Archive for the ‘estoppel from administrative proceeding’ Category

Progressive Casualty Litigation Stayed Pending Outcome of Liberty Mutual CBMs

Wednesday, April 24th, 2013

Progressive Casualty Insurance Co. sued different insurance companies for patent infringement of 5 of its patents in 2010-2012 in the Northern District of Ohio.  (Cases 1:10CV01370 and 1:11CV00082 against Safeco; Case 1:12CV01068 against State Farm; and Case 1:12CV01070 against Hartford.)  One of the defendants is Safeco Insurance Company, which has Liberty Mutual as its parent.  In 2012 and 2013 Liberty Mutual filed ten covered business method patent review (CBM) petitions (two CBM petitions were filed per patent).  Eight of these ten petitions were instituted for trial and two petitions were denied, but each of the five patents has at least one CBM where trial was instituted by the PTAB.

Liberty Mutual and the remaining defendants moved to stay the litigation based on the CBMs instituted.  Progressive opposed the motion to stay.  The District Court heard oral arguments on April 11, 2013, and granted the motion stay on April 17, 2013.

The court used a four-factor test set forth in the AIA section pertaining to CBMs (AIA § 18(b)(1), P.L. 112-29, 125 Stat. 284, 331):

  • (1) whether a stay, or the denial thereof, will simplify the issues in question and streamline the trial;
  • (2) whether discovery is complete and whether a trial date has been set;
  • (3) whether a stay, or the denial thereof, would unduly prejudice the nonmoving party or present a clear tactical advantage for the moving party; and
  • (4) whether a stay, or the denial thereof, will reduce the burden of litigation on the parties and on the court.

It is interesting that the Liberty Mutual litigation was previously stayed pending the outcome of ex parte reexaminations, yet the Court found the benefits of inter partes covered business method review compelling enough to order another stay pending the outcome of the PTAB trials.  Some of these benefits observed by the Court include:

  • CBM proceedings are inter partes rather than ex parte, which allows Liberty mutual “a better platform to advocate its interests.”
  • CBM proceedings are “presided over by a panel of three administrative judges whom are required to have ‘competent legal knowledge and scientific ability,’ 35 U.S.C. § 6(a), as opposed to a single patent examiner.”
  • To institute CBM review, the petitioner must show the claims are likely invalid, 35 U.S.C. § 324(a), which is more onerous than meeting the “substantial new question of patentability” standard required to initiate ex parte reexaminations.
  • The Court also found the short timeline of the CBM proceedings (to be completed within 18 months of institution of trial), to be attractive and likely to decide issues before the Court.

For further information the order for stay provides the details of the Court’s findings and has a detailed table attached at the last page showing the different CBMs and their status.

Patent Challenger Seeks PTAB Jurisdiction over “Involved” Pending Applications

Saturday, October 20th, 2012

The AIA provides new post-issuance proceedings to challenge issued patents.  But can these challenges be used to stop related pending patent prosecution dead in its tracks?  One recent inter partes review petition requests just that and time will tell whether the PTAB takes control of the related applications.

Chi Mei Innolux Corp. (CMI) filed a petition for inter partes review of U.S. Pat. No. 6,404,480 on October 19, 2012.  The ‘480 patent is owned by Semiconductor Energy Laboratory Co., Ltd. (SELC).  SELC sued CMI for patent infringement in a suit styled Semiconductor Energy Laboratory Co., Ltd. v. Chi Mei Innolux Corp., et al., SACV12-0021-JST (C.D. Cal.), filed on January 5, 2012.

The other patents-in-suit in the litigation are U.S. Patents 7,876,413; 7,697,102; 7,956,978; 8,068,204; and 7,923,311.  CMI has indicated that it will be filing petitions for inter partes review of these other patents-in-suit as well, and CMI hopes to have the resulting PTAB trials consolidated with the PTAB trial instituted for the present ‘480 inter partes review.

