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Pros and Cons: PTAB vs. District Courts

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PTAB (Patent Trial and Appeal Board) or district court? Where should I bring my patent validity challenge? Hundreds of lawyers and their clients decide every year that the PTAB is their first choice of venue to invalidate a patent. Described as a “death squad,” the PTAB does indeed offer a number of advantages over a traditional invalidity defense in court. The claim interpretation is broader; the evidentiary standard is lower; the PTAB judges are technically trained and understand very well what is legally obvious; PTAB trials are fast and less expensive than traditional court litigation; and district courts are often happy to stay a patent case pending a PTAB trial. It is not surprising that so many opt to have their patent validity challenges decided by the PTAB rather than a lay jury in eastern Texas. Yet, behind the allure of an easy, quick, cheap victory at the PTAB are serious risks for the unwary, and the PTAB is not the best venue for all validity challenges. This webinar will discuss in detail the various pros and cons of the PTAB as an alternative (and sometimes an adjunct) to district court for patent validity challenges.

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Pros and Cons: PTAB vs. District Courts

  1. 1. Renaissance IP Law Group PTAB  vs.  District  Courts:    Pros  &  Cons     Ma#hew  C.  Phillips   Kevin  B.  Laurence     Renaissance  IP  Law  Group  LLP     February  11,  2016     Patexia  Webinar   1  
  2. 2. Renaissance IP Law Group Agenda   •  Tools  for  Challenging  Patent  Validity   •  Review  of  AIA  Trial  Procedures   •  AIA  Trial  StaMsMcs   •  Choosing  a  Forum  to  Challenge  Validity   2  
  3. 3. Renaissance IP Law Group Tools  for  Challenging     Patent  Validity     3  
  4. 4. Renaissance IP Law Group Tools  for  Challenging  US  Patents   (Pre-­‐AIA  Patents)   Other  Basis     (§§  101,  112)   Prior  Art     (§§  102,  103)   Inter  Partes   Review     Ex  Parte   Reexam   LiHgaHon   Printed   PublicaMon   Charged  with   Infringement  of   Bus.  Meth.  Pat.   Covered  Business   Method  Patent   Review   at USPTO 4  
  5. 5. Renaissance IP Law Group Tools  for  Patent  Challengers     (AIA  FITF  Patents  UnHl  9/16/20)   Inter  Partes   Review     Outside   IniMal  9-­‐Mo.   Window   Other  Basis     (§§  101,112)   Prior  Art     (§§  102,  103)   Ex  Parte   Reexam   LiHgaHon   Printed   PublicaMon   Covered  Business   Method  Patent   Review   Post-­‐Grant   Review   Inside   IniMal  9-­‐Mo.   Window   Charged  with   Infringement  of   Bus.  Meth.  Pat.   Outside   IniMal  9-­‐Mo.   Window   at USPTO 5  
  6. 6. Renaissance IP Law Group Tools  for  Challenging  US  Patents   (AIA  FITF  Patents  ARer  9/16/20)   Inter  Partes   Review     Outside   IniMal  9-­‐Mo.   Window   Other  Basis     (§§  101,  112)   Prior  Art     (§§  102,  103)   Ex  Parte   Reexam   LiHgaHon   Printed   PublicaMon   Post-­‐Grant   Review   Inside   IniMal  9-­‐Mo.   Window   at USPTO 6  
  7. 7. Renaissance IP Law Group Review  of  AIA     Trial  Procedure     7  
  8. 8. Renaissance IP Law Group Full  Timeline  for  Review  Proceeding   ≤  6  months   ~2.5  years   Prior  to  Trial   ≤ 12  months   Trial   ~13  months   Rehearing  &  Appeal   8  
