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INTER PARTES REVIEW 
DEAN OLSON 
THE VIEWS EXPRESSED HEREIN ARE THOSE OF 
THE AUTHOR AND THEY DO NOT NECESSARILY 
REFLECT ...
SUMMARY 
•• Inter Partes Review-Introduction 
• Risk or Opportunity-By the numbers 
• Timing 
• Comparison to District Cou...
INTRODUCTION 
• America Invents Act (AIA) created new Patent Office trials to allow 
challenges to issued patents, includi...
POST GRANT PROCEEDINGS BY THE NUMBERS – 
RAPID ADOPTION HAS EXCEEDED EARLY 
PREDICTIONS 
•• 1500 IPR Petitions by July 201...
THE NUMBERS 
Number of Petitions Petition Technology 
FYI IPR T i l P t 
Breakdown 
Trials Percent 
Technology No of 
% 
I...
Procedural Schedule for IPR and PGR 
Patent owner response includes request for claim amendments and any declarations 
PTA...
IPR‐District Court Comparison 
IPR District Court 
Less costly: 500 k Litigation: 5 million 
Quicker resolutions: Decision...
IPR PROCEEDINGS –– 
INITIAL IMPRESSIONS 
• System appears to favor the challenger • Similar to Interference practice-Mind ...
IPR PROCEEDINGS 
– 
INITIAL IMPRESSIONS 
• PTAB up frequent phone conferences re: sets questions/issues and 
parties must ...
DEVELOPING SIGNIFICANT ISSUES 
• Which ““Court”” controls the validity of a patent- District 
Court or the Patent Trial an...
PTAB Decision vs. District Court Decision-Which one rules? 
• 2011: District Court held patent valid and infringed-SAP v. ...
CLAIM AMENDMENTS 
• Requirements for claim amendments -Idle Free Systems v. 
Bergstrom IPR2012-00027 • Facts/reasoning to ...
Redundancy - Is your Patent 
Ever Really Safe? 
•• PTAB commonly initiates trial on only one or two 
grounds of challenge ...
Redundancy - Is your Patent 
Ever Really Safe? 
• Will redundant grounds be estopped from use in further 
challenge, or wi...
SIMULTANEOUS PTO PROCEDURES 
• Simultaneous PTO procedures e.g., continuation 
applications, reexaminations, reissues • En...
POST GRANT REVIEW-(PGR) 
• Effective patent application filing date must be on or 
after March 16, 2013; accordingly, limi...
SUMMARY 
• New IPR patent challenge mechanism; more than 75% of IPR 
petitions have had PTAB trial initiated and most tria...
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U.S. Post Grant Patent Office Challenges; Inter-Partes Review (IPR) and Post Grant Review (PGR)-Opportunities and Risks - Dean Olson

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Presentation delivered by Dean Olson, Assistant General Counsel, Pfizer at the marcus evans IP Law Summit Fall 2014 held in Palm Beach, FL

Published in: Business
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U.S. Post Grant Patent Office Challenges; Inter-Partes Review (IPR) and Post Grant Review (PGR)-Opportunities and Risks - Dean Olson

  1. 1. INTER PARTES REVIEW DEAN OLSON THE VIEWS EXPRESSED HEREIN ARE THOSE OF THE AUTHOR AND THEY DO NOT NECESSARILY REFLECT THOSE OF THE AUTHOR’’S EMPLOYER, PFIZER INC. 1
  2. 2. SUMMARY •• Inter Partes Review-Introduction • Risk or Opportunity-By the numbers • Timing • Comparison to District Court • Initial Impressions • Developing Significant Issues • Post Grant Review 2
  3. 3. INTRODUCTION • America Invents Act (AIA) created new Patent Office trials to allow challenges to issued patents, including inter partes review (IPR) and post-grant review (PGR) ƒ Conducted by AIA-created Patent Trial and Appeals Board (PTAB) between challenger and patent owner ƒ IPR grounds of challenge limited to novelty and obviousness and patents and publications • No written description/enablement (112) grounds of invalidation • No sale/use grounds of invalidation ƒ Very fast pace; opportunities for very limited discovery ƒ Opportunity for an oral hearing before a decision on the merits ƒ Availability of termination by settlement of individual issues ƒ PTAB decision triggers estoppel to proceedings before PTO or civil litigation for grounds raised or reasonably could have been raised 3
