 2012

2

•  Signed by President Obama on Sept. 16, 2011 – Most significant change to US Patent Law in

over 100 years

•  New post-grant review procedures – New Chapter 32 Post-Grant Review (§§

321-329) – Chapter 31 Inter Partes Review (§§ 311-319)

*Rules governing procedure to publish any day now.

America Invents Act of 2011

3

Overview

•  What has changed? – Timing – Standard of Review – Procedures – Discovery – Estoppel

•  What should you do differently?

4

Timing - Availability and Effective Date of Review Proceedings

Post-Grant Review Inter Partes Review

Not later than 9 months after issuance of patent.*

On 9/16/2012, Inter Partes Review will begin to be available if more than 9 months after patent issuance.

*While the effective date for Post-Grant Review is 9/16/2012, AIA §3(n)(1) limits consideration to patents with a priority date on or after 3/16/2013. Thus, with the average time it takes for the PTO to grant a patent, Post-Grant Review will not be implemented until approximately 2015.

5

Standard Of Review

Proceeding Criteria to Initiate

Ex Parte Reexamination

Substantial new question of patentability (SNQP)

Post-Grant Review

More likely than not that at least one challenged claim is unpatentable or novel/unsettled important legal question

Inter Partes Review / Inter Partes Reexam

A reasonable likelihood that the petitioner would prevail with respect to at least one challenged claim

Standard for Request

Ex Parte Reexamination < Post-Grant Review < Inter Partes Review

6

Procedures – Grounds Available for Post-Grant Proceedings

Post-Grant Review Inter Partes Review Patentability challenge = same as in litigation:

Subject matter, utility -§101 Novelty - §102 Nonobviousness - §103 Definiteness, enablement, written description - §112 Double patenting Not best mode

Validity challenges under §102, §103 based on printed prior art publications and based on double patenting

7

Procedures – New (and Trial-Like) For Both PGR and IPR

•  Limited Discovery •  Oral Hearings •  Protective Orders •  Amendment

–  1 motion, or later joint motion

•  Settlement –  Business-confidential

•  Appeal by either Party to CAFC

8

Timing

•  Goal to improve timing over Inter Partes Reexaminations. – May increase likelihood of litigation stay.

Projected Timing Inter Partes Reexam 5+ years to BPAI decision

Inter Partes Review AIA indicates 12 to 18 months to PTAB decision

9

REALITY - Example of Inter Partes Review Timeline

10

Discovery

•  Post-Grant Review Limited to: –  “Evidence directly related to factual assertions advanced by either

party in the proceeding.” –  Depositions not expressly identified.

•  Inter-Partes Review Limited to: –  Depositions of witnesses submitting affidavits or declarations. –  What is otherwise necessary in the interest of justice.

•  U.S. District Court: (Federal Rules of Evidence) –  Any nonprivileged matter that is relevant to any party’s claim or

defense. •  Includes any documents or other tangible things and the identity

and location of persons who know of any discoverable matter. –  Depositions of Inventors, Prosecuting Attorneys, Experts, Employees.

11

Checks On Discovery

•  Limited in Scope. •  Discovery Period Limited to 4 Months. •  Sanctions for:

– Harassment – Abuse of Discovery –  Improper Purpose – Abuse of Process

•  Protective Orders for exchange and submission of confidential information.

12

Estoppel - Inter Partes Review

Parallel Litigation PTO Determines Patent

Valid

Parallel Litigation District Court Holds Patent

Valid

When Estoppel Attaches

Inter Partes Reexam

Estopped from invalidity defense (raised or could have raised in Inter Partes Reexam). • District Court Only

Inter Partes Reexam Vacated -Estopped

Final Decision - Appeals Exhausted

Inter Partes Review

Estopped from invalidity defense (raised or reasonably could have raised) • ITC & District Court

No Estoppel* *Practical Estoppel for Inter Partes Review filed by party more than one year after being sued for patent infringement. §315(b).

(PTAB) Written Decision

13

Estoppel - Post-Grant Review

•  Estoppel = “raised or reasonably could have raised” same as Inter Partes Review but since Post-Grant Review has broader basis the estoppel implications are greater for Post-Grant Review.

14

Strategic Tips for Inter Partes and Post-Grant Review - DJ Actions

•  For Inter Partes or Post-Grant Review, file DJ action on or after petitioning for review. Then, the DJ action will be automatically stayed until patentee moves to lift stay or counterclaims with infringement claim or petitioner moves for dismissal.

