35 USC § 315(b) normally bars an inter partes review (IPR) challenging the validity of a patent after one year from service of a complaint. However, the statute states the one-year rule does not apply when joining an older IPR with a currently pending IPR. 37 CFR § 42.122(b) further states that the joinder must occur within one month of the institution date of the pending IPR. This situation often occurs in multicase, multidefendant litigation. While requiring a complete and separate IPR filing, the Patent Trial and Appeal Board (PTAB) has only allowed joinder if no substantial differences exist from the original IPR.
Amendment practice was changed in May 19, 2015 final rules (Fed. Reg. 28561):
- The 15-page motion limit was increased to 25 pages.
- The opposition can also be 25 pages.
- The claim listing can be in an appendix.
Other requirements set forth in an October 30,2014 order (IPR2014-00441) remain in effect:
- A new claim is only allowed as a substitute claim to replace a claim determined unpatentable or cancelled.
- Each claim must correspond with a replaced claim, addressing the issues of that claim. The total number of claims should not change.
- A substitute claim should respond to the ground of unpatentability — in other words, include elements that distinguish the cited art.
- The patent owner must demonstrate that the claim is patentable not only over the cited art, but other prior art. This has been clarified to mean material prior art of record in the IPR and the original patent prosecution.
- Each claim must show support in the patent specification.
- A proposed claim construction is required for any terms which “reasonably can be anticipated as subject to dispute.”
The Federal Circuit blessed the amendment motion practice, which puts the burden on the patent owner to show patentability, in Prolitec Inc. v. Scentair Technologies, Inc., No. 2015-1020 (Fed. Cir., Dec. 4, 2015) (appeal from IPR2013-00179).
Unlike the old inter partes reexamination, these proceedings can be settled by the parties, providing leverage for a petitioner. Many non-practicing entities (NPE) have been settling with only the defendant who filed the IPR/CBM to avoid an adverse decision on the record. Note that the law says the proceeding shall be terminated upon the joint request of the petitioner and patent owner provided there has not been a decision on the merits (AIA sec. 317 & 327. Thus, waiting until near or after the oral hearing is risky.
Expert witness declarations for the petitioner have been challenged based on (1) an insufficient explanation of how the expert’s experience applies to the patent’s subject matter and (2) an insufficient explanation of why it is obvious to combine references. Thus, these points should not be neglected.
If an NPE has sued using an unreasonably broad claim construction, that can be considered for inclusion as a possible construction since it will often make it easier to find prior art. The Supreme Court has taken up the issue of whether the PTAB “broadest reasonable interpretation” standard should be used, rather than federal court standard of “ordinary and customary meaning.” In the meantime, it is prudent to construe terms under both standards if possible, in the event in a change in the law before an institution decision. This can force the patent owner to argue for a narrower claim construction, which in turn can provide support for a noninfringement position in court. Oftentimes, this not only forces the patent owner to deal with the prior art in claim construction, but also to take a position long before a Markman hearing in federal court. While a different claim construction standard is currently used in the PTAB (being reviewed by the Supreme Court in Cuozzo), a patent owner’s statements in a preliminary response have been held to be “akin to a prosecution disclaimer.” Aylus Networks, Inc. v. Apple Inc., 3-13-cv-04700 (CAND January 21, 2016, Order) (Chen, J.)
Be Aware of Deadlines
The rules of practice adopted are similar to the very stringent rules used in Interferences — many an opportunity can be lost if not raised at the proper time. For example, after institution of trial, objections to new evidence must be served within five (5) business days.
Patent Owner Preliminary Response
Because new evidence (declarations) cannot be submitted in support at this point, one option is not to present substantive arguments about the prior art at this time. Those arguments can be saved for the patent owner response to avoid giving the petitioner an extra six (6) months to prepare a reply. Instead, the patent owner can focus on procedural issues such as whether the prior art is admissible — e.g., is there sufficient proof of public accessibility and publication date?
Limit the Number of References Used
Initially, the U.S. Patent and Trademark Office has not allowed too many references, and has eliminated all but a few references in their decisions, excluding references found “redundant.” Thus, practitioners may consider using only up to three best references. This cuts down the analysis and argument needed as well as the extra drafting time required to condense multiple arguments within the mandated page limit.
Covered Business Method (CBM)
While an IPR has a one-year filing deadline after service of a complaint, a covered business method (CBM) does not. Thus, many defendants with pending lawsuits exceeding a year file a CBM petition to qualify, using the same 102 and 103 prior art applicable in an IPR. However, due to a drafting error, defendants cannot use 102(e) prior art (filed earlier, published later). Hopefully, Congress will correct this oversight.
Initially after passage of the America Invents Act (AIA), any patent that mentioned a financial use could qualify for a CBM review if the novel part was non-technical. More recently, the PTAB has now interpreted the AIA to restrict qualification to where a claim is a financial business method. Only one claim needs to be financial, such as a dependent claim. However, some companies have successfully avoided CBM review by disclaiming the financial claims.