Challenging Patents through Post-Grant Proceedings: What Are Your Options?

You have just been sued for patent infringement, now what? One of the key defenses in any infringement suit is challenging the validity of the asserted patent. While litigating invalidity as part of an infringement lawsuit itself may seem convenient, the USPTO offers a host of administrative proceedings for challenging patent validity. These are collectively known as "post-grant" proceedings because they all take place after the patent at issue has been granted by the USPTO.

Post-grant proceedings are often cheaper, faster, and more likely to invalidate a patent than presenting invalidity arguments in litigation. And since invalidating the asserted patent can lead to the termination of the patent infringement suit, defendants often utilize post-grant proceedings in parallel with their litigation defense.

Below we provide an overview of the post-grant proceedings available to patent challengers.

Inter Partes Review

Inter Partes Review (IPR) and the related Post-Grant Review (PGR) and Covered Business Method Review (CBM) were first introduced in the America Invents Act (AIA) of 2012. IPR has since become the dominant means for challenging the validity of patents at the USPTO, with nearly 10,000 petitions filed since its inception.[1] Any patent granted by the USPTO can be challenged in IPR starting 9 months after its grant date.

To initiate an IPR, a patent challenger first files a petition for review with the Patent Trial and Appeals Board (PTAB), an administrative adjudicatory body within the USPTO. The petition describes the challenged patent and claims and lays out why the claims are invalid in view of the prior art, which again consists only of patents and printed publications. The patent owner is allowed a preliminary response, and within about six months of filing the petition, the PTAB issues a decision on whether to institute review of the challenged claims. Institution rates currently hover around 65%.[2]

IPR proceedings are inter partes, meaning that the patent challenger (called the "petitioner") and the patent owner are directly involved in the proceedings as adverse parties. IPRs are conducted before a panel of three administrative law judges at the PTAB. These PTAB judges are former patent practitioners, and usually one or more of the judges on a panel will have technical expertise in the particular subject matter area of the patent-at-issue. The review proceeds much like a trial, and includes limited discovery, briefing, expert testimony, and finally an oral argument before the three-judge panel.

After the oral argument, the panel issues a final written decision (colloquially called a "FWD") on the validity of all challenged claims. By statute, in the absence of mitigating circumstances this decision must issue within one year of instituting review (a full timeline is presented below). Of those IPR petitions that have resulted in a final written decision, over 60% found all challenged claims unpatentable.[3]

One issue with an IPR is the estoppel effect. If the FWD finds the patent claims are patentable over the prior art used in the petition, then the petitioner will not be able to challenge the validity of the patent on the same grounds (and some others) that were the basis for the petition. This is obviously advantageous the patent owner and avoids the cost and risks of a validity challenge in federal court.

Post-Grant Review

Post-Grant Review (PGR) is procedurally similar to IPR, but can only be initiated within 9 months of a patent's issuance so it fills that gap of time before an IPR can be filed. Further, a petition for review by a third party must be filed before that third party files any declaratory judgment on invalidity of the claims. In contrast to IPR, PGR prior art can also include evidence of public use, on-sale activity, or other public disclosures. PGR petitioners can also challenge patents on additional grounds, such as lack of written description, enablement, and subject matter eligibility, which are not directly available in an IPR petition.

Covered Business Method Review

Covered Business Method (CBM) review can only be initiated by a party charged with infringement of a CBM patent. A CBM patent is a patent that's essentially claiming way to do business like selling a product online. Like IPR, CBM review prior art consists of patents and printed publications and review can only be initiated 9 months after the patent issues (i.e. after PGR is unavailable). Unlike IPR, CBM review can challenge patents on the same broad grounds as PGR, such as subject matter eligibility. CBM review can be preferable to IPR in some circumstances due to the more limited estoppel provisions of CBM proceedings. Finally, the CBM review procedure is due to sunset in September 2020.

Ex Parte Reexamination

Ex Parte Reexamination (EPRx) allows a third party (such as a patent infringement defendant) to request the USPTO "re-examine" an already granted patent. This re-examination is limited to prior art consisting of patents and printed publications, which are submitted by the requestor or may be identified through searching by the Office. A re-examination amounts to a limited reopening of prosecution of the patent. However, it is conducted by a panel of three experienced examiners within a special unit at the USPTO as opposed to the single examiner that typically examined the patent in the first instance.

The data for EPRx challenges shows much more limited success rates for patent challengers. Since the inception of EPRx in 1981, only 13% of proceedings resulted in all claims cancelled when reexamination was requested by a third party.[4] In addition, EPRx allows a patent owner to both amend the existing claims to avoid the cited prior art and add new claims to the patent, thereby allowing the patent owner to potentially strengthen their patent in response to an EPRx challenge. And unlike IPR, the EPRx proceeding is entirely ex parte, which means the patent challenger has no direct involvement in the re-examination other than filing the initial request.

Conclusion

Defendants (or even potential defendants) in a patent infringement suit have several options available to them to challenge the validity of the asserted patent. If you have strong prior art in the form of patents and/or printed publications, you may find one of the many post-grant procedures, like IPR, to be an efficient and effective means of invalidating the asserted patent.

For a full comparison of all post-grant proceedings available to patent owners and challengers alike, Fish has created this useful spreadsheet describing the different post-grant proceedings.

[1] https://www.uspto.gov/sites/default/files/documents/Trial_Statistics_2019-10-31.pdf

[2] Id.

[3] Id.

[4] https://www.uspto.gov/sites/default/files/documents/ex_parte_historical_stats_roll_up.pdf

More questions? Contact the authors or visit Fish’s Intellectual Property Law Essentials.

Authors: Rick Bisenius, Dan Smith, and Ryan Petty