PublishedSeptember 30, 2015

Possible Compromise on Inter Partes Review Is a Good One

As I’ve written before, inter partes review (IPR) has been a sticking point in patent reform. Some practitioners have complained that the current process for amending claims is too complicated and unfair, pointing to the tiny number of amendments that have been granted.

Whether we on the pro-reform side agree with the complaints isn’t relevant here. The reality is that some compromise is necessary to get the changes we need to deal with patent trolls. The PATENT Act left the Judiciary Committee containing unacceptable language on how to handle amendments during IPR and a promise to keep working on it. And the Senate Judiciary Committee staff came up with a creative solution.

The way it currently works is that a patent owner can propose a new claim to replace a challenged claim if the Patent Trial and Appeals Board (PTAB) invalidates it. If the original claim goes down, the PTAB considers the motion to amend. Alternatively, the patent owner can cancel a claim and propose a substitute.

In addition, a patent owner can request a separate reexamination of its patent. One problem with reexamination is that the PTAB can stay the reexamination until the IPR is complete, leaving things in limbo. Another is that because examiners don’t have to pay attention to what’s happening in the IPR, there’s a possibility of conflicting or inconsistent results with the PTAB doing one thing and an examiner doing another.

Overall, it’s a complicated and difficult process for petitioners and patent owners.

For petitioners, there are a number of problems. Because IPRs move so quickly, they don’t have much time to respond to motions to amend. They also need to find as much prior art as possible, because the PTAB can’t search. Worse is the fact that a petitioner is barred from challenging new claims in any future case if it “reasonably could have raised” some other grounds. And for a petitioner that’s been sued, there’s a one-year time bar that runs from the when the complaint is served; generally an IPR will take at least a year, meaning that in practice the petitioner will be time-barred from challenging any new claims that come out of the IPR.

For patent owners, what complicates matters is that the burden is on the patent owner to prove that its new claim is patentable. This is different from the way amendments work in patent prosecution and patent reexaminations. In those cases, a patent examiner has to demonstrate that a proposed claim is unpatentable while considering the broadest reasonable interpretation of the claims. Patent attorneys have expressed confusion and frustration over having to prove something is patentable; patentable over what? Over all prior art? Over the art at issue in the IPR? Over every piece of art that’s been identified in the IPR? (The PTAB has tried to clarify which art is relevant, but questions remain.)

There are good reasons in practice for the different standards, the main one being that the PTAB is an adjudicatory body. It does not look for prior art to make sure the new claims are valid. But an amendment process that confounds practitioners isn’t of much use.

In contrast, the proposed compromise streamlines the IPR process while at the same time ensuring that new claims are properly examined.

The basic idea is this: instead of having the PTAB deal with amendments, send them over to the Central Reexamination Unit (these examiners are considered some of the best in the USPTO). That way the judges make the call on validity of the original claims, while patent examiners can consider any proposed new claims. Patent owners can do this now, but they worry that the reexam will be delayed by the PTO until the IPR is finished. So the proposal makes sure that the reexam will keep moving at the same time as the IPR. And petitioners won’t be prevented from challenging new claims if necessary, because estoppel and the one-year time bar wouldn’t apply to new claims.

A recent article in Law360 (subscription required) has a litany of complaints from patent attorneys about the proposal. The main one seems to be the belief that the proposal is somehow more complicated than the current process.

It’s actually straightforward, because it uses the existing reexam procedure as the model and simplifies IPR.

Once an IPR is instituted, if the patent owner wants to be able to amend challenged claims, it can request the PTO to examine them. That will essentially trigger a reexamination of the requested claims, with a requirement that the patent examiner move quickly. The result of this examination is treated just as if the patent owner had separately requested reexamination, but the examiner must consider any decisions by the PTAB as part of her work.

The IPR continues on the challenged claims as it normally would, but without the amendment process that’s been the bane of patent owners and terrifies petitioners. Unlike amendments that come out of IPR, petitioners can challenge any amendments coming out of this process in a future IPR. And if petitioners are sued on the amended claims they will be able to defend themselves fully in court, something that the estoppel prevents now.

The end result is a process that’s faster and fairer to both sides, as well as much easier for practitioners.

You can read the proposed changes here.

Matt Levy

Previously, Matt was patent counsel at the Computer & Communications Industry Association

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