Inter Partes Review
The 2011 America Invents Act (AIA) created significant changes to US patent law by creating the inter partes review system, an expansion of post-grant opposition procedures.
What is Inter Partes Review?
Inter partes review (IPR revewi) is the procedure for challenging the validity of a patent registered with the US Patent Office. The inter partes review process takes place in front of the Patent Trial and Appeal Board (PTAB), rather than in federal court, saving both parties the time and expense of a jury trial. PTAB Trials are heard by administrative law judges who specialize in patent law and procedures.
A patent’s validity can be challenged based on 35 USC §102 (novelty) or §103 (non-obvious). Inter partes review can only be requested on the basis of prior art consisting of patents or printed publications.
Inter Partes Review Process
Inter partes review can be divided into five stages:
- First Stage: The petition, response, and initial decision,
- Second Stage: Motion practice,
- Third Stage: Discovery,
- Fourth Stage: Oral hearing (if applicable), and
- Last Stage: Final decision
Appeals of PTAB decisions are heard by the US Court of Appeals for the Federal Circuit.
First Stage: The Petition and Initial Decision
An inter partes review trial is initiated when the party challenging the patent files a petition with the US Patent Trial and Appeal Board (PTAB). A petition may be filed by anyone, with the exception of parties falling into these categories:
- Parties who have previously filed a civil action challenging the validity of one or more of the patent’s claims,
- Parties who have been served with a civil complaint alleging infringement of the patent more than one year prior
An initial petition must:
- Challenge the validity of an existing patent based on either prior art or prior publication,
- Show a reasonable likelihood of success on at least one claim,
- Identify all real parties in interest, and
- List any related matter in federal court or administrative matters that may affect the current case.
Unlike complaints in federal courts, petitions may not rely on notice pleading. Instead, they are limited to the patentability challenge grounds listed in the petition and the specific bases for these grounds. Successful petitions clearly lay out each argument and its supporting evidence.
The patent owner may respond to the initial petition, which is limited to arguing that PTAB should not start a trial. The patent owner may raise challenges to the petitioner’s cited prior art, or argue that the petitioner’s proposed construction of the claims is not reasonable. This response is not mandatory, and some patent owners will opt to waive this filing, in hopes of a speedier decision not to institute a trial from PTAB
If PTAB determines there is no likelihood of success, the petition will be denied. However, even if there is a likelihood of success on any claim, PTAB does have discretion to decline a petition. In General Plastic Co., Ltd. v. Canon Kabushiki Kaisha, PTAB listed several non-exclusive factors that it considers when choosing whether to hear an inter partes review case, meant to balance efficiency, fairness, and the merits of potential claims. This is especially true for “follow on” petitions, challenging the validity of a patent already subjected to an inter partes review or other proceeding in front of PTAB.
These factors generally look to what the petitioner knew regarding prior art or publications, and when they knew it, and an explanation for the delay in between filing multiple petitions directed at the same claims in one patent.
PTAB may also decide not to institute a trial where the same, or substantially the same, arguments or prior art were presented and decided previously, as another way to preserve resources.
The PTAB’s decision on whether or not it will hear a case, or institution of a petition, cannot be appealed, but a party can request a rehearing in front of the PTAB.
Second Stage: Motion Practice
If the PTAB institutes a trial, it will issue a scheduling order for motion practice and set a conference call between the parties and the Board. Prior to the conference call, the parties will need to provide a list of each of the motions they anticipate filing in the inter partes review trial. Typical motions in PTAB trials include:
- Responses to and replies in support of the petition, which present arguments regarding patent claims
- Motions to amend or substitute claims or responses to claims
- Motions to exclude or strike evidence to which a party has objected. These objections must be filed within five business days after service of the objected-to evidence.
As with federal litigation, PTAB institutes word count and page limitations in motions, and requires that arguments and supporting evidence be presented clearly in all filings. When submitting a motion, a well-crafted and supported argument is more persuasive that a deluge of all possible facts or issues.
“Third” Stage: Discovery
While inter partes review motion practice is occurring, the parties will also conduct discovery.
Discovery in inter partes review trials is slightly different than in other contested matters. The America Invents Act (AIA) specifically limits discovery to evidence directly related to factual assertions raised by either the petitioner or the patent owner. Discovery may include documentary evidence or testimony from expert witnesses, presented as either an affidavit or declaration.
Generally, the parties will exchange:
- Mandatory initial disclosures, which include names and contact information for individuals who are likely to have discoverable information, and copies of documents a party uses to support its position;
- Routine discovery, which includes exhibits cited in papers or witness testimony and cross examination; and
- Additional discovery, usually requested in a motion to the PTAB, which can include information in the exclusive possession of a party that is relevant to an issue raised by that party.
Because of the limited scope of inter partes review, expert testimony cannot take the place of disclosures found in patent applications or printed publications. Expert testimony can be used in explanation, but cannot stand on its own as a disclosure in a prior art reference.
Fourth Stage: Oral Hearing
After both parties have completed discovery and submitted all motions, either or both could request an oral hearing on an issue brought up in one of the briefs. Neither side can bring in new evidence that has not already been briefed.
At the oral hearing, the petitioner will present its case, followed by the patent owner. Both sides will have an opportunity to present a rebuttal. Each party will have 60 minutes in total to present its initial arguments and any rebuttal.
