PRESENTATION TITLE
America Invents Act:
Creating “Rocket Docket” Patent
Trials in the Patent Office
1
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
2
Pre-9/16/12 PTO Tools
Ex Parte Reexamination
Inter Partes Reexamination
 Patents/printed publications
 Patents/printed publications
 Substantial new question
 Reasonable likelihood of
prevailing
 No discovery, no oral hearing
 No discovery, no oral hearing
 No estoppel
 Estoppel (PTO and D/C)
 No settlement effect
 No settlement effect
 Patent owner may request
3
Post-9/16/12 PTO Tools
Ex Parte Reexamination
Inter Partes Reexamination
Post Grant Review
 Patents/printed
publications
 Patents/printed publications
 Any invalidity ground
 Substantial new question
 Reasonable likelihood
requester prevails
 More likely than not 1+
claim unpatentable; and/or
novel/unsettled legal
question
 No discovery, oral hearing
 Discovery, oral hearing
 Discovery, oral hearing
 No estoppel
 Estoppel (PTO, D/C and ITC)
 Estoppel (PTO, D/C and
ITC)
 No settlement effect
 Settlement terminates, no
estoppel
 Settlement terminates, no
estoppel
 Patent owner may request
 Available 9/16/12, if no PGR
 Patents filed after 3/16/13
 Within 12 months of litigation
 Within 9 months of
issuance
4
Summary of Major Areas of Change
Proceeding
Purpose &
Timing
Issues &
Prior Art
Strategic
Considerations
3rd Party challenge of
patent within 9
Post-Grant months of issuance
Review
Any ground of
invalidity (§§ 101,
102, 103, 112, 251) –
not limited to patents
or printed publications
Balancing Litigation
Defenses with
Estoppel Provisions
3rd Party challenge of
patent after PGR
Inter Partes window or conclusion
Review
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.
5
Timing
6
PGR
Challenger’s prior DJ lawsuit forfeits review entirely
Patent app.
filed after
3/16/13
Patent issues
(likely 2015
or later)
“Raised or reasonably
could have raised”
Patent
expires
Estoppel
9 mos.
2 years
Request for
PGR filed
PGR
completed
Invalidity based on:
•
Patents
•
Printed publications
•
Prior use/sale
•
Insufficient disclosure
•
Etc.
7
IPR: Scenario A (no PGR, no lawsuit)
Challenger’s prior DJ lawsuit forfeits review entirely
Patent issues
“Raised or reasonably could have raised”
Patent
expires
Estoppel
9 mos.
2 years
No PGR
filed
IPR
Filed
IPR
Completed
Invalidity based on:
•
Patents
•
Printed publications
•
Double patenting
8
IPR: Scenario B (lawsuit)
“Raised or reasonably could
have raised”
Patent issues
Patent
expires
Estoppel
No PGR filed,
> 9 mos.
elapsed
1 year
2 years
Patentee
lawsuit
IPR must
be filed
within 1
year
IPR
Completed
Invalidity based on:
•
Patents
•
Printed publications
•
Double patenting
9
USPTO Proposed Timeline for Conducting PGR and IPR
Petition
Filed
PO Preliminary
Response
2
months
Decision
on
Petition
3
months
PO
Petitioner Reply
Response &
to PO
Motion to
Response &
PO Reply to
Amend
Opposition to Opposition to
Claims
Amendment
Amendment
4
months
PO
Discovery
Period
Oral Hearing
2
months
1
month
Hearing
Set on
Request
Petitioner
Discovery
Period
PO
Discovery
Period
Period for
Observations
& Motions to
Exclude
Evidence
Final
Written
Decision
No more than 12 months
Proposed Trial Practice Guide: Federal Register 77(27):6868, 09-Feb-2012
10
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.
