What Are PTAB Trials?

PTAB Trials are legal proceedings overseen by the administrative body of the United States Patent and Trademark office known as the Patent Trial and Appeal Board (PTAB). PTAB trials take place when an individual person or company has a dispute with another individual person or company over patents or trademarks.

PTAB Trial Vocabulary

  • AIA: AIA stands for America Invents Act. This act switched the U.S. patent system from a "first to invent" to a "first inventor to file" system. It eliminated interference proceedings that allowed people to stop patents from proceeding and developed post-grant opposition. 
  • IPR: Inter partes reviews are trial proceedings conducted by the Board to review the patentability of one or more claims. The inter partes review process begins when a person who is not the owner of the patent files a petition either 9 months after the grant of the patent or issuance of a reissue patent or if a post-grant review is instituted, at termination of the post-grant review. Inter Partes Review is one of the most popular procedures, with nearly 4,200 petitions filed through the end of February 2016.
  • PGR: Post-grant reviews are conducted when a third party files a petition on or before the date 9 months after the grant of the patent or issuance of a reissue patent. The patent owner may file a preliminary response to the petition. A post-grant review can be instituted if you can show that it is more likely than not that at least one claim challenged is unpatentable.
  • CMB: Covered business method patents are patents that claim a method or corresponding apparatus for performing data processing or other operations used in practice or business services. 

Rules of PTAB Trials

In 2014, the USPTO asked for feedback in order to improve the AIA trial process.  In June 2014, they put out a formal request for public input. They responded to public comments on March 27, 2015 by announcing new "quick-fix" improvements to the PTAB rules. These would include expanding page limits for some briefs.

USPTO Director Michelle Lee, also announced that the USPTO would consider several other changes to AIA trial procedures and asked for further comment on those proposals.

The USPTO has compiled and evaluated all of the public comments that were received and published final amended rules in the Federal Register on April 1, 2016.

  • There are now claim construction standards for patents that are about to expire. If the patent is going to expire within 18 months from the entry of the Notice of Filing Date Accorded to Petition, either party may request, by a motion filed no later than 30 days from the filing of the petition, that a district court claim construction standard be used to interpret the claims, rather than the broadest reasonable construction standard usually applied in AIA trial proceedings. 
  • The USPTO now permits a patent owner to include testimonial evidence in a response to a petition for IPR, Post-Grant Review, or Covered Business Method review. A petitioner can leave to file a reply responding to the submission after a showing of good cause. If the petition and response create an issue of fact, the PTAB will view the evidence in a way that is most favorable to the petitioner to decide whether or not to institute a review. 
  • Prior to the current changes, the AIA rules allowed the use of the Phillips-based claim construction analysis, rather than the USPTO's administrative "broadest reasonable interpretation" or "BRI" claim construction. The USPTO has now amended the AIA trial rules to expand the use of a Phillips-based claim construction analysis to any situation where a patent is going to expire during an AIA trial. The new rule states that either party can request the Phillips-based review. All they need to do is file a motion certifying that the patent will expire during the AIA challenge. 
  • The PTAB will then schedule a conference call with both parties to decide whether a Phillips-based claim construction is the right decision. 
  • Patent owners are now required to show in their motion to amend the patentability of the proposed claims over:
    • Any material art in the prosecution history of the patent.
    • Any material art in the current proceeding. This includes art asserted in grounds on which the PTAB did not institute a review.
    • Any material art that was used in any other trials or proceedings that occurred before you came to the USPTO that involve the patent in question.
  • A patent owner can file new testimonial evidence without any limits on scope with their preliminary response. Any dispute over the testimonial evidence that is material to the institution decision will be resolved in favor of the petitioner for purposes of determining whether to institute a trial. There is no cap on the number of declarations that can be submitted.  In certain circumstances, a panel can place a limited discovery, including cross-examination of witnesses, before the institution. The petitioner may be afforded the right to reply if good cause is shown.
  • The USPTO will usually allow a patent owner to raise a challenge regarding a real party-in-interest at any time during a trial proceeding, but it will become more difficult to do as the case goes on.
  • The USPTO continues its present practice of considering requests to present live testimony in the form of an oral hearing on a case-by-case basis. It does not feel that live testimony will be required in every case where there is conflicting testimony. If it is requested by one of the parties involved, and if the panel believes live testimony will be helpful in making a decision, the PTAB will allow live testimony.
  • Even though requests for sanctions are infrequent in AIA trial proceedings, a certification rule has been added as a preventive measure and as a way to provide detailed guidance regarding expectations for counsel. The new rule, known as Rule 11-type, explicitly incorporates the signature and certificate requirements of 37 C.F.R. 11.18. If you are seeking sanctions on the other party, you must first offer a "safe harbor" and you are also required to serve a proposed motion at least 21 days before you seek authorization to file a motion for sanctions. During this 21-day period, the other party has the chance to withdraw or correct whatever it is that you are challenging.
  • The USPTO is imposing a word limit for petitions, patent owner preliminary responses, patent owner responses, and petitioner's reply briefs.
    • Briefs previously limited to 80 pages such as PGR or CBMR petitions must now be below 18,700 words.
    • Briefs previously limited to 60 pages such as IPR or derivation petitions must now be limited to 14,000 words.
    • Briefs previously limited to 25 pages such as replies must now be limited to 5,600 words.
    • The word count doesn't include the table of contents, table of authorities, grounds for standing, mandatory notices, certificate of service, appendix of exhibits, or claim listings.
    • For all other briefings, the USPTO will maintain a page limit. Motions to amend are limited to 25 pages. All other motions are limited to 15 pages.
  • Demonstrative exhibits must be served at least seven business days before the oral argument. They cannot be filed any later than the time of the oral argument.

