Inter Partes Review of Patents: The Case So Far
Presented by John Hintz
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2 New Option = Inter Partes Review (“IPR”)
Data and Trends
Agenda
2
Traditional Options for Challenging Patents 1
What is it?
Traditional Options
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Traditional Options
4
District Court Litigation
International Trade Commission
Reexaminations • Inter Partes • Ex Parte
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Reexam
• Defense only
• Request made to U.S. Patent and Trademark Office
• Inter partes reexam or ex parte reexam
• Standard = substantial new question of patentability
5
Traditional Options – Reexam
NOTE: AIA eliminated Inter Partes reexam as of Sept. 16, 2012.
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Court • Offense and Defense
• Venue − Local Rules − Speed − “Pro-Plaintiff”?
• Discovery (Fact and Expert) = $$
• “Markman” Hearing
• Summary Judgment
• Pre-Trial and Trial
6
Traditional Options – Court
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ITC
• Defense only
• Investigate allegations that IP infringement will impact a “domestic industry”
• Like litigation, but U.S. participates
• Decided by ALJ; Commission reviews
• President can veto (rare)
• Remedy = exclusion order; no damages
• Very fast; intensive discovery
• Can be devastating result
7
Traditional Options – ITC
New Options
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• Review validity under 102 & 103 (patents & printed publ’ns only) • All patents eligible • If sued, petitioner must file within 1 year of filing of lawsuit
Inter Partes Review
• Review validity under 101, 102 & 103 (any prior art), & 112
• Only for “first to file” patents filed after 3/16/2013 Post-Grant
Review
CBM Post-Grant Review
• Review validity under 101, 102 & 103 (any prior art), & 112
• Available only for “covered business method” patents
• Petitioner must have been charged with infringement
• Replaces interferences for “first-to-file” patents filed after 3/16/2013 Derivation
“New” Options
9
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Begins with a petition
Ends with a “trial”
Patent Trial and Appeal Board
Anyone other than patent owner may request:
must identify “all real parties in interest”
must identify claims and grounds for review
Petitioner’s burden =
preponderance Available as to all patents
IPR – What is it?
10
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IPR – Cost?
11
Filing fee depends on number of claims:
If petition granted, also pay:
Each additional
claim: $400
Up to 15 claims: $14,000
Up to 20 claims: $9,000
Each additional
claim: $200
IPR
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IPR – Petition
12
Higher standard than old inter
partes reexam OLD: “substantial new question of patentability” NEW: “there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition”
Patent owner can file
preliminary response
(and do so 80% of the time)
Decision to conduct IPR
must be made within 6 months
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112397
13
Code
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Limitations • Challenge only under § 102 and § 103 with patents or printed
publications • Timing = later of 9 months after grant of patent or termination of
Post-Grant Review • Cannot file > 1 year after served with complaint • Later, cannot assert in a lawsuit or at PTO same grounds or ones
petitioner “reasonably could have raised”
14
IPR – Petition
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IPR – Timing
15
Final decision in 12-18 months
Can appeal to Federal
Circuit
Parties can settle IPR terminated upon joint request unless PTO has decided the merits
Must file agreement; can ask to be kept secret
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IPR – Timing
16
Filing of Petition
Patent Owner Preliminary Response
Decision on Petition Initial Conference
Patent Owner Response & Motion to Amend Claims (DUE DATE)
Petitioner Reply (DUE DATE 2) Patent Owner Reply (DUE DATE 3)
Discovery Motions (DUE DATES 4-6)
Oral Argument (DUE DATE 7)
Final Writen Decision
Patent Owner Discovery (3 months)
Petitioner Discovery (3 months)
Patent Owner Discovery (1 month)
Trial (12 months)
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IPR – Worth It?
17
Factors FOR
• Evidentiary standard
• Good prior art
• Highly technical
• Stay possible
• Additional intrinsic evidence desired
• Apply pressure
• Unfavorable District Court venue
Factors AGAINST
• May take invalidity out of the trial (estoppel)
• “Poor” prior art
• Low damages exposure
• Possibility of claim amendments
• Discovery
• Limited noninfringement defenses
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IPR vs. PGR
18
Inter Partes Review Post-Grant Review
Effective date Sept. 16, 2012 Sept. 16, 2012
Patent date All patents Filed > Mar. 16, 2013
Grounds Only 102/103 All
Prior art Patents/publ’ns Any type
Deadline > 9 mos. after issue or after PGR ≤ 9 mos. after issue
Anonymous? No No
Standard Reasonable likelihood More likely than not
Cost $23,000 + $30,000 +
Speed Same Same
Estoppel Same Same
Settle? Same Same
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IPR vs. Inter Partes Reexam
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Sources: USPTO (as of Oct. 9, 2014); www.ManagingIP.com, Sept. 2014
2012 2013 2014 (as of 10/9)
17
514
1,360
2010 2011 19-year total
281 374
1,919
IPR Petitions Filed:
1,891 (3-year total)
Inter Partes Reexams:
1,919 (19-year total)
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IPRs by the Numbers
20
Source: USPTO (as of Oct. 9, 2014)
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IPRs by the Numbers
21
Source: USPTO (as of Oct. 9, 2014)
[PERCENTAGE]
[PERCENTAGE]
[PERCENTAGE]
[PERCENTAGE]
[PERCENTAGE]
Electrical/Computer (1,527)
Mechanical (325)
Chemical (157)
Bio/Pharma (121)
Design (8)
All Petitions by Technology
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IPRs by the Numbers
22
Compared to grants of requests for inter partes reexam = about 95%
Source: USPTO (as of Oct. 9, 2014)
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IPRs by the Numbers
23
Settlements in 2013 = 23% Settlements in 2014 = 39%
Source: USPTO (as of Oct. 9, 2014)
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IPRs by the Numbers
24
Source: USPTO
Inter Partes Review Petitions Terminated to Date (as of 9/4/2014)
11,046 claims in 348 petitions
6,001 claims not challenged 5,045 claims challenged (348 petitions)
3,344 claims instituted
(66% of claims challenged) (237 petitions)
1,701 claims challenged but not instituted (34% of claims
challenged)
606 claims cancelled or disclaimed (non-PTAB) (18% of claims instituted, 12% of claims challenged)
1,739 claims patentable (52% of claims instituted, 34% of claims challenged)
999 claims found unpatentable
(30% of claims instituted, 20% of claims challenged)
(91 petitions)
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IPRs – Effects/Results
25
IPR
Eliminate patents/claims
Encourage settlement
Less expensive than litigation • Obtain a stay of District Court litigation?
• 70% of disputed motions to stay are granted
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IPRs – Risks
26
Claims can be amended
Expense
Added expense if litigation not
stayed Estoppel effect