Posts Tagged ‘Post Grant Review’

New PTAB Trial Practice Rules Effective May 2, 2016

Monday, May 23rd, 2016

On April 1, 2016 the PTO published its final rule on Amendments to the Rules of Practice for Trials Before the Patent Trial and Appeal Board.  A small correction to these Amendments was published on April 27.  I presented a summary of these rule changes at the AIPLA Spring Meeting in Minneapolis, MN on May 18, 2016.  The slides from my presentation are attached.

The comments in the final rule make it clear that the PTAB will be publishing an updated Office Patent Trial Practice Guide to address these new rules and changes in practice since publication of the first Office Patent Trial Practice Guide.

Federal Circuit Reinforces PTAB’s Authority to Institute Trial on Selected Claims in Synopsis v. Mentor Graphics Appeal

Thursday, February 11th, 2016

Newcomers to post-grant proceedings are often surprised by the PTAB’s claim-by-claim approach to patent challenges under the America Invents Act.  When reporting statistics about IPRs, commentators tend to ignore these considerations:

  • First, an IPR petition can be drafted to challenge all or some of the claims of a patent.  So the set of challenged claims can be less than the set of issued patent claims.
  • Second, if the PTAB decides to institute trial, it will exercise its authority to identify exactly which claims it will institute for trial.
  • Third, of the claims instituted for trial, should the case result in a final written decision, all or some of those claims may be found unpatentable and any remaining claims may pass through the process unscathed.

A recent Federal Circuit majority opinion reinforced the PTAB’s interpretation that the AIA gave it authority to institute trial on less than all of the challenged claims.  In Synopsis, Inc. v. Mentor Graphics the majority found that the PTAB could exercise its authority to institute trial on a subset of the challenged claims and to enter its final written decision on the instituted claims.  (Synopsis, Inc. v. Mentor Graphics v. Lee,  Fed. Cir., 2014-1516, 2/10/16).  Synopsis argued that the AIA required the PTAB to provide a patentability determination of every challenged claim.  But the Federal Circuit disagreed, finding instead that the PTAB need only issue its final written decision on the claims instituted for challenge.

Judge Pauline Newman dissented, arguing that the PTAB’s interpretation it is contrary to the AIA and to the AIA’s purpose to provide an alternative and efficient forum for resolving patent validity issues, and that it leads to duplicative proceedings in the PTAB and the district courts.  Her interpretation of the AIA urges a final written decision for each of the claims challenged.  However, absent a petition for cert, the PTAB’s institution and final written practices will not be reversed any time soon based on Synopsis.

 

Target Wins Rehearing of IPR Joinder Decision with Expanded Panel

Friday, February 13th, 2015

Last fall, the Patent Trial and Appeal Board (PTAB or Board) interpreted the IPR joinder provision, 35 U.S.C. § 315(c), to require joinder requests by a non-party to an ongoing proceeding.  (Target Corp. v. Destination Maternity Corp., IPR2014-00508 and IPR2014-00509.)  Prior to that decision,  the Board had interpreted § 315(c) to allow for issue joinder by the petitioner of the original proceeding (see, for example Microsoft v. Proxyconn, IPR2013- 00109).  Of course, joinder was decided on a case-by-case basis, but had not previously been denied because the request was made by the petitioner of the original proceeding.

Target Corp. filed rehearing requests in both affected IPR proceedings in an effort to have the Board reconsider its interpretation of  35 U.S.C. § 315(c) with an expanded panel.  Target’s arguments are quite clearly stated in its Motion for Rehearing.  The Board granted Target’s rehearing request.  In a 4:3 decision,  the majority agreed that § 315(c) had been overly narrowly interpreted in the prior decision:

Turning now to the merits of the Request for Rehearing, the contention at the heart of Petitioner’s request for rehearing is that the denial of its Motion for Joinder was “based on an erroneously narrow interpretation of 35 U.S.C. § 315(c).” Paper 22, 1. We agree with Petitioner.

The majority read § 315(c)’s reference to “any person who properly files a petition under section 311” in conjunction with § 311’s requirement that the petition filer not be the patent owner, to broadly interpret § 315(c) to include any person except the patent owner.  This interpretation is at odds with the dissent’s analysis, which reads § 315(c)’s reference to “may join as a party” to literally require a new party for joinder:

The statute under which Petitioner seeks relief provides:

(c) JOINDER.—If the Director institutes an inter partes review, the Director, in his or her discretion, may join as a party to that inter partes review any person who properly files a petition under section 311 that the Director, after receiving a preliminary response under section 313 or the expiration of the time for filing such a response, determines warrants the institution of an inter partes review under section 314.

