Final AIA Rules for Post Grant Review, Inter Partes Review and Transitional Program for Covered Business Method Patents
By Kenneth N. Nigon
Post Grant Review, Inter Partes Review and the Transitional Program for Covered Business Method Patents were instituted with the goal of improving patent quality by giving third parties methods to challenge patents that are less expensive and less involved than litigation. Each of these procedures is a trial before the Patent Trial and Appeal Board (Board) composed of Administrative Patent Judges and subject to Part 42 of 37 C.F.R., Trial Practice Before the Patent Trial and Appeal Board.  The trials allow for limited discovery, which has not been available in Ex Parte or Inter Partes Reexamination, the existing procedures for challenging patents in the U.S. Patent and Trademark Office.  Because the discovery is limited, it is unlikely that these procedures will be used in cases where large amounts of evidence may be needed to prove patent invalidity. 
 
Post Grant Review
A petition for Post Grant Review (PGR) must be filed no later than nine months after the issue date of a patent or, for claims broadened in a reissue, nine-months after the date of the certificate.  A third party may challenge a patent under PGR based on any ground that may be raised under 35 U.S.C. § 282(b)(2) or (3) including patent subject matter eligibility or utility under 35 U.S.C. § 101, novelty under 35 U.S.C. § 102, Obviousness under 35 U.S.C. § 103 and enablement, written description and definiteness under 35 U.S.C. § 112.  A PGR may only be instituted for a patent having claims with an effective filing date after March 16, 2013.  A PGR must be filed no later than one year after the petitioner has been sued for infringement and cannot be instituted if the petitioner has filed a declaratory judgment action against the patent.
A PGR begins with the filing of a petition in which the Petitioner must identify, for each challenged claim, the specific statutory grounds for challenging the claim and how the challenged claim is to be construed.  The Petitioner must also provide an analysis showing how the construed claim is unpatentable under the statutory grounds.  Although the Petitioner is required to construe the claims, the Board will review each claim according to its broadest reasonable interpretation in view of the specification as it would be understood by a person skilled in the art.
 
Where the petitioner challenges a claim based on prior art, the analysis must include an element-by-element comparison of the claim as construed against the prior art.  For non-prior-art rejections, the analysis must state how the claim fails to comply with the statute.  The PGR petition may also include supporting evidence in the form of exhibits, affidavits, declarations and expert reports.  Any such supporting evidence must be referenced in the claim analysis.  The petition must also be accompanied with the appropriate fee, $35,800 for up to 20 challenged claims and $800 for each additional challenged claim.  The petition is limited to 80 pages, double spaced with 14 point font, no matter how many claims are challenged.  Claim charts, however, may be single spaced or they may be provided in an expert's opinion where they would not be counted toward the page limit.
 
Three months after the filing of the petition, the Patent Owner may file a preliminary response.  This response may include exhibits but may not include any testimonial evidence such as affidavits or expert reports.  If the Patent Owner has reason to believe that the Requester may not have standing to challenge the patent, however, the Patent Owner may be able to present testimonial evidence relating to the standing of the Petitioner after filing a motion with the Board.
 
Based on the petition and the preliminary response, if one is filed, the Board will determine whether to institute a PGR and what claims will be included.  The Board analyzes each claim to determine if, based on the submitted evidence, the Petitioner has standing and is more likely than not that at least one of the challenged claims is unpatentable.  A PGR may also be instituted if the Board determines that the petition raises a novel or unsettled legal question that is important to other patents or patent applications.
 
When the PGR is instituted, the Board will issue a scheduling order, specifying times for the various phases of the trial. Based on this order, the Patent Owner may begin to take discovery.  Under Routine Discovery, the Petitioner is required to provide any exhibits to the Patent Owner and to present any affiants, declarants or experts whose testimony was referenced in the Petition for cross-examination.  Petitioner is allowed similar Routine Discovery after the Patent Owner files the Response to the Petition.  Under Routine Discovery, each party is also required to provide any relevant information that is inconsistent with a position advanced by the party during the proceeding concurrently with the filing of the documents or things that contains the inconsistency.  Unless the Patent Owner and Petitioner agree to one of the Mandatory Discovery provisions under 37 C.F.R. § 42.51, all other discovery by the Patent Owner and Petitioner must be requested by motion which requires a showing of good cause as to why the discovery is needed.
 
Within one month of the institution of the PGR, the Petitioner or the Patent Owner may provide supplemental information as long as that information is relevant to a claim for which the trial has been instituted. Submission of supplemental information after this one month period may only be made by motion to the Board and requires a showing that the submission is in the interests of justice.
 