  9. 9. Renaissance IP Law Group Pre-­‐Trial  Proceedings   Prior  to  Trial   Trial   Rehearing  &  Appeal   NoMce  of     Filing  Date   Review ?   YES   PeMMon   3  mo.   NO   1-­‐2  wks.   Non-­‐InsMtuMon   Decision   Preliminary   Response   up  to  3  mo.   InsMtuMon   Decision   9  
  10. 10. Renaissance IP Law Group IniMal  Conference   Call   Final  Wri#en   Decision   InsMtuMon   Decision  (Order)   Appeal   CerMficate   Se#lement   Agreement   Oral  Hearing   Patent  Owner   Discovery   Appeal   Procedure  for  Trial     (Without  MoHon  to  Amend)   PeMMoner   Discovery   MoMons   Reply  Response   ? DD1 DD2 DD4-DD6 DD7 10  
  11. 11. Renaissance IP Law Group Trial  Timeline  (Current  Typical)   Owner     Discovery   Period   PeMMoner   Discovery   Period   Owner     Discovery   Period   MoMons  to   Exclude  Evidence,  Etc.   (DD4-­‐DD6)   1  mo.  2  mos.   2  mos.   11  
  12. 12. Renaissance IP Law Group AIA  Trial  StaHsHcs   12  
  13. 13. Renaissance IP Law Group Review  PeHHon  Filings   (as  of  Dec.  31,  2015)   1   10   100   1000   10000   IPR   CBM   PGR   IPR   CBM   PGR   IPR   CBM   PGR   IPR   CBM   PGR   IPR   CBM   PGR   FY  2013   FY  2014   FY  2015   FY  2016  FY  2012   13  
  14. 14. Renaissance IP Law Group Review  PeHHon  Filings  by  Technology   (FY2014-­‐FY2016  through  Dec.  31,  2015)   Electrical/   Computer   62%   Mechanical  &   Bus.  Methods   23%   Chemical   6%   Bio/Pharma   9%   Design   0%   14  
  15. 15. Renaissance IP Law Group Trial  InsHtuHon  Rate   (as  of  Dec.  16,  2015)   0.0%   10.0%   20.0%   30.0%   40.0%   50.0%   60.0%   70.0%   80.0%   90.0%   100.0%   IPR   CBM   PGR   IPR   CBM   PGR   IPR   CBM   PGR   IPR   CBM   PGR   FY  2013   FY  2014   FY  2015   FY  2016   15  
  16. 16. Renaissance IP Law Group IPR  Survival  Rate     (DisposiHon  of  Challenged  Claims)   (as  of  Dec.  31,  2015)   Not  Subject  to   Trial   57%   Sebled   13%   Canceled  or   Disclaimed  by   Patent  Owner   5%   Found   Unpatentable   21%   Found   Patentable   4%   16  
  17. 17. Renaissance IP Law Group IPR  Survival  Rate     (DisposiHon  of  Claims  Subject  to  Trial)   (as  of  Dec.  31,  2015)   Sebled   31%   Canceled  or   Disclaimed  by   Patent  Owner   11%   Found   Unpatentable   49%   Found   Patentable   9%   17  
  18. 18. Renaissance IP Law Group IPR  Survival  Rate     (DisposiHon  by  FWD  Only)   (as  of  Dec.  31,  2015)   All  Claims   Unpatentable   72%   Some  Claims   Unpatentable   15%   No  Claims   Unpatentable   13%   18  
  19. 19. Renaissance IP Law Group Choosing  a  Forum  for   Challenging  Validity     19  
  20. 20. Renaissance IP Law Group Challenge  in  Court  or  PTAB?   •  Assuming  Both  are  Available  for  Your  Validity  Challenge   •  PotenMal  Differences   –  Nature  of  decision  maker   –  Claim  construcMon/interpretaMon   –  EvidenMary  burdens   –  Nature  of  supporMng  evidence   –  Discovery  opportuniMes  and  burdens   –  ParMcipaMon  rights   –  Claims  frozen  or  fluid   –  Number  of  arguments  that  can  pracMcally  be  made   –  Effect  of  overall  equiMes   –  Costs   –  Timing   –  Standing  requirements   –  Anonymity   20  