•  If DJ action already filed, the same party cannot initiate Inter Partes or Post-Grant Review.

15

Summary of Major Areas of Change

Proceeding Purpose &

Timing Issues & Prior Art

Strategic Considerations

Post-Grant Review

3rd Party challenge of patent within 9 months of issuance

Any ground of invalidity (§§ 101, 102, 103, 112, 251) – not limited to patents or printed publications

Balancing Litigation Defenses with Estoppel Provisions

Inter Partes Review

3rd Party challenge of patent after PGR window or conclusion of PGR*

Limited to novelty, obviousness (§§ 102, 103) – limited to patents and printed publications

Balancing Litigation Defenses with Estoppel Provisions

*Patents not subject to PGR proceedings are available for IPR on 9/16/2012.

16

What Does this Mean – Pre-AIA Validity Challenge Options

Are the Invalidity Arguments Based On Prior Art?

Is the Prior Art a Printed Publication?

Was the Application Filed Before 11/29/99?

Ex Parte Reexam

Inter Partes Reexam

Litigation

Yes

Yes

Yes

No

No

No

17

What Does this Mean – Post-AIA Validity Challenge Options

No

Are the Invalidity Arguments Based On Prior Art?

Litigation Post-Grant Review or Litigation

Yes No

Is the Issued Patent Inside the Initial 9-Mo Window?

Is the Issued Patent Inside the Initial 9-Mo Window?

Is the Prior Art a Printed Publication?

Yes No

Inter Partes Review or

Ex Parte Reexam or Litigation

Post-Grant Review or

Ex Parte Reexam or Litigation

Yes No

Yes

18

Distinctions that Influence Business Decisions

Factors Post-Grant Review Inter Partes Review Litigation

Burden of Proof

Preponderance of Evidence Clear and Convincing Evidence

Presumption of Validity

No Yes

Claim scope Broadest reasonable interpretation (Suitco)

Narrow construction (Phillips)

Complexity and nature of attack

Any basis other than best mode

Many references but limited to printed publications

-Fewer references

-Any basis but best mode

Decision maker

PTAB Average Juror

19

Other Factors to Assist in Business Decisions

•  Complex Argument –  Attack under § 103 will be preferable at the PTAB relative to

district court so that large number of combinations is possible.

•  Intervening Rights after Marine Polymer –  A patentee’s pleadings and arguments defending the patent

in a Post-Grant or Inter Partes Review proceeding could create intervening rights which would shorten the damages period.

–  Marine Polymer, 659 F.3d 1084 (Fed. Cir. 2011), held that arguments narrowing the scope of the patent can create additional file history estoppel and truncate the damages period, even if the claims are not amended.

20

Other Factors to Assist in Business Decisions – Inter Partes Review

Monitor Third Party Patents

and Patent Applications.

Is the Patent Owner or Assignee Litigious?

Does the Patent Broadly Relate to your Technology?

Determine the Availability of Prior Art Patents and Printed Publications.

21

Other Factors to Assist in Business Decisions – Post-Grant Review

Monitor Third Party Patents

and Patent Applications.

Is the Patent Owner or Assignee Litigious?

Does the Patent Broadly Relate to your Technology?

Consider All Grounds of Invalidity.

22

Other Factors to Assist in Business Decisions - Patentees

•  Current patent seekers should file before the effective date (3/16/13) to avoid future Post-Grant Review.

•  Patents subjected to Post-Grant Review or Inter Partes Review might emerge stronger.

23

Hypothetical #1

•  Your Company is sued for patent infringement on a patent that issued a year earlier. You have found printed publication prior art teaching every element of the claim. Should you introduce the prior art in litigation as an invalidity defense or should you initiate an Inter Partes Review after September 16, 2012?

24

Hypothetical #2

•  It is August 2012. Your Company has received a demand letter and wants to challenge the validity of the patent based on your Company’s own product and literature predating the patent. You must determine whether to initiate an Inter Partes Reexamination, wait to file an Inter Partes Review, or wait to file an Inter Partes Review and a subsequent DJ Action in your home forum. Which option will you choose?

25

Hypothetical #3

•  Your Company is sued for Patent Infringement on a patent that issued a year earlier. You have a prior art reference that discloses 2 of the 5 claim elements. Each other claim element is disclosed in different prior art references. Should you seek to challenge the patent in the district court, or file an Inter Partes Review?

26

Questions? Comments?