A scheduling conference will be held one month after the institution of the PGR in which the Petitioner or Patent Owner may ask the Board to adjust the time limits in the scheduling order and request additional discovery.  The Patent Owner must also obtain permission to file a reasonable number of claim amendments.  Matters discussed at the scheduling conference are presented in motions to the Board prior to the conference.
 
The Patent Owner's response to the petition is due at a time determined in the scheduling order.  The default time is three-months after the institution of the PGR but this time may be adjusted by the Board.  Patent Owner's response may include a motion to amend including a reasonable number of claim amendments.  The default is one replacement claim for each contested claim but more amended claims can be provided if allowed during the scheduling conference.  The patent owner may make additional claim amendments, after the amendments made with the Patent Owner's Response, on motion to the Board but any additional amendments require a showing of good cause or agreement between the parties.
 
Once the Patent Owner's response has been filed, the Petitioner may begin Routine Discovery and, if agreed with the Patent Owner, Mandatory Discovery.  At a time determined in the scheduling order (default three months), the Petitioner may then file a reply to the Patent Owner's Response and an Opposition to the Patent Owner's motion to amend.
 
After the Petitioner's Opposition, the Patent Owner may file a reply to the Opposition at a time determined in the scheduling order (default one month).  After the filing of this reply, the PGR enters a period for observations and motions to exclude evidence.  During this period, either party may request an Oral Hearing.  After the Oral Hearing, the Board issues the Final Written Decision.
 
Once the Final Written Decision has been issued and the conclusion of any appeals to the Federal Circuit, the Petitioner is estopped from challenging any claim that was finally adjudicated based on any ground that was raised or reasonably could have been raised.  This estoppel applies to proceedings before the PTO, District Court and ITC.  The Patent Owner is also estopped from pursuing, in the USPTO (e.g. in a continuation application) any claim which is not patentably distinct from a claim that was finally refused or canceled in the PGR.

Inter Partes Review
Inter Partes Review (IPR) is provided as a substitute for the Inter Partes Reexamination proceedings which will not be available after September 16, 2012.  IPR is similar to PGR but has several key differences.
 
First, the petitioner may not file a petition for IPR until the later of nine-months after the issue date of the patent and the conclusion of any PGR proceeding that has been instituted for the patent. 
 
Second, the grounds for invalidating a patent under IPR are more restricted; the IPR petition may address only issues of novelty and obviousness based on patents and printed publications.
 
Third, the standard for instituting an IPR, "reasonable likelihood that at least one of the claims challenged in the petition is unpatentable," is less stringent than for a PGR, allowing the Board more latitude for instituting an IPR. 
 
Fourth, the standard for obtaining motion-based discovery is more stringent for IPR, an "interest of justice" standard rather than the "good cause" standard for PGR.
 
Fifth, the page limits and fees for an IPR are lower.  An IPR Petition, Preliminary Submission and Reply are limited to 60 pages each and the fee for challenging up to 20 claims is $27,200 and $600 for each additional claim. 
 
Transitional Program for Covered Business Method Patents
The Transitional Program for Covered Business Method Patents (CBM) allows a party who has been sued or threatened with suit based on a financial business method patent to be able to use a procedure similar to PGR to determine the validity of the patent.  Although CBM follows the procedures for PGR, there are several important differences.
 
First, a CBM may be instituted for any eligible patent as of September 16, 2012 based on 35 U.S.C. §§ 101, 102, 103 or 112.  If it is instituted against a patent having claims with an effective filing date prior to March 16, 2013, however, the prior art that may be used to invalidate the patent is limited to prior art under the current 35 U.S.C. § 102(a) and prior art that disclosed the invention more than one year before the filing date of the application for the patent and would have been prior art under 35 U.S.C. § 102(a) as of the invention date of the patented invention.  Challenges based on prior art under 35 U.S.C. §§ 102(e), (f) and (g) are not allowed.
 
Second, a CBM cannot be instituted during the period that a PGR could be instituted against the patent.
 
Third, the Petitioner must have been sued or have standing to bring a declaratory judgment action against the patent.
 
Fourth, the claims challenged in a CBM must concern a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service.  A CBM may not challenge a claim for a technological invention.  A technological invention is one in which the claimed subject matter as a whole recites a technological feature that is novel and unobvious over the prior art; and solves a technical problem using a technical solution.  The burden of proving that a claim is not directed to a technological invention is on the Petitioner.
 
Fifth, the estoppel for a CBM is not as broad for proceedings in District Court and before the ITC - the petitioner is estopped from raising only issues that were actually raised.  The estoppel for subsequent PGR or IPR proceedings before the USPTO is the same: raised or reasonably could have been raised.  


 
 
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