PTAB – A Year In Review of 2018 & A Look Ahead To 2019
2018 was a significant year at the Patent Trial and Appeal Board (PTAB), which included a pair of Supreme Court decisions, a landmark en banc ruling from the Court of Appeals for the Federal Circuit impacting judicial review of real party in interest, and revised standard operating procedure and updates to the trial practice guide from the PTAB.
Specific topics included:
2018 Trends and Statistics – A significant uptake of filings of petitions was seen in November of 2018, which may be caused by the petitioners wanting to file before the change of the claim construction standard. Overall, the percentage share of cases filed at the PTAB continues to grow, and the percentage of different types of petitions filed in 2018 is consistent the previous years. The PTAB institution rate continues to steadily decrease.
SCOTUS on IPRs – Two important cases were issued by the Supreme Court in 2018. In Oil States Energy Services v. Greene’s Energy Group, LLC, 138 S. Ct. 1365 (2018), the Supreme court upheld the constitutionality of IPRs, finding that they do not violate Article III or the Seventh Amendment to the United States Constitution. In SAS Inst., Inc. v. Iancu, 138 S. Ct. 1348 (2018), the Supreme Court held that, when instituting an AIA-trial (IPR, PGR, or CBM), the PTAB must institute on all presented grounds on all challenged claims. Following this decision, the PTAB has issued orders modifying the scope of pending trials to include non-instituted grounds and challenged claims.
Sovereign Immunity – In Saint Regis Mohawk Tribe v. Mylan Pharm. Inc., 896 F.3d 1322 (Fed. Cir. 2018), the Federal Circuit affirmed the PTAB ruling that tribal immunity does not apply to IPRs (a certiorari petition is pending, No. 18-899).
Real Party in Interest (RPI) – In Wi-Fi One, LLC v. Broadcom Corp., 878 F.3d 1364 (Fed. Cir. 2018), the Federal Circuit held that time bar determinations under §315(b) are subject to appellate judicial review. In Internet Time, LLC v. RPX Corp., 897 F.3d 1252 (Fed. Cir. 2018), the Federal Circuit held that determining whether an unnamed party is an RPI “demands a flexible approach that takes into account both equitable and practice considerations, with an eye toward determining whether the non-party is a clear beneficiary that has a preexisting, established relationship with the petitioner.” Further, in Worlds Inc. v. Bungie, Inc., 903 F.3d 1237 (Fed. Cir. 2018), the Federal Circuit held that the PTAB may initially accept an IPR petitioner’s identification of real-parties-in-interest, but if and when a patent owner produces evidence disputing the identification, the burden is on the petitioner to demonstrate that the correct real-parties-in-interest were identified.
PTAB Amendment Process – In Aqua Prods. v. Matal, 872 F.3d 1290 (Fed. Cir. 2017), the Federal Circuit held that the PTAB may not place the burden of persuasion regarding the patentability of the proposed claim amendments on the patent owners. Following Aqua Prods., the USPTO published a proposal for implementing a new 2-phase procedure for patent owners to make amendments during AIA patent challenges, which essentially gives patent owners a second chance after receiving an initial determination on their proposed amended claims to make further changes.
Changes in PTAB Claim Construction Standard – The USPTO published a final rule changing the standard applied in PTAB trial proceedings, replacing the broadest reasonable interpretation (BRI) standard with the Phillips standard used by US federal courts and the International Trade Commission (ITC). Under the final rule, the PTAB will take into consideration any prior claim construction determination that has been made in a civil action or a proceeding before the ITC, so long as the prior claim construction is properly entered into the record.
Updates to the Trial Practice Guide and revisions to SOPs – The USPTO published an update to the AIA Trial Practice Guide, which includes revisions to six sections of the Trial Practice Guide: (a) use of expert testimony (§ I.G); (b) word count and page limits (§ II.A.3); (c) considerations of non-exclusive factors in instituting a review (§ II.D.2); (d) providing for sur-replies to principal briefs as a matter of right (§ II.I); (e) challenging admissibility and the proper use of motions to exclude and motions to strike (§ II.K); and (f) oral hearing procedures before the Board (§. II.M). The update also includes a sample scheduling order in Appendix A, showing changes such as replacement of observations on cross-examination with sur-replies that offer patentees the last word on patentability. The USPTO also revised its Standard Operating Procedures 1 and 2, which address the processes for assigning PTAB judges to panels, for designating PTAB decisions precedential, and for seeking rehearing of issues in pending cases, which may have major effects on PTAB practice.
Implications, Trends, And Cases to Watch in 2019 – IPR/CBM petitioners may face stronger headwinds, particular at the institution stage for “follow-on” petitions. Petitioners should also be aware of the estoppel effect on all challenged claims and all grounds in a petition if a trial is instituted. Cases to watch for in 2019 include: Return Mail Inc. v. U.S. Postal Service, No. 17-1594 (argued Feb. 19, 2019 at the Supreme Court), which will address whether the U.S. government has standing to file petitions seeking to invalidate patents under the AIA; and RPX Corp. v. ChanBond LLC, No.17-1686, and JTEKT Corp. v. GKN Automotive Ltd., No. 18-750, both of which have certiorari petitions pending, which raise the question of whether a non-litigant-defendant petitioner who has not suffered patent-based injury in fact has standing to appeal an adverse IPR decision (in October 2018, the Supreme Court invited the Solicitor General to file a brief in RPX).