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US patent reform series: How to prepare for inter partes review

In part three of Managing IP’s series on America Invents Act implementation strategies, Stephen Kunin and Scott McKeown dissect the new inter partes review proceedings

Scott_McKeownOne of the most significant changes introduced by the America Invents Act (AIA) is the creation of the Patent Trial and Appeal Board (PTAB) at the USPTO. Under the legislation, the PTAB will conduct patent validity trials as a true alternative to higher cost patent litigation. The PTAB will open for business on September 16 2012, accepting requests for Inter Partes Review (IPR) and Transitional Program for Covered Business Method Patent (TPCBMP) petitions. While Post Grant Review (PGR) will be implemented in September as well, practically speaking, petitions for PGR will not be available until after the applications eligible for these proceedings (those filed on or after March 16 2013) begin to issue as patents. The impact of all three of these options is expected to be game changing with respect to current patent litigation.Stephen_Kunin

The new post grant proceedings of the AIA move away from the reexamination model of the past to an adjudicative proceeding at the PTAB. It is these new proceedings that are expected to offer the first true alternative to the high cost of patent litigation.

A litigation short circuit

The new patent validity trials of the AIA are designed to replace the reexamination model and provide a more effective litigation alternative. The new trials, much like patent reexamination, are invoked upon petition. IPR – which is expected to be used immediately upon availability in September and has implications for a broad range of patents - is limited to patents and printed publications as grounds for invalidity, while TPCBMP and PGR permit additional grounds of challenge. As IPR will be available in September for all patents, and the estoppel provision is not as all encompassing as for PGR, it is expected to be the most common post grant proceeding of the PTAB.

The chart below outlines the major differences between the new IPR proceeding and inter partes patent reexamination that are expected to influence judges to stay litigation pending the more accelerated USPTO proceeding outcome. Inter partes patent reexamination will no longer be available after September 16 2012. On this date, the new post grant trial mechanisms of the AIA become available.

Deciding Officials


Eligible Patents


Litigation Timing

Inter Partes Reexamination

Patent examiners

5-7 years

Applications filed on or after Nov 29 1999

No application to ITC; attaches at exhaustion of all appeals

No limit on when request can be filed


Administrative patent judges (PTAB)

12-18 months

All patents

Attaches in 12-18 months, applies to ITC

12 month window, DJ mechanism

Perhaps most significantly, IPR proceedings must conclude, by statute, within 12 months. At that time, estoppel attaches to the challenger with respect to those issues of validity that were “raised or reasonably could have been raised” during the proceeding. If cause can be shown by the Office for an extension, it is possible that a proceeding may last 18 months, but no longer. This compact trial schedule is a significant improvement over the prior 5-7 year duration to conclude a fully contested inter partes patent reexamination proceeding through judicial review.

Another important difference is the movement of these contested proceedings away from patent examiners (typically not lawyers) to administrative patent judges of the PTAB. The accelerated timing and new technically trained judges of the PTAB, are expected to have a significant impact on the way district court and ITC judges view the post grant USPTO proceedings. The new patent validity trials of the PTAB may encourage courts to stay litigation to await the outcome of the USPTO’s final determination. In fact, Congress has set mechanisms in place to ensure that these proceedings are initiated early on in a litigation dispute to allow time for the USPTO to simplify the validity issues, or invalidate the patent altogether.

Life after IPR

Congress fashioned the IPR statutes such that a proceeding cannot be initiated beyond the 12 month mark of a parallel litigation dispute (based upon service of the complaint). There is no such limitation on requests for inter partes patent reexamination. In other words, defendants can no longer wait until an advanced stage of a litigation proceeding (as is often the case now) before deciding to pursue an IPR proceeding.

Another control added to IPR is that defendants may not seek declaratory judgment of invalidity, and thereafter seek an IPR at the USPTO. By adding the DJ and 12 month window litigation controls, Congress has made clear their preference that the USPTO serve as an alternative to litigation, not a parallel track.