35 U.S.C. § 315(c) (emphasis added). The statute does not refer to the joining of a petition or new patentability challenges presented therein. Rather, it refers to the joining of a petitioner (i.e., “any person who properly files a petition”). Id. Further, it refers to the joining of that petitioner “as a party to [the instituted] inter partes review.” Id. Because Target is already a party to the proceeding in IPR2013-00531, Target cannot be joined to IPR2013-00531.

While the majority decision does align with panel decisions on joinder prior to Target, one must ask whether this issue is finally resolved by this expanded panel decision.  For example, what happens if another panel does not follow this interpretation § 315(c)?  Or suppose this decision is appealed; would the Federal Circuit reverse a Board decision on joinder as it relates to institution given its recent interpretation of 35 U.S.C. § 314(d) in In re Cuozzo Speed Technologies? (“We conclude that § 314(d) prohibits review of the decision to institute IPR even after a final decision. . . . Section 314(d) provides that the decision is both ‘nonappealable’ and ‘final,’ i.e., not subject to further review. 35 U.S.C. § 314(d).”)  Would a Federal Circuit appeal have to be in the form of a petition for writ of mandamus?  If so, how would that square with the mandamus decisions in In re Dominion Dealer Solutions, LLC, 749 F.3d 1379, 1381 (Fed. Cir. 2014)(mandamus relief not available to challenge the denial of a petition for IPR) and in In re Proctor & Gamble Co., 749 F.3d 1376, 1378–79 (Fed. Cir. 2014)(mandamus relief not available to provide immediate review of a decision to institute IPR)?

 

 

The Settlement Effect of PTAB Proceedings and Recent Patent Office Trial Statistics

Monday, December 29th, 2014

December 29, 2014

The Patent Trial and Appeal Board (PTAB) released statistics for AIA Patent Office trials as of Dec. 18, 2014.  Different commentators have recently reported that the institution rate for these proceedings has dropped to about 60-70 percent, depending on how you calculate it.  Those familiar with PTAB trial practice (IPR, CBM, PGR and derivation proceedings) understand that the trial statistics are moving targets, but they do provide some insight to interesting trends.

Based on the Dec. 18, 2014 data provided by the PTAB, it appears that the rate of denied petitions is approaching the rate of party settlements.  If the denial and settlement data are normalized to the number of filed trials (excluding the filings prior to decision on institution), the statistics show about a 20:20:60 percent relationship between settlements, denied proceedings, and instituted proceedings (ones that do not settle), respectively.  That means for every five petition filings, approximately one proceeding will be denied, one will settle early, and three will complete their trials.

But the filing of a petition is not always required to reach settlement between parties — the threat of a petition can provide all the impetus needed for settlement between parties.  This settlement effect of PTAB proceedings provides another opportunity for parties to attempt to settle their differences prior to the formal filing of an IPR, CBM, PGR or DER petition.  Frequently, the petition will be prepared to posture the matter for final discussion prior to its filing.  Once filed, the petition serves as valuable information for all other stakeholders interested in defeating the Patent Owner and its patent.  So a Patent Owner with some concern about the patentability of its patent has an incentive to settle with the prospective Petitioner before any petition is filed.

Of course, the PTO statistics cannot account for the cases where parties settle without filing a petition (“non-filed settlements”), so if the number of non-filed settlements is significant, then the PTO statistics underestimate the overall efficacy of post-grant proceedings for settlement of disputes between parties.

If you poll attorneys actively filing these petitions about the number of non-filed settlements they have accomplished compared to the number of petitions actually filed, you will get very different anecdotal responses.  Depending on that number, the impact on settlements of disputes in general (both formal proceedings and prior to formal proceedings) can be significant.

The following table shows how the settlement ratios change using different percentages of the number of matters that settle without any petition filing (percentage of non-filing settlements to that of post-filing settlements).  For example, if you estimate that for every 5 filed petitions, about 1 settlement occurs without a filed petition, refer to the 20% entry in the table below to find the aggregate percentage of disputes settled (including both pre-filing and post-filing disputes).  Using this 20% estimate, the aggregate percentage of disputes settled rises to roughly 33%, the percentage of denied cases drops to roughly 15%, and the percentage of matters going through full trial drops to roughly 48%.  This means for every six disputes, roughly two will settle (one with and one without a petition), one will be denied, and three will complete their trials.  Thus, by viewing disputes from a settlement perspective, including settlements obtained without filing a petition, the aggregate denial and institution rates necessarily fall and the efficacy of the challenges from an overall dispute perspective is enhanced, regardless of the win:loss ratio experienced by the parties at trial.

