AIA Overview: Post-grant Review Provisions

By Kevin E. Noonan --

For the first time in U.S. patent law, the AIA provides a mechanism for post-grant review of U.S. patents that is capable of considering reasons for unpatentability other than prior art under §§ 102 or 103.  These provisions comprise Section 6(d) of the law.

The new post-grant review provisions (codified at 35 U.S.C. §§ 321-329) are instituted by petition to the Director by any person "not the patent owner" (§ 321(a)).  Post-grant review can be based on an allegation that at least one claim is invalid under any of the provisions of 35 U.S.C. § 282(b) ("Invalidity of the patent or any claim in suit on any ground specified in part II of [Title 35] as a condition for patentability, or  . . . Invalidity of the patent or any claim in suit for failure to comply with any requirement of sections 112 or 251 of this title") and should be cancelled (§ 321(b)). A petition under the post-grant review provisions of the statute must be filed within 9 months of the patent grant or issuance of a reissue patent (§ 321(c)).

Post-grant review petitions cannot be filed anonymously, requiring identification of all real parties in interest (§ 322(a)(2)), and must identify "in writing and with particularity, each claim challenged, the grounds on which the challenge to each claim is based, and the evidence supporting the challenge to each claim" (§ 322(a)(3)).  The petition must be accompanied by copies of all patents or printed publications and any affidavits containing supporting evidence or opinion (§ 322(a)(3)(A) and (3)(B)), as well as "any other information that the Director may require by regulation" (§ 322(a)(4)).  The petition and all supporting evidence must be supplied to the patent owner or a designated representative (§ 322(a)(5)).  As with other proceedings concerning granted patents, post-grant review is public and made available "[a]s soon as practicable after receipt of a petition" for review (§ 322(b)).

The patentee has the option of responding to the petition within a time period set by the Director, which response is limited to providing reasons why the petition fails to meet the requirements for its grant (§ 323).  Petitions must put forth evidence (presumably in light of any evidence or argument in the patentee's response) that if unrebutted would make it "more likely than not" that at least one of the challenged claims is unpatentable (§ 324(a)).  Alternatively, a grantable petition may contain a showing that there is a "novel or unsettled legal question that is important to other patents or patent applications (for example, the ACLU's challenge to the patent-eligibility of gene patents; § 324(b)).  The Director must make the determination to institute post-grant review within three months after receiving the patentee's response or when the time for that response has expired (§ 324(c)), by notifying the petitioner and the patentee (and the public), wherein the notice contains the date on which the review will commence (§ 324(d)).  As with current reexamination proceedings, the Director's decision regarding whether to institute post-grant review cannot be appealed and is final (§ 324(e)).

There are additional limits to when post-grant review petitions can be filed.  The bill prohibits a petitioner from having filed a "civil action challenging the validity of a claim of the patent" (§ 325(a)(1)) (which includes a declaratory judgment actions but does not include counterclaims in patent infringement litigation; § 325(a)(3)).  In addition, if the petitioner files a civil action challenging the validity of a claim of the patent "on or after the date on which the petitioner files a petition for post-grant review," the district court is compelled to issue a stay ("automatically") unless or until the patent owner moves that the stay be lifted, the patent owner files a lawsuit or counterclaim alleging infringement, or the petitioner moves that the civil action be dismissed (with or without prejudice; § 325(a)(1)(A), (B) or (C)).  If a patent infringement suit is brought within three months of the patent grant date, a district court cannot stay its consideration of a motion for preliminary injunction based on the filing (by anyone) of a post-grant review petition (§ 325(b)), but there is nothing in the statute to prevent the court from considering the petition when assessing the likelihood of success on the merits prong of the preliminary injunction standard.  The bill grants the Director the authority to consolidate petitions in the case of multiple filings by third parties (§ 325(c)), as well as determining whether to "stay, transfer, consolidate[e] or terminat[e]" ex parte or inter partes reexamination proceedings, interferences or (presumably) derivation proceedings (§ 325(d)).  The bill also contains estoppel provisions, wherein a petitioner is estopped from "request[ing] or maintain[ing] a proceeding before the Office with respect to any claim on any ground that the petition raised or reasonable could have raised during post-grant review" (§ 325(e)(1)), and is also estopped from bringing a declaratory judgment action or an action before the International Trade Commission based on any ground that "was raised or reasonably could have been raised" during post-grant review (§ 325(e)(2)).  The latter provision does not raise an estoppel against any defense under 35 U.S.C. § 282(b) in infringement litigation, however.  For reissue patents, review is limited to broadened claims (§ 325(f)).

