Additional Opportunities for Pre- and Post-grant Review, and Brand New Patent Trial and Appeal Board in S. 23

By Kevin E. Noonan --

S. 23 (the "America Invents Act" or, colloquially the patent reform bill) contains additional provisions for the U.S. Patent Office to obtain information related to patentability, both pre- and post-grant, as well as establishing a replacement for the Board of Patent Appeals and Interferences called the Patent Trial and Appeal Board.

Section 7(a) of the bill amends 35 U.S.C. § 122 by adding new subsection (e), permitting any third party to submit "for consideration and inclusion in the record" of a pending application "any patent, published patent application or any other printed publication of potential relevance to the examination of the patent," subject to certain time limitations (§ 122(e)(1)).  These are that the submission must be done before the earlier of the date a Notice of Allowance is mailed (§ 122(e)(1)(A)) or the later of six months after the patent application is first published and the date of the first rejection by the Examiner (§ 122(e)(1)(B)).

 Any submission must include:  "a concise description of the asserted relevance of each submitted document (§ 122(e)(2)(A)); the fee set by the Director (§ 122(e)(2)(B)); and a statement that the individual making the submission "affirm[] that the submission was made in compliance with this section" (§ 122(e)(2)(C)).  Under Section 7(b), the effective date of these provisions is one year after the date of enactment, and will apply to all patent applications filed "before, on or after that effective date."  Since the amendment is limited to information readily at hand to the patent examining corps (unlike the on sale allegations raised in the Microsoft v. i4i case presently before the Supreme Court), it appears not to address any real or perceived information imbalance between the applicant and the Office, and implies that the Senate has been convinced by the plethora of industry and academic advocates that Patent Office personnel are incompetent (without any real evidence to support that view).  More importantly, the amendment does little to nothing to solve the real institutional problems that prevent effective examination in some art units.

Post-grant, Section 10 provides additional, streamlined avenues for a patentee to provoke an ex parte reexamination.  Section 10(a) amends Chapter 25 of Title 35 to add a new § 257 for this purpose.  The new § 257 permits a patent owner to request "supplemental examination" to permit the Office to "consider, reconsider or correct information believed [by the patent owner] to be relevant to the patent" (§ 257(a)).  The standard for granting such a request is that the information raises a "substantial new question of patentability" (i.e., the current ex parte standard), but in this new § 257 the patent owner does not have the right to file a statement under § 304 (which right would be illogical, since only a patent owner can file such a request).  The Director "shall" conduct the supplemental examination upon three months of the request being granted (§ 257(a)).  Supplemental examination will be performed according to the procedures set forth in Chapter 30 (the current ex parte reexamination), i.e., by the examining corp (§ 257(b)).

The revision does contain a significant new benefit for patentees in new § 257(c)(1), wherein:

A patent will not be held unenforceable on the basis of conduct relating to information that had not been considered, was inadequately considered, or was incorrect in a prior examination of the patent if the information was considered, reconsidered, or corrected during a supplemental examination of the patent.  The making of a request under subsection (a), or the absence thereof, shall not be relevant to enforceability of the patent under section 282.

The exceptions to this "get out of jail free" card regarding prior potential inequitable conduct is when there has been an allegation plead "with particularity" in an ANDA Notice letter under § 505(j)(2)(B)(iv)(II) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. § 355(j)(2)(B)(iv)(II)) prior to submission of the supplemental examination request (§ 257(c)(2)(A)), or as a defense in an enforcement action under § 337 of the Tarriff Act or plead as an affirmative defense under § 281 of the Patent Act unless the supplemental examination was concluded prior to the date when the action was brought (§ 257(c)(2)(B)).  As with other provisions, the Director is mandated to establish fees for supplemental examination and to consider requests therefor, and the fees due and owing for ex parte reexamination if ordered can be required in addition to the supplemental examination fee established by the Director (§ 257(d)).  The new § 257 also contains a provision establishing that this new § 257 does not preclude imposition of sanctions under the antitrust laws (§ 257(e)(1)), or "limit the authority of the Director" to investigate potential misconduct of applicants or their representatives before the Office  (§ 257(e)(2) or (3)).  Under Section 10(b), the effective date of these provisions is one year after the date of enactment, and will apply to all patent applications filed "before, on or after that effective date."

Section 6 of the bill establishes the Patent Trial and Appeal Board, amending 35 U.S.C. § 6.  The Board is to be constituted with the Director, the Deputy Director, the Commissioner for Patents, the Commissioner for Trademarks, and the administrative patent judges in the Office (§ 6(a)).  The duties of the PTAB are to:

(1)  on written appeal of an applicant, review adverse decisions of examiners upon applications for patents pursuant to section 134(a);

(2)  review appeals of reexaminations pursuant to section 134(b);

(3)  conduct derivation proceedings pursuant to section 135; and

(4)  conduct inter partes reviews and post-grant reviews pursuant to chapters 31 and 32.