Of course, this is only a crude first approximation of settlement dynamics.  More information is needed to know the magnitude of the settlement effect of patent office trials on party settlements.  That information will be difficult to ascertain due to the confidential nature of such settlements, but each stakeholder can make its own approximation based on its experience.  Regardless, these settlements amplify the efficacy of the PTAB proceedings and their effect can be as significant as the known settlements arising from the PTAB proceedings themselves.

Table 1

Lex Machina’s 2013 Patent Litigation Report Shows Disparity Between Litigated Patents and those under PTAB Review

Wednesday, May 14th, 2014

Litigation and post-grant proceedings often go hand-in-hand. A new litigation report published by Lex Machina summarizes patent litigation data for 2013 and prior years.  It is an interesting report and very easy to digest.  Two findings caught my eye.  The first one relates to the overall number of patent litigation cases filed in 2013:

Plaintiffs filed 6,092 new patent cases in U.S. District Courts in 2013 . . .

The second finding is the number of U.S. Patents at issue in those filings:

4,917 patents were at issue in all cases filed during 2013.

That second number is surprising, because if understood correctly, the findings indicate that about 5 out of every 6 lawsuits filed in 2013 relate to different patents.  That ratio seems high — especially in view of the AIA litigation joinder provisions.  However, if we assume these numbers are roughly correct, they show a large difference between the number of patents asserted and the petitions filed in the PTAB.

For example, compare Lex Machina’s reported 4,917 patents at issue in 2013 suits with the 1,312 total IPR and CBM petitions on file in the PTAB from September 16, 2012 to May 8, 2014.  These numbers indicate that  at most about 1 out of 3 patents in litigation are the subject of a PTAB petition.  If true, that means several patents in litigation have not been submitted for review by the PTAB.

Of course, bear in mind that this is just a rough, unscientific approximation because:

  • not every petition in the PTAB relates to a new patent,
  • not every patent being challenged in the PTAB is in litigation, and
  • this crude approach does not attempt to correlate the petitions before the PTAB with a certain year of patent assertion.

Not every patent in suit is eligible for a post-issuance proceeding in the PTAB, so there is no reason to expect that every patent in suit will be the subject of a petition.  But, this data seems to indicate that there is still a large number of litigated patents that could be subject to future post-grant challenges. Readers are invited to contact me with better data than this admittedly rough approximation.  Please send me that information and I will try to post it to give a more accurate representation of patents in litigation versus those challenged in the PTAB.

 

See You at the AIPLA 2014 Spring Meeting!

Wednesday, April 30th, 2014

I am presenting at the AIPLA Spring Meeting on May 15, 2014 in Philadelphia and hope to see you there.  My task is to provide strategies for filing inter partes reviews, covered business method reviews and post-grant reviews.  I hope to see you there!

I just got back from the PLI Post-Grant Conference held in San Francisco.  The new world of patent litigation has only just begun and we are seeing many interesting ways that the AIA post-grant provisions are changing the way we view and value patents.  This year already has brought a lot of patent-related decisions from the PTAB, Federal Circuit, and Supreme Court.  There will be a lot to process in the months to come.  Stay tuned.

Join Me in San Francisco for PLI’s Post-Grant CLE Program on April 28

Friday, March 7th, 2014

I will be presenting at PLI’s “USPTO Post-Grant Patent Trials 2014” CLE Program on April 28th with a number of other post-grant practitioners. Please join us there or attend via webinar! — Timothy Bianchi

USPTO Statistics Show Inter Partes Patent Reviews are Frequently Settled Before Final Board Decision

Monday, February 17th, 2014

The U.S. Patent Office regularly posts statistics on post-grant proceedings such as inter partes review and covered business method patent review.   An excerpt of PTAB statistics for February 13, 2014 is found below.  The acronyms “FWD” and “RAJ” stand for “Final Written Decision on the merits” and “Request for Adverse Judgment.”  The “Other” category includes terminations due to dismissal.

IPR Stats for 2-13-2014

The number of trials with a final written decision on the merits (FWD) remains relatively small because IPR proceedings take roughly about a year and a half from filing of a petition to conclusion, and the AIA provision allowing IPRs is only about 17 months old.

