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Navigating the new patent office post grant proceedings


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  • 1. Navigating the New Patent Office Post-Grant Proceedings: USPTO as Friend and Foe Lissi Mojica Principal Dentons Silicon Valley, CA +1 650-798-0383 CLE Seminar for In-House Counsel June 5, 2014 Chicago, Illinois Dave Metzger Partner Dentons Chicago +1 312-876-2578 © 2014 Dentons. All rights reserved. Kevin Greenleaf Counsel Dentons Silicon Valley, CA +1 650-798-0381
  • 2. So You Have a Troll Problem 2 small-businesses/
  • 3. Patent Office Grants Junk Patents Fact or Fiction? 3 • "Taking a photo against a white background? Amazon owns the patent on that" • • IBM Patents Changing Color of E-Mail Text • • PTO issued two patents that are "exactly the same" • This American Live - "When Patents Attack" •
  • 4. What Did Amazon Actually Invent? 4 Claim defines invention's metes and bounds A Studio arrangement comprising: 1. a background… 2. a front light source… 3. an image capture position… 4. an elevated platform… 5. a first rear light source… 6. a second rear light source… 7. a third rear light source… 8. a fourth rear light source… 9. a top surface of the elevated platform… 10.the light sources comprise a combined intensity greater than the front light source according to about a 10:3 ratio…
  • 5. Today's Post-Grant Proceedings 5 Inter Partes Review (IPR) Transitional Program for Covered Business Method Patents (CBM) Ex Parte Reexamination (EPX) Reissue Supplemental Examination Post-Grant Review (PGR)
  • 6. PTAB a Patent "Death Squad"? 6 As of 5/1/14 PTAB Roundtable Slides
  • 7. Number of Filings 7 As of 5/1/14 PTAB Roundtable Slides
  • 8. Technology Breakdown 8 As of 5/1/14 PTAB Roundtable Slides
  • 9. What is a Post Grant Proceeding? • A PGP is any of various proceedings for having the USPTO reevaluate the validity of a patent claim. • Pre- America Invents Act (AIA) • Reissue • Ex parte Reexamination • Post-AIA • Supplemental Examination • Before Patent Trial and Appeal Board – Judges • Post-Grant Review • Inter Partes Review • Cover Business Method Review (Transitional) 9
  • 10. IPR / PGR / CBM 10 Faster and Less Expensive than Litigation • Decision within 1 year of institution • ≤ 6 months to institute • ≤ 6 months extension for good cause
  • 11. IPR / PGR / CBM 11 PGR/CBM • §§ 101, 102, 103, and 112 • 80 page petitions IPR • §§ 102 and 103 • 60 page petitions
  • 12. Types of PGPs 12 • Reissue – Good way to change claims • Identify an error due to, e.g., claiming more or less than to which the patentee is entitled. Other than some priority of consideration, examination is handled in the same way as any other regular application, i.e., open-ended. • Ex parte Reexamination – Good for anonymous attack on patent • The reexamination of claims for which a petition establishes a substantial new question of patentability (SNQ) as to anticipation or obviousness. Not an open- ended examination. Reexamination is handled by the CRU. Petition can be filed anonymously. • Supplemental Examination – Used to moot possible inequitable conduct • Essentially an ex parte reexamination, but not just prior art. Opportunity to cleanse a failure to cite prior art in the regular examination. • Less important after Therasense v. Becton
  • 13. Types of PGPs 13 • Post-Grant Review • A closed-ended (14-24 months) strict review when challenger establishes it is more likely than not, at least one claim is unpatentable. Only available within 9 months after issuing of an AIA patents. Challenger must not have sought declaratory judgment of invalidity. Broad grounds of challenge, i.e., not just anticipation and obviousness. • Inter Partes Review • A closed-ended (14-24 months) strict review when challenger establishes a reasonable likelihood of prevailing on at least one claim. Grounds of challenge limited to anticipation and obviousness.
  • 14. Types of PGPs 14 • Covered Business Method Review (Transitional) • Financial services / e-commerce related patents • For a subset of patents that cover: "data processing or other operations used in the practice, administration, or management of a financial product or service." • Similar to PGR, but only available to those who have been sued. Must show that it is more likely than not, at least one claim is unpatentable.
