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Gear up for AIA post-issuance proceedings

With the one-year anniversary of the passage of the Leahy-Smith America Invents Act comes the implementation of new post-issuance validity proceedings before the USPTO – here’s how to prepare

On September 16, as part of the America Invents Act, the USPTO will replace inter partes reexaminations with inter partes review (IPR); a new post-grant review proceeding (PGR) will become available (but will only apply to patents that issue in the future); and a new transitional programme for covered business methods will be implemented. In addition, although there is no change to their substance, ex parte reexaminations will be replaced with reexamination proceedings, which will only be ex parte.

These proceedings provide the procedural mechanisms under which third parties can challenge the validity of issued patents at the USPTO. The strategic implications of these new procedures and the transition to using them can be significant and are still being worked out. Final rules governing these proceedings were published last month, but the USPTO has said it may amend its procedures as necessary along the way. However, there are already strategies and practices to consider in view of the approaching September 16 2012 implementation dates.

1. Consider setting up a monitoring system for key patents of competitors and non-practising entities within your technical field/industry. 

Under the AIA, PGR proceedings will become available for patents filed after March 16 that are not entitled to the benefit of the old law governing conditions of patentability and loss of right to a patent. While these patents are not likely to begin issuing until at least 2014, it is better to be prepared now. Moreover, being aware of the issuance of key patents allows a party to consider validity challenges in the form of IPR or reexamination, as well as design-arounds to avoid potential infringement issues.

The new PGR proceeding will offer certain procedural benefits and expand the ability to challenge an issued patent before a USPTO panel under a lower burden of proof than that required in litigation. In addition, the grounds of invalidity that a challenger may bring, as well as the types of prior art that a challenger may use, is broader in a PGR than in an IPR. Specifically, PGR permits patents to be invalidated on any grounds, including 35 USC section 101 (patent-eligibility), section 102 (anticipation), section 103 (obviousness), or section 112 (written description /enablement), and may use any type of prior art. It is worth noting, however, that recently there has been some dispute by commentators as to whether a challenge under section 101 falls under the list of defences available pursuant to 35 USC section 282, which is referenced by the AIA as providing the basis for challenges in PGRs. The USPTO appears to be assuming that a challenge under section 101 is an appropriate ground for PGR proceedings.

To take advantage of PGR proceedings, a challenger will need to file its petition within nine months of issuance of the patent being challenged. Therefore, it may be prudent to set up a monitoring system for newly issued patents in a particular clients’ field of interest so that they can make informed and timely decisions as to whether to initiate a PGR proceeding. Many organisations that operate in an international arena already have such monitoring systems in Europe and Japan. The AIA presents yet another reason for considering such solutions.

2. Calendar and docket the one year date after the complaint was served in a patent litigation to consider whether to commence an IPR.

This tip is of immediate concern. Under the AIA, an IPR proceeding will offer a challenger substantially more involvement than in a reexamination proceeding (which will only be ex parte after September 16). However, the AIA places strict limits on when an IPR proceeding can be commenced. One of those limits is that “[a]n inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent”.

Accordingly, it will be important to docket the one-year date from service of the complaint asserting a patent which the accused infringer may want to challenge in an IPR proceeding. After that one-year date, this procedural option will no longer be available.

3. Prior to instituting a declaratory judgment action, carefully consider whether it is worth giving up the right to commence an IPR proceeding.

A second and significant limit placed on the right to commence an IPR proceeding is that “[a]n inter partes review may not be instituted if, before the date on which the petition for such a review is filed, the petitioner or real party in interest filed a civil action challenging the validity of a claim of the patent”. While a petitioner may institute a declaratory judgment action after the IPR proceeding is commenced, there is a risk that the IPR proceeding may be stayed or derailed by such an action. However, filing a declaratory judgment counterclaim will not impact the right to commence an IPR proceeding.

Therefore, while seeking a declaratory judgment of invalidity in a court of law has become a useful tool for potential infringers to avoid being forced to litigate in an undesirable venue, the repercussions of effectively waiving the right to initiate an IPR as a result of initiating a declaratory judgment action will need to be carefully considered and weighed before taking this option in the future.

4. Patentees may want to consider waiting for nine months after issuance before asserting newly issued patents for patents that will be subject to PGR proceedings in the future.

Compared to an IPR or reexamination under the AIA, a PGR may potentially be a more powerful procedure by which potential infringers may challenge the validity of a patent. Thus, to the extent that a PGR is available for a newly issued patent in the future, a patentee may want to consider waiting until after the nine month period for filing a PGR has run, before commencing enforcement programmes.

The advantage of waiting until after the nine-month period is that it may limit a third party’s options to challenge the validity of the patent using PGR. The down-sides of waiting include potentially limiting the available damages and potentially limiting the availability of injunctive relief. Moreover, if a potential challenger has set up a monitoring system, it may learn of the patentee’s patent and commence a PGR prior to any efforts by the patentee to assert or enforce the patent. Patent owners will want to consider this timing issue in the future as patents filed after March 2013 being issuing.

5. Remember that when a PGR or IPR proceeding is commenced, these proceedings may be settled without any estoppel effect at any point prior to final written decision.

The estoppel provisions of the PGR and IPR proceedings will not apply unless and until a final written decision is issued by the Board. If the parties settle before a final written decision is issued, estoppel will not apply. In addition, like litigation, if a PGR or IPR is settled prior to the issuance of final decision, the proceeding may be terminated.

In this way, the proceedings encourage patentees and petitioners (and those in privity with them) to resolve disputes before the final written decision issues. This may be different than the previous dynamic with reexaminations, because once a petitioner initiated a reexamination, the USPTO would address it on the merits. The proceeding could not be stopped by the petitioner.

6. Accused infringers and potential targets of infringement claims will need to carefully weigh numerous factors when deciding whether to initiate a post-issuance validity challenge before the USPTO or whether to adjudicate validity in a district court as part of a litigation.


With the new options available, accused infringers and potential patent infringers will now have more factors to consider in deciding which venue (and when) to make potential validity challenges in the future.

Factors that parties will want to consider include:

  • The cost of litigation as compared to the costs of the new procedures;

  • the decision-maker (the Patent Trial and Appeal Board for the post-issuance proceedings versus a jury in district court);

  • the amount of discovery that will likely be necessary to mount a successful validity challenge;

  • the strength of an invalidity defence compared to non-infringement defences;

  • the timing of raising a challenge, the potential estoppel resulting from an incomplete presentation of validity defences at the USPTO; and

  • the ability of a patentee to cure potential defects in a USPTO proceeding by adding or amending claims.

    Charles R Macedo and Michael Kasdan are partners at Amster Rothstein & Ebenstein in New York.

    Charles R Macedo
    Michael Kasdan

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