Interestingly, the data shows a relatively high number of settled IPR proceedings.  These settlements can occur any time after the filing of the petition and before a final written decision on the merits.  Therefore, these settlements are made within months of the Petition filing rather than years.  Of course, all settlements are not equal.  Some result in the termination of both the Patent Office proceeding and the concurrent District Court litigation. Others may only  terminate the Patent Office proceeding.  And, as discussed in earlier posts, some settlements may dismiss the Petitioner from the Patent Office proceeding but maintain the proceeding against the Patent Owner.  Regardless, early settlements often favor the Petitioner and provide a “win” for the Petitioner.  And even if that is not the case, settlements executed before a final decision on the merits provide another opportunity for early discussion and resolution of patent disputes.

It should be noted that IPRs are responsible for more settlements than can be provided by these statistics, because many disputes are resolved by settlements achieved prior to any filing of IPR petitions (i.e., in cases where the Patent Owner is afforded an opportunity to settle before an IPR petition is filed).

It will be some time before more accurate statistics on IPRs will be available, however these settlement statistics show that parties can achieve some resolution of patent disputes very early in post-grant proceedings, and likely much earlier than in traditional litigation time frames.

Patent Office Board Clarifies Petitioner Role for Single Petition by Several Companies

Wednesday, February 12th, 2014

A petition for covered business method review, inter partes review, or post-grant review may  be filed on behalf of of several different parties and real parties in interest.  Typically, such filings involve one, two, or three named persons (e.g., companies) as the petitioner.  However, the Board’s rules do not state a limit on the number of persons that may sign a single petition. On October 15, 2013, thirty-five (35) companies were named in a Petition for a Covered Business Method Patent Review of U.S. Patent 8,146,077.  Agilysys, Inc. et al v. Ameranth, Inc., CBM2014-00014.  The companies named in the Petition include:

Slide1

The Patent Trial and Appeal Board (PTAB or Board) used this Petition to clarify its position on petitions naming several parties and real parties in interest. Id., Paper 11 (February 11, 2014).  The Board clarified that the Petition may name several companies, but that each cannot separately appear and independently participate:

On February 7, 2014, the Board initiated a conference call with the parties, to inform the parties that although thirty-five companies are identified in the petition as “Petitioners” and real parties-in-interest, the thirty-five companies collectively constitute only a single party in this proceeding before the Board. Consequently, the designation in the petition of fifteen pairs of lead and backup counsel, one pair for each of fifteen groupings of the thirty-five companies, is unacceptable. As a single party before the Board, all thirty-five companies must speak with a uniform voice, whether in writing or orally in a conference call, hearing, or deposition.

Counsel for Petitioner proposed that the thirty-five companies would file a single paper, sharing the pages among themselves, and in the event of differences  in the positions of the different companies, there would be one or more separate sections in the paper to articulate the differences.  Counsel for Patent Owner objected to this approach.  The Board agreed with Patent Owner:

The manner of conducting this proceeding, as proposed by [Counsel for Petitioner], is not in accordance with the rules governing trial practice and procedure before the Board. The thirty-five companies collectively filed a single petition, and thus, are recognized as a single party, as Petitioner, before the Board. According to 37 C.F.R. § 42.2, “Petitioner” means “the party filing a petition requesting that a trial be instituted.” In circumstances not involving a motion for joinder or consolidation of separate proceedings, for each “petition” there is but a single party filing the petition, no matter how many companies are listed as petitioner or petitioners and how many companies are identified as real parties-in-interest. Even though the separate companies regard and identify themselves as “Petitioners,” before the Board they constitute and stand in the shoes of a single “Petitioner.”

Because the thirty-five companies constitute, collectively, a single party, they must speak with a single voice, both in writing and oral representation. [Counsel for Petitioner’s] proposal transforms the “Petitioner” under 37 C.F.R. § 42.2 from a single party into thirty-five different parties. That is not only contrary to 37 C.F.R. § 42.2, which defines “Petitioner” as a single party by referring to “the party filing a petition,” but also prejudicial to Patent Owner, who potentially would have to respond to thirty-five different, possibly inconsistent, positions on every issue. Nor would the Board’s interests in the speedy and efficient resolution of post-grant proceedings be served by permitting the presentation of inconsistent positions based on the filing of a single petition.

