11 AIPLA

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American Intellectual Property Law Association

Update on Inter Partes Disputes and the PTAB

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John B. PegramFish & Richardson P.C.

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AIPLA IP Practice in Japan CommitteeApril, 2014

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Today’s Discussion ofUSPTO Post Grant Proceedings

• “Update on Inter Partes Disputes and the PTAB”

• Introduction to the Mock Hearing– “The Preliminary Decision instituting an IPR”

• Oral Hearing– Normally 2 hours– Our Mock Hearing will be 1 hour

• Limited to issues involving one claim

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PTAB Statistics

• FY = Fiscal Year, starting October 1st.• Data as of March 20, 2014. See http://www.uspto.gov/ip/boards/bpai/stats/aia_statistics_03_20_2014.pdf

18 Month PTAB Timeline

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1. Preparation• Petitioner

– Must act quickly if infringement litigation is possible.– Detailed petition is required,

• Claim charts are required, and • Expert declarations are common.

• Patentee– Must be prepared in advance, if possible, – Little time to prepare responses.

• Both parties:– Page limits on all filings can be a problem.

• Multiple petitions.

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2. Initial Tactics of the Patentee

• Two opportunities to respond to the Petition:– Preliminary Response

• Opposing institution of proceeding – completely, and/or – in part

– Main Response & Amendment of Claims• Claim construction tactics

– “Broadest reasonable interpretation” (BRI) for non-expired patents• The PTAB’s use of this standard is controversial.

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3. Claim Amendments

• Claim amendments may be offered by Motion to Amend, at the time of the Patentee’s Response, following institution of the proceeding. – Only one opportunity to amend. – The number of claims cannot be increased without a

showing of good cause. – Few amendments have been allowed thus far.

• This is becoming a major point of policy concern for AIPLA and others.

– Preliminary Response is the best time to argue patentable distinctions for dependent claims.

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Claim Amendments

• The Patentee must make a showing of patentable distinction over the prior art: (a) specifically identifying features added to substitute claim vs. challenged claim; and (b) presenting “technical facts and reasoning about those feature(s), including construction of new claim terms” sufficient to demonstrate patentability.– The Patentee can rely on expert testimony to demonstrate

significance of added features– “A mere conclusory statement by counsel is on its face

inadequate.” Idle Free Systems, Inc. v. Bergstrom, Inc., slip op. IPR2012-00027 (PTAB June 11, 2013)

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Claim Amendments

• Petitioner can rebut the patent owner’s position on patentability of the proposed substitute claims in an Opposition to the motion to amend -- with specific evidence and reasoning, including

• citation and submission of any applicable prior art and

• reliance on declaration testimony of technical experts,

• Opposition is not limited to prior art identified in original petition.

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4. Discovery Requests

– Four types of discovery: • Mandatory initial disclosures,• Routine discovery, • Additional discovery, and • Discovery by agreement of the parties.

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Additional Discovery

• PTAB must authorize discovery beyond “routine discovery”

• 35 U.S.C. § 316(a)(5) and 37 C.F.R. § 41.51(b)(2): moving party must demonstrate that additional discovery sought is “in the interest of justice”

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Additional Discovery5-part test for establishing “in the interest of justice”

(1) More than a possibility and mere allegation that something useful will be found,(2) Not merely seeking early identification of the other party’s litigation positions,(3) Lack of ability to generate equivalent information by other means,(4) Easily understandable requests, and (5) Requests are not overly burdensome to answer.

See Garmin International Inc. v. Cuozzo Speed Technologies LLC, slip. op. IPR2012-00001 (PTAB Mar. 5, 2013)

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5. Settlement

• Yes, you can settle a post grant proceeding;• However, the PTAB has refused to end some AIA

reviews that have reached an "advanced stage," even though the parties had settled. – Only the Petitioner is dismissed and the proceeding

continues with the Patentee. – For example, Interthinx v. Corelogic, Case CBM2012-

00007 (Jan. 30, 2014):• Settlement was after full briefing and before the

hearing, and• All claims were eventually cancelled.