  21. 21. Renaissance IP Law Group •  Decision  Maker  (PTAB  or  Court)   –  Comfort  zone  for  invalidaMng  duly  granted  patent  claims   •  Comfort  reaching  a  conclusion  different  from  the  original  examiner?   •  Comfort  finding  claims  obvious?     –  Different  technical  acumen   •  How  complex  are  your  facts?   •  Is  the  conclusion  apparent  once  the  facts  are  “properly”   understood?   –  Different  predilecMon  or  facility  with  legal  doctrines   •  Secondary  consideraMons  of  nonobviousness   •  Priority  enMtlement   •  Inherent  disclosure   Challenge  in  Court  or  PTAB?   21  
  22. 22. Renaissance IP Law Group ConvenHonal  Wisdom  (Generally)     in  LiHgaHon  and  Review  Proceedings     AnHcipaHon   Obviousness     LiMgaMon     Review   Proceeding   22  
  23. 23. Renaissance IP Law Group Best  Bases     for  Aback  at  PTAB   IPR   103  >  102   PGR   PGR   101  >  103  >  102   CBM   23  
  24. 24. Renaissance IP Law Group •  Claim  ConstrucMon/InterpretaMon   –  PTAB  uses  broadest  reasonable  interpretaMon  (“BRI”)   –  Courts   •  Phillips  v.  AWH  Corp.,  415  F.3d  1303  (Fed.  Cri.  2005)  (en  banc)   •  More  likely  narrow   •  Less  predictable   –  Is  the  prior  art  within  the  broadest  reasonable  meaning  of   the  claims  yet  different  from  the  disclosed  embodiment(s)?   Challenge  in  Court  or  PTAB?   24  
  25. 25. Renaissance IP Law Group •  EvidenMary  Burdens   –  Preponderance  standard  in  PTAB   –  Clear-­‐and-­‐convincing  standard  in  court   –  Ask  yourself:    Are  the  issues  so  close  that  the  evidenMary   burden  might  make  a  difference?   •  Is  the  prior  art  arguably  ambiguous  in  its  disclosure  of  a  claim   limitaMon?   •  Is  the  prior  art  status  of  the  printed  publicaMon  a  close   quesMon?   •  Does  the  outcome  turn  on  disputed,  equally  reasonable  and   supported  expert  opinions?   Challenge  in  Court  or  PTAB?   25  
  26. 26. Renaissance IP Law Group •  Nature  of  SupporMng  Evidence   –  Federal  Rules  of  Evidence  apply  in  both  court  &  PTAB   •  Rare  for  PTAB  to  exclude  evidence   –  At  PTAB:       •  Evidence  typically  must  be  “on  the  paper”   –  Documents   –  DeclaraMons   –  DeposiMon  transcripts   •  Rare  excepMons  for  live  tesMmony  at  oral  hearing  in  AIA  trial   –  Courts  permit  all  types  of  evidence,  incl.  live  tesMmony   –  Do  you  have  a  great  witness  to  bring  your  posiMons  to  life?   Challenge  in  Court  or  PTAB?   26  
  27. 27. Renaissance IP Law Group •  Discovery  OpportuniMes  and  Burdens   –  In  court,  discovery  is  wide  ranging   –  In  PTAB,  discovery  is  very  limited   •  DeposiMons  of  declarants   •  AddiMonal  discovery  is  rarely  granted   –  Ask  yourself:       •  Do  you  need  any  discovery  from  the  patent  owner  to  prove  your   invalidity  case?   •  Might  the  patent  owner  benefit  from  discovery  from  you  (e.g.,  to   prove  secondary  consideraMons  of  non-­‐obviousness  based  on   your  alleged  infringement)?   Challenge  in  Court  or  PTAB?   27  
  28. 28. Renaissance IP Law Group •  ParMcipaMon  Rights   –  Full  parMcipaMon  rights  in  court     –  Full  parMcipaMon  rights  in  PTAB   •  PeMMon   •  Depose  patent  owner’s  declarants   •  Reply  to  patent  owner’s  response   •  Oral  argument   –  ReexaminaMon,  however,  typically  offers  no  parMcipaMon   rights  aner  filing  of  request   Challenge  in  Court  or  PTAB?   28  
