1 1 AIPLA Firm Logo American Intellectual Property Law Association Comparison of Federal Court, ITC,...

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1 1 AIPLA Firm Logo American Intellectual Property Law Association Comparison of Federal Court, ITC, and USPTO Proceedings in IP Disputes TOM ENGELLENNER Pepper Hamilton, LLP IP in Japan Committee Meeting AIPLA MWI Meeting, Phoenix, AZ January, 2014

Transcript of 1 1 AIPLA Firm Logo American Intellectual Property Law Association Comparison of Federal Court, ITC,...

Page 1: 1 1 AIPLA Firm Logo American Intellectual Property Law Association Comparison of Federal Court, ITC, and USPTO Proceedings in IP Disputes TOM ENGELLENNER.

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American Intellectual Property Law Association

Comparison of Federal Court, ITC, and USPTO Proceedings in IP Disputes

TOM ENGELLENNERPepper Hamilton, LLP

IP in Japan Committee MeetingAIPLA MWI Meeting, Phoenix, AZ

January, 2014

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• Federal District Court proceedings

• International Trade Commission (ITC) proceedings

• New mechanisms for challenging patents under the AIA

• Key features of Inter Partes Review (IPR) proceedings

• Some Statistics for the first year of IPR availability

• Stays of Federal Court and ITC Cases

• Comparisons and Conclusions

Comparing Court , ITC and USPTO Proceedings

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Patent InfringementAnd Invalidity TrialsIn the Federal Courts

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Patent Litigation in the Federal Courts

• 35 U.S.C. 271 provides:– whoever without authority makes, uses, offers to sell, or

sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.

• 35 U.S.C. 281:– A patentee shall have remedy by civil action for

infringement of his patent.

• 35 U.S. C. 282:– (a) A patent shall be presumed valid. . .

(b) The following shall be defenses . . . : • (1) noninfringement, • (2) invalidity of the patent or any claim in suit

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Rise of Patent Suits in the Federal Courts

Source: PWC 2013 Patent Litigation Survey

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Top 5 Patent Forums in Federal Courts (2010)

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Typical Federal Court Patent Suit Budget

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Disposition of Patent Suits in the Federal Courts

Source: PWC 2013 Patent Litigation Survey

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The US InternationalTrade Commission

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Patent Litigation at the ITC

• 19 U.S.C. 1337 provides:• [T]he following are unlawful, and when found by the

Commission to exist shall be dealt with, in addition to any other provision of law, as provided in this section: . . – (B) The importation into the United States, the sale for

importation, or the sale within the United States after importation … of articles that—

• (i) infringe a valid and enforceable United States patent or a valid and enforceable United States copyright registered under title 17; or

• (ii) are made, produced, processed, or mined under, or by means of, a process covered by the claims of a valid and enforceable United States patent.

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Rise of Patent Suits at the Int’l Trade Comm.

Source: David Hill, Report to WIPO on US Patent Litigation (2012)

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Comparison of District Court & ITC Proceedings

Fed. District Ct. ITC

Decision maker

Federal District Judge or Jury

Administrative Law Judge subject to Commission and

Presidential Review

Timing Average time to Initial Determination: 12 months

Average time (to trial):28 months

Burden of Proof for Invalidity

Patent Presumed Valid Clear and convincing evidence to

the contrary is needed

Patent Presumed Valid Clear and convincing evidence to

the contrary is needed

Average Cost $1-10M: $2,100,000$10-25M: $3,554,000 >$25M: $5,911,000

$1-10M: $1,967,000$10-25M: $3,410,000 >$25M: $6,242,000

Source : AIPLA Economic survey (2013)

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Typical ITC Patent Suit Budget

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Federal Court and ITC Budget Comparison

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New AIAAlternativesto Litigation

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The America Invents Act

• The America Invents Act (AIA) established several new mechanisms for challenging issued U.S. Patents:

– Inter partes review– Post grant review– Cover business method review– Derivation proceedings

• All of these new proceedings are conducted before a new “Patent Trial and Appeal Board.”

