Patent Reform – Overview of the New Requirements for Post-Grant Review and Inter Partes Review

The Leahy-Smith America Invents Act (“AIA”), enacted on September 16, 2011, includes significant changes to the options available for post-grant review proceedings by the United States Patent and Trademark Office (“USPTO”).

Post-grant proceedings, such as ex parte reexaminations, inter partes reexaminations (now called inter partes review), and the newly created post-grant review, are conducted through the USPTO to reevaluate already-issued patents, and typically lead to the confirmation, amendment, cancellation or withdrawal of claims in a patent.

Post-Grant Review
Sections 6 and 18 of the AIA introduce new statutory provisions, 35 U.S.C. §§ 321–329, which create a new post-grant review procedure for third-parties to challenge the validity of a granted patent immediately after issuance.

Generally, post-grant review will be limited to patents maturing from applications filed on or after March 16, 2013. There is an exception in Section 18 for “business method patents” that are involved in litigation, for which an analogous proceeding coined a “transitional post-grant review proceeding” will be implemented as of September 16, 2012.

Under the AIA, any party besides the patent owner may file a petition to institute post-grant review so long as that party is not challenging the patent’s validity in a civil action. This includes declaratory judgment actions; however, a defendant asserting a counterclaim challenging the validity of a claim of a patent is not barred from using the post-grant review process.1

Unlike reexaminations, a request for post-grant review is not limited to challenges to the validity of the patent claims based on printed publications. The petitioner may request cancellation of one or more claims for invalidity on any basis set forth in paragraphs 2 or 3 of 35 U.S.C. § 282(b), including for example, novelty, obviousness, written description, enablement and statutory subject matter.2 The petition must be filed within nine months from grant or reissue of a patent.3

For reissue patents, if the claim at issue is “identical to or narrower than a claim in the original patent from which the reissue patent was issued,” then a petition for post-grant review must be filed within nine months after issuance of the original patent, not the reissue patent.4

To request a post-grant review, the requestor must file a petition to the USPTO under 35 U.S.C. § 322, which specifies that the post-grant review petition must include the following:

  • identification of all real parties in interest;
  • identification “with particularity” of each claim challenged, the grounds on which the challenge is based, and any evidence in support for the challenge to each claim, including copies of references and affidavits/declarations relied upon by the petitioner in its request;
  • a requisite fee (to be established by the USPTO); and
  • any other necessary information by the USPTO (as the USPTO Director may require by regulation).

A copy of each of the petitions and accompanying documents must also be served on the patent owner. Similar to reexamination proceedings, the patent owner has the opportunity to file a preliminary response to a post-grant review petition under 35 U.S.C. § 323 before the USPTO decides whether a post-grant review should be initiated.

Upon receipt of a petition for post-grant review, the USPTO must make a determination and notify both the patent owner and petitioner as to whether a post-grant review will be initiated. Under 35 U.S.C. § 324(a) and (b), the USPTO will initiate a post-grant review if:

  • the information presented in the petition “would demonstrate that it is more likely than not that at least one of the claims challenged in the petition is unpatentable;” or
  • the petition “raises a novel or unsettled legal question that is important to other patents or patent application.”
    The USPTO is required under 35 U.S.C. § 324(c) to make this determination within three months after:
  • the filing of a preliminary response by the patent owner; or
  • if such a response is not filed, the expiration date for the patent owner to file the response. This determination by the USPTO is not appealable.

35 U.S.C. § 326(d) specifically provides the patent owner one opportunity to file or “propose a reasonable number of substitute claims” for each challenged patent claim. These amendments “may not enlarge the scope of the claims of the patent or introduce new matter.” Amendments to claims found to be patentable in post-grant review are subject to intervening rights similar to claims in a reissue patent.

35 U.S.C. § 326(a)(12) requires the USPTO to provide the petitioner with at least one opportunity to submit written comments. In addition, the USPTO is also required to establish discovery standards and procedures.

Under the post-grant review process, the petitioner bears the burden of proving invalidity “by a preponderance of the evidence,” which is a lower standard than the “clear and convincing” evidentiary standard for proving invalidity in court, as per the recent Supreme Court’s decision in Microsoft Corp. v. i4i Limited Partnership.5

Pursuant to 35 U.S.C. § 326(a)(11), the USPTO must issue a final written decision in post-grant review within one year after the USPTO initiates the process and notifies the parties of its decision to institute post-grant review. The statute allows the USPTO to extend this deadline “for good cause shown” by no more than six months, unless there is joinder of multiple proceedings. The final written decision may be appealed within 60 days of the written decision by either party only to the United States Court of Appeals for the Federal Circuit.

To prevent a requester from having two bites at the apple, upon the issuance of a final decision for a post-grant review by the USPTO the petitioner is estopped from challenging the same claims considered during the post-grant review based on “any ground that the petitioner raised or reasonably could have raised during that post-grant review.”

However, pursuant to 35 U.S.C. § 327 if the petitioner and patent owner settle and request termination of the post-grant review before the USPTO issues its final decision, estoppel will not attach to the petitioner.

