Third-Party Challenges to Patents and Patent Applications at the USPTO: IPR, PGR, Preissuance Submissions

Marcus SimonPartner, Patent Prosecution Group

Dorsey & Whitney LLPSalt Lake City Office

Ask questions as we go….

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Third-Party Challenges to Patents and Patent Applications at the USPTO

• Third-party challenges to patents or patent applications include:– Inter partes review (IPR)

• USPTO fees ~$25k• $350k-$700k professional fees to completion• Typical patent case is $1-$5 million to completion

– Post grant review (PGR)– Ex Parte Reexamination– Covered Business method patent review (CBM)– Preissuance submissions– Derivation proceedings

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Inter Partes Review

• Standard to initiate: – “reasonable likelihood that the petitioner would prevail with respect

to at least 1 of the claims challenged in the petition”

• Grounds for filing for IPR:– ONLY anticipation or obviousness (§ 102 or §103 ) – ONLY based on patents or printed publications

• Who may file for IPR:– anyone other than patent owner

• provided they did not file a civil action challenging validity• Counterclaim is okay. 35 USC § 315(a)(3).• provided that petitioner, privy, or real party in interest was not served

with complaint by patent owner more than 1 year ago

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Inter Partes Review Cont’d

• When can a party file a petition for IPR:– First-to-invent patents (effective filing date 3/15/13 or earlier)

o IPR or CBM any time after granto PGR not available

– First-to-file AIA patents (effective filing date after 3/15/13)o IPR or CBM 9 months after grant or after PGR is completeo PGR with 9 months of grant

o A party must petition for IPR within a year of being served with a complaint asserting infringement of the patent. 35 USC § 315 (Statutory Bar).

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Efficient Resolution of Validity

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Who is in charge? 3 Administrative patent judges

Communication Emphasis on access and quick decisions (encourages conference calls)

FlexibilityParties can stipulate to different dates than the scheduling order (but not different oral hearing date). Trial Practice Guidelines (77 F.R. 48,756).

DiscoveryLimited, routine discovery is allowed. Parties may agree to additional discovery between themselves. 37 C.F.R.§ 42.51(b)(2).

Speed

Final written decision w/in 12 months of initiation of proceedings (grant of petition). But can extend 6 months for good cause. 35 U.S.C.§ 316(a)(11), 37 CFR 42.100

The PTAB recently confirmed that they are committed to meeting the 12 month deadline, despite the increasing workload

Stages and (target) Timeline

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• Old inter partes reexamination proceedings

• Inter partes review proceedings

IPR Timeline

Petition

• Petition lays out the grounds (§ 102 or § 103) and supporting evidence for the challenge, on a claim-by-claim basis

• Petition must provide a claim construction for the challenged clams – broadest reasonable interpretation rather than a Phillips-Type claim construction in district court

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Patent Owner Preliminary Response

• May set forth reasons not to institute, “based upon the failure of the petition to meet any requirement of this chapter.” 35 USC § 313; 37 CFR § 42.107(a).– Procedural

• RPI not identified, etc. If statutory, lose filing date.• Statutorily barred• Same or substantially the same art or arguments were previously considered by

the PTO. 35 U.S.C. § 325(d).– Substance

• References are not prior art• Claim construction is incorrect• Element not disclosed in prior art• No reasonable rationale to combine

• Owner may waive right to file preliminary response8

Decision on Petition

• PTAB sets forth grounds and specific claims for trial• PTAB issues scheduling order for trial• Patent owner discovery period until its response

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Owner Response/Amendment

• Any amendment must be made by this date• Generally, only one motion to amend is permitted. 35

U.S.C. § 316(d)(1)• Petitioner discovery period until its reply to the

owner’s response and opposition to any amendments

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Motions to Amend Claims During Proceedings

• 37 CFR § 42.121 – Amendment must respond to the grounds raised in the IPR petition – May not enlarge scope of claims or introduce new matter – May only propose a reasonable number of substitute claims

(presumed to be only one substitute claim per challenged claim) – Motion to amend must set forth the support in the original

disclosure of the patent for each claim that is added or amended

• Patent owner has high burden of demonstrating patentability based on all of the prior art owner knows about (and establish what would have been known to OOS). See Idle Free Systems Inc. v. Bergstrom Inc., IPR2012-00027, June 11, 2013 (Paper 26)

• Only one motion to amend has been grantedInt’l Flavors & Fragrances, Inc. v. U.S. Dept. of Agr., IPR2013-00124, May 20, 2014 (Paper 12) (unopposed)

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Petitioner Reply/Oppose

• Petitioner replies and opposes any motion to amend• Patent owner discovery period until its reply to the

petitioner’s opposition

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Owner Reply

• Owner replies to petitioner’s opposition to owner’s motion to amend

• Hearing set on request• Starts period for observations and motions to

exclude

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Oral Hearing

• No new evidence or arguments may be presented at the oral hearing

• Trial Practice Guidelines suggest that live testimony generally unnecessary– Exception: where one party raises lack of credibility of other party’s

declarant/witness’s testimony as an issue. K-40 Electronics v. Escort (IPR2013-00203), May 30, 2014 Order (allowing testimony from inventor)

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Increasing Popularity

15http://www.uspto.gov/ip/boards/bpai/stats/112714_aia_stat_graph.pdf

Success Rate of IPRs – Very Petitioner Friendly

• ~85% of petitions granted• ~70% of stays granted in patent litigation cases

in which an IPR was filed• ~60% - all claims deemed unpatentable – very

high• ~76% of IPRs resulted in cancellation or

amendment of at least some claims – extremely high

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Electrical/Computer Patents are Challenged Most Often

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http://www.uspto.gov/ip/boards/bpai/stats/112714_aia_stat_graph.pdf

Post Grant Review

• Standard for granting petition to institute PGR: – Target patent must be a first-to-file application (post-AIA

application) and information presented shows that it is “more likely than not that at least one of the claims challenged in the petition is unpatentable.” 35 USC §324(a). Or that the petition raises a novel or unsettled legal question that is important to other patents or patent applications. 35 USC §324(b).

