Standard for Granting an Inter Partes Reexamination Request

The USPTO announced new rules governing the provisions of the America Invents Act ("AIA") relating to inter partes reexamination that went into effect on September 16, 2011.

Inter partes reexamination requests submitted:

• Prior to September 16, 2011:  The SNQ standard is applicable in determining whether the request for inter partes reexamination will be granted. If reexamination is ordered based on the SNQ standard, then the SNQ standard will apply throughout the reexamination proceeding.

• On or after September 16,2011,  but before September 16, 2012:  The "reasonable likelihood" standard is applicable in determining whether the request for inter partes reexamination will be granted. If  reexamination is ordered based on the "reasonable likelihood" standard, then this standard will apply throughout the reexamination proceeding.

• On or after September 16, 2012:  The Office cannot grant, or even accord a filing date to, the request, because the inter partes reexamination provisions of  35 U.S.C. chapter 31 are not available for any request for inter partes reexamination submitted on or after September 16, 2012.  The Office will only accept petitions to conduct inter partes review.  (*** The Office will implement the new inter partes review proceedings in a separate rule making.)

As you can see, the Office will no longer apply the "substantial new question of patentability" ("SNQ") standard to inter partes reexaminations filed after September 16, 2011.  (The SNQ standard for granting ex parte reexamination has not been revised by the AIA.)  Instead, the Office will apply the "reasonable likelihood" standard, requiring the information presented in a request for inter partes reexamination to show that there is a "reasonable likelihood" that the requester will prevail with respect to at least one of the claims challenged in the request.

With respect to the "reasonable likelihood" standard, House Rep. 112-98 (Part 1), at 47, 112th Cong., 1st Sess., provides, in connection with inter partes review, the following:

The threshold for initiating an inter partes review is elevated from "significant new question of patentability" --a standard that currently allows 95% of  all requests to be granted--to a standard requiring petitioners to present information showing that their challenge has a reasonable likelihood of success.

(emphasis added.)

So, what is the "reasonable likelihood" standard?  

A statement pointing out, based on the cited patents and printed publications, each showing of  a reasonable likelihood that the requester will prevail with respect to at least one of the claims challenged in the request, and a detailed explanation of the pertinency and manner of applying the patents and printed publications to every claim for which reexamination is requested.

Section 1.915(b)(3)

Thoughts:

• It is almost impossible to predict - at this stage - the effect of going away from the SNQ test.  However, based on the "elevated" language in the Congressional record, it appears that the new standard may result in a lower percentage of requests being granted.

• Unlike an inter partes review, an inter partes reexamination cannot be terminated by settlement between the parties.  Plus, following an inter partes review, the petitioner will be estopped (in a later civil, PTO, or ITC proceeding), from challenging the patent on any ground that was raised or "reasonably could have been raised" during the proceeding.  Whereas, following an inter partes reexamination, the petitioner is only estopped from challenging the patent on any ground that was raised or "could have been raised."  These procedural issues should be taken into consideration - as we approach September 2012 - when deciding whether to request an inter partes reexamination or wait to request inter partes review.

America Invents Act - Post-Issuance Proceedings

Ex Parte Reexam

Use:  Anyone can challenge based on patents or printed pubs.
Availability:  September 16, 2011
Timing Req:  Anytime after a patent issues
Threshold:  Substantial New Question of Patentability ("SNQ")
Decision Maker:  Examiners in Central Reexam Unit ("CRU")

Inter Partes Reexam

Use:  Third-Party can challenge based on patents or printed pubs.
Availability:  September 16, 2011 - September 15, 2012
Timing Req:  Anytime for any patent filed after November 29, 1999
Threshold:  A reasonable likelihood to prevail ("RLP") with respect to at least one claim
Decision Maker:  Examiners in CRU

Inter Partes Review

Use:  Third-Party can challenge based on patents or printed pubs.
Availability:  September 16, 2012 (*** this proceeding available for all pending patents)
Timing Req:  (1)  Filed 9-months after the grant of patent or reissue, or after termination of a post grant review, whichever is later.  (2)  Filed within 1-year after service of Complaint.  (3) Not available if DJ is filed.
Threshold:  RLP with respect to at least one claim
Decision Maker:  Patent Trial & Appeals Board ("PTAB")

Post-Grant Review ("PGR")

Use:  Third-Party can challenge based on broad grounds (*** not just patents and printed pubs)

Availability:  Patents with an effective filing date on/after March 16, 2013.