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6. Relationships with parallel litigationStays of District Court Cases

• As of March 11, 2014: – 112 motions to stay were granted, and – 47 for stay were denied.

• A frequently updated list of district court orders on motions to stay is provided at www.fishpostgrant.com/stays

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Some principal stay considerations• Will a stay simplify the issues in question and streamline

the trial?– Will all asserted claims be addressed by the PTAB?

• Is discovery is complete and has a trial date has been set?

• Will a stay or denial unduly prejudice the nonmoving party?

• Will a stay present a clear tactical advantage for the moving party?

• Will a stay or denial reduce the burden of litigation on the parties and on the court?

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6. Relationships with parallel litigationEstoppel

• The petitioner in an inter partes review of a claim in a patent that results a final written decision, or the real party in interest or privy of the petitioner, may not assert in district court or the ITC any ground that the petitioner raised or reasonably could have raised during that inter partes review. 35 U.S.C. 315(e)(2).• IPR filing statistics suggest that Petitioners are not

very worried about estoppel.• It is unclear whether estoppel applies to grounds that

the PTAB has refused to consider when instituting review.

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8. Relationships with parallel litigationTiming—the race to a judgment

• Fresenius USA, Inc. v. Baxter Intern., Inc.,721 F.3d 1330 (Fed. Cir. 2013) (reexamination).– Claims were cancelled by the PTO,– That decision was affirmed by the Federal Circuit, – There had not been a final judgment on appeal of an

infringement action;– Therefore, the cancellation was effective, in spite of

the fact that the courts had not found the claims invalid in the infringement proceedings.

The Preliminary Decision Instituting Review by the PTAB

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Materials Prepared byJohn B. Pegram

Fish & Richardson P.C._____

AIPLA IP Practice in Japan CommitteeApril, 2014

18 Month PTAB Timeline

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DECISIONInstitution of Inter Partes Review

Outline of a DecisionInstituting an Inter Partes Review

I. Introduction– Background– Summary of the Invention– Illustrative Claim– Prior Art References Applied by Petitioner– The Alleged Grounds of Unpatentability

Outline of a DecisionInstituting an Inter Partes Review

II. ANALYSISA. Findings of Fact

1. Dugan2. Kim3. Sklarz

B. Claim Construction1. Principles of Law2. "User Knowledgeable-about the Distinguished Home“3. "Owner of a Home“

Outline of a DecisionInstituting an Inter Partes Review

II. Analysis (continued)Sections C. thru F. discuss whether or not the

Petitioner has demonstrated a reasonable likelihood that one or more claims are unpatentable on each asserted ground. III. ORDER

THRESHOLD: “a reasonable likelihood that the petitioner would prevail”

Mock HearingSummary of the Invention

Summary of References and Alleged Grounds of Unpatentability

Findings of Fact

Claim Term Constructions

Grounds of UnpatentabilityExample 1 - Granted

Grounds of UnpatentabilityExample 2 – Redundant (Same Art)

Grounds of UnpatentabilityExample 3 - Denied

Grounds of UnpatentabilityExample 4 – Redundant (Different Art)

Order – Grounds Granted

Order – Grounds Denied

Order

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Resources

• USPTO sites:– AIA Main: http://www.uspto.gov/aia_implementation/index.jsp– Inter Partes: http://www.uspto.gov/aia_implementation/bpai.jsp– PTAB: http://www.uspto.gov/ip/boards/bpai/

• F&R web sites:– Post-Grant for Practitioners: http://fishpostgrant.com/webinars/– General: http://fishpostgrant.com/– IPR: http://fishpostgrant.com/inter-partes-review/– PGR: http://fishpostgrant.com/post-grant-review/– Rules governing post-grant: http://fishpostgrant.com/

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Thank you

John B. PegramFISH & RICHARDSON

P.C. pegram@fr.com