11
Strategic Considerations
12
Maximizing Options
Proactive Approach
Patent
Monitoring
Freedom to
Operate
Analysis
Other Opportunities
Post-Grant
Challenge
• Notice letter
from patentee
• Stalled prelitigation
negotiations
• Prior art search
reveals new
invalidating art
• Litigation filed
• License
expiration
13
Benefits to Challenger
Cancellation of claims - Avoid infringement
- Freedom to operate
Amendment of claims
- Intervening rights
Patentee
admissions
Prosecution
history
estoppel
Create
intrinsic
evidence
14
Strategic Pros And Cons
Pros
Ex Parte
Reexam
Cons
• Faster/less expensive than
litigation
• Only patents/printed
publications
• No estoppel
• No involvement after request
• Anonymity
• $17,760 Filing fee
• Multiple reexams
• Lower burden of proof
• Technically sophisticated
15
Strategic Pros And Cons
Pros
Inter
Partes
Review
• Less expensive than litigation
Cons
• Only patents/printed
publications
• Discovery, oral hearing
• Some invalidity grounds remain
for litigation
• Lower burden of proof
• Estoppel on patents and
printed publications that could
have been raised
• Effectively prevents ex parte
reexam
• Technically sophisticated
16
16
Strategic Pros And Cons
Pros
Post
Grant
Review
• Less expensive than litigation
• Discovery, oral hearing
• Lower burden of proof
Cons
• Estoppel on all invalidity
grounds that could have been
raised
• Effectively prevents IPR and
ex parte reexam
• Technically sophisticated
• Broad invalidity bases
17
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 validity
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 validity
defense (raised or
reasonably could have
raised)
•ITC & District Court
No Estoppel*
(PTAB)
Written
Decision
* Practical Estoppel for Inter
Partes Review filed by party
more than one year after
being sued for patent
infringement. §315(b).
18
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 Unknown impact of shorter time to
stay motions
decision – more inclined to stay?
Greater ability of PO to amend
More restricted amendments
19
Strategic Issues: PTO vs. Litigation
Factors
Post-Grant
Review
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
• Any references, but
limited to best
• Any basis but best mode
Decision maker
Inter Partes Review
References limited to
printed publications, but
must pick best
PTAB
3 Judge Panel
Litigation
Average Juror
20
Practical Considerations and the
Governing Rules
21
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
22
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
23
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).
24
Procedures – Petition for an Inter Partes
Review
Board will conduct the proceeding
so 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.
25
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.
26
Procedures – “Rocket Docket” Patent
Office Trials
Routine Discovery
• Documents cited.
• Crossexamination for
submitted
testimony.
• Information
inconsistent with
positions
advanced during
the proceeding.
Additional Discovery
Request
by any party
for additional
discovery*
• Any discovery
beyond routine
discovery.
• Can include
additional live
testimony.
* 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.
27
Proposed Filing Fees (Single Patent)
Post Grant
Procedure
PTO Petition Fees
(base)
Ex Parte
$17,760
IPR
$27,200
PGR
$47,100
28
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
29
Comments on the Rules – Companies
Companies
• Intel
• Microsoft
• Page Limits
• Discovery
• Scope of direct examination
• Verizon
• Google
• Cisco
• Preliminary response by PO
with testimonial evidence
• Fees
30
Potential Pitfalls
Short Response
Time
Patentee
• Respond to claim
construction
• Analyze prior art
• Consider expert &
secondary
considerations
Drafting Petition
Petitioner
• Grounds to raise?
• Impact of standard
of review?
• Impact of claim
constructions on
litigation?
Discovery
• 4 months
• Extensions unlikely
• Ramifications of
claim amendments
Discovery
• 2 months
• Extensions unlikely
• Responding to
amendments &
secondary
considerations
31
Case Studies
32
Case Study #1: PGR (“All In”)
Win PGR: freedom to
operate, litigation over
“Raised /reasonably could have raised”
Estoppel
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
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
33
Case Study #2: IPR (“The Hedge”)
Win IPR: freedom to
operate, litigation over
“Raised /reasonably could have raised”
Estoppel
FTO
analysis
identifies
patent X,
issued
12
months
ago,
strong
printed
art and
prior
use/sale
IPR
(patents
/printed
pubs.)
Lose IPR:
litigation
resumes
File DJ Infringement,
action
§112, and
(stayed) 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
34
Case Study #3: IPR (“The Choice”)
PreIP reexam
9/16/12, (patents
receive
/printed
invitation pubs.)
to license
3-6 year proceeding through appeal (potential litigation
stay throughout); risk of conversion to IPR process
Win IPR: freedom to
operate, litigation over
“Raised /reasonably could have raised”
Estoppel
IPR (patents
/printed
pubs.)
File DJ
action
(stayed)
Lose IPR:
litigation
resumes
Infringement, §112,
and prior use/sale
invalidity defenses
35
Case Study #4: Ex Parte Reexam: Old School
Win ex parte reexam: freedom
to operate, litigation over
(No “estoppel,” but potentially
argument estoppel)
FTO
analysis
identifies
patent X
and
multiple
invalidity
arguments
Ex parte
reexam
Ex parte
reexam
Lose reexam:
litigation resumes
Patent Owner
files lawsuit
(stayed)
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
36