On September 29, 2021, Senators Patrick Leahy and John Cornyn introduced a bipartisan bill titled the Restoring the America Invents Act (“RAIA”). Senator Leahy stated the bill would “protect the gains made by” the America Invents Act (AIA), a law also sponsored by Senators Leahy and Cornyn and enacted by Congress ten years ago.1 If passed, the RAIA would (1) curb discretionary denials by the PTAB, (2) amend various estoppel provisions, including delaying when patent challenger estoppel triggers, (3) broaden IPR challenges in terms of the types of invalidity grounds that can be asserted and the parties that can bring them, and (4) codify considerations for district courts in granting or denying stays pending IPR, among other provisions.
- The RAIA Takes Aim at Fintiv-Based Denials.
If enacted, the RAIA would limit the PTAB’s discretion to deny institution of an IPR proceeding. Specifically, the RAIA would amend 35 U.S.C. § 314(a) regarding institution of IPRs as follows2:
The Director may not authorize an inter partes review to be instituted unlessSubject only to the discretion of the Director under section 325(d)(4), a petition that meets the requirements of this chapter shall be instituted if the Director determines that the information presented in the petition filed under section 311 and any response filed under section 313 shows that there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition.
While the RAIA would not eliminate all discretionary denials—for example, the PTAB may still deny institution in its discretion under § 325(d) if “the same or substantially the same prior art or arguments previously were presented to the Office”—it has the potential to curb them substantially by eliminating discretionary authority to deny institution under § 314(a). The amendment would require that the petition “shall be instituted” if it demonstrates a reasonable likelihood of success on the merits and otherwise meets the requirements of IPRs.3 Significantly, this language would remove the PTAB’s discretionary authority to deny institution under the factors laid out in Fintiv, which is derived from § 314(a).4
The PTAB’s rate of discretionary denials has climbed steadily since 2017.5 In 2020, the year the PTAB issued Fintiv, the rate of institutions denied on procedural grounds was 17.7%, or nearly one in five petitions.6 The RAIA seeks to reverse this trend by limiting the PTAB’s authority to deny institution in its discretion.
- The RAIA Amends Estoppel Provisions for both Patent Challengers and Patent Owners.
The RAIA also includes various amendments to estoppel provisions, affecting estoppel as it relates to both the patent owner and the patent challenger. With respect to the patent challenger, the RAIA would delay estoppel until after appeal.7 Currently, after the PTAB issues its final written decision, the petitioner is estopped from challenging invalidity in district court or the ITC “on any ground that the petitioner raised or reasonably could have raised during that inter partes review.”8 The RAIA would amend this provision such that this estoppel does not come into effect until “after the time for appeal of the [Final Written] decision has expired or any such appeal has terminated.”9
With respect to the patent owner, the RAIA would add an estoppel provision estopping patent owners from obtaining “any claim that is not patentably distinct from a claim that was issued and was subsequently (i) found to be unpatentable; or (ii) canceled in any proceeding before the Office . . . .”10 This would codify as a federal statute a similar and existing USPTO rule that “[a] patent applicant or owner is precluded from taking action inconsistent with the adverse judgment, including obtaining in any patent (i) a claim that is not patentably distinct from a finally refused or canceled claim . . . . .”11 This may limit patent owners’ ability to use reissue proceedings to attempt to revive claims from a predecessor patent that have been found unpatentable, for example in an IPR proceeding.
- The RAIA Expands IPR Challenges
The RAIA broadens the types of invalidity challenges that can be brought in an IPR and who can file IPRs. The RAIA extends the invalidity grounds under which a petitioner can challenge a patent to include statutory or obviousness-type double patenting and admitted prior art.12 However, challenges to patentable subject matter under § 101, to invalidity under §§ 102 and 103 using non-paper prior art such as the sale of prior art systems, and under § 112, continue to remain unavailable as grounds for IPRs.13 The RAIA also would allow government entities to file IPRs, along with requests for re-examination and post-grant review proceedings.14
- The RAIA Codifies Considerations for Stays in District Courts.
Additionally, the RAIA codifies various factors that district courts should consider in evaluating whether to stay litigation pending IPR.15 Specifically, the RAIA would amend 35 U.S.C. § 315(b) to add the following section16:
(2) REQUEST FOR STAY.