The statute also provides limitations to when a court can grant a stay of litigation.6

Inter partes Review
The AIA leaves ex parte reexamination in force, but by September 16, 2012 it will replace inter partes reexaminations (currently conducted by Examiners in the Central Reexamination Unit of the USPTO), with “inter partes review” proceedings to be adjudicated by a newly renamed “Patent Trial and Appeal Board” within the USPTO.

Section 6(a) of the AIA sets forth these revisions regarding inter partes review.7 The revisions to the statute do maintain the express prohibition against the patentee requesting inter partes review,8 as well as limit the scope of review to patents and printed publications.9

Petitions for inter partes review must be filed at the later of nine months from the grant date of a patent or reissued patent, or the date of termination of post-grant review.10 These time limits are to ensure that post-grant review and inter partes review are not conducted simultaneously. As is consistent with the current law, the Director’s decision whether to grant inter partes review cannot be appealed.11

While post-grant review provides a petitioner a forum to challenge a patent on any basis of patentability, inter partes review is limited to novelty and non-obviousness. The basis for review is limited to patents or printed publications, as in current inter partes reexaminations, although supporting evidence and opinions may be submitted in the form of affidavits or declarations.12 The most significant change in the new inter partes review proceedings is a change in the initiation threshold which will make it much more difficult to have a request (now termed a “petition”) for inter partes review granted by the USPTO. Namely, the old threshold of raising a “substantial new question of patentability” under pre-AIA law (a threshold which is met in over 90% of the reexaminations filed), will be replaced with the higher threshold of requiring that the USPTO find “a reasonable likelihood that the petitioner will prevail with regards to at least one of the claims challenged in the petition.”13

This higher standard will also be applied to inter partes reexamination requests filed during the transition period immediately following enactment of the AIA and preceding the shift to inter partes review, that is, for any request that is filed on or after September 16, 2011 but before September 16, 2012.

    • For inter partes reexamination requests submitted:
  • Prior to September 16, 2011: the USPTO will apply the “substantial new question of patentability” standard in determining whether the request for inter partes reexamination will be granted. If reexamination is granted under the “substantial new question of patentability” standard, then this standard will apply throughout the reexamination proceeding.14
  • On or after September 16, 2011, but before September 16, 2012: the USPTO will apply the “reasonable likelihood” standard, i.e., a reasonable likelihood that the requester will prevail with respect to at least one of the claims challenged in the request in determining whether the request for inter partes reexamination will be granted. If reexamination is granted under the “reasonable likelihood” standard, then this standard will apply throughout the reexamination proceeding.15
  • On or after September 16, 2012: after this date, the USPTO will not grant a request for inter partes reexamination. The USPTO will only accept petitions to conduct inter partes review.16

Unlike an inter partes reexamination, an inter partes review can be terminated by settlement between the parties. Also, following an inter partes review, the petitioner will be estopped (in a later civil, USPTO, or International Trade Commission proceeding) from challenging the patent on any ground that was raised or “reasonably could have been raised” during the proceeding. This appears to be a slightly more lenient standard than the current inter partes reexamination provisions, in which the petitioner is estopped only from challenging the patent on any ground that was raised or “could have been raised.”

The statutory guidelines for the new post-grant review process provide only a relatively short time period in which to submit a petition requesting post-grant review. Thus, it is recommended that all competitive inventors and companies should implement monitoring systems for their important issued patents to ensure that they can timely challenge their competitors’ patents. Also, inventors and owners of patents filed on or after March 16, 2013 should consider having systems in place to continuously evaluate known art (which, if material, should be submitted to the USPTO) to be prepared for the possibility of facing post-grant review challenges. Such due diligence investigations could also form the basis for filing an offensive post-grant review challenge in situations where a competitor is granted a patent for an invention involving related subject matter.

It seems that one of the factors which led Congress to promulgate the new inter partes review proceeding was to address a major criticism of inter partes patent reexamination, namely, the often significant length of time necessary to conduct and conclude such proceedings. Indeed, Congress has mandated that inter partes review be concluded at the USPTO within 12 months, extendable to 18 months if the Director is able to show cause for extension.17 It remains to be seen whether such concerns regarding time duration will be addressed successfully.

In the meantime, while patent challengers are now presented with more avenues for resolving patent validity, before embarking they should nevertheless carefully consider and weigh the potential benefits of the new post-grant review and inter partes review proceedings against their potential estoppel effects as well as the costs of litigation in federal district courts.

Susan Paik is a patent attorney at Tutunjian & Bitetto, P.C. in Melville, practicing in all aspects of patent, trademark and copyright law
1. 35 U.S.C. § 325(a)(3).
2. 35 U.S.C. § 321(b).
3. 35 U.S.C. § 321(c).
4. 35 U.S.C. § 325(f).
5. 131 S.Ct. 2238 (2011).
6. 35 U.S.C. § 325(a)(2).
7. 35 U.S.C. §§ 311–319.
8. 35 U.S.C. § 311(a).
9. 35 U.S.C. § 311(b).
10. 35 U.S.C. § 311(c)(1) or (2).
11. 35 U.S.C. § 314(d).
12. 35 U.S.C. § 312(a)(3).
13. 35 U.S.C. § 314(a).
14. 35 U.S.C. §312(a).
15. AIA Section 6(c)(3)(B).
16. AIA Section 6(c).
17. 35 U.S.C. §316(11).