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Trial practice before the PTAB in contested proceedings

INTELLECTUAL PROPERTY LAW SECTIONDALLAS BAR ASSOCIATION

October 18, 2012Dallas, Texas

Marc A . HubbardHUBBARD LAW, PLLC

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Inter partes reviews filed through Oct. 14, 2012

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Covered business method reviews filed through Oct. 15, 2012

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Topics

• Overview of timing of basic trial procedures in context of reviews

• Overview of motion practice, evidence and discovery

• Discussion of some key issues

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Rules governing trial procedures at PTAB

• Part 42, Subpart A, of 37 C.F.R. governs trial in four types of contested proceedings:

• Inter partes review (IPR)

• Post grant review (PGR)

• Transitional covered business method patent review (CBMR)

• Derivation proceeding

• Detailed guidance: Office Patent Trial Practice Guide

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PTAB Contested Proceeding Overview

Optional PO response

Decision on authorization

3 months

< 3 months

Rehearing

Petition Filed

Decision on rehearing

Trial

Trial

Yes

No

No

Yes

Final decision

SettlementYes

No

Dismissal*

Motion for rehearing /

Appeal to Fed. Cir.

*Unless board has already made a decision

No appeal / Try again <12 months, unless

extended by 6 months

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Petition

• Standing

• Must certify that patent/application available for review and demonstrate that statutory requirements for bringing proceeding have met

• Must certify that petitioner is not barred or estopped

• Mandatory notices (Real party in interest, related matters, lead and backup counsel, service information)

• Challenge to one or more claims

• Evidence

• All evidence relied upon must be filed with petition (subject to limited opportunities to supplement)

• Filing fee

• Must accompany petition; non-refundable

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Challenge

• For each challenged claim

• Proposed claim construction

• Can be sufficient to state simply “broadest reasonable interpretation, as understood by one of ordinary skill in the art and consistent with the disclosure”

• Board will apply the broadest reasonably interpretation standard

• If specific term should have a meaning other than a plain meaning, must identify support in disclosure for it

• Specific statutory grounds (§102, §103 for IPR, PGR and CBM; §§101 and112 for PGR and CBMR)

• How claim is unpatentable

• Must specify exhibit # and specific portions of evidence to support challenge

• Claim charts recommended, but count toward page limits (unless attached as evidence from other case)

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Patent owner’s preliminary response

• Optional

• Evidence can be attached, but no testimony can be taken prior to authorization of trial

• May disclaim one or more claims

• May waive response early in time period in order to expedite decision by Board on whether to authorize trial

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Types of responses for a patent owner to consider

• The petitioner is statutorily barred

• The references are not in fact prior art

• The prior art lacks a material limitation found in all of the independent claims

• The prior art teaches or suggests away from a combination

• The claim interpretation is unreasonable

• For post-grant review raising §101 grounds, a brief explanation as to how the challenged claims are directed to a patent-eligible invention

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Institution of trial

• For IPR

• Petition must demonstrate a reasonable likelihood that petition would prevail as to at least one of the challenged claims

• Viewed by PTAB as giving it more discretion (can be 50/50)

• For PGR/CBMR

• Petition must demonstrate that it is more likely than not that at least one challenged claim is unpatentable

• Board will identify claims and specific grounds on which trial is being authorized

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Trial management

• Board has broad discretion manage the proceeding as it sees fit, but within confines of statutory requirements

• Scheduling order (see model in Trial Guide) sets up stages

• All relief must be sought through petition or motion

• Motions may only be entered with Board approval

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Standard Schedule for IPR/PGR/CBMR

Board decides to institute trial and issues scheduling order

PO: (1) response to petition; (2) motion to amend claims

Petitioner: (1) reply to PO response and (2) opposition to motion to amend

Initial conference call

(1) 3 months

PO Discovery

Period

(2) 6 months

Petitioner Discovery

Period

PO: reply to opposition to amendment(3) 7 months

PO Discovery

Period

Oral Hearing (only upon request)

Pet: motion for observations on cross-x of reply witnessesPO/Pet: motion to exclude evidence / req. hearing

Due Dates Set By Scheduling Order (Parties may stipulate to different dates for 1 to 5)

Pet/PO: Opposition to motion to exclude PO: response to observations

Replies to motions to exclude

0

(4) 7 months + 3 weeks

(5) 8 months + 1 week

(6) 8 months + 2 weeks

Final Decision12 months

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Patent owner’s response to petition

• Identify all involved claims that are believed to be patentable

• State basis for that belief

• Include any affidavits and other additional factual evidence to be relied upon

• Explain relevance of the evidence

• May include claim charts

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Motion practice

• No motion will not be entered without prior Board authorization, except —

• if impractical to seek prior Board authorization (e.g. motions to seal and motions filed with petition)

• motions for which authorization is automatically granted by rules or in scheduling order (e.g. requests for rehearing, observations on cross-examination, and motions to exclude evidence)

• Generally, however, time limits are imposed for making these motions

• Authorization for all other motions obtained during initial conference call or subsequent call.

