presentation title 1 america invents act: creating “rocket docket” patent trials in the patent...
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PRESENTATION TITLE
1
America Invents Act: Creating “Rocket Docket” Patent
Trials in the Patent Office
Agenda
Overview of the old and new tools
New tools– Timing– Strategic considerations– Costs
Case studies exploring effectiveness of the new tools
Status of Rules Governing Procedures
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Pre-9/16/12 PTO Tools
Ex Parte Reexamination Inter Partes Reexamination
Patents/printed publications
Substantial new question
No discovery, no oral hearing
No estoppel
No settlement effect
Patent owner may request
Patents/printed publications
Reasonable likelihood of prevailing
No discovery, no oral hearing
Estoppel (PTO and D/C)
No settlement effect
3
Post-9/16/12 PTO Tools
Ex Parte Reexamination Inter Partes Reexamination Post Grant Review
Patents/printed publications
Substantial new question
No discovery, oral hearing
No estoppel
No settlement effect
Patent owner may request
Patents/printed publications
Reasonable likelihood requester prevails
Discovery, oral hearing
Estoppel (PTO, D/C and ITC)
Settlement terminates, no estoppel
Available 9/16/12, if no PGR
Within 12 months of litigation
Any invalidity ground
More likely than not 1+ claim unpatentable; and/or novel/unsettled legal question
Discovery, oral hearing
Estoppel (PTO, D/C and ITC)
Settlement terminates, no estoppel
Patents filed after 3/16/13
Within 9 months of issuance
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Summary of Major Areas of Change
ProceedingPurpose &
TimingIssues &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
* PGR only available for patents filed on or after 3/16/2013. Practically, PGR will not be implemented until approximately 2015.
Timing
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PGR
Patent app. filed after 3/16/13
Patent issues (likely 2015
or later)
Patent expires
9 mos.
Request for PGR filed
PGR completed
2 years
Invalidity based on:
• Patents
• Printed publications
• Prior use/sale
• Insufficient disclosure
• Etc.
Estoppel
“Raised or reasonably could have raised”
Challenger’s prior DJ lawsuit forfeits review entirely
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IPR: Scenario A (no PGR, no lawsuit)
Invalidity based on:
• Patents
• Printed publications
• Double patenting
9 mos.
IPR Filed
2 years
IPR Completed
Patent issues Patent expires
Estoppel
Challenger’s prior DJ lawsuit forfeits review entirely
No PGR filed
“Raised or reasonably could have raised”
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No PGR filed, > 9 mos. elapsed
Patentee lawsuit
1 year
IPR must be filed within 1
year
Patent issues Patent expires
Estoppel
IPR: Scenario B (lawsuit)
Invalidity based on:
• Patents
• Printed publications
• Double patenting
IPR Completed
2 years
“Raised or reasonably could have raised”
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USPTO Proposed Timeline for Conducting PGR and IPR
Proposed Trial Practice Guide: Federal Register 77(27):6868, 09-Feb-2012
Petition Filed
PO Preliminary Response
Decision on
Petition
PO Response &
Motion to Amend Claims
Petitioner Reply to PO
Response & Opposition to Amendment
PO Reply to Opposition to Amendment Oral Hearing
Final Written
Decision
2 months
3 months
4 months
2 months
1 month
Hearing Set on
Request
No more than 12 months
PO Discovery
Period
Petitioner Discovery
Period
PO Discovery
Period
Period for Observations & Motions to
Exclude Evidence
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Procedures – “Rocket Docket” Patent Office Trials
Sample Scheduling Order
• 4 months for PO response to petition and amendment proposal,
• 2 months for Petitioner reply,
• 1 month for PO reply to Petitioner’s opposition,
• 2-3 months for motions to exclude evidence and oral hearing, and
• 2 months for final written decision.
