PTAB Trial FAQs

1. What is a PTAB Trial?

A PTAB Trial is a contested case that takes place in the Patent Trial and Appeal Board (“PTAB”), which is an administrative body within the U.S. Patent and Trademark Office (“PTO”). There are four types of proceedings that are classified as PTAB Trials: (1) inter partes review (“IPR”); (2) covered business method review (“CBM or CBMR”); (3) post-grant review (“PGR”); and (4) derivations. Derivations are special proceedings under the America Invents Act to establish whether an invention in a patent was derived from another inventor. The remaining three proceedings, IPR, PGR and CBM, are proceedings to invalidate the claims of an issued based on prior art publications. Additionally, in PGR and CBM proceedings, the petitioner can raise invalidity based on 35 U.S.C. § 112 (lack of written description and failure to claim with required clarity), as well as under 35 U.S.C. § 101 (statutory subject matter) during PGR and CBM proceedings. In the remainder of this document, PTAB Trial will be used to refer to IPR, PGR, and/or CBM proceedings.

2. Why should I consider a PTAB Trial as a petitioner?

Congress created PTAB Trials as an efficient alternative forum to contesting the validity of a U.S. patent. Due to the reduced timeframe and limited discovery the cost of a PTAB Trial can be a mere fraction of the cost of a district court litigation. There are also several advantages that this forum offers the petitioner/accused infringer, as compared to challenging validity in a district court litigation.

First, the burden of proof is reduced as compared to a district court. For example, the petitioner must show a reasonable likelihood of success in order to have an IPR instituted, and can prevail in the proceeding by proving invalidity by the preponderance of the evidence. In contrast, the petitioner/accused infringer must prove invalidity by clear and convincing evidence to prevail in a district court proceeding, which is a higher standard of proof.

Second, the fact finder in a PTAB Trial will be a panel of administrative patent law judges, who are experts in patent law issues, and the majority of whom are experienced patent practitioners with technical educational backgrounds. This is in contrast to district court litigation, where the fact finding is typically performed by jurors, who typically lack scientific or engineering educational backgrounds, and whom are unlikely to have past experience with the patent system.

Third, the meaning of claim terms in an unexpired patent are given their “broadest reasonable interpretation” during a PTAB Trial, as opposed to a narrower interpretation of the claims that is likely in district court proceeding. The broader interpretation of the patent claims in the PTAB Trial means that the petitioner can often rely on additional prior art in the PTAB Trial than would be available under the narrower interpretation of the claims used in district court proceedings.

Finally, to the extent the petitioner is able to obtain a stay of any co-pending district court litigation, the petitioner is often able to avoid providing any discovery during the PTAB Trial, other than providing expert declarations and depositions. This is because the PTAB places severe limits on discovery during the proceedings. As a result, the proceeding can be completed more quickly, with far less expenditure on attorneys’ fees associated with discovery disputes, document production, document review, and without the related disruption to the petitioner’s business associated with complying with discovery obligations in a district court proceeding.

3. What are the risks of a PTAB Trial to a petitioner?

The primary risk to consider as a petitioner is the estoppel impact of a completed PTAB Trial. In particular, the petitioner is precluded from asserting in a civil action any ground of invalidity of a claim that the petitioner raised or reasonably could have raised during an inter partes review or a post grant review, once that review has resulted in a final written decision. A similar estoppel applies to a business method review, except that the estoppel is limited to grounds actually raised in the CBM review.

Additionally, these proceedings move quickly and the PTAB is not tolerant of errors or mistakes in the petitioner’s submissions. Unlike district court proceedings where the accused infringer is given opportunities to refine and revise its contentions as the case progresses, the PTAB Trial petitioner is often limited to the arguments and evidence submitted in its petition. Accordingly, care must be given at the petition preparation stage to ensure the best arguments are presented, and that those arguments are presented well.

4. How likely is it that I will obtain a stay of a district court proceeding if I file a PTAB Trial petition?

The likelihood of obtaining a stay of a district court proceeding largely depends on the facts of the case and the preference of the particular district court judge. Courts give significant consideration to the progress of litigation when evaluating stay requests. For example, they are often reluctant to enter a stay once the case has progressed past the Markman stage for claim construction. Courts are also more likely to enter a stay if the PTAB proceeding has actually been instituted.

In multi-party patent cases, some parties may choose not to join an IPR petition—typically to avoid the broadened IPR estoppel, which prevents petitioners from later arguing invalidity in court on “any ground that the petitioner raised or reasonably could have raised during that inter partes review.” When only a subset of parties request IPR, the petitioning defendants may have difficulty obtaining a stay given court concern about inconsistent case management. A similar issue arises when the IPR does not cover all of the asserted claims, whether from an intentionally limited petition or because the PTAB only granted particular grounds of a petition. In such cases, courts generally weigh the scope of the IPR against the remaining issues in the case in order to determine how much is likely to be resolved through the IPR.

The number of motions to stay pending IPR, CBM or reexam, and the likelihood of success of such motions, have risen every year since passage of the America Invents Act (AIA). From January through July of 2015, for example, in 277 cases a stay was granted in 174 (63%), denied in 90 (32%) and granted-in-part or denied-in-part in 13 (5%). A substantial number of the stays that were denied were denied "without prejudice" (e.g. IPR/CBM petition filed bu not decided) affording the petitioner a chance to refile at a later date with a greater chance for success. The decisions granted-in-part reflect a variety of reasons: waiting until after claim construction; conditions on parties not part of the IPR/CBM to agree to estoppel; additional patents in suit not subject to the IPR/CBM; and/or time limits on the stay or periodic reports on the status of IPR/CBM.

