In the first two articles in the “Patent Law Update: America Invents Act” series, I discussed the changes to the patent law that affect the patent application process. (Article 1, Article 2) In this third newsletter, I will transition my discussion to issues that may arise after your patent application has been filed. Here, I will cover four critical topics. First, I will evaluate the new derivation proceedings and how they differ from the existing interference proceedings to resolve conflicts between competing inventors applying for patents on the same invention. Second, I will examine the expansion of the current procedures for third parties to submit evidence of prior art to the United States Patent and Trademark Office (“USPTO”) to derail a pending patent application. Third, I will discuss the new supplemental examination procedures and how they can be used to as both an offense and defensive resource related to a patent’s legitimacy. Finally, I will survey the new procedures developed by the USPTO to resolve the validity of a recently issued patent through formal trial proceedings.
Under the current system, special examiners from the USPTO use interference proceedings to resolve conflicts between competing inventors applying for patents on the same invention. During these proceedings, inventors are permitted to submit signed and dated notes, prototypes, affidavits and secondary evidence like credit card statements and receipts to prove that he or she was the first to create the disputed invention. An inventor is also permitted to contest the sufficiency of the other’s inventor’s supporting documentation. Ultimately, interference proceedings are designed to determine who was the first to invent the object or process and/or whether the competing claim is novel or obvious in light of the competitor’s claimed subject matter.
On March 16, 2013, the first-to-file system will eliminate interference proceedings and the practice of “swearing back” (where the inventor submits documentation of a date of conception or reduction to practice prior to the date of the disclosure or filing). Instead, conflicts between inventors will be entitled to resolution through a derivation proceeding. However, derivation proceedings will operate differently than the current interference proceedings. The focus of these new proceedings is to determine whether the subject of a patent application was derived from the invention of someone else. Although this may seem synonymous to an interference proceeding, there is a subtle difference: an interference proceeding is designed to establish your ownership in an invention, whereas a derivation proceeding is designed to prevent someone else from obtaining the rights to a derivative of your invention. Under the new system, disputes over the ownership of an invention will be resolved solely based upon the priority and disclosure rules discussed in my first article. In light of the changes to the disclosure and prior art rules, the new derivation proceedings will inevitably be more complex than the old interference proceedings.
Third Party Submission of Prior Art
Third party submissions of prior art are designed to strengthen the patent system by quickly eliminating patents that are obvious in light of prior art. The process helps the USPTO identify prior art that is relevant to its evaluations and determinations. Currently, third parties are permitted to submit prior art to the USPTO they believe are applicable to pending patent applications. However, third parties are not permitted to explain why the alleged prior art is relevant to the PTO’s evaluation of the subject patent. As discussed in Newsletter 1, the scope of prior art will be expanded beyond just patents and publications under the America Invents Act (“AIA”) in the Spring of 2013.
On September 16, 2012, third parties will still be permitted to submit prior art believed to be relevant to a pending patent application. However, the new patent system will also allow third parties to provide statements about the relevance of the prior art that they submit. Third parties will be permitted to submit prior art before the issuance of the patent or within six months after first publication of a patent application. Third parties will also be permitted to submit prior art six months after the first rejection of a patent application.
AIA’s expansion of a third party’s ability to submit prior art and explain its relevancy to a pending patent application will be an important tool to ward off potential infringers. A prior art submission may preclude the need to initiate lengthy review procedures (discussed below) or to file infringement claims in court. Ultimately, a submission of prior art may prevent infringement before it even starts.
Supplemental Examination Procedure
After September 16, 2012, the supplemental examination procedure will allow a patent owner the ability to request a supplemental examination of a patent to consider, reconsider or correct information believed to be relevant to the patent. A patent owner can utilize this procedure to put his or her patent in the best form possible before initiating infringement litigation against an infringer. Although the scope of the patent cannot be enlarged, the patent can be rewritten to strengthen its claims and protections. In addition, a supplemental examination may give the perception that the patent has been doubly confirmed by the USPTO. If modifications/corrections are concluded before litigation is initiated, the infringer cannot use the changes as a basis to support an argument that the subject patent is unenforceable.
The supplemental examination procedure can also be used by a third party to challenge the validity of a patent. Here, the filing party must demonstrate that a substantial new question of patentability exists with the subject patent. The new evidence regarding the patentability of the subject invention is limited to existing patents and printed publications.
The USPTO has ninety (90) days from that initial request to decide whether to grant the supplemental examination. If the supplemental examination is granted, the patent holder is permitted to file a response. In doing so, the patent holder may rewrite the patent so that the new evidence no longer invalidates the patent. An ex parte filer is permitted to file a reply to the patent holder’s response. Then, the USPTO will issue a ruling as to the validity of the patent. The USPTO’s decision is appealable to the Patent Trial and Appeal Board (“PTAB”) and then to the Federal Circuit.
The supplemental examination process can be a powerful tool for a patent owner to prepare for litigation over the validity of someone else’s patent. The process can also be a relatively cheap way for a party to challenge the validity of a patent, even though the patent holder may be able to prevent invalidation by amending the patent. The key aspect to supplemental examinations is that they are administrative in nature. Unlike the review processes discussed below, supplemental examinations do not mimic trial practices. As a result, these examinations require less time and resources to reach resolution.
Post-Grant Review Procedures
Although this change will not become effective until September 16, 2012, the new post-grant review procedures will have an important impact on one’s ability to challenge the validity of a patent. These procedures contain a number of new requirements that affect the nature and scope of the evaluation of process. Ultimately, these procedures are designed to quickly eliminate conflicting patents that are obvious and provide a speedy alternative to civil litigation when a claimant seeks to invalidate a patent based on prior art. For the sake of clarity, I will address the new procedures individually.
