On May 9, 2018, U.S. Patent and Trademark Office (PTO) issued a notice of proposed rule for changing the standard for construing claims in unexpired patents in inter partes review (IPR), post-grant review (PGR), and transitional covered business method (CBM) proceedings from current broadest reasonable interpretation (BRI) to the same claim construction standard that is
Under 35 U.S.C. 315(e)(1), a petitioner in an inter partes review of a claim in a patent that has resulted in a final written decision by the Board may not request or maintain a proceeding before the Patent Office with respect to that claim on any ground that the petitioner raised or reasonably could have…
The USPTO has gone ahead and finalized new rules for post-grant proceedings under the America Invents Act (AIA) – despite heavy criticism that the rules do little to alter the lopsided nature of these proceedings. The new rules were published at 81 FR 18750 on April 1, 2016 and go into effect on May 2, 2016.
Technically this “final rulemaking” amends various portions of 37 C.F.R. 42, the rules that govern post-grant proceedings under the AIA, including inter partes review (IPR), covered business method review (CBM), and post-grant review (PGR).
Perhaps the most significant change is that under the new rules the patent owner will be able to submit testimonial evidence, such as an expert declaration, as part of a patent owner’s preliminary response to a patent challenge before the Patent Trial and Appeal Board (PTAB) decides to institute an IPR, CBM, or PGR trial. (Under the existing rules, the Patent Owner usually cannot present testimonial evidence until after the institution decision and the PTAB makes its decision to institute trial after hearing only one side of the story, e.g., from the petitioner’s expert.)
However, 37 CFR 42.108(c) has been revised such that if the patent owner presents testimonial evidence as part of a preliminary response, any “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 an inter partes review.” An analogous new rule in 37 CFR 42.208(c) for a post grant review has also been finalized. Under the new rules petitioners may also seek leave to file a reply to any preliminary response filed by the patent owner.
These changes beg the questions: what do the patent owners have left to say after institution if their experts’ opinions have already been considered and found unpersuasive, and will the PTAB judges ever change their minds during trials when the petitioner’s evidence is not viewed in its most favorable light?…
Continue Reading New Final Rules for Post-Grant Proceedings Published by USPTO on April Fools Day
Earlier this month, the Patent Trial and Appeal Board (PTAB) added two decisions to its list of “precedential” opinions for the USPTO’s new proceedings for challenging patents under the America Invents Act. The list (which now consists of three decisions out of the over 1000 opinions that have been rendered) is intended to bring to public’s attention cases that the PTAB has concluded settle aspects of the evolving law governing inter partes review (IPR), covered business method (CBM) review, supplemental examination and post grant review (PRG) proceedings.
With over 200 administrative patent judges and over 2000 pending proceedings being handled by a myriad of different panels of judges, precedential decisions are intended to resolve conflicts. However, the process for designating an opinion as “precedential” is quite cumbersome. The process starts by nomination of an opinion by a PTAB judge (or a member of the public within 60 days of the rendering of the opinion). The Chief Judge of the PTAB then circulates the opinion to all members of the PTAB with an invitation to comment (typically within 10 days) and then vote on whether the opinion should be designated as precedential. If a majority of the PTAB judges agrees, the Chief Judge notifies the Director of the Patent Office, who can concur or reject the recommended designation. If the Director concurs, then the opinion labeled as precedential and publishes as such on the USPTO website (http://www.uspto.gov/patents-application-process/appealing-patent-decisions/decisions-and-opinions/precedential).
In the first new precedential opinion, LG Electronics, Inc. v. Mondis Tech Ltd., IPR2015-00937, Paper 8 (PTAB Sept. 17, 2015), the PTAB found LG’s petition for inter partes review was barred by 35 U.S.C. § 315(b), even though LG had filed its petition within one year of being served with an infringement complaint in 2014. The opinion concluded that the one-year bar of section 315(b) applies because petitioner had also been served with an earlier infringement complaint in 2008 on the same patent. There’s a certain irony in this decision because IPR proceedings did not come into existence until 2012 – so LG could never have petitioned for IPR the first time around. The effect of this decision apparently is that anyone sued more than a year before the AIA proceedings became available is effectively barred from petitioning for inter partes (or CBM) review.
