Recent USPTO Update Provides Blueprint for PTAB Patent Challenge Process
Dec. 12, 2019
Since the passing of the America Invents Act (AIA) and the implementation of the inter partes review (IPR) process, IPR has become a popular and important avenue for companies and individuals to challenge the validity of a patent in an administrative proceeding through the U.S. Patent and Trademark Office (USPTO). In the past five years, patent owners and challengers alike have presented new and sometimes novel challenges to the way the Patent Trial and Appeal Board (PTAB), comprised of a panel of administrative law judges that review and decide cases, conduct trial proceedings, causing the PTAB to reevaluate and tweak the process along the way. Building on the scores of changes and interpretations the PTAB has made since the first AIA trial, the USPTO provided guidance in August 2018 and more recently in July 2019 summarizing and clarifying how the PTAB handles the IPR process. On November 20, 2019, the Patent Office issued a consolidated Patent Trial Practice Guide (“Practice Guide”) incorporating the updates from August 2018 and July 2019, providing practitioners with a single streamlined blueprint for the overall review process.
What You Need to Know
In addition to incorporating the August 2018 and July 2019 updates to the original August 2012 Practice Guide, the newly consolidated Practice Guide makes revisions to ensure consistency and reconcile the updates and to reflect the Board’s current practices.
Of particular note, the consolidated Practice Guide adopts and incorporates the guidance provided in the July 2019 update on the alignment of the claim construction standard used in IPRs with the standard used in district courts. In the past, the PTAB used the broadest reasonable interpretation (BRI) instead of the standard articulated by the Federal Circuit in Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005). Contrary to the BRI standard, the Phillips court held that the words of the claims should be given their ordinary meaning in the context of the patent documents, as interpreted by a person of ordinary skill in the art to which the patent pertains. Thus, interpreting the claims under the BRI standard could result in a broader reading of the claims by the PTAB than the district court under the Phillips standard. Parties in the past have been able to use this potential dichotomy to argue more narrow claim constructions in district court for purposes of non-infringement and more broad claim constructions before the PTAB in the context of validity. With the PTAB abandoning the BRI standard in favor of the Phillips standard, this practice will likely be toppled.
The new Practice Guide also provides information on how the PTAB will view the record in applying the Phillips standard, including providing guidance on the timing of submitting a claim construction from another proceeding and what deference it will give to the same. The Practice Guide notes that the submission of a prior claim construction determination is mandatory “if it is ‘relevant information that is inconsistent with a position advanced by a party during the proceeding.’” The change in claim construction standard began to apply to all America Invents Act (AIA) trials filed on or after November 13, 2018.
The Board’s Discretion to Institute and the General Plastic Factors
In addition, another area of uncertainty and change in the IPR process in recent years is how the PTAB decides to institute, or more importantly, deny, a petition for an IPR. The July 2019 update, which was also incorporated in the Practice Guide clarified that the Board will consider a number of factors in whether to exercise the Director’s discretion to decline to institute review pursuant to 35 U.S.C. §§ 314(a) and 324(a), especially in “follow-on” petitions challenging the same patent. These non-exclusive factors were set forth in General Plastic Industrial Co., Ltd. v. Canon Kabushiki Kaisha, IPR2016-01357, Paper 19 (PTAB Sept. 6, 2017) and include:
Whether the follow-on petition is by the same petitioner and is directed to the same claims and same patent;
whether at the time of the first petition the petition knew or should have known of the prior art being asserted in the follow-on petition;
the stage of the first petition (i.e., whether a patent owner’s preliminary response was received or a decision on institution was made);
the length of time between when the petitioner learned of the prior art in the second petition and when the petition was filed;
whether an adequate explanation was provided for the time elapsed between the first petition and the follow-on petition;
the “finite” resources of the Board; and
he ability of a final determination to be issued not later than one (1) year after institution.
The guidance further notes that when the follow-on petition is filed by a different petitioner, the Board considers the relationship between the first petitioner and second petitioner. The guidance further explains that the General Plastic factors are not dispositive but are a part of a balanced assessment of the relevant circumstances of the case, including the merits and the advanced state of any parallel district court proceeding.
The guidance further addressed when the PTAB would consider whether the circumstances warrant the filing of more than one petition. The PTAB noted that in the majority of cases, multiple petitions by the petitioner are not warranted and warned that “based on prior experience,” it finds it unlikely that circumstances will arise justifying three or more petitions. However, when filing multiple petitions are warranted, the PTAB suggests that petitioners should to file a separate paper (no more than five pages), ranking the petitions in the order in which they wish the PTAB to consider the merits and if the PTAB uses its discretion to institute any of the petitions.
A Helpful Blueprint
While the above highlights some of the key information provided by the PTAB in recent updates and incorporated into the Practice Guide, the PTAB further provided additional guidance on the discovery process, the motion to amend procedure, tips on filing motions, including motions for joinder and motions to file supplemental information, and other aspects of the IPR process. Therefore, patent practitioners should carefully review the latest consolidated Practice Guide.
The consolidation of the PTAB’s updates into a new Practice Guide will be helpful to patent practitioners, who previously were responsible for researching all of the different decisions and PTAB rulings. Now, the updated guidelines provide a blueprint that petitioners can refer to in assessing the likelihood the petition will be instituted and the procedures that the PTAB will follow during the trial proceedings if the petition is instituted.