Portfolio Media. Inc. 860 Broadway, 6th Floor New York, NY 10003 www.law360.com Phone: +1 646 783 7100 Fax: +1 646 783 7161 customerservice@law360.com Starting An AIA Post-Grant Proceeding Law360, New York (August 17, 2012, 1:51 PM ET) -- The Leahy Smith America Invents Act[1] (AIA), in part, substantially overhauls post-grant proceedings in an effort to realize U.S. Congress original intention that post-grant proceedings serve as an effective and efficient alternative to district court litigation.[2] One important consideration that should be weighed when a third party is trying to decide which postgrant proceeding to use, particularly if the only issues to be raised are based on prior art, is the threshold standard that must be met by the requester (or petitioner). For ex parte reexamination, used by a third party or the patent owner, or the new supplemental examination (SE), used by the patent owner, the petitioner must show that a substantial new question of patentability (SNQ) exists.[3] For current inter partes reexamination[4] and future inter partes review (IPR), the petitioner must show that there is a reasonable likelihood that the petitioner would prevail with respect to at least one of the claims challenged in the IPR petition, when the petition is considered in view of the patent owner s response if applicable.[5] Finally, for post-grant review (PGR) proceedings, the petitioner must show that it is more likely than not that at least one challenged claim is unpatentable.[6] The question arises: Are these standards merely semantics of the SNQ standard or are they different in a way that would actually affect the grant of the respective proceeding? According to the AIA and the associated legislative history, the threshold standards described above are intended to have graded differences as discussed below. The SNQ standard still applies to ex parte reexamination and will also apply to SE. The U.S. Patent and Trademark Office (USPTO) states that a SNQ exists where there is a substantial likelihood that a reasonable examiner would consider the prior art patent or printed publication [or item of information if the request is for a SE[7]] important in deciding whether or not the claim is patentable. [8] Historical statistics reported by the USPTO reveal that 92 percent of all ex parte reexamination requests have been granted from July 1, 1981, to Sept. 30, 2011, (having the SNQ standard)[9], and 95 percent of all inter partes reexamination requests have been granted from Nov. 29, 1999, to Sept. 30, 2011.[10]
It is generally accepted that the SNQ standard requires showing that is less than a prima facie case of unpatentability and is not difficult to satisfy. As Judge Paul Redmond Michel, former chief judge for the U.S. Court of Appeals for the Federal Circuit, testified to the U.S. House of Representatives, Any patent lawyer worth his salt can raise a substantial new question in virtually every case. [11] With the enactment of the AIA on Sept. 16, 2011, the SNQ standard, which had been used with inter partes reexamination, was changed to reasonable likelihood of successful challenge with respect to at least one claim, with the change being effective immediately upon enactment of the statute.[12] Satisfaction of this threshold standard depends on a consideration of both the petition from the third party requestor and the patent owner s response to the petition.[13] In its changes to implement inter partes review proceedings, the USPTO did little to clarify what this standard requires except to state that [a] reasonable likelihood standard is a somewhat flexible standard that allows the judge room for the exercise of judgment. [14] Although the USPTO has been quick to implement this new standard, a precise definition has not been and likely never will be promulgated, despite pleas for clarity and guidance.[15] However, the legislative history surrounding the switch to the reasonable likelihood standard evidences an unequivocal intention that the reasonable likelihood threshold is higher than the SNQ threshold.[16] Sen. Jon Kyl, R-Ariz., explained that the 'reasonable likelihood' test is currently used in evaluating whether a party is entitled to a preliminary injunction, and effectively requires the petitioner to present a prima facie case justifying a rejection of the claims in a patent. [17] For now, the guidance provided by the legislative history must suffice: The reasonable likelihood standard generally requires the petitioner to present a prima facie case of unpatentability. PGR will be available to challenge a patent that issues under the AIA s new first-to-file rules.[18] Challenges must be brought within nine months of issuance and may be based on any ground that could be raised under 35 U.S.C. 282(b)(2) or (3), 102, 103, 101 and 112, with the exception of lack of compliance for best mode.[19] The standard for granting a petition for PGR is whether the petitioner demonstrates that it is more likely than not that at least one of the claims challenged in the petition is unpatentable.[20] Similar to its explanation of what constitutes a reasonable likelihood, the USPTO has thus far provided little more than a restatement of the standard enacted by Congress. Proposed Rule 42.208(c) provides that the Patent Trial and Appeal Board may institute PGR if the more likely than not standard is met.[21] In response to numerous comments requesting clarity between the two standards for IPR and PGR[22], the USPTO s chief judge of the board of patent appeals and interferences, James Donald Smith, issued a statement explaining that the two are, in fact, different standards.[23] Smith explained that the reasonable likelihood standard is lower than the more likely than not standard: The reasonable likelihood standard allows for the exercise of discretion but encompasses a 50/50 chance whereas the 'more likely than not' standard requires greater than a 50 percent chance of prevailing.
