USPTO Contested Proceedings: New Challenges, New Opportunities
Lisa A. Dolak Syracuse University College of Law
The implementation of post-grant trial proceedings in the U.S. Patent and Trademark Office (USPTO) is one of the most significant aspects of the 2011 Leahy Smith America Invents Act (AIA). The relevant AIA provisions took effect almost a year ago, on September 16, 2012, creating four new types of contested USPTO proceedings that are intended to provide a fair, speedy, and comparatively inexpensive alternative to litigating validity in the courts. The high level of interest patent challengers have shown in this alternative forum suggests that the USPTO is succeeding in meeting those objectives.
Three of the new proceedings – post-grant review, inter partes review, and the transitional post-grant review proceeding for covered business method patents – are designed to provide opportunities to challenge the validity of issued U.S. patents. Post grant review (PGR) will be available to challenge patents issued under the new “first inventor-to-file” regime implemented under the AIA, for the first nine months after they issue. Inter partes review (IPR) can be used to challenge any unexpired patent (except for first-inventor-to-file patents during the first nine months after issuance, i.e., while they are subject to post-grant review). The transitional post-grant review proceeding (CBM) facilitates the challenge of a particular category of patents, the so-called “covered business method” patents.
While PGR and CBM can be used to assert a broad range of invalidity defenses, including ineligible subject matter, anticipation, obviousness, lack of written description, and non-enablement, IPR challenges must be based on anticipation or obviousness in view of patents or printed publications. In addition, because these proceedings are intended as alternatives to district court litigation, PGR and IPR are not available to a petitioner who filed a civil action challenging the validity of a claim of the patent before filing the petition, and CBM proceedings are only available to petitioners who have been sued or charged with infringement of the patent at issue.
The fourth type of contested proceeding is the “derivation proceeding.” Derivation proceedings are the AIA first-inventor-to-file regime replacement for the old, first to-invent interference proceedings. A derivation proceeding is available to provide redress to an applicant who asserts that an inventor named in an earlier-filed application derived the claimed invention from the (later) applicant and filed its application without the true inventor’s authorization. As of this writing, no “first-inventor-to-file” patents have issued; these will be issued on applications filed on or after March 16, 2013 (unless all of the claims in the application are supported by a priority application filed before that date), and no derivation petitions have been filed. But we can expect to see derivation proceedings in the future.
All of these proceedings will be conducted before the new Patent Trial and Appeal Board, which replaced the Board of Patent Appeals and Interferences in the USPTO. The number of administrative law judges on the Board has been significantly increased in order to accommodate the new contested proceedings (in addition to continuing to hear ex parte appeals in original applications and ex parte reexamination proceedings), and the new judges bring a wealth and diversity of experience and relevant, specialized knowledge.
The USPTO has instituted a new set of common procedures for the conduct of the new contested proceedings. Detailed new rules govern the filing of documents, required notices, motion practice, the taking of testimony, discovery, sanctions for litigation misconduct, and settlement. Additional rules address unique aspects of and requirements for IPR, PGR, CBM, and derivation proceedings, respectively.
Although the design of the new patent challenge proceedings (PGR, IPR, and CBM) generally favors the challenger, the new contested proceedings present challenges and opportunities for both petitioners and patent owners. For example, petitioners must consider the significant estoppel that will attach to a final written decision in IPR and PGR in particular, precluding further litigation on grounds that the petitioner raised or “reasonably could have raised” in the IPR or PGR. And patent owners must now need to be prepared to defend their patents, as soon (potentially) as they issue, against challengers with no standing limitations, in fast-paced proceedings where there is a limited opportunity to amend claims. On the other hand, both sides are essentially forced to show their best cards, without the opportunity to delay litigation via wide-ranging discovery or otherwise. And USPTO litigation is conducted before patent law experts, many of whom are technically trained. For the savvy and well-prepared litigant – petitioner or patent owner – the new contested proceedings present a golden opportunity to showcase a meritorious position.
The new proceedings also present challenges and opportunities for counsel. The USPTO contested proceeding is an entirely new practice arena, and one that is proving popular among patent challengers. However, these are high-stakes, fast-track, tightly-run proceedings, frequently conducted in the shadow of concurrent infringement litigation in the courts. Of counsel, they require specialized expertise, careful preparation, and sophisticated strategic analysis.