Created in the America Invents Act (AIA), the new Inter Partes Review (IPR) and Post Grant Review (PGR) “trials” at the US Patent Office have the potential to be game-changers in the way patents are challenged in the future. After several attempts at creating Patent Office-based proceedings that are efficient and effective, there is much in the new IPR and PGR that lend credence to the notion that Congress finally hit on a combination of pure patent litigation and Patent Office procedure that will be attractive to patent challengers. As a result, patent owners need to be intimately aware of the details and strategy considerations of these proceedings because of certain advantages offered to patent challengers, including:
1. The burden of proving patent invalidity in an IPR or PGR proceeding is merely a “preponderance of the evidence” – lower than the standard required in Federal court of “clear and convincing evidence”;
2. Claims in an IPR or PGR proceeding are given their “broadest reasonable interpretation,” consistent with the patent prosecution standard at the Patent Office; this is likely to be a broader interpretation than what would be argued in Federal court, making it easier to read claims on prior art;
3. While cost, as compared to prior PTO proceedings, will be higher, cost is still considerably lower than patent challenges in Federal court;
4. The speed of these proceedings – to be completed within 12 months – may be an attractive feature in some circumstances;
5. The PGR procedure allows challenges to patents based on novelty and obviousness arguments for non-published prior art, such as prior use and prior sale, as well as 101 and 112 issues; and
6. The ability to have some litigation tools to control the proceedings – depositions, oral hearing, etc. – will make it more palatable to submit good prior art to the Patent Office.
All is not lost, however, for patent owners. Patent owners may appreciate the speed of the proceedings and the ability to have access to some litigation tools, as discussed above. In addition, patent owners will find the following features attractive:
1. Patent challengers, and their privies, are estopped from later raising validity challenges actually raised, or which could reasonably have been raised, in IPR and PGR proceedings (after a final written decision is entered) – this estoppel applies to Federal court litigation, USITC, as well as other proceedings before the Patent Office and attaches much quicker than the previous Patent Office proceedings;
2. Patent challengers are afforded the ability to make claim amendments to overcome prior art issues, where appropriate (and, as is often the case, these narrowing amendments can result in claims that are stronger from a validity perspective, but not changed from an infringement perspective);
3. IPR and PGR are not available if a petitioner has already filed a civil action claiming patent invalidity (counter claims do not count); and
4. IPR and PGR are not available if filed more than one year after a civil action is brought by patent owner.
Only time will tell if IPR/PGR become the long-desired elixir for expensive patent litigation. There are some who predict they will be little-used proceedings. Others suggest they may transform patent litigation and serve as a commonly-used substitute for Markman hearings. We’ll look forward to seeing this new development unfold before our eyes.