Last Stage: The Final Written Decision
Within a year of its decision to institute a trial, PTAB will issue its final written decision. The petitioner is responsible for proving its claims under a preponderance of the evidence standard. The Board’s decision may cancel some or all of the patent’s claims that were either anticipated or obvious. When evaluating claims, the Board will use the broadest reasonable interpretation standard.
Once the Patent Office has issued its final decision, the petitioner is estopped from raising challenges to the patentability or validity of the claims in future litigation, because the petitioner raised, or could have raised, these claims in the inter partes review trial.
Although the parties may decide to settle an inter partes review proceeding at any time, the Patent Office may decide to independently continue to review the patentability of the claims.
Inter Partes Review Timeline
The inter partes review trial timeline distinguishes whether the invention is a “first-to-invent” or if it is the “first-inventor-to-file” patent.
Once the inter partes review petition has been filed, the patent owner will issue a preliminary response within three months. No later than three months after a preliminary response, the Patent Office issues a decision on the petition as whether or not it will institute a trial. Within a month of this decision, PTAB will schedule a conference call with the parties to discuss the schedule of motion practice.
Motion practice and discovery run concurrently for approximately seven months.
For the first three months, the patent owner will conduct discovery and submit a response and any motions to amend its claims. For the next three months, the roles will reverse, and the petitioner will conduct discovery and submit its reply in support of the initial petition, along with any motions to amend. The last month is set aside for any final discovery by the patent owner and any replies to the petitioner’s opposition motions.
At the end of this period, PTAB may hear additional motions regarding witness testimony, exclusion of evidence, and requests for an oral hearing.
Within a year of issuing its decision on the initial petition, the Patent Office will issue a final written decision. This is a statutory deadline instituted by 35 USC 316. However, this deadline may be extended by the Director of the Patent Office for an additional six months, upon a showing of good cause.
As a result, inter partes review trials can take up to two years for completion if no appeal is filed, from the date the initial petition is filed. An appeal of the final written decision will take at minimum, an additional year for a decision.
Inter partes review and post grant review cases can be searched in the Patent Office’s End to End (E2E) database. This is also the system that parties in ongoing inter partes review cases can e-file their documents.
The E2E database permits, but does not require, researchers to create an account and login. Users can search the database by:
- AIA number,
- Patent number,
- Application number, and
- Party name.
Search results can be filtered by
- The type of case,
- The filing party,
- The attorney’s name,
- The type of patent, and
- Filing date.
Unlike PACR, the online system to research filings in the federal court system, E2E documents are free to search and free to view. The Patent Office recommends using the Google Chrome browser to use the E2E database.
Since the procedure was instituted in September 2012, nearly 9,500 inter partes review cases have been filed. They make up the vast majority of trials heard in front of PTAB, representing 92% of the nearly 10,200 total petitions filed.
Fewer than 70% of petitions are instituted, or accepted by PTAB, each year. FY2018 represents the low end of this range, at a 60% institution rate, with 859 petitions being instituted and 577 being denied. More than a third of filed petitions result in settlement — 12-20% of cases are settled pre-institution, and approximately 20-25% are settled post-institution.
The cost for taking an inter partes review case all the way to a final written decision is a fraction of the cost of patent litigation.
Inter partes review is governed by trial rules set in the America Invents Act (AIA) and Title 37, Part 42 of the Code of Federal Regulations.
Generally, the purpose of these rules is to balance the merits of any particular case against the need to be fair to all parties involved, as well as the resources of PTAB. The goal of these rules is to create a fast an inexpensive resolution of every inter party review procedure. 37 CFR 42.1(b).
PTAB’s rules for inter partes review were upheld as a constitutional exercise of the agency’s authority in the 2016 Supreme Court Case, Cuozzo Speed Technologies, LLC v. Lee.
The Patent Office has authority to set fees for trials heard in front of the PTAB. These fees are meant to cover costs for adjudicating inter partes review cases so that no taxpayer money is used.
The Patent Office has three separate fee schedules depending on the size of the entity: “normal” sized entities, small entities, and micro entities. These designations give smaller companies greater ability to protect their inventions, while still allowing the USPTO to recoup costs of issuing patents and conducting post grant opposition hearings.
The Patent Office fee schedule regarding inter partes review can be found here.
The Inter partes review request fee (for all size entities) is:
- Up to 20 claims: $15,500
- Each claim request in excess of 20: $300
Definition of Small and Micro Entities
Small entities are defined as:
- An individual
- A small business concern having no more than 500 employees (or affiliates)
- A university, or
- A 501(c)(3) nonprofit organization.
Additionally, small entities cannot be under an obligation to license or assign the patent to an organization that does not qualify as a small entity. In addition, they cannot:
- Be named on more than four previously utility patent applications and
- Not have a gross income of more than three times the median household income in the previous year.
Alternatively, inventors can qualify as micro entities if the majority of their income comes from a public or nonprofit institute of higher learning, or if the inventor is required to assign the patent to an institute of higher learning. Third party filers are not eligible for the micro entity fee.
To qualify for these reduced fees, inventors must submit a declaration stating that they are small or micro entities at the time they file a patent application and pay the fee. Inventors who do not meet the above qualifications are required to pay the full fee.
If you are considering filing for Inter Partes Review or if one has been filed against you, please feel free to contact us.