U.S. Patent Office’s Proposed Rule Changes to AIA Trial Practice

On May 27, 2020, the U.S. Patent Office published a notice of proposed rulemaking to the rules of practice in IPR, PGR, and CBM proceedings as follows:

First, in accordance SAS Institute Inc. v Iancu, 138 S. Ct. 1348 (2018) (“SAS”), the Office proposed revision of 37 CFR §§ 42.108 and 42.208(a) to provide for institution of an IPR, PGR, or CBM on all challenged claims (and all of the grounds of unpatentability) presented in a petition, or none (and denial of the petition). This proposal should not come as a surprise to practitioners as it essentially implements the Board’s current SAS practice of instituting on all claims and all grounds, or none.

Second, the Office proposed revision of 37 CFR §§ 42.23, 42.24, 42.120, and 42.220 to permit: (a) replies and patent owner responses to address issues discussed in the institution decision, and (b) sur-replies to principal briefs (i.e., to a reply to a patent owner response or to a reply to an opposition to a motion to amend). This proposal should similarly not come as any surprise, as it too essentially codifies the Board’s current trial guidance on this issue.

The Office’s third proposal, however, which proposes eliminating the presumption favoring petitioner for a genuine issue of material fact created by testimonial evidence submitted with a patent owner’s preliminary response, will likely give practitioners pause. On one hand, patent owners may be amenable to this proposal because submitting testimonial evidence with a preliminary response for discrete issues can provide an effective tool against institution. On the other hand, until the details (e.g., any pre-institution discovery) and practical implications of this proposal are fleshed out, patent owners will likely remain wary about showing all their cards in a preliminary response and risk rejection of their rebuttal testimony at institution and not having anything new or more to say in the patent owner response. It is also possible that patent owners may take a more conservative approach at first, deciding to submit testimonial evidence, but only to rebut conclusory statements set forth in a petition with no underlying support.

The public has until June 26, 2020, to provide comments on the Office’s proposed rulemaking. Public comments are unlikely to change the substance of the Office’s first and second proposals regarding all-or-nothing institution and the scope of patent owner responses, replies, and sur-replies as they simply codify current Board guidance and trial practices. On the other hand, the Office is likely to see more substantive comments from the public regarding its proposed rule eliminating the presumption favoring petitioner at institution. If the public comments bear it out, the Board may, for example, allow limited pre-institution discovery on discrete issues, such as a reference’s status as printed publication. However, the most likely revision will not be to the substance of the rules, but how the rules changes are implemented — for example, whether the rule changes would be applied to all pending proceedings, to those proceedings in which a patent owner’s preliminary response is filed on or after the effective date of the rule changes, or whether the changes would apply only to petitions filed after the effective date. We will have to wait and see how the Patent Office implements its rule changes and whether elimination of the presumption favoring petitioner will change patent owner preliminary response practice in any significant way.