September 2, 2014

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Patent Reform is on the Immediate Horizon - New Options for Challenging Patents Before the USPTO

On June 23, 2011, the U.S. House of Representatives passed the America Invents Act (H.R. 1249), which follows in the wake of the Senate version, S. 23, approved on March 8, 2011. Although differences between the two bills will have to be reconciled before the proposed legislation can be signed into law by the President, Congress is poised to enact major reforms to the patent laws. After many years of debate and compromise, patent reform seems to be just steps from the finish line.

We focus here on two provisions relating to challenging patents before the U.S. Patent and Trademark Office, as currently set forth in the House bill.  First, inter partes reexaminations will be replaced with inter partes review proceedings. Second, the legislation will create post-grant review proceedings for the first time. Together, these proceedings will expand the options available to competitors who wish to challenge patents before the USPTO.

Both inter partes review and post-grant review will be adjudicated by a three-judge panel of the Patent Trial and Appeal Board (PTAB). The PTAB will be formed from and supplant the current Board of Patent Appeals and Interferences. As with current interference proceedings, inter partes review and post-grant review will involve filing motions (e.g., to amend claims) and provide for limited discovery. Thus, there are likely to be many procedural parallels between interferences, inter partes review and post-grant review. Additionally, inter partes reviews and post-grant reviews must be concluded within one year, extendable to 18 months in unusual cases.

Inter Partes Review

Inter partes review includes some significant differences from the current inter partes reexaminations. Like inter partes reexamination, inter partes review will permit a third party to challenge one or more patent claims as anticipated or obvious on the basis of prior art patents or printed publications. Unlike reexamination, which can be ordered at any time during the period of enforceability of a patent, a petition for inter partes review can only be filed after the later of: (1) nine months after the grant of a patent or a reissue of a patent; or (2) the termination of post-grant review, if a post-grant review has been instituted for that patent. The standard for commencing an inter partes review will be higher than that for ordering reexamination. Reexamination is ordered if there is “a substantial new question of patentability affecting a claim of the patent.” In contrast, inter partes review will be commenced upon a determination that “there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged.” Thus, competitors will find it more difficult to mount challenges to patents under this provision of the law.

The legislation addresses the interplay between inter partes review and district court litigation, and it places constraints on the extent to which the proceedings will overlap. Inter partes review may not be instituted if the petitioner has already filed a civil action challenging the patent’s validity. However, a counterclaim by a defendant in a civil action may challenge the patent’s validity without barring inter partes review. Following a final decision in an inter partes review, a petitioner will be estopped from subsequently disputing a claim’s validity in litigation or before the USPTO on grounds that the petitioner “raised or reasonably could have raised” during the inter partes review. Settlement of the inter partes review proceeding will eliminate any estoppel, thus giving parties greater incentive to settle than under the current scheme. Thus, in a settlement context, the estoppel provisions underinter partes review are somewhat less onerous than under inter partes reexamination. 

Finally, the legislation also provides for reexaminations that are instituted as the result of supplemental examination of the patent. A patent owner may request supplemental examination of a patent to have the Office consider, reconsider, or correct information believed to be relevant to the patent. In contrast to current law regarding reexaminations, this information is not limited to prior art patents and publications, and it may include, for example, information relating to an on-sale bar or experimental data relevant to the enablement requirement. If information presented in the request raises a substantial new question of patentability, the Director will order reexamination. Supplemental examination immunizes a patent against a later holding of unenforceability based on the same information provided during supplemental examination.

Post-Grant Review

As a supplement to inter partes review proceedings, the new legislation also creates post-grant review as a mechanism for challenging patents. Although there are many similarities between the two procedures, significant differences are present, and they warrant a closer look. Unlike inter partes review, a third party may challenge an issued patent on any invalidity ground by filing a petition within nine months after issuance or re-issuance of the patent. The broad grounds available for seeking post-grant review parallel those available for finding invalidity in a civil action in district court. For example, post-grant review will permit challenges based on lack of written description or lack of enablement, thus expanding the bases for attacking patents in proceedings before the USPTO. The USPTO will authorize a post-grant review upon a showing that “it is more likely than not” that at least one challenged claim is unpatentable. This standard is more stringent than the “substantial new question of patentability” standard for initiating inter partes reexamination under the current law. Alternatively, post-grant review may be authorized if a petitioner raises a novel or unsettled legal question that is important to other patents or applications. As with inter partes review, post-grant review cannot be initiated if the petitioner has filed a civil action challenging the validity of the patent. Additionally, a final decision in a post-grant review proceeding will create an estoppel on any ground that the petitioner “raised or reasonably could have raised” during thatpost-grant review.

Conclusion

The new legislation will give competitors greater options for challenging patents. Although it remains to be seen how effectively the USPTO will be able to handle the proceedings, given the one-year time constraint for concluding such proceedings, the existence of each option should be borne in mind both by patent owners who may seek to enforce their patents and by competitors who wish to eliminate the patents of others. As compared to civil litigation, post-grant review and interpartes review may prove to be attractive tools for challenging patents, particularly in view of the faster resolution and lower costs than typical district court litigation, the “preponderance-of-theevidence” standard of proof, and the broadest reasonable claim construction that are applied at the USPTO. Potential patent challengers will wish to stay informed regarding the patent landscape, so that they can timely file for post-grant review if desired.

© 2014 Sterne Kessler

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About this Author

Eldora Ellison Ph.D. Biotech Chemical Attorney Sterne Kessler law firm
Director

Dr. Ellison is a Director in the Biotech/Chemical and Litigation Practice Groups. Over the course of her nineteen-year career, she has gained extensive experience in inter partes patent matters, building on a strong foundation in patent prosecution. Dr. Ellison’s experience includes representing clients in more than a dozen inter partes review proceedings, more than fifteen patent interferences, and in various patent reexaminations and district court litigations.  Dr. Ellison's practice also includes evaluating patent portfolios, e.g.,...

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