You have been accused of infringing a patent and you can’t believe that the asserted patent could ever have been granted. What can you do to take the offensive in attacking the asserted patent?

Beginning with the passage of the America Invents Act (AIA) in 2012, several new proceedings were implemented that allow the general public to challenge patents granted by the United States Patent and Trademark Office (PTO). Certain of these procedures were available immediately while others had to wait until applications filed after the passage of the Act were approved by the PTO and issued as patents.  These proceedings have become valuable tools for accused infringers and technology adapters to clear away otherwise blocking patents.

There are now four types of proceedings which the public can use to challenge issued patents. Although each of the proceedings can result in the invalidation of a patent, the proceedings are different and should be used under a carefully thought-out strategy.  The proceedings, all of which are presided over by the Patent Trial and Appeal Board (PTAB), are:

  • Post Grant Reviews
  • Inter Partes Reviews
  • Covered Business Methods
  • Reexaminations

Post Grant Reviews

In a Post Grant Review (PGR) proceeding, a third party can challenge the validity of a patent on any of the grounds that could be raised as a defense in litigation. These grounds include novelty, obviousness, written description, lack of enablement, indefiniteness, utility, and subject matter eligibility.  The PGR proceeding must be brought within nine months of the issuance of the patent and the challenger (also known as the real party in interest) must be identified.  A PGR proceeding can only be filed against a patent that issued off of an application that is subject to the First Inventor To File provisions of the AIA.  In general, this will be most, but not all, patent applications filed after March 16, 2013.

The PGR proceeding begins with the third party challenger filing a petition with the PTAB. The patent owner has the option of submitting a response to the petition.  The PTAB will then determine whether the challenger has shown that more likely than not at least one claim of the patent is invalid.  If the PTAB finds that the challenger failed to make such a showing, then the petition is dismissed.  If the PTAB finds that the challenger has made such a showing, then the PGR proceeding will commence and the challenger and patent holder will submit more formal proofs to the PTAB which will then make a final determination.  Either party can appeal the decision to the Court of Appeals for the Federal Circuit.  If the PTAB maintains the validity of the patent claims, the challenger and any party related to it will be foreclosed from raising the same arguments as a defense in any patent infringement lawsuit on the subject patent.

Inter Partes Reviews

An Inter Partes Review (IPR) proceeding is similar to a PGR proceeding except it is filed after nine months after the grant of a patent and the grounds of the challenge are limited. A challenger in an IPR can only argue that the patent is invalid on the basis of novelty and obviousness.  An IPR can be filed against any patent, whether governed by the new First Inventor To File standard or the former First To Invent standard.  Moreover, if the challenger or any party in privity with the challenger such as a parent or subsidiary has been sued for infringement by the patent owner, the challenger has one year from the date of the filing of that lawsuit to file the IPR petition.

Similar to the PGR proceeding, an IPR proceeding begins with the third party challenger filing a petition with the PTAB. The patent owner has the option of submitting a response to the petition.  The PTAB will then determine whether the challenger has shown that it has a reasonable likelihood of success in proving that at least one claim of the patent is invalid.  If the PTAB finds that the challenger failed to make such a showing, then the petition is dismissed.  If the PTAB finds that the challenger has made such a showing, then the PGR proceeding will commence and the challenger and patent holder will submit more formal proofs to the PTAB which will then make a final determination.  Either party can appeal the decision to the Court of Appeals for the Federal Circuit.  If the PTAB maintains the validity of the patent claims, the challenger, and any party related to it, will be foreclosed from raising the same arguments as a defense in any patent infringement claim filed by the patent owner on the subject patent.

Covered Business Methods

Covered Business Method (CBM) proceedings predate the enactment of the AIA, although the AIA expanded the types of patents that could be challenged. CBM proceedings target patents covering financial business methods.  CBM proceedings were first established to address the concern that the PTO was not equipped to review such patents because of a lack of familiarity and expertise in the PTO Examiner corps with respect to business methods.  A challenger must demonstrate that the patent is directed to financial business methods and can then challenge the patent under the same grounds as in PGR proceedings.  In order to bring a CBM proceeding, a challenger must have been sued for patent infringement or otherwise charged with infringing a patent.  If a CBM proceeding is instituted and the challenger is unsuccessful, it will be foreclosed from relying on the same arguments in the litigation.

Reexaminations

Reexamination proceedings also predate the enactment of the AIA. To institute a reexamination, a challenger must file a petition with the PTAB and establish that there is a new question of patentability based on novelty or obviousness grounds with respect to at least one claim of the patent.  Unlike the other proceedings, the challenger does not need to be identified and can remain anonymous.  However, once the reexamination is established, the challenger has no further role in the process and is not permitted to comment on the arguments submitted by the patent owner in support of patentability.  There is no estoppel effect given to the reexamination decision so the challenger can later assert the same arguments challenging the patent in litigation brought by the patent owner.

Standards of Review

The PTO has issued regulations to govern the standards of review for the post issue proceedings. The PTAB will give a patent claim the “broadest reasonable interpretation” and will use a burden of proof standard that the prior art shows that the claim is more likely than not invalid.  In other words, the PTAB will give no deference to the prior issuance of the patent.  These standards are different than those used by a court in a patent infringement case where a patent is presumed valid and must be shown to be invalid by clear and convincing evidence and where the court will interpret a patent claim in a manner to preserve its validity.

These standards are currently the subject of review by the Supreme Court. Patent owners have argued that the new post issue proceedings (other than reexaminations) are intended to be replacements for more costly litigation and should be governed by the same standards used n litigation.  The PTO has argued that the standards that have been adopted are the same standards used by the PTO in reviewing patent applications and that there is no reason to change the standards for post issue proceedings.   Because a reexamination proceeding reopens the review process for a patent and permits liberal amendments to the claims, it is more akin to the normal patent application process and the use of PTO standards of review have not been criticized.

Strategies

The use of these post-issue proceedings has become more popular. Parties accused of infringing a patent should now review the possibility of using one of these proceedings to challenge the patents asserted against them.  When these proceedings were first available, their success rate was very high, possibly due to the fact that the initial targets of these proceedings were the low-hanging fruit of clearly invalid patents.   More recent success rates are not as great, but there proceedings remain a viable option in the accused infringer’s arsenal of defenses.  By taking the offensive, the accused infringer can add an element of increased risk to the patent owner.  Moreover, the parties in a contested proceeding such as an IPR or CBM can agree to settle the proceeding before it is decided, providing an added incentive for the patent owner to resolve the dispute in favor of the accused.