The LG opinion notes but does not necessarily endorse an earlier PTAB decision (Oracle Corp. v. Click-to-Call Techs., LP, Case IPR2013-00312, Paper 40 (PTAB Dec. 18, 2013) ) in which a panel held that the 315(b) bar is not triggered by an earlier complaint – more than one-year before the petition – if the action is dismissed without prejudice. The panel in the LG case distinguished the Oracle decision because in the present case the dismissal of Mondis’s 2008 complaint was dismissed partial with prejudice and partially without prejudice.
In the second decision designated as precedential on January 12, 2016, Westlake Services, LLC v. Credit Acceptance Corp., (CBM2014-00176, Paper 28 (PTAB May 14, 2015) the Board interpreted the estoppel provision of 35 U.S.C. § 325(e)(1), ruling that the estoppel that prevents a petitioner from bringing a second CBM or PGR proceeding following “a final written decision” in the statute refers only to a decision on the specific claims on which the proceeding was instituted. Westlake was thus not estopped from bringing a second petition and challenging different claims.…
Continue Reading Patent Trial and Appeal Board Adds Two More Cases to its List of Precedential and Informative Decisions
The Federal Circuit will apply a relaxed standard for review of the Patent Office’s post grant patent review proceedings and will give a good deal of deference to PTAB “findings of facts.”…
Continue Reading Federal Circuit Affirms Invalidity Of A Merck Patent Based On Substantial Evidence Standard
In SightSound Technologies, LLC v. Apple, Inc. (CBM2013-00020), the Court of Appeals for the Federal Circuit (the patent appellate court) recently affirmed the decision of Patent Trial and Appeal Board (PTAB) to invalidate certain claims of SightSound’s patents 5,191,573 and 5,966,440 in a covered business method (CBM) proceeding based on an obviousness ground that was not expressly raised by the petitioner (Apple).
The ‘573 and ‘440 patents relate to methods for electronic sale and distribution of digital audio and video signals. Each of the relevant claims required forming a connection, through telecommunications lines, between a party’s first memory and a second party’s second memory, selling the desired digital signals for a fee through the telecommunications lines, transmitting the desired signal from the first memory to the second memory through the telecommunications lines, and storing the transmitted signal in the second memory.
In instituting the review of the challenged claims, PTAB found that the patents qualified for CBM review because they involved an activity that was “financial in nature,” namely, the electronic movement of money between financially distinct entities. The PTAB further found that the challenged claims did not include inventive technological features that would have otherwise excluded them from CBM review. The PTAB instituted the review not only based on anticipation grounds advanced by Apple but also based on an obviousness ground that was not specifically alleged by Apple, though the evidence upon which the PTAB relied for the obviousness ground was included in Apple’s petition. This evidence involved a series of disclosures relating to a computer system developed by CompuSonics in 1980’s. The Board reasoned that its reliance on this evidence was proper because while Apple’s petitions did no explicitly assert obviousness based on those disclosures, they nonetheless supported such a ground based on Apple’s detailed explanation of the CompuSonics references.…
Continue Reading Fed. Circuit Affirms PTAB’S CBM Decision Based on a Ground Not Raised By Petitioner
Newly appointed USPTO Director Michelle Lee has responded to public criticism of the post-grant patent review mechanisms provided by the America Invents Act (AIA) by announcing in her blog last week that the government will implement several rule changes. The new rules, which will be implemented in three stages, have not yet been finalized but Director Lee strongly hinted these changes should benefit Patent Owners.
One of the rule changes apparently will make it easier for patent owners to amend their claims that are challenged by petitioners in inter partes review (IPR), covered business method (CBM) review and post grant review (PGR) proceedings.
According to the Director Lee, a first round of “quick fixes” will be released in the spring, followed by a second round of more substantial changes that will be published in the Federal Register for public comment in the summer. A third round of changes will follow involving revisions to the PTAB Trial Practice Guide, which governs the conduct of IPR, CBM and PGR proceedings.…
Continue Reading USPTO Responds To Criticism By Promising PTAB Rule Changes That Should Benefit Patent Owners
Two of the earliest challenges to patents under the new post grant proceedings established by the America Invents Act (AIA) are now on appeal to the Court of the Appeals for the Federal Circuit and both appeals are taking direct aim at the US Patent and Trademark Office’s decision to adopt a controversial standard for claim construction – the so-called “Broadest Reasonable Interpretation” standard – to govern all of the new AIA proceedings.