The original Petition named fifteen pairs of lead and backup counsel.  Based on the “single petitioner” concept articulated by the Board, the Petitioner was ordered to file a paper to re-designate lead and backup counsel “by regarding itself as a single party” in accordance with 37 C.F.R. § 42.10(a) within a week of the Order entered February 11, 2014.

 

Board Proposes Solution for Petitioner if Expert Witness Not Available for Deposition in Patent Office Trial

Sunday, January 26th, 2014

In current post-grant practice, most petitions are accompanied by an expert declaration to support the assertions made by the petitioner.  If the petitioner successfully obtains institution of a patent office trial (inter partes review, covered business method patent review, or post-grant review), each declarant making a declaration for the petition must be made available for deposition.  But what happens if the declarant is not available?  One example is provided in Corning Gilbert Inc. v. PPC Broadband, Inc., IPR2013-00347.

In the Corning IPR, the Petitioner’s expert, Dr. Mroczkowski, signed a declaration that was submitted to support the IPR petition.  After institution of the IPR, the Board was informed that Dr. Mroczkowski had become ill with cancer and had to undergo surgery.  He was also undergoing weekly chemotherapy and daily radiation treatment during late December and scheduled for therapy up to early February.  Counsel for Petitioner requested a twelve week extension in order for Dr. Mroczkowski to recover and be available for deposition, noting that 35 U.S.C. § 316(a)(11) provides an additional  time (up to 6 months) to complete the IPR.

The Board declined a twelve week extension, and instead suggested that Petitioner attempt to locate another expert who would be willing to present the same testimony as Dr. Mroczkowski:

The Board considers reasonable an extension of approximately five weeks for Petitioner to locate and substitute, for Dr. Mroczkowski, another expert witness who would be willing to execute the same declaration executed by Dr. Mroczkowski, excluding the credentials and qualifications of Dr. Mroczkowski. Counsel for Petitioner expressed that obtaining another expert at this time would add to Petitioner’s cost, perhaps unnecessarily, because Dr. Mroczkowski may recover in time to be cross-examined.

The Board explained that five weeks will be provided to Petitioner to make an effort to resolve the difficulty presented by the illness of Petitioner’s original expert witness. Petitioner is free to forego that opportunity, and to depend on Dr. Mroczkowski’s getting well enough to be cross-examined at an appropriate time according to a revised schedule including the five-week extension. In that case, however, Petitioner will have made a litigation choice, and assumed the risk of events not proceeding according to plan.

(IPR2013-00347, Paper 18 at p. 3, December 23, 2013.)

The Board provided more guidance in its next order (Paper 20, January 2, 2014).  Counsel for Petitioner suggested that it file a declaration by a second expert “simply declaring that the second expert agrees with the opinions set forth in Dr. Mroczkowski’s declaration.”  The Board indicated that the proposed approach would still ultimately rely on the testimony of Dr. Mroczkowksi, “which is inappropriate if he cannot be cross-examined.”  (Paper 20 at p. 2.)  The Board offered another approach:

The Board inquired why the new expert could not execute a declaration literally having the same wording as in Dr. Mroczkowski’s declaration. Counsel for Corning replied that because the two experts will have different qualifications, paragraph numbers as referenced in Corning’s petition, directed to Dr. Mroczkowski’s declaration, likely will not match paragraph numbers in the declaration executed by the second expert witness.

To maintain the same paragraph numbers in the second declaration, however, Corning may present qualifications of its second expert witness in a separate exhibit or in later paragraphs, and then use blank spaces to occupy the paragraphs which, in the first expert declaration, express the qualifications of Dr. Mroczkowski. If such a substitute expert declaration is filed, however, Corning also should file a substitute petition that refers to the declaration by the substitute expert witness, and not the declaration of Dr. Mroczkowski.

The Board asked the parties to try to reach agreement as to the various specifics about Corning’s potentially filing of a substitute declaration from another expert witness, to replace that of Dr. Mroczkowski, before contacting the Board with a proposal.

The parties appear to have agreed to new dates, as set forth in a Notice of Stipulation to Extend Due Dates 1-3 (Paper 21, January 14, 2014).  However, there is nothing further in the record to reflect whether agreement was reached as to the possible filing of a substitute declaration as of the date of this post.

It remains to be seen if this approach is employed in other contested proceedings, since it is inevitable that an expert witness will occasionally be unable to testify after institution of a proceeding.

[Editor’s Note:   All of us who have had friends or family touched by cancer empathize with Dr. Mroczkowski’s situation, and we wish him a full and speedy recovery.]