(A) IN GENERAL. If a party seeks a stay of a civil action brought under section 281 alleging infringement of a patent that is also subject to an inter partes review, the court shall decide whether to stay the civil action based on whether—
(i) the outcome of the inter partes review will likely simply the issues in question in the civil action and streamline the proceedings in the civil action;
(ii) as of the date on which the stay is requested, discovery in the civil action is complete
(iii) a stay, or the denial thereof, would—
(I) unduly prejudice the nonmoving party; or
(II) present a clear tactical advantage for the moving party; and
(iv) a stay, or the denial thereof, will reduce the burden of litigation on the parties to the civil action and the court.
Currently, factors considered by district courts in deciding whether to grant or deny a request for a stay pending inter partes review are set forth in caselaw specific to that jurisdiction, and the RAIA would present a unified approach across district courts. At a high level, the factors set forth in the RAIA may not be that different from factors already considered by district courts in various jurisdictions under current caselaw, depending on the jurisdiction.17 The second factor—“as of the date on which the stay is requested, discovery in the civil action is complete”—may provide more specificity and uniformity regarding (1) at what time the district court should assess the stage of the case, and (2) that district courts should specifically consider the timing of the request for a stay in relation to the completion of discovery.18 The RAIA also affords the right to an immediate interlocutory appeal of the district court’s stay decision to the Federal Circuit for review de novo.19
- Additional Provisions.
Although the details of these provisions are beyond the scope of this article, it is worth noting that the RAIA includes many other provisions and amendments, including:
- Establishing review of final written decisions by the Director, either on the Director’s own initiative or at the request of a party, to modify or set aside the decision of the PTAB20;
- Limiting the one-year time bar on filing for IPR such that it does not apply to requests for joinder under § 315(c) or if the complaint is dismissed without prejudice21;
- Applying the same estoppel provisions under § 315(e) that apply to patent challengers and patent owners to “[a]ny person joined as a party to an inter partes review, and any real party in interest or privy of such person”22;
- Allowing parties who do not having standing to appeal the PTAB’s final written decision to not be subject to the estoppel provisions of § 315(e)23;
- If the patent owner proposes substitute claims under § 316(d), placing the burden on the patent owner to prove patentability by a preponderance of the evidence and requiring the PTAB to either examine the substitute claim or refer it for examination24; and
- Setting forth when injury in fact is presumed for purposes of standing to appeal the PTAB’s final written decisions.25
- Takeaways for Practitioners.
If enacted, the RAIA will impact IPR strategy for both patent challengers and patent owners. Patent owners arguing against institution of IPR proceedings should be aware of the potential change in the law in considering how heavily to rely on discretionary denial arguments under § 314(a) as opposed to arguments challenging the merits of the petition. Patent challengers may have some more flexibility to weigh the benefits of filing an early IPR versus an IPR later in the case, but should be cognizant of the RAIA’s codification of district court stay factors, including the factor specifically evaluating the timing of the stay request as it relates to close of fact discovery. Both patent owners and patent challengers should be aware of the amended estoppel provisions, as these provisions may affect invalidity strategy in both the PTAB and district courts. Moreover, the combination of the discretionary denial amendments and estoppel amendments may impact a patent challenger’s strategic decisions regarding whether to stipulate at the PTAB not to rely on certain prior art or grounds in co-pending litigation.
1 Press Release, Leahy and Cornyn Introduce Bipartisan bill to Support American Innovation and Reduce Litigation (Sept. 29, 2021), available at: https://www.leahy.senate.gov/press/leahy-and-cornyn-introduce-bipartisan-bill-to-support-american-innovation-and-reduce-litigation (last accessed October 19, 2021).
5 See PTAB Annual Report, unifiedpatents.com, available at https://portal.unifiedpatents.com/ptab/annual-report?year=2020 (last accessed October 19, 2021); see also Ragusa, Paul A., The Post-Fintiv World: The Interplay Between PTAB Discretionary Factors to Deny Institution and Parallel Litigation, available at https://www.bakerbotts.com/thought-leadership/publications/2021/march/the-post-fintiv-world.
11 37 C.F.R. § 42.73(d)(3) (also applying to “[a]n amendment of a specification or of a drawing that was denied during the trial proceeding, but this provision does not apply to an application or patent that has a different written description.”).
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