Smith s explanation is consistent with the legislative history. Kyl further explained that the standard of review for PGR is higher than the reasonable likelihood standard for inter partes review because some of the issues that can be raised in post-grant review, such as enablement and section 101 invention issues, may require development through discovery. The office wants to ensure that petitioners raising such issues present a complete case at the outset. [24] Sen. Patrick Leahy, D-Vt., noted that a substantial new question would not be enough to initiate PGR and the new higher standard... was created to make it even more difficult for these procedures to be used as tools for harassment. [25] From the descriptions provided by the USPTO and the legislative history, the three standards have graded thresholds, with SNQ being the lowest and more likely than not being the highest. This should mean that the petitioners for IPR and especially PGR will have higher burdens to meet, versus an ex parte reexamination and SE, just to start the post-grant proceeding. How the new standards of reasonable likelihood and more likely than not affect the grant rate of requests for IPR and PGR, respectively, remains to be seen. In addition, whether the differences in the standards result in substantive differences in the ability to have a petition for a particular post-grant proceeding granted, remains to be seen. However, both Congress and the USPTO have clearly stated that the standards are different and require a different showing. This presents an additional variable for a third party to consider when trying to decide which post-grant proceeding to use against a patent, particularly when the only issues to be raised are based on prior art. --By MaryAnne Armstrong and Eugene Perez, Birch Stewart Kolasch & Birch LLP MaryAnne Armstrong, Ph.D., and Eugene Perez are partners in Birch Stewart's Falls Church, Va., office. The opinions expressed are those of the authors and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice. [1] Leahy-Smith America Invents Act, Pub. L. No. 112-29 (2011) ( AIA ). [2] See H.R. Rep. No. 112-98, at 45-46 (June 1, 2011); (citing Reexamination will permit efficient resolution of questions about the validity of issued patents without recourse to expensive and lengthy infringement litigation... The reexamination of issued patents could be conducted with a fraction of the time and cost of formal legal proceedings and would help restore confidence in the effectiveness of our patent system... It is anticipated that these measures provide a useful and necessary alternative for challengers and for patent owners to test the validity of united states patents in an efficient and relatively inexpensive manner. See H.R. Rep. No. 96 1307(I) at 3 (1980), reprinted in 1980 U.S.C.C.A.N. 6460, 6462 63). [3] 35 U.S.C. 303(a); AIA, (35 U.S.C. 257).
