The New Rules For PTAB Trials Are Now A Reality

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As of May 2016, new rules of practice govern trial proceedings before the Patent Trial and Appeal Board (PTAB). The changes enacted by the U.S. Patent and Trademark Office (USPTO) affect inter partes review (IPR), post-grant review (PGR), the transitional program for Covered Business Method (CBM) and derivation proceedings under the America Invents Act (AIA). Practitioners should closely review these changes and consider their impact on practice strategy.

Changes to the Preliminary Response

Perhaps the most notable change is the ability to submit new testimonial evidence in the patent owner’s preliminary response (POPR) in IPR, PGR and CBM proceedings. The amendments to 37 CFR § 42.108(c) and § 208(c) provide an opportunity for the patent owner to respond prior to institution directly to issues raised by the petitioner with, for example, expert testimony. Although the availability of expert testimony provides the patent owner with a potentially powerful new tool to consider at the pre-institution stage, the board is instructed to view any genuine issue of material fact in the light most favorable to the petitioner when deciding whether to institute the IPR, PGR or CBM. Additionally, upon a showing of good cause, the petitioner can file a reply to the patent holder’s preliminary response. Patent owners should carefully consider the impact of introducing testimonial evidence at the preliminary stage.

Changes to Claim Construction Standards

Amendments to 37 CFR § 42.100(b), § 200(b) and § 300(b) introduce a new claim construction standard for patents set to expire within 18 months. The new standard offers an alternative to the “broadest reasonable interpretation standard” previously mandated in PTAB proceedings.

Either party may now request a claim construction approach similar to that used in district court proceedings. The Phillipsstyle claim construction standard could benefit patent owners by limiting the scope of relevant prior art and may offer the best opportunity to preserve the validity of the patent. A party seeking this claim construction standard must make a motion under § 42.20 within 30 days of the filing of the petition.

For trial proceedings covering all nonqualifying patents, the PTAB will continue to apply the broadest reasonable interpretation standard. This may change, however, depending on the outcome of In re Cuozzo,currently on appeal to the United States Supreme Court. Commentators expect the Supreme Court to release its decision concerning the broadest reasonable interpretation standard before summer recess.

Sanctions and Rule 11-Type Certification

The amended version of 37 CFR § 42.11 establishes the process of imposing sanctions on practitioners who violate the duty of candor owed to the USPTO. The clause also establishes the conditions necessary to justify such sanctions. Section 42.11 incorporates the standard set forth in 37 CFR § 11.18 regarding the veracity and purpose of statements made to the USPTO. A party failing in this duty “shall be subject to the penalties set forth under 18 U.S.C. 1001 and any other applicable criminal statute.”

Word Counts, Not Page Limits

The new rules establish a number of word count limits for documents formerly governed by page counts. The amendments to 37 CFR § 42.24, § 42.107(a) and § 42.207(a) establish new guidelines for PTAB petitions, POPRs, patent owner responses after institution (POR) and petitioner replies to patent owner responses.

In IPR and derivation proceedings, petitions, POPRs and PORs are limited to 14,000 words. Petitioner replies are limited to 5,600 words. In CBM and PGR proceedings, petitions, POPRs and PORs are limited to 18,700 words. Petitioner replies are limited to 5,600 words.

The new rules do not eliminate all page counts, however. All motions, including motions to amend, are subject to the same page count limitations as before.

Making Real-Party-in-Interest Determinations

Patent owners can challenge who is a real-party-in-interest or privy at any point of a trial proceeding. That said, the USPTO acknowledges the importance of resolving these issues quickly and recommended that patent owners raise them in the preliminary stages.

The flexibility of the USPTO in hearing these challenges after the preliminary stages will likely depend on the impact of the delay and any justification for not having raised the question earlier. The USPTO plans to add further information concerning realparty- in-interest objections to the Patent Trial Practice Guide.

In Conclusion

Although it is too early to tell, the amended rules for PTAB trials have the potential to have some impact on early-stage denials of institution and the odds of surviving a validity challenge on soonto- expire patents. Early indications are that at least some patent owners are taking advantage of new testimonial evidence in the pre-institution phase, but it is unclear whether this tool will alter board decisions on substantive issues prior to institution.

Additionally, in cases involving soon-to-expire patents, the availability of Phillips-style claim construction may have some limited impact on claim survival statistics. How these and other changes will play out as board decision issues in the coming months will be of great interest to practitioners in the field.

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