November 4, 2014
Corporate Counsel
By Michael J. Flibbert; Leythem A. Wall; Maureen D. Queler
Authored by Michael J. Flibbert, Leythem A. Wall, and Maureen D. Queler
Almost two years after the new U.S. patent post-grant challenges went into effect, the U.S. Patent and Trademark Office already has received well over 1,500 petitions for inter partes review (IPR). In Europe, oppositions have long served as a powerful tool for challenging patents. Because many inventions are protected by closely related patents in both Europe and the United States, companies now will face the prospect of having to coordinate their post-grant patent challenges (or defenses to challenges) in these two jurisdictions. This article, which features three charts, will examine key similarities and differences between the proceedings, compare likely timelines, and suggest ways to maintain consistent positions while using the actions in one jurisdiction to help in the other.
European oppositions must be filed within nine months of patent grant. In the U.S., this is most similar to the timeline for filing a post-grant review (PGR). PGRs may be filed against patents issuing from the first-inventor-to-file provisions of the America Invents Act (AIA), and may be filed anytime between patent issuance and nine months after. When the period for filing a PGR has passed, a petition for inter partes review (IPR) may be filed. IPRs are available for those patents issuing under first-inventor-to-file or first-to-invent statutory provisions. A party may be subject to an IPR challenge long after the threat or occurrence of a PGR proceeding or European Patent Office (EPO) opposition has passed.
IPRs and PGRs may take up to 18 months from date of petition to final written decision. In IPRs, for example, the patent owner has three months from the petition to file a preliminary response. A decision on the petition is issued within three months of the preliminary response, and then the proceeding must be concluded within 12 months. While traditionally the EPO has an 18-30 month turnaround, more and more we are seeing cases resolved with the oral decision issued within a 15-24 month timeline—not too dissimilar to the U.S. procedures. As can be seen from Figure 1 below, there are numerous stages for submissions from both the petitioner and the patent proprietor in both U.S. and EPO post-grant proceedings. By shifting these timelines accordingly, it is possible to see where submissions in one jurisdiction can precede the other, and hence help both proprietor and petitioner identify how they can avoid duplicating efforts and also how they can potentially trigger a reaction in the other jurisdiction.
At the EPO most grounds for challenging patents are available, but not clarity or unity. In EPO oppositions, arguments can be put forward against as many claims and under as many theories of rejection as the challenger wishes, and the EPO authority typically will consider each theory and proposed ground.
PGRs can challenge on all available grounds of unpatentability, including lack of written description or enablement, obviousness and anticipation. IPRs, however, only may raise grounds of unpatentability under 35 U.S.C. §§ 102 and 103 based on patents or printed publications. But similar to the EPO, if the patent owner tries to amend the patent during an IPR (through a motion to amend), the challenger then may raise issues of written description, indefiniteness and enablement against the proposed amended claims.
Although the statute and regulations do not prohibit raising multiple grounds of unpatentability against patent claims in an IPR petition, the Patent Trial and Appeal Board (PTAB) has been using its discretion under the rules to find certain multiple grounds redundant and exclude those from the proceeding. Given the timing and broader grounds of rejection allowed during EPO oppositions, starting with the EPO opposition route may prove a useful forum for determining best arguments for the challenger which can then be used in the U.S. proceedings. Similarly, claim amendments may be tested first during an EPO opposition before being proposed in an IPR or PGR motion to amend.
Opposition at the EPO is very cost effective, with an official fee of around $1000 and no charges associated with the number of claims being challenged. Accordingly, although oppositions are on average longer in duration than IPRs or PGRs, they are more cost-effective and have no vertical or horizontal restraints as found with the IPRs and PGRs. Starting with EPO opposition at a lower cost may therefore prove a useful way to determine best arguments for the challenger, and those arguments can then be used in the U.S. proceedings.
The 2013 statistics for EPO opposition decisions reveal that 31 percent of the patents opposed were fully maintained, 29 percent were revoked and 40 percent were maintained in an amended form. It is clear that challengers have a good chance of at least "wounding" a European patent (69 percent are revoked or maintained in amended form). However, the figures do show an upturn in patents maintained with amendments. Accordingly, patent proprietors are encouraged to look for fallback positions when opposed.
Only two PGRs have been filed to date, in August and September 2014, and therefore meaningful statistics are not yet available on the disposition of those proceedings. For IPRs, as of September, more than 1,700 petitions had been filed, with more than half filed in 2014 alone. To date there have been 869 decisions on IPR petitions, with a 76 percent trial institution rate and only a 26 percent denial rate. IPRs therefore provide a strong option for patent challengers to pressure patent owners. For example, 235 IPRs have resulted in either settlement or entry of adverse judgments, and in approximately 70 percent of those IPRs, no claims, either original or amended, have survived.
