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Inter Partes Review of Patents

Richard P. Beem

Beem Patent Law Firm

www.BeemLaw.com

Chicago, IL US

© Beem Patent Law 2015Permission is granted to reproduce with attribution

Chicago Bar AssociationIntellectual Property Law Committee

March 24, 2015

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What is PTAB?

• Patent Trial and Appeal Board• Instituted as a result of AIA• Formerly, BPAI – Board of Patent Appeals and

Interferences• Appeals from patent prosecution• Post Grant Procedures• Chief judge, lead judges• PTAB webpage:

www.uspto.gov/patents-application-process/patent-trial-and-appeal-board-0

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Post-Grant Procedures

• Post-Grant Procedures• Post Grant Review (PGR)• Inter Partes Review (IPR)• Covered Business Method (CBM)

• IPR is most popular of post-grant procedures

Major Differences between IPR, PGR, and CBMPost Grant Procedure

Petitioner Estoppel Standard Basis

Post Grant Review (PGR)

• Person who is not the patent owner and has not previously filed a civil action challenging the validity of a claim of the patent

• Must identify all real parties in interest

• Raised or reasonably could have raised

• Applied to subsequent USPTO/district court/ITC action

More likely than notORNovel or unsettled legal question important to other patents/applications

101, 102, 103, 112, double patenting but not best mode

Inter Partes Review (IPR)

• Person who is not the patent owner, has not previously filed a civil action challenging the validity of a claim of the patent, and has not been served with a complaint alleging infringement of the patent more than 1 year prior (exception for joinder)

• Must identify all real parties in interest

• Raised or reasonably could have raised

• Applied to subsequent USPTO/district court/ITC action

Reasonable likelihood 102 and 103 based on patents and printed publications

Covered Business Method (CBM)

• Must be sued or charged with infringement

• Financial product or service• Excludes technological

inventions• Must identify all real parties in

interest

• Office—raised or reasonably could have raised

• Court-raised

Same as PGR Same as PGR (some 102 differences)

4Source: USPTO

Major Differences between IPR, PGR, and CBMPost Grant Procedure Petitioner

Post Grant Review (PGR) • Person who is not the patent owner and has not previously filed a civil action challenging the validity of a claim of the patent

• Must identify all real parties in interest• Must be filed within 9 months of issue date

Inter Partes Review (IPR) • Person who is not the patent owner, has not previously filed a civil action challenging the validity of a claim of the patent, and has not been served with a complaint alleging infringement of the patent more than 1 year prior (exception for joinder)

• Must identify all real parties in interest• Cannot be filed until 9 months after issue date• Must await decision on any pending PGR petition

Covered Business Method (CBM)

• Must be sued or charged with infringement• Financial product or service• Excludes technological inventions• Must identify all real parties in interest

5Source: USPTO

Major Differences between IPR, PGR, and CBMPost Grant Procedure

Estoppel Standard Basis

Post Grant Review (PGR)

• Raised or reasonably could have raised

• Applied to subsequent USPTO/district court/ITC action

More likely than notORNovel or unsettled legal question important to other patents/applications

101, 102, 103, 112, double patenting but not best mode

Inter Partes Review (IPR)

• Raised or reasonably could have raised

• Applied to subsequent USPTO/district court/ITC action

Reasonable likelihood 102 and 103 based on patents and printed publications

Covered Business Method (CBM)

• Office—raised or reasonably could have raised

• Court—raised

Same as PGR Same as PGR (some 102 differences)

6Source: USPTO

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Why Inter Partes Review?

