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11 AIPLA
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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
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