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Interplay between Litigation and the AIA __________ An Overview

Interplay between Litigation and the AIA __________ An Overview. John B. Pegram Fish & Richardson P.C. _____ AIPLA IP Practice in Europe Committee March, 2013. Interplay between litigation and AIA. Proceedings in Courts and the USPTO , and Almost Everything Else

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Interplay between Litigation and the AIA __________ An Overview

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  1. Interplay between Litigation and the AIA__________An Overview

    John B. Pegram Fish & Richardson P.C. _____ AIPLA IP Practice in Europe Committee March, 2013
  2. Interplay between litigation and AIA Proceedings in Courts and the USPTO, and Almost Everything Else (Other AIA Changes Affecting Litigation) Note: This presentation is based on the author’s personal views at this time, which are not necessarily the same as those of any organization with which he is affiliated.
  3. Invalidation Procedures in TraditionalU.S. Patent Litigation In infringement Litigation: Invalidity defenses, and Invalidity counterclaims Declaratory judgment actions Only when the DJ Plaintiff is threatened with infringement litigation No European-style Post grant opposition, or Nullity actions
  4. Reexamination(Pre-AIA) Two types: Ex Parte, and Inter Partes Filed at any time—No threat required Similar to application examination By Examiners in the Central Reexamination Unit (CRU) Decision Appealable to USPTO Board Long pendency until final USPTO Decision
  5. Ex Parte Reexamination Filed by either Patentee or Third Party Still available Post-AIA Third party involvement limited to initial stage Third party cannot argue against Patentee’s or Examiner’s actions and arguments Third party has no right of appeal Not a satisfactory substitute for litigation
  6. Inter PartesReexamination (IPRx)(Pre-AIA) Filed by a Third Party Third Party had full participation Replaced in the AIA by Inter PartesReview (IPR)
  7. New USPTO PROCEEDINGSAfter the AIA
  8. Patent Trial and Appeal Board(PTAB) Board of Administrative Patent Judges (APJs) Adversary proceedings Not a form of examination Limited discovery Direct appeal to the Federal Circuit One less step than reexamination Less chances to cure mistakes Increased need for litigation skills PTAB Reviews can be settled
  9. Main Issues withNew PTAB Review Procedures Cost of PTAB Review Thresholds for PTAB Review Estoppels based on PTAB Review Stay of Litigation pending PTAB Review Different Standards from Litigation favor Challenger Claim scope Burden of proof Page Limits
  10. Three New PTAB Review ProceduresUnder the AIA Inter PartesReview (IPR) Available since September 2012 Post Grant Review (PGR) To be available: From March 2013, But only for patents issued on AIA applications Covered Business Method (CBM) Review Available since September 2012
  11. Inter PartesReview By PTAB Invalidity Grounds: Limited to patents & publications Threshold: “reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition” Estoppel Effect: “with respect to that claim on any ground that the petitioner raised or reasonably could have raised”
  12. Post Grant Review By PTAB Invalidity Grounds: Any Threshold: “if information presented in the petition … is not rebutted, [it] would demonstrate that it is more likely than not that at least 1 of the claims challenged in the petition is unpatentable” Estoppel Effect: “with respect to that claim on any ground that the petitioner raised or reasonably could have raised”
  13. Covered Business Methods (CBM) A PTAB review of the validity of covered business method patents “Covered business method patent means a patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions.”
  14. Covered Business Methods (CBM) Invalidity Grounds Pre-AIA patents – Limited prior art AIA patents – Any Threshold Same standards and procedures as PGR, plus Petitioner must have been sued for infringement of the patent, or charged with infringement under the patent. Petitioner must show that at least one patent claim is for a CBM
  15. Covered Business Methods (CBM) Estoppel Effects Petitioner is estopped before the Office with respect to any claim on any ground raised or reasonably could have been raised, and in a subsequent district court or ITC action that a claim is invalid on any ground that the petitioner raised. Patent owner is estopped from taking action inconsistent with any adverse judgment including obtaining a patent claim that is patentably indistinct from a finally refused or cancelled claim, or amending its specification or drawing in a way not permitted during the proceeding.