• Because district court litigation is expensive

• Similar to European invalidation procedures

• Faster, cheaper decision

• District courts aren’t technical

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When to Use Inter Partes Review?• File promptly if sued for patent infringement• Requirements: timing

• Petition for IPR will be barred if it is “filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.”  35 U.S.C. §315(b)

• Cannot be filed until 9 months after issue date• Must await decision on any pending PGR petition

• Can’t file civil action for D.J. of invalidity in D.Ct. 35 U.S.C. §315(a)

• Limited to §§102, 103 based on patents and printed publications 35 U.S.C. §311(b)

• Decision: roughly 18 months

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IPR Procedure

• Petition• Preliminary response optional• Institution (90% of petitions result in trial being

instituted)• Discovery• Motion practice: must arrange telecon to get permission

to file motion; often decided on the spot without a motion

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Inter Partes Review Timeline

Source: USPTO

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• 3 monthsPetition Filed

• No More than 3 months

PO Preliminar

y Response (optional)

• 3 monthsDecision

on Petition

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• 3 monthsDecisio

n on Petition

• 3 months

PO Response & Motion to Amend

Claims

Petitioner Reply to PO Response & Opposition

to Amendment

PO Discovery Period

Petitioner Discovery Period

PO Discovery Period

No more than 12 months for discovery

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• 1 month

Petitioner Reply to PO Response & Opposition

to Amendment

• Hearing Set on Request

PO Reply

to Opposition

to Amendment

Oral Hearing

Final Written

Decision

Period for Observations &

Motions to Exclude Evidence

PO Discovery Period

No more than 12 months for discovery

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IPR Petitions• The petition is your

entire case-in-chief• Support it with expert

testimony (evidence) in the form of a declaration

• Page limit and formatting requirements (37 C.F.R. 42)

• Review Request fee and Post-Institution fee upfront ($23,000+)

Fee Code Fee Description Amount

1406 IPR review request fee–up to 20 claims

$9,000

1414 IPR review post-institution fee–up to 15 claims

$14,000

1407 IPR review request in excess of 20

$200/claim

1415 IPR post-institution request in excess of 15

$400/claim

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IPR Petitioners:

Your petition is your day in court.

• This is not notice pleading

• Make your petition tight

• Present best arguments only

• Make it complete

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IPR Petition Length and Format

• 60 page limit

• 14 pt. font, double spaced

• No arguments in claim chart• Intended to prevent circumvention of page/font/spacing

requirements• Assertions on knowledge of one of ordinary skill may be

objectionable as argument

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IPR Petitions

• How do you know what claims to challenge?

• What if there are 162 claims?

• Most cases do not dispose of all claims

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IPR Petitions Terminated by January 15, 2015

• 20,206 Claims in 617 Patents Petitioned• 9,048 Claims Challenged• 6,114 Claims Instituted• 68% of Claims Challenged• 425 of 617 Petitions

• 2,176 Claims Found Unpatentable• 36% of Claims Instituted• 24% of Claims Challenged• 173 of 617 Petitions

Source: USPTO

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Grounds Must Not be Redundant (I)

• Take your best shot with one §102 or two §103 prior art references—patents or publications• A “publication” is theoretically available but often it

won’t be sufficiently complete• Not public use—that will have to wait for D.Ct.

• Must not be redundant (hundreds of grounds were advanced, PTAB said cut it down, or when we get to first redundant ground, we’re stopping)• Claim construction

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Grounds Must Not be Redundant (II)

• Note: decisions often include little analysis to support the redundancy conclusion.• Permobil v. Pride Mobility Products, IPR2013-00407• Instituted review based on 2 of 13 combinations of prior art.• Denied petitioner's proposed alternate grounds as redundant

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Decision Points for Patent Owner

• Think twice before filing infringement suit – expect IPR

• Get started immediately, including getting experts onboard

• Preliminary response is optional and cannot include expert evidence• Pros and cons of filing prelim response

• If instituted, PO may take discovery and file response• Support with expert testimony

• Motion to amend claims permitted • First must confer with Board• Likelihood: fuhgeddaboutit

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Experts• Why an expert? Because that’s evidence.

• Monsanto Company v. Pioneer Hi-Bred International, Inc., IPR2013-00022• Monsanto’s expert testimony not considered because conclusory. Left only attorney

argument and prior art. Denied Monsanto’s petition.