• Initial conference about one month from the date of institution to discuss the motions that the parties intend to file and to determine if any adjustment needs to be made to the Scheduling Order

• Procedural issues likely to be decided during conference calls to avoid need for additional briefing

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Motions to amend claims

• Only one motion to amend as of right (statutory)

• Timing

• Although permission to file is not required, patent owners expected to confer with Board before making it (preferably during initial conference call) as it may impact schedule

• Motion expected to be presented with patent owner’s response

• Good cause required for motions to amend sought later in proceeding (amendment to advance settlement usually good enough)

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Nature of amendment limited

• Generally, one substitute claim per challenged claim, unless need for more than one demonstrated

• Motion must identify support for each claim that is added or amended

• Motion can be denied if —

• Amendment does not respond to a ground of unpatentability involved in the trial

• Enlarges the scope of the claim or introduces new subject matter

• Petitioner may respond with additional evidence that addresses new issues

• Amendments are subject to §252 intervening rights

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Evidence

• Admissibility of evidence generally governed by Federal Rules of Evidence

• Testimony

• Uncompelled direct testimony by affidavits

• All other (compelled direct, cross-examination, redirect) by deposition

• Objections must be made to preserve right to move to exclude evidence

• To deposition evidence: at time of deposition

• 10 business days of institution of trial for evidence filed with Petition; otherwise 5 days of service

• May respond to objection by serving supplemental evidence within 10 business days

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Discovery

• Discovery not permitted except —

• For “routine discovery”

• On agreed upon mandatory initial disclosures, if agreed to by the parties prior to patent owner’s preliminary response

• On motion

• May ask for any type of discover permitted by FRCP

• As otherwise agreed by the parties

• Board expects to enter standard E-discovery order modeled after the Federal Circuit’s model order when party seeks ESI beyond routine discovery

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Routine discovery

• Cross-examination of affidavit testimony within time period authorized by Board in scheduling order

• Any exhibit cited in paper or in testimony must be served with paper or testimony, unless previously served or otherwise agreed by parties

• Mandatory disclosure of relevant information inconsistent with position advanced by party

• Must be served prior to or with paper containing inconsistent statement

• Does not apply to privileged documents

• This apparent duty extends to inventors, corporate officers and persons involved with preparation of documents

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Agreed upon “mandatory initial disclosures”

• Parties may agree to mandatory discovery in the form of initial disclosures

• To be done not later than filing of patent owner preliminary statement or time for filing the statement

• Upon institution of trial, parties may automatically take discovery of information identified in the initial disclosure

• Two options

• (1) FRCP Rule 26(a)(1)(A)

• (2) Much more extensive list of disclosures set out in the Trial Guide

• Initial disclosures must be filed as exhibits

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Discovery upon motion

• Any types of discovery available under the Federal Rules of Civil Procedure can be sought, but motion must be filed

• Grant of motion requires showing of —

• “interests of justice” for IPR and derivations (high threshold)

• “good cause” for in PGR and CBM (lower threshold)

• Example of when it might be sought:

• when a party raises an issue, where the evidence on that issue is uniquely in the possession of the party that raised it

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Supplemental information

• Within 1 month of institution of trial—parties may move to submit supplemental information relevant to a claim that is subject of trial

• Otherwise, party must request authorization to file a motion to submit the information; motion must show —

• why the supplemental information reasonably could not have been obtained earlier

• that consideration of the supplemental information would be in the interests-of-justice (a relatively high standard)

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Confidentiality / protective orders

• Petition may be filed with motion to seal (with proposed protective order: either its own or PTO default protective order)

• PO cannot see confidential information unless agrees to protective order supplied by Petitioner, or parties agree on one

• If not order agreed to prior to institution of trial, Board will enter default standard protective order

• Confidential information that is subject to a protective order will become public 45 days after denial of a petition or 45 days after final judgment

• Party may file a motion to expunge the information from the record prior to the information becoming public

• Redaction preferred over sealing of document

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Fees / Page limits on petitions

• Filing fees

• IPR: $27,200 + $600 per excess claim (over 20)

• PGR/CBM: $35,800 + $800 per excess claim

• Page limits: Petitions for IPR and Derivation limited to 60 pages; 80 pages for PGR/CBM (double-spacing; 14 point font; excludes exhibits)

• Claim charts can be single spaced

• Use claim charts from other proceedings as exhibits

• Omit extensive discussions of basic legal principles

• Break down claims and file multiple petitions

• Board might decline to institute proceeding if too many claims or too many references on grounds that it cannot be completed within 1 year

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Miscellaneous

• Counsel requirements

• Must specify lead and back up counsel

• Non-registered attorneys may apply for pro hac vice admission, but Board will condition admission on having lead counsel be registered with PTO

• Patent owner estoppel: PO may not take action inconsistent with an adverse judgment by obtaining patent:

• with patentably indistinct claims

• with an amendment to specification or drawing denied during trial

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Conclusion

• No trials have yet been authorized, so we don’t yet have anything to judge how well these will work

• Rules are geared toward keeping a tight control over the parties and to prevent abuses

• PTO is serious about its 1 year mandate

• Board seems to be very open and encourages interaction with it

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Marc A. HubbardHubbard Law PLLC740 E. Campbell Road, Suite 550 | Richardson, TX 75081(214) 396-6001 direct(214) 208.2601 mobile(214) 785-6958 faxwww.hubbardip.com

© 2012 Marc A. Hubbard

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