Post-grant review provisions of the new patent law may affect a potential patent infringement defendant’s strategies in filing a declaratory judgment (DJ) action.
Under the new patent law, any third party can challenge the validity of an issued patent using either post-grant review under 35 U.S.C. § 321 or inter partes review under 35 U.S.C. § 311. Both proceedings are effective September 16, 2012.
Briefly, under 35 U.S.C. § 321 and 35 U.S.C. § 311, respectively, both post-grant review and inter partes review proceedings can be initiated by anyone “who is not the owner of a patent” by filing a petition with the United States Patent and Trademark Office (USPTO). Post-grant review must be initiated within nine (9) months of the issuance of a patent, and permits any patentability issue to be raised, which can be based on any evidence. In contrast, inter partes review cannot be initiated until the later of nine (9) months after a patent issues or after post-grant review is complete. Further, inter partes review is limited to the grounds of novelty or non-obviousness, which can only be supported by patents or printed publications.
While both provisions provide non-litigation tools to a potential patent infringement defendant to challenge the validity of a patent, notably these provisions may significantly affect a DJ action.
A DJ action is typically initiated by a potential patent infringement defendant to secure a more desirable venue (e.g., a venue other than the patentee friendly Eastern District of Texas). However, under 35 U.S.C. § 325 and 35 U.S.C. § 315, respectively, a potential defendant seeking to utilize a DJ action to secure venue will foreclose a later filed post-grant review or inter partes review.
Further, if a potential defendant (or real party in interest) files a DJ action on or after the potential defendant files a petition for post-grant review or inter partes review, the DJ action is automatically stayed until:
(A) the patent owner moves the court to lift the stay;
(B) the patent owner files a civil action or counterclaim alleging that the petitioner or real party in interest has infringed the patent; or
(C) the petitioner or real party in interest moves the court to dismiss the civil action. (35 U.S.C. § 325 (a)(2) and 35 U.S.C. § 315 (a)(2)).
In order to secure both a review by the USPTO and a favorable venue for a DJ action, a potential defendant may file a request for either post-grant review or inter partes review at the same time as filing a DJ action in a favorable district court.
The DJ action will be automatically stayed, and a final decision of the post-grant review or inter partes review will have an estoppel effect on later proceedings raising grounds of invalidity “that the petitioner raised or reasonably could have raised during the post-grant review or inter partes review.” (35 U.S.C. § 325 (e) and 35 U.S.C. § 315 (e)).
In summary, a potential patent infringement defendant should consider developing and implementing a comprehensive strategy that utilizes the various tools offered by the new patent law to defend against patent infringement claims. The new post-grant review provisions, in particular, provide a significant new tool that should be wielded. We are always happy to discuss available strategies that fit your particular situation.