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Comparison of AIA Proceedings

IPR CBM PGR

Grounds 102 & 103 but only patents and printed publications

101 (ineligible subject matter)112 (enablement or written description) &all102/103 prior art

101 (ineligible subject matter)112 (enablement or written description) &all102/103 prior art

Timing Pre-AIA patents:AnytimePost-AIA patents:9 months after issue and after termination of PGR challenges

Pre-AIA patents:Anytime if sued or threatened by PO.Post-AIA patents:9 months after issue and after all PGR challenges are terminated

Available only forPost AIA patents:Must be filed within9 months of grant

Standard Receivable likelihood success

More likely than not that a claim is invalid

More likely than notthat a claim is invalid

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Key Features ofIPR proceedings

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Key Features of IPR Proceedings

• Initiated by a Petition (and fee payment):

– Formal recitations– Must identify all challenged claims and recite all

grounds for review– 60 pages or less, 14pt. font, double spaced

• Must be accompanied by all supporting evidence– PTAB expects in most cases the evidence will

include one or more expert declarations.– What does a reference disclose? What does the

reference mean to a person skilled on the art? Why a feature in inherent in the prior art?

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Key Features of IPR Proceedings

• Patent Owner (PO) Initial Response (optional):• Decision to Initiate Proceedings• PO takes discovery of Petitioner’s Expert(s)• Patent Owner Response (with PO’s Expert Declarations)

and Motion to Amend Claims (only one opportunity)• Petitioner takes discovery of PO’s expert(s).• Petitioner’s Reply (w/ rebuttal declarations) and

Opposition to Amendments• PO discovery of rebuttal experts• PO’s Reply• Trial (Oral Hearing) ~~~~~> Final Written Decision

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Typical Inter Partes Review Budget

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Comparison of Federal Court, ITC & IPR Costs

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IPR STATISTICS9/16/2012 to 9/15/2013

Special thanks to Yasser El-Gamal, Ehab Samuel and Peter Siddoway who compiled some of the following data for the AIPLA

http://www.aipla.org/learningcenter/live_webinars/Pages/Wednesday,-October-9,-2013-Webinar.aspx

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Statistics

• 483 petitions filed in the first year

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Statistics

• Most IPR petitions have been against NPEs

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Statistics

• About 6% of IPRs involve Japanese companies

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Statistics

• During the first year, about 8% (37) of the IPR petitions resulted in settlements (20 before, and 17 after, institution)

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Statistics

• 403 of the 483 petitions (83%) were related to pending patent litigation between the same parties

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Statistics

• The 403 Petitioners involved in related Federal Court litigation has filed for stays 159 times

But Petitioners are very unlikely to get a stay at the ITC

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Forum Comparison

USPTO (IPR) ITC DISTRICT CT

Grounds 102 & 103 but only patents and printed publications

101 (ineligible subject matter)112 (enablement or written description)&all102/103 prior art

101 (ineligible subject matter)112 (enablement or written description) &all102/103 prior art

Presumption of validity?

No. Petitioner need only show that it is more likely than not that a claim is invalidity

Yes. Respondent must prove invalidity by clear and convincing evidence

Yes. Defendant must prove invalidity by clear and convincing evidence

Collateral effect of invalidity?

Conclusive on all other proceedings

Not conclusive unless affirmed by the CAFC

Not conclusive on other proceedings unless affirmed

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Forum Comparison (Continued)

USPTO (IPR) ITC DISTRICT CT

Jury Trial? No No Yes

Timing12 months from

Initiation to Decision

12 Months from Initiation to Initial Determination

Average time to trial: 28 months

Damages? No No Yes

Injunction? No Yes Maybe

Resolve Infringement

No Yes Yes

Costs ~$300K – 500K ~$2M - $6M ~$2M - $6M

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Thanks for your attention! Questions?

TOM ENGELLENNERPepper Hamilton, LLP

High Street Tower, 19th Floor125 High Street

Boston, MA 02110+1-617-204-5189

[email protected]

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