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May 29, 2013Newsletter

At The Board Newsletter

A Newsletter for Inter Partes Proceedings at the PTAB – May 2013

Welcome to the inaugural issue of At The Board. In this newsletter, we will provide information about the Inter Partes Review ("IPR") and Post-Grant Review proceedings created by the Leahy-Smith America Invents Act (“AIA”). The information provided in this newsletter is intended to provide you with an insight into these proceedings and how these proceedings might provide less costly alternatives to challenge patents that could threaten your business.

In this issue, we explain IPR proceedings, in particular, when a petition for IPR should be considered. In addition, we provide statistics showing the trends for Inter Partes Review proceedings at the Patent Trial and Appeals Board ("the Board"). The focus of this newsletter will be the IPR process. In the future, the focus will expand to cover other post-grant proceedings, such as Post-Grant Review.

Inter Partes Review May Provide a Process to Challenge the Validity of a Patent That Is More Economical and Efficient Than Patent Litigation

IPR is one of the procedures created under the AIA that allows a third party to petition the United States Patent and Trademark Office ("USPTO") to review the validity of an issued patent.[i] It went into effect on September 16, 2012 replacing Inter Partes Reexamination.

Inter Partes Review Fees

Request — Up to 20 claims

$9,000.00

Post-institution — Up to 15 claims

$14,000.00

Request of each claim in excess of 20

$200.00

Post-institution request of each claim in excess of 15

$400.00

 

IPR is intended to provide a process to resolve the validity of a patent that is more economical and efficient than patent litigation. The current filing fee for an IPR petition is $23,000 for up to 15 claims. If the petition is denied, the Board will refund the portion of the fee that was allocated to the post-institution phase of the proceeding — $14,000.

Although the filing fee for an IPR petition is high compared to the filing fee of a patent infringement lawsuit, the overall cost of the IPR proceeding is expected to be only a fraction of the overall cost of litigation. The overall cost for most IPR proceedings is expected to be between $150,000 and $400,000 depending on the complexity of the technology and patent at issue. Even at the higher end of the range, the cost of IPR proceedings should be significantly less than the cost of patent litigation, which typically exceeds $1 million.

Under the new IPR procedure, any person other than the patent owner can petition the Board to review the claims of an issued patent. Petitions for IPR can only be based on prior patents and printed publications and cannot be based on prior sales, public uses, or other bases for challenging the validity of patents normally available in patent litigation.

The timeline below provides a sequence of events for a typical IPR.

The Board’s goal is to complete IPR proceedings in 18 months — from the filing of a petition to the issuance of a final decision — but that time period could be extended to 24 months at the discretion of the Board. This duration for IPR trials compares favorably with the average time-to-trial of patent litigation which is about 30 months from the filing date of the complaint.

An IPR trial is very different from a patent litigation trial. IPR is conducted before a panel of three Administrative Patent Judges. Also, the Board will decide the matter on the papers without an oral hearing unless the parties request one. If a hearing is requested, it is expected that the parties will offer only oral argument and will not present evidence from live witnesses.  In addition, discovery in IPR proceedings is limited, and the Board plays an active role in determining the scope of discovery. Unlike patent litigation, discovery in IPR proceedings is tailored narrowly to address the disputed issues. For example, depositions of witnesses are permitted to the extent that an affidavit or declaration was filed in support of the petition or the patent owner’s response.

At any time after a petition is filed, but before the Board completes its review on the merits, the parties may settle the matter and request that the proceeding be terminated.

After the Board enters a final written decision, either party may appeal the decision directly to United States Court of Appeals for the Federal Circuit.

The majority of IPR petitions filed with the Board have involved patents that are in litigation. Many of the petitioners have filed requests to stay the related litigation pending the outcome of the IPR proceeding. These requests have been granted on a frequent basis depending on the status of the litigation, resulting in significant savings on litigation costs.  Recently, however, some courts have denied motions to stay, without prejudice, until the Board renders a decision on the IPR petition. 

If you have been sued for patent infringement, you should consider seeking inter partes review of the asserted patents. Any request for IPR must be filed within one year of being sued. Of course, you do not need to wait until you have been sued for patent infringement to file a petition for IPR to challenge the validity of a patent. If you have any questions or would like to obtain more information about IPR proceedings, please contact Martin Stern, Kevin Moran, Gilberto Espinoza, or Ed Evans at the information provided below

 

Current Trends at the Board

The current trends show that petitioners have been largely successful in obtaining a trial on at least some of the challenged claims. Only five petitions have been denied in their entirety by the Board. Of the 58 trials that have been instituted by the Board, 48 trials will proceed on all the claims that were challenged by the petitioner. In addition, the Board has granted the parties’ joint request to terminate the IPR proceeding after the parties entered into a settlement agreement.

IPR Trends at the Board September 2012 – April 2013

Petitions Filed

217

Petitions Denied

5

Trials Instituted

58

   On all challenged claims

48

   On some challenged claims

10

Trials Dismissed/Settled

5

Trials Adjudicated

0

 

Upcoming Issue

In the next issue, we will explain what is involved in preparing the petition for IPR.

Contact Information

Martin L. Stern at mlstern@michaelbest.com or 312.661.212

Kevin P. Moran at kpmoran@michaelbest.com or 262.956.6510

Gilberto E. Espinoza at geespinoza@michaelbest.com or 312.596.5802

Edward J. Evans at ejevans@michaelbest.com or 262.956.6548

This Newsletter is a publication of Michael Best & Friedrich LLP and is intended to provide clients and friends with information on recent legal -developments. This Newsletter should not be construed as legal advice or an opinion on specific situations. For further information, feel free to contact the authors or other members of the firm. We welcome your comments and suggestions regarding this publication. © 2013 Michael Best & Friedrich LLP. All rights reserved.



[i] The other procedures created by the AIA are Post-Grant Review, Covered Business Methods Review, and Derivation Proceedings.

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