• Grounds for filing:– A petition may be filed based on §§ 101, 102, 103, and 112 (except

best mode)

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Post Grant Review, Cont’d

• Who may file for post grant review:– anyone other than the patent owner

• provided they did not file a civil action challenging validity• Counterclaim is okay. 35 USC §315(a)(3).• provided that petitioner, privy, or real party in interest was not served with

complaint by patent owner more than 1 year ago• When must a petition be filed:

• Within 9 months of grant of target patent• Time line and procedures are similar to those described above

for inter partes review.

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Covered Business Method Patent Review

• What is a covered business method?– Generally defined in the AIA as a method or corresponding

apparatus for performing data processing or other operations for a financial product or service

– Definition excludes patents for “technological inventions”• Standard for granting petition to institute CBM:

– Target patent must be a covered business method patent (pre or post-AIA), and information presented shows that it is “more likely than not that at least one of the claims challenged in the petition is unpatentable.” 35 USC §324(a). Or that the petition raises a novel or unsettled legal question that is important to other patents or patent applications. 35 USC §324(b).

• Grounds for filing:– A petition may be filed based on §§ 101, 102, 103, and 112 (except

best mode)

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Covered Business Method Patent Review, Cont’d

• Who may file a petition:– A person who was sued or charged with infringement

• "Charged with" means has standing to bring a declaratory judgment action

• When must a petition be filed:• any time after grant of application and outside of the time that post-

grant review proceedings may be instituted (9 months after grant), or any time after a post grant review is completed.

• Time line and procedures are similar to those described above for inter partes review.

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IPR PGR CBMAll patents are eligible (both Pre and Post AIA filing dates)

Petitioner has not filed an invalidity action and petition is filed no more than one year after service of infringement complaint

Only §§ 102 and 103 grounds based on patents or printed publication

Only FTF (post AIA) patents are eligible

Petitioner has not filed an invalidity action and petition filed within 9 months of patent grant

Only §§ 101, 102, 103, and 112, except best mode

All covered business method patents are eligible

Petitioner must be sued or charged w/ infringement

Only §§ 101, 102, 103, and 112, except best mode

Major Differences Between AIA Actions

Derivation Proceedings

• Instituted for post-AIA claims to determine whether an earlier filing inventor derived their invention from another inventor’s work.

• Standard for Granting Petition, the petition must: – State with particularity the basis for finding that a named inventor in

the earlier application derived the claimed invention from an inventor named in the petitioner’s application, and without authorization for the filed earlier application.

– Set forth a claim to the same or substantially the same invention.– Be made under oath and supported by substantial evidence. 35 USC

§135(a).– Decision to institute proceedings is final and non-appealable. Id.

• Grounds for Filing: claim that earlier filing inventor filed application, without authorization, on invention derived from work of later filing inventor

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Derivation Proceedings, Cont’d

• Who can file a petition: – Only an applicant for a patent may file a petition to institute

derivation proceedings (must file a patent with or before petition)

• When: – Must be within 1 year of first publication of earlier filed application

• Time line and procedures are similar to those described above for inter partes review.

• Note: for pre-AIA applications, interference proceedings are still available.

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Comparison of Thresholds for Grant of Petition to Institute Proceedings

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• IPR: Information presented shows that there is “a reasonable likelihood that the petitioner would prevail with respect to a least one of the claims challenged in the petition.” 35 USC §314(a).

• PGR: Information presented shows that it is “more likely than not that at least one of the claims challenged in the petition is unpatentable.” 35 USC §324(a). Or that the petition raises a novel or unsettled legal question that is important to other patents or patent applications. 35 USC §324(b).

• CBM: Same as PGR. AIA §18(a)(1).• Derivation: The petition demonstrates that the standards for

instituting a derivation are met. 35 USC §135(a).

Third-Party Preissuance Submissions

• Under 35 U.S.C. § 122(e), a third-party may submit patents, published applications, or other printed or other printed publications of potential relevance to the examination of a patent application with a concise description of the asserted relevance of each document submitted.

• Such submissions must be made before (1) the later of 6 months after the date of publication, or the date of the first office action on the merits; or (2) before the date of a notice of allowance, if earlier.

• This is an ex parte process, wherein no further communication is held after submission of the reference(s).– Third party now has the option to request email notification regarding

whether the submission was found compliant or non-compliant

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Proper Third-Party Preissuance Submissions

• No fee for first submission by a party against an application if submitting 3 or less references.

• $180 for every 10 documents filed• Compliance with requirements:

– Must be timely filed– Must be accompanied by fee (if required)– Third party must submit reference(s) and a concise description of

relevance of each, the concise description must:• Be more than a bare statement that the reference is relevant• Be free of conclusions or argument of patentability

• Failure to comply with requirements will result in references not being considered and loss of fee payment

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Thanks for your attention! Questions?

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Marcus S. SimonPartner, U.S. Patent Attorney

Patent Group Head – SLC OfficeDorsey & Whitney LLP

136 South Main Street, Suite1000Salt Lake City, Utah 84101

Phone: (801) 933-7360simon.marcus@dorsey.com