The Current Review Process: Reexamination Procedures
The current patent system has a reexamination process. The process was designed to allow the validity of a patent to be challenged without having to initiate litigation. However, due to the increased volume of petitions that have been filed over the years, reexaminations routinely take many years to be resolved. Reexamination procedures often involve multiple Office actions, several rounds of third party and patent owner responses to the Office actions and numerous other petitions. Although the reexamination is conducted by the USPTO, the process resembles civil litigation in practice.
A reexamination petition can be filed any time during the life of the subject patent. In order for a reexamination petition to be granted, the petitioner must demonstrate a substantial, new question of patentability exists with respect to the patent. However, the scope of the petition is limited to existing patents and printed publications. A party is permitted to simultaneously pursue a declaratory action related to the validity of the patent in civil court and a reexamination process through the USPTO. In order to prevail in the reexamination process, the petitioner must prove the unpatentability of the device, plant or process at issue by a preponderance of the evidence.
The Future Review Process: Post-Grant Procedures and Inter Partes Procedures
Post-Grant Review Procedures
The post-grant review procedure is an entirely new process created under AIA. A post-grant review is a trial proceeding under the jurisdiction of the PTAB. Through the post-grant review process, a third party may request a proceeding to challenge the validity of a recently issued patent. A post-grant review can be initiated under nearly any invalidity defense, including its patentability, novelty, obviousness, evidence of prior sale, prior use or public knowledge. Post-grant review proceedings may also focus on deficiencies in the patent applicant, including the applicant’s failure to comply with the specification and best mode requirements. These proceedings are designed to be resolved within twelve (12) to eighteen (18) months after they begin.
A third party can request a post-grant review by filing a petition within nine (9) months after the subject patent has been granted. In light of this short time frame, I believe that it will be necessary to actively monitor your industry and evaluate the patents registered by your competitors. As noted above, the scope of the possible grounds that will be available to challenge a competitor’s patent is much broader under the new system. As such, I believe that it will be important to take advantage of these post-grant procedures in the future.
In order for a post-grant review proceeding to be granted, the petition must demonstrate that it is more likely than not that at least one of the claims challenged in the petition is unpatentable. However, unlike the current reexamination process, a post-grant review would not be granted if the petitioner has already filed a civil suit challenging the validity of the patent. If granted, the petitioner has the burden of proving unpatentability by a preponderance of the evidence. This is the same burden of proof required under the current reexamination procedure and is more favorable to petitioners than the clear and convincing standard faced in the courts. Once the patentability of a subject matter has been adjudicated by the PTAB, petitioners are precluded from challenging the validity of the patent involved in subsequent federal court or International Trade Commission proceedings on any grounds that were raised or reasonably could have been raised during the post-grant review proceeding. However, the PTAB’s post-grant review decisions are appealable to the Federal Circuit.
Inter Partes Review Procedures
Under the AIA, the inter partes review process will be available to third party petitioners after the nine (9) month post-grant review period has expired or a post-grant review proceeding has been terminated. An inter partes review process may be initiated any time during the remaining life of the subject patent. In many ways, the inter partes review procedures are similar to the current reexamination procedures.
Much like the current reexamination process, the scope of inter partes review is limited to prior art consisting of patents and printed publications. In addition, the petitioner has the burden of proving unpatentability by a preponderance of the evidence under both sets of procedures. However, an inter partes review may only be initiated if there is a reasonable likelihood that the petitioner would prevail with respect to at least one of the claims challenged in the petition. This is a much higher standard than required under the current reexamination procedures.
An inter partes review cannot be initiated by a petitioner who has filed a civil suit challenging the validity of the patent. However, if the petitioner files a civil action to challenge the validity of the patent on or after the date the petitioner files a request for inter partes review, the civil action is automatically stayed. In addition, if a petitioner is defending an infringement claim, the petitioner cannot request inter partes review more than one year after being served with the complaint. Taken together, these new timing restrictions will limit a petitioner’s flexibility in instituting a concurrent challenge against an infringer.
Overall, the post-grant review process and the inter partes review process create a new system to contest the validity of a recently issued patents. Both the post-grant review process and the inter partes review process will make it more difficult to seek patent invalidation before the USPTO. However, the post-grant review process has significantly broadened the scope of issues that can be considered by the USPTO to invalidate an infringing patent. While the inter partes review process maintains the safeguards found under the current reexamination process, it also limits your ability to pursue remedies in multiple venues at the same time. Because of the intricacies involved in the new system, you should meet with your attorney before its implementation to devise a strategy that will allow you to capitalize on its advantages and avoid its pitfalls.
The new patent law involves a number of new and revised procedures that may be applicable to your patent or patent application once it has been filed. These procedures are designed to resolve disputes faster and reduce the cost associated with enforcing your intellectual property rights. You should work with your attorney to determine how these new procedures can be utilized to protect your interests in existing and future patents.
My final article will discuss issues under the new patent law related to defending the interest in your patent. In doing so, I will discuss three important areas of the new law. These areas include: 1) the prior use defense; 2) the best mode requirement; and 3) advice of counsel.
© 2012 Michael P. James, J.D., M.B.A., CSSGB
Michael James provides representation and counseling related to all facets of business enterprise and healthcare matters. For more information, you can contact Michael at firstname.lastname@example.org, (810) 936-4040 or www.michaeljameslaw.com.