Strategic Considerations
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Maximizing Options
Proactive Approach Other Opportunities
• Notice letter from patentee
• Stalled pre-litigation negotiations
• Prior art search reveals new invalidating art
• Litigation filed• License
expiration
Patent Monitoring
Post-GrantChallenge
Freedom toOperateAnalysis
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Benefits to Challenger
Cancellation of claims - - Avoid infringement
- Freedom to operate
Amendment of claims- Intervening rights
Patentee admissions
Prosecution history
estoppelCreateintrinsic
evidence
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Strategic Pros And Cons
Pros Cons
Ex Parte Reexam
• Faster/less expensive than litigation
• No estoppel
• Anonymity
• Multiple reexams
• Lower burden of proof
• Technically sophisticated
• Only patents/printed publications
• No involvement after request
• $17,760 Filing fee
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Strategic Pros And Cons
Pros Cons
Inter Partes Review
• Less expensive than litigation
• Discovery, oral hearing
• Some invalidity grounds remain for litigation
• Lower burden of proof
• Technically sophisticated
• Only patents/printed publications
• Estoppel on patents and printed publications that could have been raised
• Effectively prevents ex parte reexam
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Strategic Pros And Cons
Pros Cons
Post Grant Review
• Less expensive than litigation
• Discovery, oral hearing
• Lower burden of proof
• Technically sophisticated
• Broad invalidity bases
• Estoppel on all invalidity grounds that could have been raised
• Effectively prevents IPR and ex parte reexam
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Estoppel - Inter Partes Review
Parallel LitigationPTO Determines Patent
Valid
Parallel Litigation District Court Holds Patent
Valid
When EstoppelAttaches
InterPartesReexam
Estopped from validity defense (raised or could have raised in Inter Partes Reexam). •District Court Only
Inter Partes Reexam Vacated -Estopped
Final Decision -AppealsExhausted
Inter Partes Review
Estopped from validity 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)WrittenDecision
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Strategic Timing: Inter Partes Reexam v. IPR
Inter Partes Reexam (pre-9/16/12) IPR (post-9/16/12)
Standard: reasonable likelihood of prevailing
Standard: reasonable likelihood of prevailing (but effectively may be higher to ease burden on PTAB)
If not converted to IPR procedure, longer time to decision, estoppel
Faster time to decision, estoppel
Can file even if already in DJ litigation or litigation > 1 year
Cannot file if DJ litigation before IPR; cannot file if in litigation > 1 year
Long delay often a factor in denying stay motions
Unknown impact of shorter time to decision – more inclined to stay?
Greater ability of PO to amend More restricted amendments
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Strategic Issues: PTO vs. Litigation
Factors Post-GrantReview
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)
Contextual (narrow) construction (Phillips)
Complexity and nature of attack
Any basis other than best mode
References limited to printed publications, but must pick best
• Any references, but limited to best
• Any basis but best mode
Decision maker PTAB3 Judge Panel
Average Juror
Practical Considerations and the Governing Rules
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Procedures – “Rocket Docket” Patent Office Trials
• Goal to improve timing over Inter Partes Reexaminations.– May increase likelihood of automatic stay
“sticking.”
Projected Timing
Inter Partes Reexam 5+ years to BPAI decision
Inter Partes Review AIA indicates 12 to 18 months to PTAB decision
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Procedures – “Rocket Docket” Patent Office Trials
Litigation/Trial-Like
• Claim Construction• Limited Discovery• Protective Orders• Settlement• Hearing
Prosecution/Reexamination
• Amendments to Claims– 1 as matter of right– 1 by joint motion
• Claim Charts
Appeal by either party to the CAFC
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Procedures – Petition for an Inter Partes Review
Petition = Summary Judgment Motion, Plus:
• Identify all real parties in interest. • Identify all claims challenged and grounds on which the
challenge to each claim is based. • Provide a claim construction and show how the
construed claim is unpatentable. • Include statement of facts, identify the exhibit number of
the supporting evidence relied upon to support the challenge and state the relevance of the evidence.
• Provide copies of evidence relied upon, including any declarations.
• Page limits for IPR (50) and PGR (70).
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Procedures – Petition for an Inter Partes Review
Board will conduct the proceedingso as to reduce the burdens:
• Instituting a trial on a claim-by-claim, ground-by-ground basis.
• Conference calls with a judge handling the case to decide issues quickly and efficiently and to avoid the burdens associated with filing requests for relief.
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Procedures – “Rocket Docket” Patent Office Trials
Post-Grant Review
• “Evidence directly related to factual assertions advanced by either party in the proceeding.”