• Not submitting expert testimony makes Board more likely to find in favor of opposing expert.

• But see• Biodelivery Sciences Int'l, Inc., Petitioner, IPR2014-00325.

• PTAB expects affidavits/declarations of experts (in complex cases).

• However, “expert testimony is not a per se requirement.”

• Primera Tech., Inc., Petitioner, IPR2013-00196• PTAB “reject[s] the notion that the failure to present expert testimony on a position presented in

a petition necessarily compels us to ignore or excuse that position.”

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Motions to Stay—District Court

• Accused infringer: File motion to stay?• When to file motion to stay (timing of IPR)? • What if District Court refuses to stay?

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Treatment of AIA’s four-factor test for stay:

• File motion early, perhaps before PTAB issues decision on whether to institute IPR

• Including all asserted patent claims in instituted IPR proceeding weighs heavily in favor of stay

• Can no longer successfully argue that stay should be denied because IPR will likely not result in finding of invalidity. Improper collateral attack.

• Motion to amend patent claims in IPR weighs in favor of stay because potentially changing claim language may complicate claim construction if stay is not granted.

• Failure of patentee to seek preliminary injunction weighs in favor of stay because its goes against argument that patentee will be prejudiced without stay

• delay by patentee in filing suit weighs in favor of stay because it also weighs against prejudice absent stay

• Alleged loss of evidence due to witnesses’ ages will not be given much weight—VirtualAgility Inc. v. Salesforce.com, Inc., No. 2014-1232

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Settlement and Termination of IPR (I)

• Settlement• Mediation – private• Requires board approval• Termination not automatic• How: request phone conference, get permission to file

motion, state why PTAB should dismiss after finding good grounds to institute• What must be filed on the record

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Settlement and Termination of IPR (II)• Settlement does not guarantee termination of proceeding. Section 317 provides that “Office

may terminate the review or proceed to a final written decision under section 318(a).”

• Less inclined to terminate when settlement occurs at an advanced stage. Settle early and before final briefings are filed• Blackberry Corp. v. Mobilemedia Ideas, IPR2013-00016

• Declined to terminate when parties filed joint motion to terminate seven months after institution and one day before oral hearing

• Blackberry v. MobileMedia, IPR2013-00036• Declined to terminate when the parties fully briefed issues and oral hearing had already taken place

• But see• IBM Corp. v. Financial Systems Technology, IPR2013-00078

• Agreed to terminate proceedings settled during petition stage.

• Hitachi Cable America Inc. v. Belden Inc., IPR2013-00408

• Agreed to terminate proceedings settled within first few months of trial.

• Sony Corp. v. Tessera, Inc., IPR2012-00033

• Agreed to terminate proceedings ten days before oral argument.

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Terms of Art in IPRs

• Petition (want to have all ducks in a row – this is your whole case!) • Institute Trial (paper record! Not what we normally think

of).• Oral Hearing (judges are well prepared; come into it

with a tentative decision).

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Key Learnings and Take-Aways• On timeline, at minus 2-3-5 years, file better, more thorough patent

applications after good prior art search; make sure claims distinguish over prior art• Aim for IPR-proof patents• IPR may not dispose of all issues• IPR petitioner: your petition is your trial present your entire best case-

in-chief including written expert testimony in form of declaration and claim charts with one or two best prior art references• For both parties: thorough preparation with expert support is key; start

early and allow plenty of time• District Court infringement litigation has cooled• An IPR-proved patent is golden (estoppel – yet TBD)

© Beem Patent Law 2015 29

Questions?

© Beem Patent Law 2015 30

Thank you!

Richard P. Beem Beem Patent Law Firm

www.BeemLaw.com

 Presentation (subject to revisions) is intended to be posted on SlideShare: www.slideshare.net/RichardBeem Visit our blog, Beem on Patents, for additional updates and information on patent law and IPRs: www.beemonpatents.com