{ November/26/2014 }

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Matthew B. Pinckney
Hoffman Warnick LLC

Garrett K. Quillia
Hoffman Warnick LLC

(From the Sept 2012 Newsletter)

This coming September, another round of changes to US patent laws will go into effect as part of the tiered implementation of the recently passed America Invents Act (AIA).  This upcoming round of revisions to the patent code may dramatically change patent practice before the United States Patent and Trademark Office (PTO), and litigation practices for companies and individuals involved in intellectual property (IP) development and enforcement.  One of the most notable, and likely impactful, changes going into effect in September is a new patent post-grant review (PGR) system enabling the public to challenge the validity of recently issued patents.

Under the new PGR system, within nine months of a patent’s issuance, any third party may request to cancel one or more claims of the issued patent as unpatentable.  The third party challenger must present an argument to the newly created Patent Trial and Appeal Board (PTAB) regarding invalidity of the challenged claims, and provide evidence to support that argument.  In their request, the third party challenger must demonstrate to the PTAB that it is “more likely than not” that at least one claim is invalid.  Once a challenge is filed, the patent owner is given a period of time to file a preliminary response arguing against the merits of the challenge.  As of this point, the proposed rules suggest that the patent owner will be given a two month period to file the preliminary response.  This request and response are then considered by the PTAB which will determine whether to advance the PGR proceedings.

If the PTAB decides to advance the PGR proceeding, then the PTAB will issue a scheduling order setting deadlines for both parties to conduct rounds of discovery, and generate and submit responses and challenges.  Once both sides have been given an opportunity to present their respective cases as to validity, the PTAB will rule on the contested claims.  After the PTAB rules on the matter, some, all, or none of the claims may be invalidated; and the third party challenger is estopped from raising grounds of invalidity in subsequent proceedings arising in the District Court, before the PTO or the International Trade Commission (ITC) that were not raised during the PGR proceeding.

Through this adversarial review process, the new PGR system provides competitors with the ability to conduct discovery and to challenge patent validity on grounds such as inadequate written description, claim indefiniteness, lack of enablement, and subject matter ineligibility.  This system may drive technology companies to monitor patent issuances in their technology areas, and motivate patent owners to conduct more thorough application drafting and prosecution in preparation for invalidity challenges following issuance.  Through PGR, patent owners may earn patent rights which are presumably more valuable, secure, and enforceable, potentially reducing counterclaims, and litigation risks and costs by deciding invalidity issues at an early stage of the life of the patent.

Many competitors may view PGR as a slightly more expensive alternative to reexamination (e.g., $35,800 for a petition challenging 1-20 claims through PGR as compared to $27,200 for a petition challenging 1-20 claims through inter partes review), allowing these competitors broader grounds (e.g., a challenge on any grounds of invalidity with PGR as opposed to a challenge based solely on prior art patents or printed publications with inter partes review) and a more active role in validity challenges.    This new ability to challenge and investigate issued patents may encourage industries and technology segments to self-police patent issuances, driving competitors to monitor, analyze, and potentially challenge one another’s patents at an early, more cost-effective stage than in the courts.  For example, over the past few years in the European Union, the European Patent Office (EPO) has seen a similar program (EPO oppositions) result in 4.5-6% of patents being challenged within 9 months of issuance.

While the new PGR is likely to increase the expense and difficulty of patent acquisition in congested technology areas with oft-contested IP, in the long run PGR is likely decrease the costs of patent enforcement and litigation, preliminarily deciding many invalidity issues at the PTAB stage.    Overall, the PGR may be a useful tool for both patent owners and innovators, providing a mechanism poised to streamline portions of the patent process and further spur innovation.



November 2014 NEWSLETTER

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