• Depositions not expressly identified.
Inter Partes Review
• Depositions of witnesses submitting affidavits or declarations.
• What is otherwise necessary in the interest of justice.
U.S. District Court
• 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.
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Procedures – “Rocket Docket” Patent Office Trials
Routine Discovery
• Documents cited.• Cross-
examination for submitted testimony.
• Information inconsistent with positions advanced during the proceeding.
Additional Discovery
• Any discovery beyond routine discovery.
• Can include additional live testimony.
Requestby any party for additional discovery*
* A party seeking additional discovery in IPR and derivation must demonstrate that the additional discovery is in the interests of justice. A party seeking additional discovery in PGR will be subject to the lower good cause standard.
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Proposed Filing Fees (Single Patent)
Post Grant Procedure
PTO Petition Fees (base)
Ex Parte $17,760
IPR $27,200
PGR $47,100
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Comments on the Rules – Legal Organizations
Legal Organizations
• ABA
• AIPLA
• IPO
• Association of Corporate Counsel
• International Federation of IP Attorneys
• Filing of a Petition with option to file “Supplemental Information”
• Preliminary response using testimonial evidence
• Initial evidentiary disclosures• Motions to amend claims - reasonable
number• Pro Hac Vice not freely granted• “Reasonably could have raised”
estoppel• Standard for claim construction -
“Broadest Reasonable Construction”• Fees• Page limits• Timing of PO response
30
Comments on the Rules – Companies
Companies
• Intel
• Microsoft
• Verizon
• Cisco
• Page Limits
• Discovery
• Scope of direct examination
• Preliminary response by PO with testimonial evidence
• Fees
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Potential Pitfalls
Patentee
Petitioner
Short Response Time
• Respond to claim construction
• Analyze prior art• Consider expert &
secondary considerations
Discovery
• 4 months• Extensions unlikely• Ramifications of
claim amendments
Drafting Petition
• Grounds to raise?• Impact of standard
of review?• Impact of claim
constructions on litigation?
Discovery
• 2 months• Extensions unlikely• Responding to
amendments & secondary considerations
Case Studies
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Case Study #1: PGR (“All In”)
FTO analysis identifies patent X, issued 3 months
ago, and multiple invalidity
arguments
PGR (all invalidity bases)
File DJ action
(stayed)
Lose PGR: litigation resumes
Win PGR: freedom to operate, litigation over
Estoppel“Raised /reasonably could have raised”
Effectively infringement
only
Best circumstances for use:• Strong, but complex invalidity
positions• Strong prior use/sale, 101, 112
arguments• Strong 103, no 102, arguments• Decent non-infringement position
Case Study #2: IPR (“The Hedge”)
FTO analysis identifies patent X,
issued 12
months ago,
strong printed art and
prior use/sale
IPR (patents /printed pubs.)
File DJ action
(stayed)
Lose IPR: litigation resumes
Win IPR: freedom to operate, litigation over
Estoppel“Raised /reasonably could have raised”
Infringement, §112, and
prior use/sale invalidity defenses
Best circumstances for use:• PGR not available• Complex invalidity positions• Prior art positions, both printed
and not printed• Strong 103, no 102, arguments• Weak non-infringement position
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Case Study #3: IPR (“The Choice”)
Pre-9/16/12, receive
invitation to license
IPR (patents /printed pubs.)
File DJ action
(stayed)
Lose IPR: litigation resumes
Win IPR: freedom to operate, litigation over
Estoppel
“Raised /reasonably could have raised”
Infringement, §112, and prior use/sale invalidity defenses
IP reexam (patents /printed pubs.)
3-6 year proceeding through appeal (potential litigation stay throughout); risk of conversion to IPR process
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Case Study #4: Ex Parte Reexam: Old School
FTO analysis identifies patent X
and multiple invalidity
arguments
Ex parte reexam
Patent Owner files lawsuit
(stayed)
Lose reexam: litigation resumes
Win ex parte reexam: freedom to operate, litigation over
(No “estoppel,” but potentially argument estoppel)
Litigation on all issues
Best circumstances for use:• Need to preserve some prior art based invalidity arguments for litigation
• Weak non-infringement positions• Cost is a factor
Ex parte reexam
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