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American Intellectual Property Law Association

PTAB Update: IPR & CBMSponsored by the Japan Patent Office

Ron Harris, The Harris Firm

AIPLA IP Practice in Japan CommitteeTokyo, Japan

April 7, 2014

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AIA Monthly Filings (as of March 27, 2014)

Total 1,128 IPR 983 CBM 140 DER 5

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AIA Progress (as of March 27, 2014)

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IPR and CBM (as of March 27, 2014)

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IPR Stages

• Petition (…then after 3 months)– PO Preliminary Response (…no more than 3 months)– Decision on Petition (…3 months [PO Discovery])

• Response/Motion to Amend (3 months [Petitioner Discovery])– Petitioner Reply to PO Response/Opposition to Amend (…1 month [PO Discovery

Period])– Set Hearing (observations/motions to exclude evidence)

• Oral Hearing […up to 1 year after granting petition]• Final written decision […~ 2 months]

– Appeal to Federal Circuit only

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IPR Petition Requirements (1)

• Petition must show:– Patent is eligible for IPR review– A “reasonable likelihood” that at least one claim is

unpatentable under Section 102 or 103 based on prior art patents or publications

• Must comply with relatively strict formal requirements.

• Preparation of successful petition requires extensive preparation.

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IPR Petition Requirements (2)

• Timing: – Petition must be filed within one year of service of a

complaint asserting the patent.– IPR not available if patent was previously asserted in DJ

action filed by petitioner (or its “privies”)

• Petition must identify “real party in interest”– Petitioner and “privies” estopped as to arguments raised

or reasonably could have been raised– Fact specific inquiry as to other parties that might be

bound by outcome of IPR.

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IPR Petition Requirements (3)

• Motivation to combine references for 103 should be explained and supported by evidence

• Claim charts: – helpful but supporting argument required.

• Expert declarations may: – (1) explain technology; – (2) explain BRC; – (3) explain prior art; – (4) support motivation to combine

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IPR Petition Requirements (4)

• Claim construction: Board applies “broadest reasonable construction” (BRC)– Petition should identify proposed construction of terms

that affect 102/103 issues– Even if BRC is proposed, advisable to provide technical

definitions from dictionaries available at priority date of patent.

• Publications should be shown to qualify as prior art• Petitioner must disclose “inconsistent statements”

– E.g., address inconsistent claim construction, inconsistent findings from prior proceedings

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IPR Preliminary Response

• The Patent Owner’s Preliminary Response is both optional and limited– Optional: about 25% of patent owners do not file a

preliminary response (A preliminary response might alert the petitioner’s expert before you can depose him/her)

• Limited – in scope and content– Principal purpose is to persuade the Board not to

institute trial – no trial at all, or that trial should not include certain redundant grounds, claims, or references

– Cannot include new testimonial evidence– Cannot amend claims– Should include argument/evidence on claim construction

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IPR Experts/Routine Discovery

• Experts from outset in Petition/Prelim Response• Routine discovery

– Production of exhibits cited in a paper or testimony– Cross-examination of opposing declarants by deposition– “Non-cumulative information that is inconsistent with a

position advanced during the proceeding”

• IPR expert reports should be tailored to PTAB– PTAB will pay more attention to nexus between

secondary considerations & claim limitations– PTAB will pay more attention to commensurateness in

relation to claim scope

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IPR Additional Discovery

To establish “in the interest of justice”(1) More than a possibility or mere allegation that something useful will be found,

(2) Not merely seeking early identification of the other party’s litigation positions,

(3) No ability to gather equivalent information otherwise,

(4) Easily understandable requests, and

(5) Requests are not overly burdensome.

See Garmin International Inc. v. Cuozzo Speed Technologies LLC, slip. op. IPR2012-00001

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IPR Response

• Single, very best opportunity to defeat the petition– BUT, only ONE chance to amend (cannot broaden)– PO must prove with (potentially constraining) arguments

about (a) prior art and (b) amendment language claim construction/support, that it overcomes all grounds

– Presumption: substitution of no more claims than in original patent (ought to prosecute at least 20 in US)

• IPR instituted most challenged claims likely die– Proposed claims can be made contingent upon original

claims being found unpatentable

• Possible to settle with petitioner– if done before filing a response, likely to terminate IPR

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IPR Response - Recent Decisions (1)

• Idle Free Systems, Inc. v. Bergstrom, Inc., IPR2012-00027– Motion to Amend was denied

• Bergstrom failed to set forth what one of ordinar skill in the art would have known about features in amended claims

• PTAB did not address differences from claims and prior art

– General teachings from PTAB:• Presumption that a challenged claim may be replaced by only

one substitute claim (one-for-one substitution); PO must specify what claims are being replaced with what substitute claims

• Proposed amendments must respond to surviving petition ground of unpatentability

• All limitations from original claim must be present or narrowed

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IPR Response - Recent Decisions (2)

• See also Nichia Corp. v. Emcore Corp., IPR2012-00005, and

• Microsoft v.Proxyconn, IPR2012-00026– insufficient arguments/evidence prima facie case of

patentability made, – failed to:

• construe newly added claim terms, • address way the claims are patentable generally over the art, • identify closest prior art known, • address the level of ordinary skill in the art at time of the

invention, • discuss how such a skilled artisan would have viewed the newly

recited elements in the claims

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IPR Hearing

• Demonstrative Exhibits– “The Board has found that elaborate demonstrative

exhibits are more likely to impede than help an oral argument. The most effective demonstrative exhibits tend to be a handout or binder containing the demonstrative exhibits.”

• Exhibits must be served on opposing counsel 5 business days before the oral argument

• Live testimony not likely granted• More like extended appellate hearing than

evidentiary proceeding

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CBM Increased Filings

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CBM

• Any ground available to challenge a claim– Practically any patent having a claim with a financial term

such as “buy”, “sell”, is deemed to be a “financial business method” patent; no “technological invention[s]”

• More likely than not at least one claim unpatentable– Higher threshold, but most petitions instituted

• Similar schedule, discovery, litigation stays as IPR– 1 year after institution– Limited vis-a-vis litigation; mainly written discovery– Like IPR, stays generally granted because less than 2.5

years through appeal to Federal Circuit

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CBM

• Redundancy doctrine (also applied to IPR)– 422 grounds for rejections contrary to regulatory requirements

for efficiency • Horizontal – multiple references applied as alternatives

– If Ref. X and Ref. Y anticipate, cumulative; thus must differentiate to have both considered

• Vertical – base reference covers all features but you needlessly apply a second reference.

• See Liberty Mutual, which requires presentation of best art, not both, or where varying claim constructions require both references.

– If construction 1, use X– If construction 2, use y

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Thanks for your attention. Questions?

Ron C. Harris, Jr.The Harris Firm

922 N Street, NW, Suite 101Washington, DC • 20001

T: +1 202 470 0126F: +1 202 478 2725

3-3-3 Higashiazabu, 3FMinato-ku, Tokyo 106–0044

T: +81 3 4455 7215F: +81 3 6800 6868www.harrisfirm.net