IPR and PGR – They are NOT “American Oppositions”

The America Invents Act (AIA) creates two new methods for third parties to challenge issued patents in the USPTO: inter partes review (IPR) and post-grant review (PGR). While new in the United States, similar types of post-grant proceedings are a regular part of patent practice in other jurisdictions. However, it is a mistake to assume that an IPR or PGR is an “American opposition.”

Like European Patent Office (EPO) oppositions, for example, IPR and PGR are post-grant proceedings held in the patent office. But that is more or less where the similarities end! The timing, intensity, and cost of the proceedings, and their effect on later litigations can be vastly different from those of an EPO opposition. Here are a few of the principle differences:

• Cost: The current filing fee for an EPO opposition is €745. As of March 2013, the current filing fee for an IPR or PGR is $23,000 or $30,000, respectively, plus additional fees for challenging more than 20 claims. Moreover, because of the lack of discovery, an EPO opposition is a lower cost proceeding overall.

• Substantive Threshold for Initiation: The Patent Trial and Appeal Board (PTAB), which hears IPRs and PGRs, has a right to refuse to institute the proceeding if it finds that the challenger’s initial IPR or PGR request lacks substantive merit. In at least one case to date, the PTAB has refused to initiate an IPR. Synopsys, Inc. v. Mentor Graphics Corp., IPR2012-00041 (PTAB, February 22, 2013). Moreover, an IPR or PGR is instituted on a claim by claim basis, based on the merit of the petition, meaning that the PTAB can decide to institute an IPR or PGR on only some of the requested claims or grounds. Furthermore, if the PTAB refuses to institute the proceeding or institutes it only in part, the challenger has no right of appeal. In contrast, the EPO does not subject opposition requests to an initial subjective screen. As long as the formality requirements are met and a ground for opposition is provided, the opposition is instituted for all claims.

• Timing: IPR and PGR are designed to be completed within a 1 to 1.5 year time period. In contrast, an EPO opposition often takes two to three years to resolve, not including appeal.

• Discovery: In addition to the short time-frame for an IPR or PGR, a limited amount of discovery is also allowed, for example, to allow questioning of any experts providing declarations in support of the challenger or patentee. There is no similar provision in an EPO opposition.

• Grounds for Challenge: The grounds for challenge in a PGR are similar to those in an EPO opposition (except that indefiniteness (clarity) is not a ground at the EPO), while those in an IPR are limited to novelty and obviousness based on patents or printed publications.

• Effect on Later Litigation: An IPR or PGR that results in a final written decision by the PTAB can have a harsh effect on later-filed litigations or other civil proceedings between the parties to the IPR or PGR. Specifically, if the PTAB issues a final written decision in an IPR or PGR upholding some or all of the challenged patent claims, then the challenger is barred from raising the same arguments later in court, and also from raising any arguments that the challenger reasonably could have made in the IPR or PGR but chose not to make. Note that this effect is triggered by a “final written decision” from the PTAB. If the parties settle the matter before such a decision, this effect may be avoidable. There is no similar estoppel effect for a European opposition.

• Anonymity: Finally, an IPR or PGR cannot be filed anonymously; the real party in interest must be identified. This is not necessary in an EPO opposition.

The overall structure of an IPR or PGR provides a strong incentive for a patent challenger to put its best arguments and prior art in front of the PTAB in the initial petition. As a whole, an IPR or PGR is better thought of as a short and intense mini-trial that is an alternative to a court proceeding, rather than an opposition, which is typically viewed as an extension of examination.