The New Tool for Patent Defendants
Inter Partes Review
Daniel W. McDonald
George C. Lewis, P.E.
Merchant & Gould, P.C.
April 16, 2014
© 2014 Merchant & Gould P.C.
© 2014 Merchant & Gould P.C.
What’s Really Keeping CLOs Up At
Night?
© 2014 Merchant & Gould P.C.
© 2014 Merchant & Gould P.C.
A little History
• Trolls are not new
• Many technology booms had trolls
– Steam Engines
– Bicycles
– Automobiles US Pat. No. 549,160
– Airplanes
– Radios
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Inter Partes Reexamination
• Created in 1999
• Intended to reduce costs of invalidating
weak patents
• Since 1999, 1919 inter partes
Reexaminations have been filed
• Not available since September 2012
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Problems with Old Inter Partes
Reexamination Process
• Estoppel
• Amendments by Patent Owner relatively
easy
• Handled by an Examiner
• Slow
• Two Appeals
• Lawsuits usually continued in parallel: cost
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Practical Effect of These Problems
• Most patents confirmed in some way.
• Requestor often worse off after
Reexamination
• Parallel proceedings increased costs
• IP community clearly understood the
process was failing to achieve its purpose.
© 2014 Merchant & Gould P.C.
Patent Reform: Review Replaces
Reexamination
• America Invents Act (AIA) now gives more
ways to challenge patents at the US Patent &
Trademark Office (USPTO)
– Broadest: Inter Partes Review (IPR)
– Also Post Grant Review, CBMP
• Effective 2012, Decisions now coming in
• Early Indications: IPR is more powerful way
to attack patents than old reexamination
© 2014 Merchant & Gould P.C.
© 2014 Merchant & Gould P.C.
© 2014 Merchant & Gould P.C.
Benefits of IPRs to Challenger
• Defendant has a better chance to win
– Only issue: invalidity
– Technology evaluated by a panel of three patent
judges at USPTO
– Lower burden of proof at the USPTO
– Broader interpretation of claim scope makes
invalidation easier
– Courts more often exclude expert testimony and
other evidence on procedural grounds, lowering
chance of winning in court
© 2014 Merchant & Gould P.C.
Benefits of IPRs: Speed and Stays
• Stay of lawsuit saves litigation costs, as IPR might
end or narrow case
• Stay more appealing now because IPRs proven to
lead to faster final decisions
• Statutory based fast timeline -18 months
• Direct Appeals to Fed. Cir.
• PTAB Process Designed to Avoid Delays
– Discovery minimal
– Limited amendment opportunity
– Redundant grounds axed
© 2014 Merchant & Gould P.C.
Strategic benefits of IPRs for
Challengers
• Forces Patent Owner to take positions
early, before facts regarding infringement
are known
• Patent Owner forced to narrow and
distinguish claims, making infringement
harder to prove
© 2014 Merchant & Gould P.C.
Best Practices:
Coordinate IPR and Trial Strategy
• Prepare non-infringement positions first
• Focus IPR arguments to obtain favorable
early claim construction on terms
important to noninfringement
• Even if patent survives IPR: Set up
settlement and issues for summary
judgment motions
© 2014 Merchant & Gould P.C.
Best Practices: Coordinating Strategy
• Need to find strong prior art, fast
• Ideally, include one prior art reference similar to
the allegedly infringement product
• Forces patent owner to argue why the patent
claims exclude your product
• Preserve validity challenge in court—non
published prior art (sales, public use)
© 2014 Merchant & Gould P.C.
Limitations on IPRs
•
•
•
•
•
Not all prior art can be used
Not all grounds of invalidity are available
Estoppel scope unclear
Risk that IPR is unsuccessful
Delay in filing may make IPR unavailable
or stay less likely
© 2014 Merchant & Gould P.C.
Strategies for Patent Owners
• Consider search and reexamination before
bringing suit—to reduce chances of successful
IPR
• Pick targets less likely to file IPR
• Choose venue carefully
• Consider claim amendments, continuations
• Keep valuable patent families alive
© 2014 Merchant & Gould P.C.
Thank You!
Questions?
George C. Lewis
[email protected]
© 2014 Merchant & Gould P.C.