  29. 29. Renaissance IP Law Group •  Claims  Frozen  or  Fluid   –  Claims  are  frozen  in  court   –  Claims  are  fluid  in  reexaminaMon   –  Claims  are  essen4ally  frozen  in  review   •  MoMons  to  amend  are  rarely  sought   •  MoMons  to  amend  are  rarely  granted   •  Reissue  and  reexaminaMon  are  other  opMons   •  Any  amendment  must  be  narrowing  (except  in  broadening  reissue)   •  Almost  all  amendments  trigger  intervening  rights   –  Does  the  specificaMon  support  a  limitaMon  absent  from  the   prior  art  but  present  in  the  accused  device?   Challenge  in  Court  or  PTAB?   29  
  30. 30. Renaissance IP Law Group •  Number  of  Arguments   –  Limits  in  court   •  Page  limits   •  Time  limits   •  PracMcal  limits  on  judge’s  paMence  &  indulgence   –  Limits  in  AIA  trials   •  Page  limits   •  Redundancy  doctrine   •  Best  to  focus  on  a  few  (1-­‐3)  well  developed  challenge  grounds   –  A  mulMplicitous  approach  is  be#er  suited  for   reexaminaMon   Challenge  in  Court  or  PTAB?   30  
  31. 31. Renaissance IP Law Group •  Effect  of  EquiMes   –  Court   •  Lines  between  issues  can  be  blurry   •  Decision  maker  “takes  it  all  in”     •  Juries  can  be  especially  influenced  by  overall  equity   •  Juries  seem  to  be  especially  moved  by  inventors   –  PTAB   •  Bigger  picture  does  not  usually  come  through   •  Perhaps  some  insMtuMonal  bias  against  NPEs?   Challenge  in  Court  or  PTAB?   31  
  32. 32. Renaissance IP Law Group •  Timing   –  One-­‐year  bar  for  IPR   •  Must  file  IPR  peMMon  before  1-­‐year  anniversary  of  service  of  infringement  complaint     •  No  such  bar  for  CBM  or  PGR   –  No  AIA  trial  possible  aner  DJ  acMon  for  invalidity   –  Stay   •  Court  may  stay  liMgaMon  pending  AIA  trial   •  Special,  more  liberal  stay  statute  for  CBMs   –  Estoppel   •  FWD  in  AIA  trial  triggers  estoppel  against  peMMoner   •  IPR  &  PGR:    Scope  of  estoppel  in  court  is  validity  challenges  “raised  or  reasonably   could  have  been  raised.”   •  CBM:    Scope  of  estoppel  in  court  is  just  validity  challenges  “raised.”   •  Don’t  agonize  over  estoppel.    Raise  your  validity  challenges  in  the  forum  where  they   are  most  likely  to  succeed  (PTAB).     Challenge  in  Court  or  PTAB?   32  
  33. 33. Renaissance IP Law Group •  Costs   –  Differ  by  order(s)  of  magnitude   –  LiMgaMon  >>  Review  >  ReexaminaMon   •  Standing   –  No  standing  requirement  to  file  review  peMMon  or   reexaminaMon  request     –  But  beware  of  standing  on  appeal   •  Anonymity     –  Not  possible  for  liMgaMon  or  AIA  trial   –  Possible  for  reexaminaMon     Challenge  in  Court  or  PTAB?   33  
  34. 34. Renaissance IP Law Group Challenge  in  Court  or  PTAB?   34   Factor   Court   PTAB   Decision  maker   Claim  interp./constr.   EvidenMary  burden   SupporMng  evid.   Discovery   ParMcipaMon  rights   No.  of  arguments   Claim  fluidity   Effect  of  equiMes   Cost   Timing   Standing   Anonymity  
  35. 35. Renaissance IP Law Group Thank  You!   35   Kevin B. Laurence Patent Attorney Direct: (703) 448-8787 kevin.laurence@renaissanceiplaw.com 1940 Duke St., Suite 200 Alexandria, VA 22314 Fax: (503) 517-9919

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