  16. Statistics (IPR) Number of IPRs Filed 124 filed through February 8, 2013 26 filed in January, 2013 Application of Threshold: Reasonable Likelihood of Success IPR has been instituted in 9 of the 9 decisions reviewed In several cases, IPR was ordered on only some of the petitioned claims
  17. Statistics (CBM) CBMs Filed 15 filed through February 8, 2013 None filed in January, 2013
  18. Statistics: Types of Cases? Filings by industry (IPR + CBM) ~60% software or EE ~20% mechanical ~20% bio/chemical Approximately 75% of challenged patents are in pending litigations
  19. Construction of Patent Claims Courts use Markmanprocedure to determine the correct construction of the claims USPTO uses “broadest reasonable construction” of the claims Used in reexamination Query use in PTAB Reviews? In Gore, Judge Moore suggested that there is no “broadest reasonable construction” once the Fed Cir has construed the claims In essense, there is a single reasonable construction.
  20. Construction of Patent Claims Aria Diagnostics v Sequenom, argued in January, 2013, questions whether claim construction should receive de novo review.  Parties will keep raising the issue until the Fed Cir decides it
  21. Stay of Litigations In typical case of infringement suit followed by an IPR request District Judge has discretion re whether to stay Because IPR is faster than IPRx, stay is more likely AIA encourages a stay of District Court case pending a CBM Review: See Market-Alerts Pty. Ltd. v. Bloomberg Finance LP, Civil Action No. 1:12-cv-00780 (D. Del. Feb. 5, 2013)
  22. Dealing with Estoppel Open question: How will “reasonably could have raised“ be interpreted? What about later discovered prior art? How good is the noninfringement defense? Can PTAB Review help improve that defense? Do you have prior use or sale evidence that cannot be considered in an IPR or a CBM? Is the PTAB the best forum for invalidity issues, in spite of estoppel Favorable standards Skilled judges
  23. ALMOST Everything Else_____(Other AIA CHANGES AFFECTING LITIGATION)
  24. Joinder (35 U.S.C. § 299) There was a growing practice of forcing unrelated defendants to litigate in one case Less costly for Trolls More costly for Defendants due to coordination Joinder of unrelated defendants is discouraged by the AIA Greater likelihood of transfer to a more convenient court Possible consolidation for discovery
  25. False Marking(35 U.S.C. § 292) Before the AIA Private Parties could sue for a penalty in cases of false patent number marking A flurry of cases AIA Only the government can sue for the penalty A person who has suffered a competitive injury may sue for damages adequate to compensate for the injury marking of a product relating to a patent that covered that product but has expired is not a violation of this section Amendments limited pending cases False marking litigation has dried up
  26. Supplemental Examination A form of reexamination by the CRU Patent owners can “cure” failures to disclose prior art, etc. May avoid charges of inequitable conduct Not used much Seven requests through February 15, 2013 One filing accepted by USPTO for reexamination One rejected Five remain under review as of February 25, 2013 Not highly recommended
  27. Best Mode Failure to disclose the Best Mode no longer is a defense Harmonization point Somewhat greater emphasis on defenses of Lack of Enablement, and Lack of a Written Description of the Claimed Invention
  28. Defense to infringement based on prior commercial use(AIA § 5) An expansion of subject from the existing business methods prior use defense Not a traditional prior use defense Commercial use in the United States One year before earlier of effective filing date or certain public disclosures Exception—does not apply to patents based on applications by a University, etc.
  29. Advice of Counsel(35 U.S.C. § 298) ‘‘The failure of an infringer to obtain the advice of counsel with respect to any allegedly infringed patent, or the failure of the infringer to present such advice to the court or jury, may not be used to prove that the accused infringer willfully infringed the patent or that the infringer intended to induce infringement of the patent.’’ One piece of the trend toward making proof of willful infringement more difficult and less of a threat
  30. Thank you for your attention! Questions? John B. Pegram Fish & Richardson P.C. New York pegram@fr.com For further information see: www.fr.com/post-grant-practice/
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