the new tool for patent defendants - inter partes review daniel w. mcdonald george c. lewis, p.e....

The New Tool for Patent Defendants -Inter Partes Review

Daniel W. McDonaldGeorge C. Lewis, P.E.

Merchant & Gould, P.C.April 16, 2014

© 2014 Merchant & Gould P.C.

What’s Really Keeping CLOs Up At Night?


A little History

• Trolls are not new• Many technology booms had trolls

– Steam Engines– Bicycles– Automobiles US Pat. No. 549,160– Airplanes– Radios


Inter Partes Reexamination

• Created in 1999• Intended to reduce costs of

invalidating weak patents • Since 1999, 1919 inter partes

Reexaminations have been filed• Not available since September 2012


Problems with Old Inter Partes Reexamination Process

• Estoppel• Amendments by Patent Owner relatively

easy• Handled by an Examiner• Slow• Two Appeals• Lawsuits usually continued in parallel:

cost© 2014 Merchant & Gould P.C.

Practical Effect of These Problems

• Most patents confirmed in some way.• Requestor often worse off after

Reexamination• Parallel proceedings increased costs• IP community clearly understood the

process was failing to achieve its purpose.


Patent Reform: Review Replaces Reexamination

• America Invents Act (AIA) now gives more ways to challenge patents at the US Patent & Trademark Office (USPTO)– Broadest: Inter Partes Review (IPR)– Also Post Grant Review, CBMP

• Effective 2012, Decisions now coming in• Early Indications: IPR is more powerful way

to attack patents than old reexamination


Benefits of IPRs to Challenger

• Defendant has a better chance to win– Only issue: invalidity– Technology evaluated by a panel of three patent

judges at USPTO– Lower burden of proof at the USPTO– Broader interpretation of claim scope makes

invalidation easier– Courts more often exclude expert testimony and

other evidence on procedural grounds, lowering chance of winning in court


Benefits of IPRs: Speed and Stays

• Stay of lawsuit saves litigation costs, as IPR might end or narrow case

• Stay more appealing now because IPRs proven to lead to faster final decisions

• Statutory based fast timeline -18 months• Direct Appeals to Fed. Cir.• PTAB Process Designed to Avoid Delays

– Discovery minimal– Limited amendment opportunity– Redundant grounds axed


Strategic benefits of IPRs for Challengers

• Forces Patent Owner to take positions early, before facts regarding infringement are known

• Patent Owner forced to narrow and distinguish claims, making infringement harder to prove


Best Practices:Coordinate IPR and Trial Strategy

• Prepare non-infringement positions first

• Focus IPR arguments to obtain favorable early claim construction on terms important to noninfringement

• Even if patent survives IPR: Set up settlement and issues for summary judgment motions © 2014 Merchant & Gould P.C.

Best Practices: Coordinating Strategy

• Need to find strong prior art, fast• Ideally, include one prior art reference

similar to the allegedly infringement product

• Forces patent owner to argue why the patent claims exclude your product

• Preserve validity challenge in court—non published prior art (sales, public use)


Limitations on IPRs

• Not all prior art can be used• Not all grounds of invalidity are

available• Estoppel scope unclear• Risk that IPR is unsuccessful• Delay in filing may make IPR

unavailable or stay less likely© 2014 Merchant & Gould P.C.

Strategies for Patent Owners

• Consider search and reexamination before bringing suit—to reduce chances of successful IPR

• Pick targets less likely to file IPR• Choose venue carefully• Consider claim amendments,

continuations • Keep valuable patent families alive



Thank You!

Questions?

George C. [email protected]

the new tool for patent defendants - inter partes review daniel w. mcdonald george c. lewis, p.e....

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