sense and sensibility: the pros and cons of new alternatives to patent litigation

© 2013 Armstrong Teasdale LLP

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Jennifer Hoekel

September 25, 2013

Alternatives to Patent Litigation


Post-Issuance PTO Proceedings Available to Challengers Ex Parte Reexamination Inter Partes Review (IPR) Post-Grant Review (PGR) Covered Business Method (CBM) Patents

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Which PTO Decision Making Body? Ex Parte Examination:

• Central reexamination unit (CRU).

Inter Partes Review, Post Grant Review, Covered Business Method Patents:

• Patent Trial and Appeals Board (PTAB).

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When is a Challenge Allowed?

Ex Parte Reexamination• Any time during the enforceable life of a patent.

Inter Partes Review• Nine months after the patent issues or after PGR final

decision or • Within one year of filing infringement action.

Post-Grant Review• Within nine months after a patent issues.

Covered Business Method Patents• Within nine months after a patent issues, for first to file.• Anytime for others but limited prior art• Not available after August 14, 2020.

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Which Types of Patents Can be Challenged? Ex Parte Reexamination

• All patents. Inter Partes Review

• All patents. Post-Grant Review:

• With some exceptions, requires at least one claim have an effective date after March 15, 2013.

Covered Business Method Patents• Method/apparatus for operations concerning

financial products/services, without any technological inventions.

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Grounds for Invalidity or Challenge Ex Parte Reexamination

• Sections 102 and 103, based on patents and printed publications only.

Inter Partes Review• Sections 102 and 103, based on patents and printed

publications only. Post Grant Review

• Sections 101, 102, 103 and 112. Challenge under 102 and 103 may be based on prior public knowledge including prior use or sale.

Covered Business Method Patents• Sections 101, 102, 103 and 112. Challenge under 102 and

103 may be based on prior public knowledge including prior use or sale.7


Patent Challenges & Discovery

Ex Parte Reexamination• No discovery.

Inter Partes Review• Discovery allowed.

Post-Grant Review• Discovery allowed.

Covered Business Method Patents• Discovery allowed.

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Standards to Initiate

Ex Parte Reexamination• Substantial new question of patentability.

Inter Partes Review• Reasonable likelihood that at least one claim is

invalid. Post-Grant Review

• More likely than not that at least one claim is invalid.

Covered Business Method Patents• More likely than not that at least one claim is

invalid. Showing Invalidity in All Cases =

Preponderance of the Evidence

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Allowability of Amendments

Ex Parte Reexamination• Yes, but cannot broaden the scope of the

patent. Inter Partes Review

• Yes. Post-Grant Review

• Yes. Covered Business Method Patents

• Yes.

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Estoppel & Challenger Anonymity Ex Parte Reexamination

• Estoppel = NO. • Challenger Anonymity = YES.

Inter Partes Review• Estoppel = YES, statutory allowance. • Challenger Anonymity = NO.

Post-Grant Review• Estoppel = YES, statutory allowance.• Challenger Anonymity = NO.

Covered Business Method Patents• Estoppel = YES, with some limits. • Challenger Anonymity = NO.11


Availability of Appeal

Ex Parte Reexamination• NO - Patentee only.

Inter Partes Review• YES - Direct appeal to Fed Cir.

Post-Grant Review• YES - Direct appeal to Fed Cir.

Covered Business Method Patents• YES - Direct Appeal to Fed Cir.

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Challenger’s Advantages and Disadvantages to Reexam Advantages

• Cheaper• Anonymity• No estoppel • Possible litigation

stay

Disadvantages

• Slower • No participation

other than by patentee

• No discovery• Claim amendments

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Challenger’s Advantages and Disadvantages to IPR Advantages

• Lower burden• Fast• Litigation stay likely• Discovery/

Adversarial• Amendments can

give intervening rights

• Preserve some defenses

Disadvantages• Expensive • One chance• No anonymity • Amendments could

strengthen patent• Stronger patent

possible

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Challenger’s Advantages and Disadvantages to PGR Advantages

• Lower burden• All statutory bases

available • Fast• Litigation stay likely• Discovery/

Adversarial

Disadvantages • Broad estoppel• Expensive• One chance• No anonymity • Amendments could


possible

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Challenger’s Advantages and Disadvantages to CBM Advantages

• Lower burden• All statutory bases

available • Fast• Litigation stay likely• Discovery/

Adversarial

Disadvantages

• Estoppel (narrower than IPR and PGR)

• Expensive• One chance• No anonymity • Amendments could


possible16


Post Issuance PTO Proceedings Available to Patent Holders Ex Parte Reexamination Supplemental Examination Reissue Certificate of Correction

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Which PTO Decision Making Body? Ex Parte Reexamination

• Central reexamination unit (CRU). Supplemental Examination

• Central reexamination unit (CRU). Reissue

• Examiner. Certificate of Correction

• Supervisory examiner (except that Certificate of Corrections Branch may handle errors that are clearly minor, clerical or topographical).