If an IPR proceeding is initiated within the 12 month window which will by definition be in the early stages of a litigation, it is expected that motions to stay the court proceeding will be granted quite liberally. If the stay is granted, in 12-18 months IPR will either simplify the validity issues in dispute by operation of estoppel, or perhaps resolve the dispute altogether by invalidating the patent. If the stay is not granted and the court result comes first, IPR will continue and possibly conclude with a different result. Alternatively, if the USPTO result comes first (very likely if concluded on time) the court may be wasting resources in continuing on a parallel track.

Don’t count on the ITC

An important aspect of IPR estoppel that it is not applicable in inter partes reexamination proceedings is that the IPR estoppel, as well as that of PGR and TPCBMP, will extend to the ITC for the first time. One could also argue that by extending the estoppel to the ITC Congress was sending a message to that forum with respect to its support for the new mechanisms, perhaps in acknowledgement of the increasing attractiveness of this forum to non-practicing entities and to encourage them to stay their proceedings pending the outcome of the IPR when IPR petitions are promptly filed.

In summary, the new IPR proceedings will provide a far more timely and robust mechanism for opposing the patentability of patent claims in an adjudicative proceeding of the PTAB. Pursuing IPR at the outset of litigation is expected to be an especially effective tool to obtain a stay of the litigation stays, avoid injunctions, create patent owner estoppels/disclaimers of claim scope, provide an intervening rights defence, reduce settlement costs and avoid wilful infringement finding.


When considering whether or not to use IPR, patent owners should weigh factors including choice of counsel, costs and the estoppel impacts.

The hiring of experienced registered patent attorneys will be essential. Pro hac vice practice will be limited to those with experience and technical qualifications. The threat of sanctions warrants against hiring inexperienced counsel to handle IPR proceedings.

Because of the high fees the USPTO will impose for IPR attacks against patents with large numbers of claims it is expected that patent applicants will file even larger numbers of claims in their applications to insulate them against IPR attack. This cost and the limitation on IPR request page limits may encourage third parties to split their attacks against patent claims among separate requests.

On the other hand, new devastating patent owner estoppels may apply. A patent applicant or owner whose claim is cancelled is precluded from taking action inconsistent with the adverse judgment, including obtaining in any patent (1) a claim to substantially the same invention as the finally refused or cancelled claims; (2) a claim that could have been filed in response to any properly raised ground of unpatentability for a finally refused or cancelled claim; and (3) an amendment of a specification or drawing that was denied during the trial proceeding.

This patent owner estoppel may disrupt continuation application practice, especially in view of the fact that the patent owner may only add a reasonable number of substitute claims during the IPR proceedings. As to the estoppel impacts on third parties who would like to use IPR proceedings they cannot file for IPR after having filed a declaratory judgment action against the patent owner on the patent or more than one year after they have been sued by the patent owner for infringement of the patent.

The key questions

In summary, IPR filing will involve new strategic considerations that are presented by the following questions:

<!--[if !supportLists]-->                   (1) Will IPR upset the patent troll business model by injecting more uncertainty into contingency relationships

<!--[if !supportLists]-->                   (2) Do patent owners have a greater incentive to file ex parte reexamination requests prior to bringing law suits to preempt the IPR               proceedings?

<!--[if !supportLists]-->                   (3) Will plaintiff friendly jurisdictions like the Eastern District of Texas be more willing to stay litigation pending the outcome of IPR           proceedings because of the shortness of their duration?

<!--[if !supportLists]-->                   (4) Will the ITC change its anti-stay posture in view of the increased speed of IPR proceedings, and the new ITC estoppel provision?

<!--[if !supportLists]-->                   (5) Will the discovery opportunities benefit the third party more than the patent owner?

<!--[if !supportLists]-->                   (6) How will the inventors' and technical experts' opinions hold up in depositions?

Stephen Kunin and Scott McKeown co-chair the post grant patent practice group of Oblon Spivak in Alexandria, Virginia.

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