The first procedure made available by the AIA is called “post-grant review” (PGR). A PGR is a trial conducted before panels of three administrative law judges of the PTAB. A PGR is initiated when a third party (a party other than the patent owner) files a petition requesting review, provided that party has not filed a civil action, challenging the validity of the patent in a U.S. district court. PGR is only available for patents issued from applications with an “effective filing date” of on or after March 16, 2013, and that are up to nine months old.
A PGR petition must demonstrate that it is more likely than not that at least one of the claims challenged in the patent is unpatentable. The presumption of validity of a claim in a patent under 35 U.S.C. § 282 does not apply in a PGR. Instead, the PTAB will give a claim its “broadest reasonable interpretation” in light of the specification of the patent. This makes it easier to develop an invalidity attack on a claim in a PGR than a claim in a civil action filed in a U.S. district court, which uses the “clear and convincing” standard. A PGR proceeding must be concluded within one year from the date of the grant of the petition. However, the time can be extended by up to six months for good cause.
The grounds that can be raised in a PGR can include any ground for invalidity that is permitted in litigation in front of a district court, except for a patent owner’s failure to comply with the best mode requirement. These grounds include the following:
- patent-eligible subject matter under 35 U.S.C. § 101
- novelty under 35 U.S.C. § 102
- obviousness under 35 U.S.C. § 103
- written description and/or enablement under 35 U.S.C. § 112
- double patenting
- a novel or an unsettled legal question that is important to other patents or applications under 35 U.S.C. § 324(b)
To assist the PTAB in identifying any possible conflicts of interest and to ensure proper application of any estoppel provisions, the real party in interest or privy must be identified. Estoppel can attach if there is any issue that was raised or reasonably could have been raised, so as to prevent parties from being subjected to multiple PGR petitions and from instituting a PGR petition and then subsequently getting a “second bite at the apple” by filing a lawsuit in a U.S. district court and raising the same issues.
Limited discovery is allowed during a PGR proceeding, and the burden of justifying discovery is on the party seeking the discovery. Specifically, discovery is limited to “evidence directly related to factual assertions advanced by either party.” Moreover, unlike proceedings in district court and subject to exceptions, the proponent of an argument before the PTAB generally has access to relevant evidence that is comparable to its opponent’s access, and therefore, much of the expense and complications typically associated with discovery will likely be avoided.
A decision issued by the PTAB in a PGR can be appealed directly to the Court of Appeals for the Federal Circuit.
Inter Partes Review
Like a PGR, an “inter partes review” (IPR) is a trial conducted before panels of three administrative law judges of the PTAB, and an IPR is initiated when a third party (a party other than the patent owner) files a petition requesting review. An IPR cannot be requested, however, if
- the petitioner or a real party in interest has already filed a civil action in a U.S. district court challenging the validity of a claim of that patent;
- more than one year has elapsed since the date on which the petitioner, the petitioner’s real party in interest, or a privy of the requester was served with a complaint alleging infringement; or
- the petitioner, the petitioner’s real party in interest or a privy of the requester already challenged a claim of the patent in a prior review proceeding.
Unlike a PGR, the IRP request can be based on only two grounds: 35 U.S.C. § 102 and 35 U.S.C. § 103. The threshold for determining whether to institute an IPR is “reasonable likelihood that the petitioner would prevail with respect to at least one of the claims challenged in the petition.”
IPR provides for a second window of time during which the patentability of a claim of a patent can be challenged. This window is available after the nine-month PGR period ends. To file a petition for an IPR, a requester must wait until after the later of nine months after the issue date of the patent or the date of the termination of the PGR, if a PGR was commenced. Unlike PGR, an IPR is available retroactively for all patents in force on September 16, 2012, and the grounds for raising an IPR are limited to lack of novelty under 35 U.S.C. § 102 and obviousness under 35 U.S.C. § 103 and can only be based on patents or printed publications.
As statutorily demanded, an IPR is instituted within 6 months of the filing of an IPR petition and is dispensed within 12 to 18 months of institution. In fact, the PTAB has a mandate to complete an IPR within 12 months of a decision on the petition.
