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AIA USPTO Patent Challenges and Patent Litigation Strategy
Practical Law Legal Update 5-535-4499 (Approx. 6 pages)
AIA USPTO Patent Challenges and Patent Litigation Strategy
by Practical Law Intellectual Property & Technology
| Published on 27 Aug 2013 • USA (National/Federal) |
The Leahy-Smith America Invents Act (AIA) was enacted on September 16, 2011 and made significant changes to US patent law, including creating new US Patent and Trademark Office (USPTO) procedures such as inter partes review and post-grant review. This update addresses these two new administrative patent challenge proceedings and highlights certain aspects of these proceedings that may impact patent litigation strategy.
The America Invents Act (AIA) was enacted on September 16, 2011 and created, among other things, two new US Patent and Trademark Office (USPTO) proceedings for challenging patent validity. Specifically:
- Inter partes review.
- Post-grant review.
For more information on the AIA generally, see Practice Note, Leahy-Smith America Invents Act: Overview.
For more information on the trial practice rules of the Patent Trial and Appeal Board (PTAB), which conducts inter partes review and post-grant review, see Practice Note, PTAB Trial Practice Rules.
Inter Partes Review Overview
Inter partes review has been available to third-party patent challengers since September 16, 2012. It can be instituted against any patent after the later of either:
- Nine months after the patent's issue or reissue date.
- The termination date of any post-grant review that has been instituted against the patent.
However, an inter partes review may not be instituted if the petitioner filed the inter partes review petition:
- After filing a declaratory judgment action challenging the patent's validity.
- More than one year after the petitioner (or someone in privity with the petitioner) or the real party in interest was served with a patent infringement complaint.
An inter partes review may only be brought on the ground that the claim is invalid as anticipated or obvious under Sections 102 or 103 of the Patent Act (35 U.S.C. §§ 102 or 103). Anticipation and obviousness must be based solely on prior art consisting of patents or printed publications.
Post-grant Review Overview
Post-grant review is only available for patents having an effective filing date on or after March 16, 2013, which is generally the filing date of patents subject to the first-inventor-to-file system. When those patents issue, post-grant review will only be available within nine months of the patent's issue or reissue date for broadening reissues.
In addition, a post-grant review may not be instituted if the petitioner filed the post-grant review petition after filing a declaratory judgment action challenging the patent's validity.
The third-party challenger may base its post-grant review petition on either:
- Any ground that can be raised under paragraphs (2) or (3) of Section 282(b) of the Patent Act (35 U.S.C. § 282(b)), which includes defenses under Sections 101, 102, 103 and 112 (35 U.S.C. §§ 101, 102, 103 and 112).
- A showing that the petition raises a novel or unsettled legal question that is important to other patents or patent applications.
For more information on the first-inventor-to-file system and post-grant review, see Legal Update, America Invents Act First-inventor-to-file Transition: Don't Be Left Behind and Practice Note, Leahy-Smith America Invents Act: Overview: Post-grant Review.
Key Inter Partes and Post-grant Review Considerations
Certain aspects of inter partes and post-grant review may affect patent litigation strategy. For example, whether or when to litigate or file a petition for an inter partes review or post-grant review may depend on considering:
- Claim construction and burden of proof.
- The estoppel effect of inter partes review and post-grant review decisions.
- The availability and extent of discovery.
- The potential for a litigation stay.
Claim Construction and Burden of Proof
In both inter partes and post-grant review:
- The USPTO construes claims by applying the broadest reasonable interpretation to the patent claims. (For more information on claim construction, see Practice Note, Patent Claim Construction: Overview.)
- The petitioner must prove invalidity by a preponderance of the evidence.
In contrast, in district court litigation:
- The district court generally construes claims to preserve their validity.
- The accused infringer must prove invalidity by clear and convincing evidence.
These distinctions suggest that it should be easier for an accused infringer to invalidate a patent through an inter partes or post-grant review rather than in district court. However, until the PTAB decides more of these cases and the US Court of Appeals for the Federal Circuit reviews these cases, it is not clear to what extent the PTAB proceedings will be more favorable to accused infringers.
Estoppel
Counsel for an accused infringer must consider whether the potentially favorable forum of inter partes and post-grant review outweighs the risk that the estoppel effect of any decision in such a proceeding will limit the accused infringer's options in any related district court litigation. Specifically, counsel should consider that estoppel:
- Applies to both inter partes and post-grant review.
- Extends to any ground that the petitioner raised or reasonably could have raised during the review.
- Attaches once the PTAB issues a final written decision.
- Is applicable in:
- civil actions;
- USPTO proceedings; and
- International Trade Commission proceedings.
Post-grant review carries a greater potential estoppel risk than inter partes review because challenges under Sections 101 and 112 can be made in a post-grant review but not in an inter partes review.
Discovery
Discovery is permitted in inter partes review and post-grant review. However, the scope of discovery is limited and will not be as broad as in district court litigation. For example, discovery in:
- Inter partes review is limited to:
- the deposition of witnesses submitting affidavits or declarations; and
- what is necessary in the interests of justice.
- Post-grant review is limited to evidence directly related to factual assertions made by either party in the proceeding.
In addition, the PTAB has noted that discovery should be limited to lower cost, minimize complexity and shorten the time to reach resolution (see, for example, Garmin Int'l, Inc. v. Cuozzo Speed Techs. LLC, IPR2012-00001 (PTAB Mar. 5, 2013)).
Litigation Stays
The USPTO must complete an inter partes and post-grant review within one year after the USPTO institutes the review. The USPTO may extend this period for an additional six months for good cause. The speed with which these proceedings must be completed may result in more district courts staying a parallel district court litigation pending the outcome of the proceeding.
In addition, since the Federal Circuit hears all appeals from inter partes reviews and post-grant reviews, the district court may be more inclined to stay parallel district court litigation because:
- It is likely that the Federal Circuit will hear an appeal in such a proceeding before any appeal in the district court litigation.
- The Federal Circuit's decision in the related inter partes review or post-grant review could affect the disposition of the parallel district court litigation (see Legal Update, USPTO Cancellation of Claims Binding in Pending District Court Litigation: Federal Circuit).
It is also worth noting that any civil action challenging the validity of a patent filed by a petitioner after filing a petition for inter partes or post-grant review will be automatically stayed unless the patent owner either:
- Moves the court to lift the stay.
- Files a claim or counterclaim alleging the petitioner or real party in interest infringes the patent.
For more information on the AIA and patent litigation strategy, see Article, Patent Litigation Strategy: The Impact of the America Invents Act and the New Post-grant Patent Procedures.