In opposing a stay, parties must show that they would be prejudiced by a delay in the case. Courts typically give little credence to generic arguments that evidence could be lost during the pendency of the stay or that a delay in resolution of the case is harmful. Courts have also been dismissive of non-practicing entities’ arguments that a stay would prejudice their licensing efforts. On the other hand, practicing entity plaintiffs frequently establish prejudice by showing that they are competitors and that delay may cause a loss of market share.

5. What are the differences between an inter partes review, a post-grant review, and a covered business method review? How does the petitioner choose between these types of petitions?

 

PTAB Trial Petitioner Estoppel
Legal Standard to Institute
Post Grant Review (PGR)

Person who is not the patent owner and has not previously filed a civil action challenging the validity of a claim of the patent

 

Must identify all real parties in interest

Raised or reasonably could have raised

 

Applied to subsequent USPTO/district court/ITC action

More likely than not
OR
Novel or unsettled legal question important to other patents/applications
Inter Partes Review (IPR)

Person who is not the patent owner, has not previously filed a civil action challenging the validity of a claim of the patent, and has not been served with a complaint alleging infringement of the patent more than 1 year prior (exception for joinder)

 

Must identify all real parties in interest

Raised or reasonably could have raised

 

Applied to subsequent USPTO/district court/ITC action

Reasonable likelihood
Covered Business Method (CBM)

Must be sued or charged with infringement

 

Financial product or service

 

Excludes technological inventions

 

Must identify all real parties in interest

Office: raised or reasonably could have raised

 

Court: raised

Same as PGR

 

PTAB Trial
Basis
Available
Applicable
Timing
Post Grant Review (PGR)
101, 102, 103, 112, double patenting but not best mode From patent grant to 9 months after patent grant or reissue Patent issued under
first-inventor-to-file
Must be completed within 12 months from institution, with 6 months good cause exception possible
Inter Partes Review (IPR)
102 and 103 based on patents and printed publications For first-inventor-to-file, from the later of: (i) 9 months after patent grant or reissue; or
(ii) the date of termination of any post grant review of the patent.
For first-to-invent, available after grant or reissue (technical amendment)
Patent issued under
first-to-invent or
first-inventor-to-file
Must be completed within 12 months from institution, with 6 months good cause exception possible
Covered Business Method (CBM)
Same as PGR (except does not permit 102(e) art) Available 9/16/12 (for first-inventor-to-file only after PGR not available or completed) Patent issued under first-to-invent or
first-inventor-to-file
Must be completed within 12 months from institution, with 6 months good cause exception possible

 

6. What is the deadline for filing a petition to institute a PTAB Trial?

  • An IPR must be filed within one year of the third party being served with an infringement complaint by the patentee, and prior to seeking a declaratory judgment challenging the validity of a claim in the patent. An IPR cannot be filed while PGR is still available (i.e., within 9 months from the issue date of a patent having an effective filing date on or after March 16, 2013), or a PGR is still pending.
  • A PGR must be filed within 9 months from the issue (or reissue) date of the patent, and prior to seeking a declaratory judgment challenging the validity of a claim in the patent.
  • No deadline for CBM, but cannot be filed while PGR is still available (i.e., within 9 months from the issue date of a patent having an effective filing date on or after March 16, 2013), or a PGR is still pending.

7. What is the general timeline for a PTAB Trial?


8. What is included in PTAB Trial discovery?

In general, discovery in a PTAB Trial is much more limited than in district court proceedings. Discovery is considered “limited discovery” because it must fall in an accepted class of discovery, i.e., “routine discovery” or “additional discovery.” Routine discovery is simply (1) any exhibit not otherwise publicly available or served, (2) cross examination of a declarant, and (3) non-cumulative information that is inconsistent with a position taken by the party before the PTAB. In the typical case, category (2) is the only routine discovery. “Additional discovery” includes everything outside of those categories.

The parties may mutually agree to an increased scope, and either party may file an authorized motion seeking additional discovery under a “good cause” standard; but the PTAB maintains strictness with the breadth of discovery. In a PGR, discovery may be limited to things directly related to factual assertions advanced by either party in the proceeding. In an IPR, discovery may also include deposition of witnesses submitting affidavits or declarations and what is otherwise necessary in the interest of justice. Thus, to seek “additional discovery” in an IPR an “interest of justice” showing is required. Since patent challengers in IPR rely on patent and printed publications filed with their IPR petition, there is rarely, if ever, a need for additional discovery that will satisfy the requisite showing.

9. What is the likely outcome of a PTAB Trial?

According to recent PTO statistics, the following chart represents the outcomes of PTAB Trials through August 2015:

 

   
Trials Instituted
Joinders
Denials
Total No. of Decisions on Institution
Disposals
Settled
Final Written Decision
Request for Adverse Judgment
Inter Partes Review (IPR) FY 13
167
10^
26
203
38
-
2
FY 14
557
15^
193
765
210
130
39
FY 15
733
109
383
1,225
446
297
60
Covered Business Method (CBM) FY 13
14
-
3
17
3
1
-
FY 14
91
1^
30
122
27
13
3
FY 15
84
7
41
132
46
40
3

 

10. Do PTAB Trial proceedings completely eliminate the need for a court trial?

In the vast majority of cases, the answer is no. District court proceedings and/or Section 337 investigations before the U.S. International Trade Commission remain essential to the complete adjudication of most patent infringement claims. Thus, although PTAB Trial proceedings may be used pre-emptively or in lieu of traditional patent litigation, these PTAB Trial proceedings are generally initiated in parallel with one or more traditional patent infringement actions as a viable component of an overall defense strategy.