The family of patents and applications is shown in the following graphic:

 

Things get very interesting when CMI identifies the 12/257,514 and 12/257,521 applications as “involved applications” and requests a stay of prosecution of these involved applications:

37 C.F.R. 42.3 conveys exclusive jurisdiction to the PTAB over every involved application and patent during the proceeding, as the Board may order. See 35 U.S.C. 6 (b), as amended, 35 U.S.C. 326(c), and Public Law 112–29, section 18. The term “proceeding” is defined by 37 C.F.R. 42.2 as a trial or preliminary proceeding. Rule 42.2 also defines the term “preliminary proceeding” as beginning with the filing of an IPR petition. To this end, the PTAB now has jurisdiction over the following involved applications. [see graphic above]

Divisional applications 12/257,514 and 12/257,521 are actively being prosecuted before Art Unit 2871. As the family of applications claiming priority to the ‘480 patent remain active, these applications may be utilized as a basis to present patentably indistinct claims, and, may, if allowed to continue, proceed to issuance prior to the determination of the PTAB in this IPR. The issuance of such indistinct claims during the pendency of this IPR is at least inconsistent with 37 C.F.R. 42.373(d)(ii), and, would provide an “end-around” the reasonable number of substitute claims that may be presented in this proceeding. As such, further USPTO processing of these proceedings may prejudicial to the Petitioner’s interests and inconsistent with controlling PTAB rules. Petitioner respectfully submits that it is appropriate under the circumstances for the PTAB to suspend, sua sponte, further prosecution of the above noted applications, or at least require any further patent application filings, or claim changes be authorized by the PTAB prior to submission to the USPTO.

CMI is correct that the PTAB may acquire jurisdiction of involved patents and applications.  37 C.F.R. § 42.3 states:

(a) The Board may exercise exclusive jurisdiction within the Office over every involved application and patent during the proceeding, as the Board may order.

(b) A petition to institute a trial must be filed with the Board consistent with any time period required by statute.

Since “involved” means an application, patent, or claim that is the subject of the proceeding, it will be interesting to see whether the PTAB decides to order control of the pending applications as requested by CMI.

Creative attempts to use the AIA to challenge patents, such as this one, have only begun.  Many more will come.  The complexities of these challenges raise the stakes for patent owners.  They must now reconsider how they choose their patent counsel to make sure they understand not only how to make patent rights that will survive prosecution and litigation, but also rights that will survive reexamination and post-grant review proceedings.

Steady Stream of AIA Post-Issuance Review Petitions Filed in PTAB

Friday, October 19th, 2012

It has been a little over one month since post grant patent reviews were authorized by the AIA and the Patent Office Patent Review Processing System (PRPS) shows about 47 petitions on file in the PTAB.

Look at it this way to put things in perspective:

  • The 47 petitions filed over this past month are just shy in number of the total number of inter partes reexamination requests filed  in the first four years of the inter partes reexamination statute (only 53 total inter partes reexamination requests were filed in the years of 2000 to 2004 according to PTO statistics).
  • If this rate of filing continues for the next 11 months, we could see about 500 petitions in the first year period, which is more than the 374 inter partes reexamination requests filed in 2011.
  • Assuming we only see about 250 such petitions this year, that would roughly equate to the number of filings of inter partes reexamination requests filed in 2009 (258).

So regardless of how many filings are made over the year, AIA post-grant proceedings are off to a very fast start compared to the adoption of inter partes reexamination.  This is interesting because there is obvious popularity despite enhanced filing fees, costs of preparation, and estoppel.

Comparative Study of Post Issuance Review Options

Friday, September 21st, 2012

Today I had the pleasure of co-presenting at the Midwest IP Institute on various post-issuance proceedings with Kevin Rhodes, Chief Intellectual Property Counsel and President of 3M Innovative Properties Company.  A PDF of our joint presentation is found here.

The presentation provides a comparison between IPR (inter partes review), PGR (post grant review), and CBM (covered business method) patent review.  It contrasts these proceedings to ex parte reexamination (EPX).  The goal was to present the available options for review of patents now that inter partes reexamination is no longer available.