Versata v. SAP concerns the very first “covered business method” (CBM) review proceeding (CBM2012-00001) conducted by the USPTO and is on appeal by the Patent Owner, Versata, of the Patent Trial and Appeal Board (PTAB) decision to invalidate certain challenged claims. Cuozzo v. Garmin concerns the first inter partes review (IPR) proceeding and likewise is on appeal from a PTAB decision finding Couzzo’s claims invalid.
Both appellants are challenging the USPTO’s claim construction standard as impermissible substantive rule-making by the agency and arguing that the standard instead should be the same as that applied to issued patents by the federal courts – the so-called Phillips rule that requires judges and juries to give the elements of a claim their “ordinary and customary meaning.” (See, Phillip v AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005))…
Continue Reading Does the Broadest Reasonable Interpretation Standard Make Sense?
According to its mission statement, Consumer Watchdog is a non-profit entity “dedicated to providing an effective voice for taxpayers and consumers in an era when special interests dominate public discourse, government and politics” – and they apparently also challenge patents in their spare time.
In 2006 Consumer Watchdog filed a request for inter partes reexamination under the old pre-AIA rules, challenging certain patent rights to stem cells that had been granted by the USPTO to the Wisconsin Alumni Research Foundation. When this public interest group failed to get the WARF patent thrown out last year, they exercised their statutory right to appeal. Section 141(c) of the U.S. Patent Laws provides that a party to a USPTO administrative proceeding who is dissatisfied with the Patent Office’s final written decision may appeal to the U.S. Court of Appeals for the Federal Circuit. (35 U.S.C. § 141.)
However, like Dikembe Mutombo swatting away a lay-up, the Federal Circuit recently told Consumer Watchdog: Not in my house! Chief Judge Radar writing for a unanimous three-judge panel rejected the appeal out of hand because the public interest appellant simply lacked standing. According to the Federal Circuit opinion, to invoke federal jurisdiction, the petitioner must meet the minimum requirements of Article III. Consumer Watchdog v. Wis. Alumni Research Found., 753 F.3d 1258, 1260 (Fed. Cir. 2014).…
Continue Reading Do-Gooders Need Not Apply
In an Inter Partes review (IPR) proceeding before the PTAB, a patent owner is not automatically afforded the right to amend the challenged claims. Rather, the patent owner has a burden of establishing that it is entitled to amend one or more of the challenged claims. 37 C.F.R. §42.20(c). To this end, the patent owner must first confer with the Board regarding a proposed motion to amend. After the patent owner receives the Board’s approval, it must file a motion to amend contemporaneous with or prior to the patent owner’s response. 37 C.F.R. §42.121(a)(1). The proposed amendments must be in response to a ground of unpatentability involved in the trial, and may not enlarge the scope of the original challenged claims. §37 C.F.R. 42.121(a)(2)(ii) and 35 U.S.C. §316(d).
In addition, the Board has held that the patent owner bears the burden of proof to demonstrate the patentability of the proposed claims, not only with respect to the prior art references on which the trial was instituted, but also over the prior art in general. Idle Free Sys., Inc. v. Bergstrom, Inc. (IPR2012-00027). The PTAB has explained that the requirement to distinguish the proposed claims over prior art in general does not mean that the patent owner is “assumed to be aware of every item of prior art presumed to be known to a hypothetical person of ordinary skill in the art.” Id. Rather, the patent owner should discuss, and present evidence (if appropriate), regarding the level of ordinary skill the art and what was known in the relevant timeframe about the features being relied on to demonstrate patentability of the proposed claims.
The requirement to show the patentability of the proposed amended claims over prior art in general has been an important factor in the Board’s repeated denial of motions to amend. In fact, the Board had not granted any motion to amend until last month when the Board granted the patent owner’s motion to amend with respect to certain challenged claims in International Flavors & Fragrances Inc. v. The United States of America (IPR2013-00124).