New AIA Rules Level the Evidentiary Playing Field Pre-Institution
On December 9, 2020, the US Patent and Trademark Office (Office) published some final rules in the Federal Register. For the most part, these rules codified existing Patent Trial and Appeal Board (PTAB) practice relating to whether and how the PTAB institutes an inter partes review (IPR) or a post-grant review (PGR) proceeding, and to the ability of a petitioner and a patent owner to address a PTAB decision on institution.
In one area, the Office amended the rules of practice to change PTAB treatment of testimonial evidence that a patent owner might present in a preliminary response prior to a decision on institution. Now, there will be no presumption in favor of the petitioner if the patent owner’s pre-institution testimonial evidence presents an issue of fact. The amended rules may make patent owners more willing to present testimonial evidence to oppose institution of an IPR or a PGR.
When IPR and PGR proceedings began under the America Invents Act (AIA), patent owners were not allowed to present evidence in a preliminary response opposing a petition to institute an IPR or a PGR. In April 2016, the Office published rules allowing patent owners to present testimonial evidence with their preliminary response. As part of these rules, there was a presumption in favor of the petitioner if the patent owner’s testimonial evidence created a genuine issue of material fact. That presumption only existed for purposes of deciding whether to institute an IPR or PGR.
While the 2016 rules made it possible for patent owners to present testimonial evidence as part of their efforts to prevent institution of an IPR or PGR, the presumption made a number of patent owners less willing to present such evidence. Without the evidence being given the consideration it would get in an IPR or PGR proceeding, patent owners were concerned about showing their hand too early, to little effect.
Removing the Presumption
Before the new amendment, 37 C.F.R. §§ 42.108(c) and 42.208(c) read, in pertinent part (emphasis added): “The Board’s decision will take into account a patent owner preliminary response where such a response is filed, including any testimonial evidence, but a genuine issue of material fact created by such testimonial evidence will be viewed in the light most favorable to the petitioner solely for purposes of deciding whether to institute [a] review.” The amendment deletes the italicized words.
In commenting on the amended rules, the Office acknowledged that a petitioner carries the burden to meet the standard for institution of an IPR or a PGR, per 35 U.S.C. §§314(a) and 324(a), but noted that the deleted words, giving a presumption in favor of a petitioner at the institution stage for this class of evidence, may lead to results that are inconsistent with this burden.
The Office said that the change in the rules will enable any testimonial evidence that is part of a patent owner’s preliminary response to be taken into account as part of the totality of the evidence. This testimonial evidence will be treated similarly to other evidence for purposes of institution.
It will be interesting to see how patent owners react to the amended rules. Will they submit more testimonial evidence to try to avoid institution in the first instance? The new rule may make it worth reconsidering how much of their hand a patent owner wants to show. After all, IPRs and PGRs are expensive for patent owners. If submitting broader testimonial evidence can provide a better chance to avoid institution, patent owners may decide to oppose institution more broadly than before.