Both IPRs and PGRs offer opportunities for limited discovery. Routine discovery in these proceedings includes production of any exhibits cited, the cross-examination of experts or other declarants, and any relevant information that is inconsistent with a position advanced in the proceeding. The parties may agree to additional discovery, or file a motion for discovery with the PTAB. The PTAB will apply an "interests of justice" standard in IPR proceedings and the more liberal "good cause" standard in PGR proceedings when determining whether to grant additional discovery.
Because depositions of declarants are considered "routine," it is important to choose experts and declarants who can withstand cross-examination and perform well under the pressures of depositions. No such discovery occurs in EPO proceedings, and witness testimony rarely is used. However, expert testimony can play a role and with the more established practice in the U.S. of cross-examination, inconsistencies uncovered in that jurisdiction also could be used in Europe.
Data is becoming increasingly important in EPO oppositions, particularly in the chemical sector. In such proceedings, however, there is no obligation to file all data generated, with parties typically focusing on the results that best support their case. In the U.S., however, such redaction of data sets may run afoul of the duty of candor requirements.
In U.S. post-grant proceedings, all parties have a duty of candor and good faith to the Office during the course of the proceeding. A party to the U.S. proceeding also may have a viable reason to request full disclosure of experimental results, either as part of routine discovery or as part of a motion for discovery. Accordingly, full data sets that are extracted via U.S. proceedings could be introduced into Europe to support or counter an inventive step or sufficiency argument, depending on which side you are on.
As can be seen in Fig. 1, in EPO oppositions, PGRs and IPRs, opportunities exist for patentees to respond and amend their claims.
In EPO oppositions there is no official restriction to the number of changes made, as long the amendments occasion a ground of opposition and EPO added matter and clarity requirements are satisfied. There also is no official limit to the number of conditional sets of claims (known as auxiliary requests) that can be submitted. Typically, these are introduced with the final written submission in response to the summons to oral proceedings, in order to leave the challenger with as little time as possible to consider arguments against these revised claims.
As recent statistics show, patents are maintained most often in amended form after being opposed in Europe. Accordingly, the patentee is encouraged, and has great liberty, to try out different sets of claims. In contrast, during IPR and PGR proceedings, the patent owner typically has only one chance to submit proposed amended claims in a motion to amend, with any supplemental motions to amend requiring a showing of good cause. The patent owner has the burden to establish the patentability of the proposed amended claims, and the bar currently is set very high with only approximately 7 percent of proposed amended claims in IPRs having been granted.
A patent owner may use the relative freedom of amendment in EPO proceedings to determine what amendments provide the best chance of success, and use that knowledge in any subsequent U.S. proceedings. For the challenger, any claim changes made during an EPO opposition may be used to support the unpatentability of a patent claim during a U.S. challenge, especially when the patent owner’s ability to make similar claim changes is more restricted than in Europe.
In U.S. post-grant proceedings, the identity of the petitioner cannot be concealed. EPO oppositions, however, can make use of the "straw man" provision, whereby submissions can be filed in the name of an authorized party (e.g., the attorney rather than the real party in interest). Even further removed, third-party observations can be filed anonymously during prosecution of a European application. Such observations even can be filed during an opposition to which the "observer" is not party. Though these submissions must include contact details, a straw man can be used. Such anonymity and use of the straw man provision may be of great interest to the petitioner to reduce risk of commercial backlash. Additionally, based on the duty of disclosure requirements discussed above, European submissions most likely will make their way into at least U.S. prosecution proceedings.
One of the great advantages of post-grant challenges now available in both Europe and the U.S. is that they are not litigation. This can be important to companies that consider such headlines to be bad press. Furthermore, in the U.S. litigation is estopped to certain extents after IPR or PGR challenges. The event that triggers estoppel in an IPR or PGR is a "final written decision," which is the written order issued by the presiding PTAB panel at the conclusion of the trial. Once the final written decision issues, the petitioner is barred from raising in another PTO proceeding or in court "any ground that the petitioner raised or reasonably could have raised" during the IPR or PGR.
In Europe there is no such estoppel. A party may in theory lose an EPO opposition and then argue invalidity in litigation in national court(s) involving the same patent. Due to their significantly smaller cost than national litigation(s), oppositions are therefore an attractive option to the petitioner as they still have the backup option of national courts. Even with the estoppel issues in the U.S., patentability challenges in the PTO can be desirable for the challenger for several reasons, including the speed, lower burden of proof, broader standard for claim construction and reduced cost compared to litigation.
Reprinted with permission from Corporate Counsel ©2014 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited. For information, contact 877-257-3382, reprints@alm.com or visit www.almreprints.com. This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws. This article is only the opinion of the authors and is not attributable to Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, or the firm's clients.
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