Inter-Partes Review of Patents: The Case So Far (CLE)

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


Traditional Options

4

District Court Litigation

International Trade Commission

Reexaminations •  Inter Partes •  Ex Parte


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.


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


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


•  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


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


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


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


112397

13

Code


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


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


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)


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


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


IPR vs. Inter Partes Reexam

19

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)


IPRs by the Numbers

20

Source: USPTO (as of Oct. 9, 2014)


IPRs by the Numbers

21


[PERCENTAGE]

[PERCENTAGE]

[PERCENTAGE]

[PERCENTAGE]

[PERCENTAGE]

Electrical/Computer (1,527)

Mechanical (325)

Chemical (157)

Bio/Pharma (121)

Design (8)

All Petitions by Technology


IPRs by the Numbers

22

Compared to grants of requests for inter partes reexam = about 95%



IPRs by the Numbers

23

Settlements in 2013 = 23% Settlements in 2014 = 39%



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)


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


IPRs – Risks

26

Claims can be amended

Expense

Added expense if litigation not

stayed Estoppel effect

rimonlaw.com

Thank You

John M. Hintz

[email protected]

Law

Inter-Partes Review of Patents: The Case So Far (CLE)