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When is a Challenge Allowed?

Ex Parte Reexamination• Any time during the enforceable life of a

patent. Supplemental Examination

• Any time during the enforceable life of any patent that was enforceable on or after September 16, 2012.

Reissue • Any time during the enforceable life of a

patent. Certificate of Correction

• Any time during the enforceable life of a patent.

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Grounds for Invalidity or Challenge Ex Parte Reexamination

• Sections 102 and 103, based on patents and printed publications only.

Supplemental Examination• Sections 101, 102, 103 and 112. Any type of written

information “believed to be relevant to the patent.” Reissue

• Sections 101, 102, 103 and 112. Patents, printed publications, defects related to subject matter eligibility, utility, written description, enablement and clarity.

Certificate of Correction• Clerical or typographical mistakes or mistakes of “minor

character” by the applicant.• Any mistake by PTO “clearly disclosed” in PTO records.• Mistakes concerning inventorship.

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Standards to Initiate

Ex Parte Reexamination• Substantial new question of patentability.

Supplemental Examination• Substantial new question of patentability.

Reissue • Admission of defect in patent by patent owner.

Certificate of Correction• Discretionary. Proof of facts required to correct

inventorship.

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Allowability of Amendments

Ex Parte Reexamination• YES – claims can be narrowed but not broadened.

Supplemental Examination• No amendments during supplemental examination

itself. If ex parte reexamination is ordered, amendments allowed but cannot broaden.

Reissue • YES – claims can be narrowed anytime, or broadened if

at least one change that broadens claims is applied for within 2 years of grant of original patent.

Certificate of Correction• YES – but cannot add new matter or make changes that

require reexamination. 22


Availability of Appeal

Ex Parte Reexamination• YES – examiner’s final rejection of any claims may be

appealed to PTAB;• Adverse decisions of PTAB are appealed to the Fed Cir.

Supplemental Examination• Denial is final and not appealable, but may petition

Director under 37 CFR 1.181. Reissue

• Appeal to PTAB. • Adverse decisions of PTAB are appealed to Fed Cir.

Certificate of Correction• Petition to Technology Center Director under 37 CFR

1.181.23


Patentee’s Advantages and Disadvantages to Reexam Advantages

• Cheaper• Preemptive • Examiner Interviews• No third party

involvement

Disadvantages

• Slower • Narrowing or

rejecting of claims • Once started, it

cannot be stopped unilaterally

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Patentee’s Advantages and Disadvantages to Supplemental Examination

Advantages • Broad range of

prior art available• Inoculate against

fraud allegations• Art becomes of

record

Disadvantages

• Narrowing or rejecting of claims possible

• Slightly more expensive upfront

• No statements allowed other than explanation of relevance

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Patentee’s Advantages and Disadvantages to Reissue Advantages

• Cheaper• Broaden claims

within 2 yrs of issue• Narrow anytime

Disadvantages

• Admit defect • Slow

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Advantages and Disadvantages to Certificate of Correction Advantages

• Cheap or free • Do not need to

allege that there was no deceptive intent

• Fast

Disadvantages

• Must be clerical or a mistake of “minor character”

• Must be a mistake made in good faith

• Only for later-arising suits (will not help in a current lawsuit)

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Best Practices Follow the Rules:

• Non compliant submissions are often sent back. • PTAB will follow rules closely to keep reviews within one

year as required. Choose Your Battles Wisely:

• Narrow your arguments to increase chances of success. Make Petitions Thorough Up Front:

• It is difficult to supplement later in the process. Make Claim Construction Work for You:

• Good idea to make your case on claim construction from outset.

Put Together a Winning Team:• Include a mix of litigators and prosecutors to achieve

success.28


Contact

Jennifer [email protected]

CLE and HRCI Confirmation Code: JH0912

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sense and sensibility: the pros and cons of new alternatives to patent litigation

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