(§ 6(b)) by panels of at least three administrative patent judges (§ 6(c)).  Duly constituted panels of APJs are the only fora empowered under the new § 6 to grant rehearings (§ 6(c)).  This portion of the bill also provides a correction for situations as occurred in the previous administration where there was a question of whether certain APJs were constitutionally appointed; § 6(d) provides that it will be considered a defense to any challenge that an APJ was not properly appointed that the APJ was acting as a "de facto officer."

Section 6(b) of S. 23 amends § 134 to remove reference to third party requestor rights to appeal an adverse decision by the Director not to grant an inter partes reexamination (pursuant to the changes in inter partes reexamination rules; see "Post-grant Review Provisions of S. 23") and Section 6(c)(1) amends § 141 to be consistent with provisions of the revised inter partes reexamination rules and the new post-grant review rules, and includes ex parte and supplemental examinations under Sections 7 and 10 of the bill, that appeals from adverse decisions in those proceedings can only be appealed to the Court of Appeals for the Federal Circuit (§ 141(c)).  For derivation proceedings, the revised § 141 provides that appeals be heard by the Federal Circuit, but "such appeal shall be dismissed if any adverse party to such derivation proceeding, within 20 days after the appellant has filed notice of appeal in accordance with section 142, files notice with the Director that the party elects to have all further proceedings conducted as provided in section 146" (§ 141(d)).  However, "[i]f the appellant does not, within 30 days after the filing of such notice by the adverse party, file a civil action under section 146, the Board's decision shall govern the further proceedings in the case."  Section 6(c)(2) amends 28 U.S.C. § 1295(a)(4)(A) to include the jurisdiction of the PTAB under the provisions granting a right to a civil action under 35 U.S.C. §§ 145 or 146, and Section 6(c)(3) of the bill grants the Director the right to intervene in an appeal under 35 U.S.C. § 143 from a decision of the PTAB in a derivation proceeding, an inter partes reexamination or a decision on post-grant review, as well as the obligation to submit to the appellate court in writing "the grounds for the decision of the Patent and Trademark Office, addressing all of the issues raised in the appeal."

The effective date of these provisions under Section 6(d) is one year after the date of enactment of the bill into law, with the exceptions that the jurisdiction of the Federal Circuit over appeals of reexamination decisions extends to any decisions of the current BPAI "with respect to a reexamination that is entered before, on, or after the date of the enactment of this Act" (Section 6(d)(1)); the amendments of §§ 6, 134, and 141 shall not go into effect for any inter partes reexaminations requested prior to one year after the enactment date (Section 6(d)(2)); (curiously), "the Patent Trial and Appeal Board may be deemed to be the Board of Patent Appeals and Interferences for purposes of appeals of inter partes reexaminations that are requested under section 311 prior to the date that is 1 year after the date of the enactment of this Act" (Section 6(d)(3)); and the right of the Director to intervene in an appeal under 35 U.S.C. § 143 from a decision of the PTAB in a derivation proceeding, an inter partes reexamination or a decision on post-grant review will extend to inter partes reexaminations requested "prior to the date that is 1 year after the date of the enactment of this Act" (Section 6(d)(4)).

Since the amendment is limited to information readily at hand to the patent examining corps (unlike the on sale allegations raised in the Microsoft v. i4i case presently before the Supreme Court), it appears not to address any real or perceived information imbalance between the applicant and the Office, and implies that the Senate has been convinced by the plethora of industry and academic advocates that Patent Office personnel are incompetent (without any real evidence to support that view).  More importantly, the amendment does little to nothing to solve the real institutional problems that prevent effective examination in some art units.

Comments

[EG]

Kevin,

What you say here just confirms what a joke it is to call S.23 "patent law reform" and why referring to this bill as the "America Invents Act" is oxymoronic. I doubt the Senate comprehends (or even cares about) the burden it is imposing on the USPTO with all these new procedures. If the USPTO can't currently handle reexams with dispatch, how can the USPTO possibly be expected to handle all these new procedures?

Also, these new procedures will require extensive rulemaking to implement due to how complex and complicated they are. Small entities in particular haven't got a chance under these new procedures. We can only hope (probably a faint hope) that the House will nix this utter nonsense.

[Skeptical]

I agree with EG.

Congress, please start over.

[charanjit]

Pregrant is a wonderful idea as the possible legal complex procedures for invalidation of the granted patents which had escaped the examiner's attention a relevant prior art which a third party knows of