The IPR discovery rules are the same as those for PGR. The amount of discovery that the PTAB will permit in an IPR was a matter of first impression in Garmin International Inc. v. Cuozzo Speed Technologies LLC, No. IPR2012-00001 (P.T.A.B. Mar. 5, 2013). The court explained that “[r]outine discovery under 37 C.F.R. 41.51(b)(1)(iii) is narrowly directed to specific information known to the responding party to be inconsistent with a position advanced by that party in the proceeding, and not broadly directed to any subject area in general within which the requesting party hopes to discover such inconsistent information.” The PTAB also gave five criteria for determining whether a request for additional discovery is “in the interest of justice”:
1. More Than a Possibility and Mere Allegation.
2. Litigation Positions and Underlying Basis.
3. Ability to Generate Equivalent Information by Other Means.
4. Easily Understandable Instructions.
5. Requests Not Overly Burdensome to Answer.
Garmin Int’l, slip op. at 6–7.
According to the PTAB, factor one was deemed most relevant. The essence of factor one is unambiguously expressed by its language, i.e., the requester of information should already be in possession of a threshold amount of evidence or reasoning tending to show beyond speculation that something useful will be uncovered. “Useful” in that context does not mean merely relevant or admissible; instead, in the context of factor one, “useful” means favorable in substantive value to a contention of the party moving for discovery. Thus, the PTAB has made clear that it is setting a very high standard for motions asking for additional discovery “in the interests of justice.”
As with a PGR, a decision issued by the PTAB in an IPR can be appealed directly to the Court of Appeals for the Federal Circuit.
Transitional Program for Review of Covered Business Method Patents
A third procedure made available by the AIA is a covered business method (CBM) patent review. A CBM review is available for all patents issuing from applications subject to first-inventor-to-file provisions of the AIA as well as those patents issuing from the previous patent regime of first-to-invent, provided that the patent is drawn to a CBM. A CBM patent is a patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions. Subject to a few exceptions, the statutes and rules for a PGR generally apply to a CBM proceeding.
The first written decision of the PTAB for a CBM issued on June 11, 2013, in the case of SAP America Inc. v. Versata Development Group, Inc., No. CMB2012-00001 (MPT), where the PTAB invalidated claims 17 and 26–29 of U.S. Patent No. 6,553,350, assigned to Versata, for failure to comply with the patentable subject-matter requirement set forth in 35 U.S.C. § 101. The PTAB panel held that each of the challenged claims involved “the use of an abstract idea: determining a price using organizational and product group hierarchies, which are akin to management organizational charts.” SAP, slip op. at 28. The panel found that although the claims were drafted to include computer-hardware limitations, the underlying process that was implemented on such hardware could also be performed using pen and paper. Id. at 29. The PTAB therefore concluded that Versata’s claims did not add any meaningful limitations beyond the recited abstract idea and acted merely to preempt the abstract idea. The PTAB held the claims unpatentable under section 101. This opinion was important because it laid out the standard for claim construction that the PTAB will use in all of its AIA reviews, and also because it illustrated how stringent the analysis for CBM will be under section 101—it will not be enough to recite an abstract idea that is implemented on a general-purpose computer to confer patent eligibility to a claim under section 101.
Strategic Implications and Practice Pointers
- An attorney not registered to practice before the USPTO is barred from representing a petitioner in any proceeding conducted at the USPTO. It should be noted, however, that an attorney who is not registered to practice before the USPTO may apply for a “temporary status” to represent a petitioner. This is similar to the pro hac vice status available to attorneys not admitted to practice in a jurisdiction where a particular district court is located.
- As with decisions issued by district courts, decisions issued by the PTAB will be appealable to the U.S. Court of Appeals for the Federal Circuit, with the caveat that the decisions will be binding on district courts.
- It is easier to develop an invalidity attack on a claim in a PGR than a claim in a civil action filed in a U.S. district court because the PTAB will give a claim its “broadest reasonable interpretation,” whereas the district court will use the “clear and convincing” standard.
Donika P. Pentcheva is an intellectual property attorney at Westman, Champlin & Koehler, P.A., in Minneapolis, Minnesota. Nathan Shrewsbury evaluates intellectual property matters for an administrative agency with the federal government in Washington, D.C. Debora Plehn-Dujowich, Ph.D., is a patent attorney at Drinker Biddle in Philadelphia, Pennsylvania.