The presentation further covered administrative trials in the PTAB.  A hypothetical was used to demonstrate the use of litigation, IPR, PGR, CMB, and EPX depending on strength of 35 USC § 101 and § 112 arguments as opposed to 35 USC § 102 and § 103 prior art invalidity arguments.  Different scenarios were used to demonstrate the complexity of the analysis.

My thanks to Kevin Rhodes and 3M for allowing me to post these slides.

Preissuance Submission Final Rules Published July 17, 2012

Friday, July 20th, 2012

The Patent Office has published its final rules for preissuance submissions under the AIA. A copy of the final rules can be found here (2012-16710). I briefly summarized the rule requirements in a presentation that can be found here (Preissuance Submissions Final Rule July 17 2012).

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Declaratory Judgment Plaintiff and Stays Pending Reexamination

Monday, March 12th, 2012

In Interwoven, Inc. v. Vertical Computer Systems, Inc. (Case No. C 10-04645 RS, Northern District of California), Judge Richard Seeborg was less than persuaded by Interwoven’s attempt to obtain a stay after filing an ex parte reexamination of the patents in suit.

BACKGROUND

Vertical owns U.S. Pat. Nos. 6,826,744 and 7,716,629 relating to Internet technologies.  Vertical sued Microsoft in the Eastern District of Texas and settled in 2009.  Later, Vertical informed Interwoven that its products infringed the patents as well.   Interwoven filed a declaratory judgment action in the Northern District of California and Vertical countered with a counterclaim for patent infringement. (more…)

Do You Want That Post-Grant Review Super-Sized? – Part III

Tuesday, November 22nd, 2011

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.

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Do You Want That Post-Grant Review Super-Sized? – Part II

Wednesday, November 16th, 2011

This is the second post in a series of articles on PGR strategies.  In my last post I made the point that while patents come in all shapes and sizes, post-grant reviews (PGRs) don’t.  PGRs are very different from ex parte prosecution.  In ex parte prosecution, if a patent application includes 200 claims that are somehow not divided by restriction practice, there is a way to prosecute all of them using extensions of time, requests for continuing examination (RCEs), and an almost unlimited capacity to amend the claims if necessary.  In post-grant review, however, the Patent Owner has limited time to argue its position and limited opportunities to amend the issued patent.  Furthermore, the Petitioner may appear to have an initial advantage when a petition for a PGR is granted because the Patent Office will employ a heightened standard when deciding whether to grant a PGR.  The heightened standard provides that granted PGR petitions include grounds that are likely to result in a successful challenge at least one claim of the patent.  But at this stage, despite this initial “win” for Petitioner, the PGR is still young and there is much to consider.

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Strategic Use of Reexamination in view of the Patent Reform Bill

Monday, August 22nd, 2011

Last week I had the privilege of speaking on reexamination at the AIPLA Electronics and Computer Law Summit.  The title of my speech was “Strategic Use of Reexam after Patent Reform – Post-Grant Review and Inter Partes Review.”  The powerpoint presentation materials can be found here.  The materials assume that the bill currently pending before the Senate is passed substantially intact.  The speech focuses primarily on post-grant review and inter partes review.  It also touches on supplemental examination and the proposal to provide PGR-like review of “covered business methods.”  We shall see how Congress votes on the bill in September.

Estoppel in Post-Grant Review (cont’d)

Saturday, August 20th, 2011

In the previous post we discussed some aspects of post-grant review (PGR)  in the current bill before the Senate.  The grounds available for petition in PGR are more comprehensive than those available for traditional reexamination and and also for the grounds of petition slated for inter partes review.  So if the estoppel is on grounds that “Petitioner raised or reasonably could have raised during that post-grant review” then the estoppel arising from PGR is likely to be broader than other post-grant procedures (click on graphic above to enlarge).  That means a petitioner of a post-grant review has a lot to think about before filing a petition.

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