  • 15. Some proceedings not addressed in this discussion 15 • Inter Partes Reexamination (discontinued, but many cases ongoing) • Interference (only available for pre-AIA matters) • Derivation (only available for AIA matters, and not the usual invalidity challenge)
  • 16. Key Aspects 16 Settlement Real Part in Interest Cost (Filing and Attorney’s Fees) Estoppel (Petitioner and Patent Owner) Timing Discovery Interactions with Litigation
  • 17. Settlement Issues 17 • PGPs as a litigation strategy • Generally removes possibility of estoppel • Settling earlier makes it more likely to be granted
  • 18. Real Party in Interest 18 • Must identify all real parties in interest • Factors • Funding • Direction • Control • Joint defense group, alone, insufficient to make a party an RPI • Be careful when working with others on an IPR petition
  • 19. Cost 19 IPR - up to 20 claims - $9,000 IPR post-institution fee -up to 15 claims - $14,000 CBM - up to 20 claims - $12,000 CBM - post-institution fee -up to 15 claims - 18,000 Derivation Proceeding $400 Request for Ex Parte Reexamination $12,000
  • 20. Lower Cost 20 • Fees and costs vary depending upon complexity, expert testimony and number of challenged claims, but typically are in the $100,000 to $500,000 range because the they are limited to consideration of the challenged claims and exclude consideration of infringement or damages. • Discovery is limited, as is the presentation of evidence. • Motion practice is very restricted. • Challenger's case is made in the petition.
  • 21. Petitioner Estoppel 21 “What reasonably could have been raised” • PGR might change to what was raised • Dependent on amount of discovery allowed Claim-by-claim basis for IPR and PGR • New claims might be attacked in a different proceeding CBM • More limited – “any ground raised”
  • 22. Patent Owner Estoppel 22 • No action inconsistent with the adverse judgment • - A claim that is not patentably distinct • - An amendment of a specification or drawing that was denied • - Does not apply to an application or patent that has a different written description • Weaker estoppel than proposed rules
  • 23. Timeline / Scheduling Order 23 Petition PO Prelim. Response Decision/ Institution 1) PO Response 2) Motion to Amend* 1) Petitioner Reply 2) Opposit.* PO Reply* Oral Hearing Final Written Decision Trial Begins ≤ One Year Observations and Motions Petition PO Prelim. Response Decision/ Institution 1) PO Response 2) Motion to Amend* 1) Petitioner Reply 2) Opposit.* PO Reply* Oral Hearing Final Written Decision PO Discovery (3 months) Petitioner Discovery (3 months) PO Discovery (1 month) 3 ≤ 3 3 3 1 2 ≤ 3 months
  • 24. Interactions with Litigation 24 Cannot file a petition after filing for a DJ challenging validity May file for a DJ challenging validity after petition is filed in USPTO The Court must issue an automatic stay May not file an IPR 1 year after complaint IPR • DJ for non-infringement does not challenge validity • CBM – Must be “charged with infringement”
  • 25. Litigation 25 • AIA favors stays in CBMs • Courts starting to grant stays more liberally. About 60% are granted. Of those denied, some are waiting determination on institution, and then will revisit stay • Estoppel attaches at final written decision and applies on a claim-by- claim basis • Second/parallel bite at the apple-USPTO invalidity trumps non-final District Court liability
  • 26. Joinder Stats 26 As of 5/1/14 PTAB Roundtable Slides
  • 27. Appeal 27 Party may request rehearing at PTAB Party may appeal to Federal Circuit
  • 28. 28 • 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). • Request for Joinder. Joinder may be requested by a patent owner or petitioner. Any request for joinder must be filed, as a motion under § 42.22, no later than one month after the institution date of any inter partes review for which joinder is requested. The time period set forth in § 42.101(b) shall not apply when the petition is accompanied by a request for joinder. (37 C.F.R. § 42.122(b)). Joinder of Post-Grant Proceedings
  • 29. 29 • Can join pending IPR outside one-year window • Cannot raise substantial new issues • Cannot disrupt pending IPR too much Joinder of Post-Grant Proceedings