  4. 4. POST GRANT PROCEEDINGS BY THE NUMBERS – RAPID ADOPTION HAS EXCEEDED EARLY PREDICTIONS •• 1500 IPR Petitions by July 2014 –ongoing rate 5/day increasing to 6+ per day • PTAB more than 75% of petitions lead to initiation of trial • PTAB is 3rd most active ““litigation venue””-August 2014 85 Judges • 89 final decisions now available • High patent invalidation rate „ Many on obviousness grounds „ Lack of meaningful ability to amend claims is a challenge • As of July 2014-Termination of proceedings for 450 patents petitioned „ 285 trials instituted „ 196 settled/adverse judgment „ 89 final Decisions „ 75 patents-at least some claims unpatentable 4
  5. 5. THE NUMBERS Number of Petitions Petition Technology FYI IPR T i l P t Breakdown Trials Percent Technology No of % Instituted Instituted 2012 17 No. Petitions Electrical/ computer 1230 71.7 2013 514 167 87% 2014 985 419 76% Total 1516 co pu e Mechanical 263 15.3 Chemical 123 7.2 Bio/Pharma 92 5.4 Design 8 0.4 Final Dispositions Technology Settlements Adverse Judgments Final Written Decisions 2013 38 2 0 2014 125 31 89 5
  6. 6. Procedural Schedule for IPR and PGR Patent owner response includes request for claim amendments and any declarations PTAB order/decision to initiate “trial” begins “discovery” period 6
  7. 7. IPR‐District Court Comparison IPR District Court Less costly: 500 k Litigation: 5 million Quicker resolutions: Decision within 18 months of petition but with potential pitfalls analogous to interference practice Litigation- 25-36 months Lower standard: Preponderance of evidence-No presumption of validity that must be overcome Clear & convincing standard/Presumption of Validity Broader claim construction: broadest reasonable interpretation in light of the specification- so more art applies Ordinary and customary meaning to the skilled artisan IPR limited to novelty and obviousness Not limited to y novelty/obviousness arguments: Patents and printed publications; retains 112 arguments for future challenge Claim amendment very unlikely No claim amendment allowed Limited Discovery Extensive Discovery allowed 7
  8. 8. IPR PROCEEDINGS –– INITIAL IMPRESSIONS • System appears to favor the challenger • Similar to Interference practice-Mind the rules! • Limited discovery is quite limited-Some discovery is mandated even without request of opposing party „ Cited exhibits „„ Cross-examination of declarants „ Information that is inconsistent with a position advanced during proceeding • Motions for additional discovery ““i.e., in the interests of justice”” Garmin v. Cuozzo IPR2012-00001 (Paper 19) typically rejected 8
  9. 9. IPR PROCEEDINGS – INITIAL IMPRESSIONS • PTAB up frequent phone conferences re: sets questions/issues and parties must be ready to argue and answer all questions ––also must contact PTAB prior to filing any motion • Oral hearings similar to appellate hearing and include a very technically adept hot bench- but the time limit is short-1 hour per side • Consider not filing substantive (vs. procedural) Patent Owner Preliminary Response -has not been effective in stopping trial initiation „ Gives advance notice of strategy „ Expert declaration generally not available so reliance is on attorney argument „„ But may help rebut petitioner’’s initial claim construction 9
  10. 10. DEVELOPING SIGNIFICANT ISSUES • Which ““Court”” controls the validity of a patent- District Court or the Patent Trial and Appeal Board? • Is a claim amendment in an IPR a fiction? • Differing grounds of invalidation can be redundant-estoppel impact? • Simultaneous PTO procedures-are they stayed? 10