Timing Req:  Must file within 9-months of the issue date of a patent or reissue patent (only if broadening)

Threshold:  "More likely than not" that a claim is unpatentable

Decision Maker:  PTAB

Supplemental Review

Use:  Patent owner can address inequitable conduct issue proactively

Availability:  September 16, 2012

Timing Req:  Anytime after patent issues; however, not available when in litigation if inequitable conduct is asserted with particularity

Threshold:  SNQ

Decision Maker:  Examiners in CRU

Transitional PGR for business method patents

Use:  Third-Party can challenge based on patents or printed pubs.

Availability:  September 16, 2012 - September 15, 2020

Threshold: "More likely than not" that a claim is unpatentable

Decision Maker:  PTAB

America Invents Act

Patent Reform – Changes that take effect immediately


Effective DateS

September 15, 2011

The U.S. Senate last week passed the House version of the Leahy-Smith America Invents Act (H.R. 1249) (“Act”).  The Act will become law once signed by President Obama.    

The Act will significantly change the American patent system.  Some of the more highly publicized provisions will not take effect for 12 to 18 months after signing.  These provisions include moving from the current “first to invent” system to a “first to file” system and additional mechanisms for post issuance review.   With the “first to file” provision, priority will be given to the first inventor to file a patent application, which will bring U.S. law into harmony with the patent laws of most other countries around the world.  The additional mechanisms for post issuance review  – post grant review, inter partes review, and supplemental examination – create new administrative procedures for challenging or amending a patent after issuance and are intended to reduce litigation.

Certain important provisions will be effective immediately or soon after signing, including:

USPTO PROCEDURES:

Surprise - PTO Fees on the rise.  The Act imposes a 15% surcharge on most PTO fees.  The Act includes a financial incentive to electronically file patent applications.  Applicants not filing electronically will be charged an additional $400 fee (effective 60 days from signing).

Higher Threshold for Inter Partes Reexamination.  The Act imposes a higher threshold for requesting inter partes reexamination.  In order to be granted, the requester will be required to show a reasonable likelihood that the requester will prevail with respect to at least one claim (current law requires a showing of substantial new question of patentability with respect to at least one claim).  This is an interim provision (to be replaced by inter partes review) and will be effective until the implementation of the new administrative post grant review procedures, scheduled to become effective 12 months from signing.  Plus, you can now request an inter partes reexamination for pre-1999 patent.

Limitation on Issuance of Patents.  The Act prohibits a patent claim directed to or encompassing a human organism.  This will apply to all pending applications, not issued patents.

LITIGATION:

Shorter List of Defendants.  The Act limits joinder of unrelated accused infringers in actions commenced on and after signing.  Joinder will be prohibited if solely based on allegations that a defendant has infringed a patent.  The Act also will limit the ability to join together parties in a patent infringement litigation, if the parties only have tenuous connections to the underlying dispute in the litigation.  The most obvious impact of this limitation will be on multi-defendant actions brought by non-practicing entities (NPE's).

Goodbye "Best Mode" Defense.  The Act eliminates failure to disclose best mode as a basis for adjudging a patent invalid or unenforceable.  This provision will only apply to lawsuits filed on or after the signing.

Hello "Infringement Based on Prior Commercial Use" Defense.  The Act expands the prior use defense under § 273 to include all patents, whereas it is currently only available for business method patents.  However, the defense cannot be asserted against universities or technology-transfer companies.

Big Changes Re: False Marking.  The Act amends § 292 to effectively eliminate all pending and future false marking lawsuits.  First, the Act provides that only those plaintiffs who have suffered “competitive” injury as a result of the false marking have standing to sue for compensatory damages.  Second, only the United States government has standing to sue for the fine of “not more than $500 for every such offense.”  Third, no civil or criminal liability arises if one marks a product with an expired patent number, provided that the expired patent actually covered the product. 

Getting with the times - Virtual Marking.  The Act amends § 287 to allow for virtual marking if the word “patent” or “pat.” is marked on a product, along with a reference to an internet website that the public can access free of charge to learn more about the specific patent. 

Venue.  Appeals of decisions issued by the U.S. Patent & Trademark Office (e.g., suspensions of attorneys or agents to practice before the PTO, actions to obtain a patent, derivation proceedings, etc.) will be heard by the U.S. District Court for the Eastern District of Virginia instead of the U.S. District Court for the District of Columbia.