U.S. PTO releases new proposed rules governing PTAB proceedings

By Jessica Karmasek | Aug 25, 2015


WASHINGTON (Legal Newsline) - Last week, the U.S. Patent and Trademark Office released a set of proposed rule changes governing Patent Trial and Appeal Board proceedings.

One of the most significant changes under the proposed rules would allow patent owners to include, along with their opposition to a petition to institute a proceeding, new testimonial evidence, such as expert declaration.

Michelle K. Lee, under secretary of commerce for intellectual property and director of the PTO, wrote in a blog post Wednesday that the change responds to commentary “raising concerns” that patent owners are disadvantaged by current rules that let petitioners’ evidence go unanswered before a trial is instituted.

The America Invents Act, signed into law by President Barack Obama in 2011, created three new kinds of post-patent issuance review proceedings to be conducted by the PTAB. They include inter partes review, or IPR; post-grant review, or PGR; and the transitional post-grant review for covered business method patents, or CBM.

IPR is a procedure for challenging the validity of a patent before the PTO. The procedure allows third parties to challenge bad patents.

PGR is a proceeding that reviews the patentability of one or more claims in a patent. The process begins with a third party filing a petition on or prior to the date that is nine months after the grant of the patent or issuance of a reissue patent. The patent owner may file a preliminary response to the petition.

CBM is a proceeding conducted to review the patentability of one or more claims in a covered business method patent. Such proceedings employ the standards and procedures of a PGR, with certain exceptions.

The PTO, under the AIA, has the authority to create and improve the three proceedings.

As such, since the office first issued the rules and guidance for the proceedings in 2012, it has reached out to the public and received input through various events.

Based on that input, the PTO issued its first set of changes -- or “quick fixes,” as Lee wrote -- that were relatively simple.

Lee then promised that the office would have a second package of more involved proposed rules ready to share this summer.

Those set of additional proposed improvements, detailed in the PTO’s Federal Register Notice, include:

- Allowing patent owners to include, with their opposition to a petition, new testimonial evidence;

- A new requirement on practitioners before the PTAB -- akin to the Rule 11 requirements in federal courts -- to give the PTO a more robust means with which to police misconduct; and

- Clarifying that the PTAB will use the claim construction standard used by district courts for patents that will expire during proceedings and therefore cannot be amended, while confirming the use of broadest reasonable interpretation, or BRI, for all other cases.

The package of changes also notes the PTAB’s development of motions-to-amend practice through its own body of decisions, including a recent decision that clarified what “prior art” a patent owner must address to meet its burden of proof.

Prior art is defined as information made available to the public in any form before a given date that might be relevant to a patent’s claims of originality.

“We recognize that, while we believe the proceedings are working well, there are improvements that could be made based on our and the public’s experiences with the proceedings,” Lee wrote.

“Along with the PTAB’s refinement and improvement of its proceedings that it has made through specific decisions, today’s proposed rules represent the next step in making improvements to these proceedings.”

Lee, in her blog post, also shared some notable statistics -- three years’ worth of data -- on the review proceedings.

She said the data provides a “helpful picture” of the activity occurring before the PTAB to date, in particular how and by whom the proceedings are being used.

As of July 31, the PTAB has received a total of 3,655 petitions, of which 3,277 are IPRs, 368 are CBMs and 10 are PGRs.

Of all of the AIA petitions filed so far, 63 percent were filed in the electrical/computer technology centers, or TCs; 23 percent in the mechanical/business methods TCs; 9 percent in the bio/pharma TC; and 5 percent in the chemical TC.

Trials have been instituted on 1,389 of 3,277 IPR petitions, 185 of 368 CBM petitions and two of 10 PGR petitions.

Also, of the first IPRs to reach a conclusion, 12 percent of total claims available to be challenged -- 4,496 of 38,462 -- were determined by the PTAB to be unpatentable in a final written decision. Other claims were either not challenged, resolved by settlement, cancelled or upheld as patentable.

Of the first IPRs to reach a conclusion, 25 percent of claims actually challenged -- 4,496 of 17,675 -- were found to be unpatentable.

For more data, click here.

“Taken together, the demand for these new proceedings (as reflected by the large number of filings) and the results we are seeing at the CAFC [U.S. Court of Appeals for the Federal Circuit] appear to indicate that the PTAB proceedings are succeeding in their Congressional mandate to effectively and efficiently resolve patent validity disputes, while providing timely, low-cost alternatives to district court litigation,” Lee wrote of the data.

The proposed rule changes, which also address comments made about requests for additional discovery, live testimony and confidential information, will be available for public comment until Oct. 19.

Click here to find out how to submit a comment.

Lee said in her blog post that the PTO, in cooperation with the American Intellectual Property Law Association, also will conduct public road shows this week to discuss the rule changes.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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