The Director is given broad authority to prescribe regulations for post-grant review proceedings, including:

(1)  providing that the file of any proceeding under this chapter shall be made available to the public, except that any petition or document filed with the intent that it be sealed shall be accompanied by a motion to seal, and such petition or document shall be treated as sealed pending the outcome of the ruling on the motion;

(2)  setting forth the standards for the showing of sufficient grounds to institute a review under subsections (a) and (b) of section § 324;

(3)  establishing procedures for the submission of supplemental information after the petition is filed;

(4)  in accordance with section 2(b)(2), establishing and governing a post-grant review under this chapter and the relationship of such review to other proceedings under this title;

(5)  setting forth standards and procedures for discovery of relevant evidence, including that such discovery shall be limited to evidence directly related to factual assertions advanced by either party in the proceeding;

(6)  prescribing sanctions for abuse of discovery, abuse of process, or any other improper use of the proceeding, such as to harass or to cause unnecessary delay or an unnecessary increase in the cost of the proceeding;

(7)  providing for protective orders governing the exchange and submission of confidential information;

(8)  allowing the patent owner to file a response to the petition after a post-grant review has been instituted, and requiring that the patent owner file with such response, through affidavits or declarations, any additional factual evidence and expert opinions on which the patent owner relies in support of the response;

(9)  setting forth standards and procedures for allowing the patent owner to move to amend the patent under subsection (d) to cancel a challenged claim or propose a reasonable number of substitute claims, and ensuring that any information submitted by the patent owner in support of any amendment entered under subsection (d) is made available to the public as part of the prosecution history of the patent;

(10)  providing either party with the right to an oral hearing as part of the proceeding;

(11)  requiring that the final determination in any post-grant review be issued not later than 1 year after the date on which the Director notices the institution of a proceeding under this chapter, except that the Director may, for good cause shown, extend the 1-year period by not more than 6 months, and may adjust the time periods in this paragraph in the case of joinder under section § 325(c); and

(12)  providing the petitioner with at least 1 opportunity to file written comments within a time period established by the Director.

The only constraint the Section puts on the Director is a consideration of "the effect of any such regulation on the economy, the integrity of the patent system, the efficient administration of the Office, and the ability of the Office to timely complete proceedings instituted under this chapter" (§ 326(b)).

The proceedings are to be conducted by the Patent Trial and Appeal Board (§ 326(c)).  The patentee is given the right to file one motion to amend one or more of the challenged claims, either by cancelling the claims outright (§ 326(d)(1)(A)) or proposing a "reasonable number" of substitute claims for each cancelled claim (§ 326(d)(1)(B)).  Any further motion to amend can be filed only as an agreed motion between the patentee and the petitioner (§ 326(d)(2)), and any amendments filed in any motion under this section "may not enlarge the scope of the claims . . . or introduce new matter" (§ 326(d)(3)).  The petitioner bears the burden of proof by a preponderance of the evidence (§ 326(e)), a much lower standard than the "clear and convincing evidence" standard of inter partes review or patent litigation.

Post-grant review can be terminated by settlement (§ 327(a)) or decision of the Board (§ 328).  While similar to current provisions for settlement in interferences, the provisions differ in that whether review is terminated or the Board renders a decision is at the discretion of the Director (§ 327(a)).  As with interferences, any such settlement must be in writing and filed with the Office before review will be terminated and, although the settlement will not be published with the remainder of the review proceedings, settlements will be available to Federal Government agencies upon written request, or anyone upon a showing of "good cause" (§ 327(b)).  These settlement provisions are curious in view of the avowed basis of the post-grant review proceedings being to cure the "plague" of "bad" or "poor-quality" patents; just because a petitioner may be willing to settle with the patentee the public's interests are not addressed by such private agreements.

The provisions regarding decisions of the Board (§ 328(a)) provide for a certificate "canceling any claim of the patent finally determined to be unpatentable, confirming any claim of the patent determined to be patentable, and incorporating in the patent by operation of the certificate any new or amended claim determined to be patentable" (§ 328(b)).  Intervening rights arise as the result of a post-grant review proceeding (§ 328(c)) according to the same criteria as are applied under § 252.  The Office is tasked with making available of the length of time it takes for the Board to complete its review (§ 328(d)).

Any party is entitled to appeal an "adverse" decision after post-grant review, under any of the provisions of 35 U.S.C. §§ 141-144 (§ 329).

The Director is compelled ("shall") issue regulations effecting post-grant review "not later than" one year after enactment of the bill into law (Section 6(f)(1)) and shall apply only to patents described in Section 3(n)(1) of the bill (Section 6(f)(2)).  In addition, the Director can "impose a limit on the number of post-grant reviews initiated in the first four 1-year periods following the effective date (something presumably within the Director's discretion to grant petitions in the first place under (§ 324(e)).  Section 6(f)(3) provides for the Director to determine how to integrate post-grant review provisions with interferences "commenced before the effective date" of the post-grant review provision, which can include dismissal of the interference in favor of post-grant review or "to proceed as if the Act has not been enacted."

These provisions will become applicable to any application having an effective filing date on or after March 16, 2013.

Comments

[Dan Feigelson]

Interestingly, proof of fraud in obtaining a patent is not among the bases for post-grant review.

[Marian Flattery]

Kevin,

I believe that your analysis of the scope of estoppel arising from post-grant review is incorrect. You state that §325(e)(2) "does not raise an estoppel against any defense under 35 U.S.C.§282(b) in infringement litigation, however." §325(e)(2) references "a civil action arising in whole or in part under section 1338 of title 28" which is not limited to declaratory judgment actions. Section 1338 of title 28 is the jurisdictional provision relating inter alia to patents and provides that "[t]he district courts shall have original jurisdiction of any civil action arising under any Act of Congress relating to patents, plant variety protection, copyrights and trademarks." I don't see how this limits post-grant review estoppel to declaratory judgment actions.

[bgreen]

Do you think this provision will have a chilling effect on venture funding for startups? Or, is it no worse than the current uncertainty of patent grant for early stage companies?