  • 30. “The Office anticipates that joinder will be allowed as of right—if an inter partes review is instituted on the basis of a petition, for example, a party that files an identical petition will be joined to that proceeding, and thus allowed to file its own briefs and make its own arguments.” Sony Corp. of America v. Network-1 Security Solutions, Inc., IPR2013-00495, paper 13 quoting 157 Cong. Rec. S1376 (daily ed. Mar. 8, 2011) (statement of Sen. Kly). “Joinder is not automatic, and the fact that joinder is permitted in one case under one set of facts does not mean it will be allowed in another case under a different set of fact.” Sony Corp. of America v. Network-1 Security Solutions, Inc., IPR2013-00495, paper 13 at 8, (September 16, 2013). 30 Joinder of Post-Grant Proceedings
  • 31. Factors to consider: • Differences in the products or processes alleged to infringe, possible different claim construction • The breadth of the claim scope, particularly if alleged later in litigation. • Claim-construction rulings that adopt claim interpretations that are substantially different from the claim interpretation used in the first petition when that petition's interpretation was not manifestly in error. • Number of related patents 157 Cong. Rec. S1360-S1394, S1376 (Remarks by Sen. Kyl) 31 Joinder of Post-Grant Proceedings
  • 32. Joinder of Post-Grant Proceedings Factors to consider: • Number of claims alleged to be infringed and how similar they are. • Consent of the patent owner. • A request of the court. • A request by the first petitioner for termination of the first review in view of strength of the second petition. • Whether the petitioner has offered to pay the patent owner's costs. 157 Cong. Rec. S1360-S1394, S1376 (Remarks by Sen. Kyl) 32
  • 33. Patent Owner Options: Reissue 33 • Pros: • Patent owner can pursue amended or new claims in parallel to a PGP, although the reissue likely will be stayed during the pendency of the PGP. (cannot pursue PGP invalidated claim or non-obvious variation of the claim). • Patent owner can seek correction of patent prior to assertion. • Patent owner can seek narrower claims after loss of claims in court. • Much leeway in handling the examination as it is open-ended. • Cons: • Can lose all claims. • Can be slow.
  • 34. Patent Owner Options: Ex Parte Reexamination 34 • Pros: • Ex parte • Claims can be scrubbed prior to assertion • Denial of petitions bolsters validity position • Granted claims enjoy bolstered validity position • Cons: Can be slow (years), risk of loss of claims or broad claim scope.
  • 35. Patent Owner Options: Supplemental Examination 35 • Pros: • Just like ex parte reexamination, claims can re-scrubbed prior to assertion. • USPTO can consider art not considered during regular examination. • USPTO can consider non-prior art issues (good for addressing CBM issues). • Cons: • More expensive that ex parte reexamination or reissue. • Stricter requirements and deadlines.
  • 36. Patent Owner Options: Track One 36 • Special status • Placed on the examiner’s special docket until final disposition • The goal is twelve-months to final disposition after being granted • Track One prioritized examination fee of $4000.00 ($2000.00 for small entities, or $1000.00 for micro entities).
  • 37. Strategic Advantages for Petitioner 37 Settlement opportunity No longer has to be “new” (lower standard) 1) File IPR 2) File a DJ 3) Get a stay SpeedStraight to Federal Circuit after final decision PGR|CBM not just prior art and printed publications Claim-by-Claim
  • 38. Strategic Disadvantages for Petitioner 38 Patent owner may respond without rebuttal Discovery & depositions Costs are much higher Stronger estoppel
  • 39. Supplemental Examination 39 SNQ Reexam Ordered • Same as ex parte reexam, except no Patent Owner statement Only Patentee may request • Must make a statement about why item raises an issue Concludes within 3 months
  • 40. Supplemental Examination Effects on Enforcement 40 Patent cannot be held unenforceable based on considered issues Exceptions • Does not apply if complaint was filed before request Fraud is not curable by this process • Director must refer fraud to Attorney General
  • 41. Thank You! We are very interested in your feedback - please take a moment to leave a note about this class and presenters on the back side of your evaluation form. © 2014 Dentons. Dentons is an international legal practice providing client services worldwide through its member firms and affiliates. This publication is not designed to provide legal or other advice and you should not take, or refrain from taking, action based on its content. Please see for Legal Notices. Lissi Mojica Principal Dentons Silicon Valley, CA +1 650-798-0383 Dave Metzger Partner Dentons Chicago +1 312-876-2578 Kevin Greenleaf Counsel Dentons Silicon Valley, CA +1 650-798-0381