[4] The new threshold standard for initiating inter partes reexamination was immediately changed from substantial new question of patentability to reasonable likelihood of successful challenge with respect to at least one claim when the AIA was enacted on Sept. 16, 2011. While the new reasonable likelihood standard is currently applicable to inter partes reexamination requests, it is only available for patents for patents filed on or after November 29, 1999. 37 C.F.R. 1.913. As of Sept. 16, 2012, the current inter partes reexamination proceeding will be completely replaced with inter partes review and applies to any patent issued before, on, or after Sept. 16, 2012. [5] AIA, 6 (35 U.S.C. 314(a)). [6] AIA, 6 (35 U.S.C. 324 (a)). In the alternative, as provided by 35 U.S.C. 324(b), a petition for PGR may also be granted if the petition raises a novel or unsettled legal question. In its Proposed Rulemaking entitled Changes to Implement Post-Grant Review Proceedings, the USPTO stated that it expects this ground to be used sparingly. 77 Fed. Reg. at 7066; Proposed Rule 42.208(d). [7] 77 Fed. Reg. at 3672 (citing Manual of Patent Examination and Procedure ( MPEP ), 2242 (8th ed. 2001) (Rev. 8, July 2010)). [8] MPEP 2242 (8th ed. 2001) (Rev. 8, July 2010). [9] Ex Parte Reexamination Historical Statistics. Statistics provided by the United States Patent and Trademark Office. Available at www.uspto.gov/patents/ep_quarterly_report_sept_2011.pdf (last visited July 24, 2012). [10] Inter Partes Reexamination Historical Statistics. Statistics provided by the United States Patent and Trademark Office. Available at www.uspto.gov/patents/ip_quarterly_report_september_2011.pdf (last visited July 24, 2012). [11] See www.uspto.gov/aia_implementation/hearing-feb11.pdf (last visited July 24, 2012). [12] Revision of Standard for Granting an Inter Partes Reexamination Request, 76 FR 59055 (Sept. 23, 2011) (Final Rule). Available at www.uspto.gov/aia_implementation/revision-of-ip-std.pdf (last visited July 24, 2012). [13] 35 U.S.C. 314(a) (2011). [14] 77 Fed. Reg. at 7046. [15] For a representative request for clarity, See AIPLA s Comments on Notice of Proposed Rulemaking Changes to Implement Inter Partes Review Proceedings 77 Fed. Reg. 7041 (Feb. 10, 2012). Available at www.uspto.gov/aia_implementation/comment-aipla6.pdf (last visited July 24, 2012) [16] See 112 Cong. Rec. S1375 (daily ed. March 8, 2011) (Senator Kyl Remarks) ( Among the most important protections for patent owners added by the bill are its elevated thresholds for instituting inter partes and post grant reviews. The present bill dispenses with the test of substantial new question of patentability, a standard that currently allows 95 percent of all requests to be granted. It instead imposes thresholds that require petitioners to present information that creates serious doubts about the patent s validity. ) [17] Id. [18] AIA, 35 U.S.C. 329(f)(2)(A) ( Appeal ).
[19] AIA, 35 U.S.C. 321(a)-(c); 77 Fed. Reg. at 7061. [20] AIA, 35 U.S.C. 324(a). [21] Proposed 42.208(c) would provide that the institution may be based on a more likely than not standard and is consistent with the requirements of 35 U.S.C. 324(a). 77 Fed. Reg. at 7066. [22] For a representative request for clarity, See AIPLA s Comments on Notice of Proposed Rulemaking Changes to Implement Post-Grant Review Proceedings 77 Fed. Reg. 7060 (Feb. 10, 2012) and Comments on Notice of Proposed Rulemaking Changes to Implement Inter Partes Review Proceedings 77 Fed. Reg. 7041 (Feb. 10, 2012). Available at www.uspto.gov/aia_implementation/commentaipla7.pdf and www.uspto.gov/aia_implementation/comment-aipla6.pdf (both last visited July 24, 2012). [23]Available at www.uspto.gov/aia_implementation/smith-blog-extravaganza.jsp (last visited July 24, 2012). [24] See 112 Cong. Rec. S1375 (daily ed. March 8, 2011)(Senator Kyl Remarks). [25] See 112 Cong. Rec. S5428 (daily ed. September 8, 2011)(Senator Leahy Remarks). All Content 2003-2012, Portfolio Media, Inc.