  11. 11. PTAB Decision vs. District Court Decision-Which one rules? • 2011: District Court held patent valid and infringed-SAP v. Versata „ May 2013: CAFC affirmed court decision „ June 2013: PTAB cancelled all claims • Reasons for different outcome „ ““Broadest reasonable interpretation in light of the specification”” (BRI) claim interpretation made a difference –– PTAB not bound by District Court claim construction „ Lower standard- preponderance of the evidence instead of clear and convincing evidence • Very complex-multiple proceedings-timing of PTAB decision may be important as to whether PTAB or District Court decision followed • District Court refused to overturn original jury verdict in light of subsequent PTAB decision and District Court decision upheld by CAFC • Compare to Fresenius- may mean that timing of PTAB decision (whether prior or post-District Court decision) determines which decision is followed • Two different SAP cases currently before CAFC ––likely have to wait for en banc decision 11
  12. 12. CLAIM AMENDMENTS • Requirements for claim amendments -Idle Free Systems v. Bergstrom IPR2012-00027 • Facts/reasoning to persuade Board that substitute claims are patentable ƒƒ Representation about the closest prior art ƒ Substitute claims means one for one substitution • First claim amendments in 2000 cases finally allowed May 20, 2014 ƒ Int. Flavors & Fragrances Inc. v. U.S. Dept. of Agriculture (IPR2013-00124; pat. No. 7,579,016) ƒ But both parties agreed to amendment and patentee was ““Uncle Sam”” 12
  13. 13. Redundancy - Is your Patent Ever Really Safe? •• PTAB commonly initiates trial on only one or two grounds of challenge deeming other grounds as redundant • Redundancy is PTAB workload management procedure for complying with 1 year trial time frame •• Horizontal redundancy- ““““similar”””” prior art references used as alternative invalidation grounds • Vertical redundancy-sets of prior art references that include additional references used as alternative invalidation grounds 13
  14. 14. Redundancy - Is your Patent Ever Really Safe? • Will redundant grounds be estopped from use in further challenge, or will PTAB’’s decision that other grounds are redundant be overturned by CAFC as denying Petitioner’’’’s due process? • If PTAB’’s redundancy rulings are overturned, does that set up patentee for sequential challenges by opponent on the other grounds? • Is there a solution to this problem that satisfies the one year PTAB trial timeline? 14
  15. 15. SIMULTANEOUS PTO PROCEDURES • Simultaneous PTO procedures e.g., continuation applications, reexaminations, reissues • End run around the IPR that allows an amendment? • Should these procedures be stayed in light of an IPR? • Should the IPR be stayed in light of these PTO procedures? •• Continuation applications may not be stayed-see 35 USC 315(d) ““stay”” limited to matters involving ““patent”” • Reexamination may not be stayed-Ethicon Inc., v. Quigg 849 F.2d 1422 (Fed. Cir. 1988) • PTO request for comments due Sept. 15 15
  16. 16. POST GRANT REVIEW-(PGR) • Effective patent application filing date must be on or after March 16, 2013; accordingly, limited actual experience so far • First PGR filed early August 2014-(PGR2014-00008) ƒ Pat. No. 8,684,420-written description challenge • Timing-PGR limited to 9 month period following grant; IPR limited to post PGR period • PGR-Broad grounds for challenge ƒ PGR grounds of challenge-novelty, obviousness, written description, enablement, indefiniteness, 101? • Potentially differing preliminary standard-””reasonably likelihood”” vs. ““more likely than not”” 16
  17. 17. SUMMARY • New IPR patent challenge mechanism; more than 75% of IPR petitions have had PTAB trial initiated and most trials result in invalidation or settlement • Cost reduction - IPR is 500k vs. 5 million for litigation and IPR is faster (18 months v. 25-36 months for district court) • Procedural advantages of IPR over litigation „ Claim construction-broadest reasonable construction „ Preponderance of evidence vs. clear and convincing standard „ No presumption of validity • IPR still in its infancy; many evolving questions remain (e.g., redundancy; extent of estoppel; do simultaneous PTO proceedings continue; are claim amendments possible; even challenges to USPTO IPR system itself) 17

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