This is the third post in a series of articles on PGR strategies. In Part I, I made the point that while patents come in all shapes and sizes, post-grant reviews (PGRs) basically come in two sizes. By statute, the PGR must complete in 1 to 1 ½ years. Part II addressed some of the issues that the Petitioner faces during a PGR and when the Petitioner may benefit from a 6 month extension. This post will provide some insight to the Patent Owner’s analysis of what to do if its patent is tested in a PGR.
The Patent Owner has a lot to consider when the petition for review is granted. The American Inventor’s Act includes a standard for granting a petition for review that is more difficult to satisfy than the substantial new question of patentability standard associated with ex parte and inter partes reexamination. How it will exactly be implemented in practice still remains to be seen, and there is a healthy debate on how to implement the standard. Regardless, the Patent Owner has to take a decision for review very seriously. PGR affords the Patent Owner one opportunity to amend the patent claims by right. All subsequent opportunities are at the discretion of the PTAB who will control the motion practice following the decision to grant the PGR.
Many of the questions involved in traditional reexamination will be asked by the Patent Owner. If a challenge is based on prior art, the natural question is whether the prior art was in the ex parte prosecution record? If so, what is the basis for review? If not, how close is the prior art to the challenged patent? If the review is post-grant review under 35 U.S.C. 321, then it must have been filed within 9 month of issue of the patent. So the patent is relatively new and the potential accrual of past damages is small at the time of the PGR petition, save the possibility of provisional damages which have a number of prerequisites of their own. (Note that this may well not be true for a PGR initiated as a result of the transitional program for challenging covered business method patents under Section 18 of the AIA.) If the review is inter partes review under 35 U.S.C. 311, then the potential accrual of past damages is greater, because the petition can be filed substantially past the date of issue of the challenged patent.
When it comes to amendments, the Patent Owner is at a disadvantage in post-grant proceedings as opposed to ex parte proceedings. There is no examiner to interview, as in ex parte reexamination. The single amendment right must be taken seriously. In cases where evidence continues to be produced during the review, counsel for the Patent Owner must be vigilant to determine patentable subject matter, since what is believed to be patentable at the beginning of the procedure may well change over time.
Given that the Patent Owner has a single year to fight for its patent (which may be extended under certain circumstances to another six months), there is much to be done. Expert declarations and other testimony must be coordinated and presented. The Patent Owner must also review and respond to discovery, as well as make discovery demands of its own. The process may be unforgiving for the Patent Owner whose position in the original claims or in amendment is not well thought out and engineered to overcome a host of new prior art information.
If the grounds for review are weak, they are at least ostensibly improvidently granted. The Patent Owner’s job is to try to turn off the review and overcome rejections as soon as possible. An extended review is not to the Patent Owner’s advantage if it has traction in arguing its position.
However, if the grounds for review are strong, many times it will be to the Patent Owner’s advantage to have a bit more time to argue and determine patentable subject matter and to fight off as much of the asserted prior art as possible. In cases with strong grounds for review, the Patent Owner is likely starting from a deficit and good advocacy becomes critical. The depth of the dependent claims may save the day for the Patent Owner. And if the dependent claims fail, hopefully there is some depth to the disclosure to plumb that might still be commercially relevant and provide room for narrowing amendments.
As much as a Patent Owner may be besieged in these situations, the sobering countervailing concern for the Petitioner is that if the patent survives review (amended or not), it emerges stronger due to the practical and/or legal estoppel that attaches. If the Patent Owner had to narrow its claims to survive the review, these narrowed claims may be much harder to invalidate in any subsequent action, including other reviews and litigation. If the claims after review are still commercially valuable to the Patent Owner, that which does not kill the patent only makes it stronger. The upshot: even if armed with good challenges, potential patent challengers need to proceed thoughtfully because the Patent Owner may simply benefit from the review process.