PTAB Statistics

As part of the PTAB rules overhaul, Director Lee discussed a set of statistics from the past three years of AIA filings.

  • In the last three years, there have been 3,655 petitions, of which 3,277 are IPRs, 368 are CBMs, and 10 are PGRs.
  • Since 2014, 63 percent of trials have focused on patents from electrical/computer technology centers (TCs) and only 9 percent have focused on the bio/pharma technology centers.
  • Of the 2,277 IRP petitions, only 1,389 have gone to trial.
  • Of the 368 CMB petitions, only 185 have gone to trial.
  • Of the 10 PGR petitions, only two have gone to trial.
  • 12 percent of all of the claims available to be challenged, 4,496 out of 38,462, were determined by the PTAB to be unpatentable in a final written decision. 
  • All other claims were either not challenged, resolved by settlement, canceled, or upheld as patentable. 
  • Of the first IPRs to reach a conclusion, 25% of claims actually challenged (4,496 of 17,675) were found to be unpatentable.

Changes Considered, But Not Implemented

One important aspect of the new USPTO rules is what they did not cover. For several different reasons, the USPTO decided not to revise these rules more extensively. They prefer to allow the PTAB to consider these issues on a case-by-case basis.

  • Single-Judge Pilot Program 

The USPTO will not go forward with the proposed pilot program which would have allowed a single PTAB judge to determine whether to institute a trial at the petition stage of proceedings. If that solitary judge did decide to initiate a trial, two more judges would be added to the panel to hear the case.

  • Rules Governing Claim Amendments

The USPTO decided not to revise the current procedures for amending claims during the AIA trial. Motions to amend are rarely granted. The USPTO feel that the PTAB panel is not equipped to examine the patentability of proposed amended claims. They have decided that amended claims automatically become part of the patent under review.

  • Expanded Availability of Discovery

The USPTO decided not to modify the current restrictive standard for allowing discovery. They have decided that requests for discovery will be considered on a case-by-case basis.

  • Other Procedural Reforms

The new rules do not include any rules that govern how the PTAB should process multiple proceedings involving the same patent. The PTAB panels will continue to manage this issue on a case-by-case basis.

TRIALS BY PTAB

AIA has three administrative trial procedures where you can request a review of the patentability of issued patents outside of litigation, post-grant review, the transitional program for covered business method patents, and inter partes review.

Under these procedures, third parties can file a petition with the PTAB that challenges the validity of patents that have already been issued. All of these procedures allow:

  • The opportunity for the patent owner to respond to and challenge a petition. 
  • The opportunity for an oral hearing before a decision is made.
  • The opportunity for limited discovery.
  • The availability of a settlement between the petitioner and the patent owner.

Interferences

Although the first-to-file provision of the AIA attempted to remove the option of an interference for new patent applications, interferences are still a viable option for many patent applications if you have a claim to earlier filing dates.  

Most of PTAB's current rules on interference are built on prior interference practices. Several of the PTAB judges were on the Board of Patent and Appeals and Interferences when it still existed and continue to refer to those practices even today.

If you feel that you have a case that would interfere with a new patent application that may be infringing on a current patent that you have, you should contact a patent attorney as soon as possible to discuss the matter.

Derivations

Derivation proceedings give an exception to the first-to-file provisions of the AIA. Any patent applications that have an effective filing date on or after March 16, 2013, are available to have derivation proceedings if you feel you were earlier-to-file a patent application.

Derivation proceedings are still relatively new to the PTAB; derivation of an invention is an often-raised issue in interference cases if there was some sort of collaboration involved between then two parties. 

Appeals of PTAB Trial Decisions

Any appeals to PTAB decisions go directly to the Federal Circuit. Before attempting to appeal a PTAB decision you should speak to a patent or trademark attorney to help you analyze the likelihood of success for each possible issue on appeal. They can counsel you on which issues to raise and provide the best overall appeal strategy so that you succeed.

PTAB Fees

There are plans for the PTAB board to raise fees in order for the Board to be more self-sustaining going forward. Until now it seems the PTAB operated at a substantial loss, which means patent owners and patent applicants will be paying more to challenge infringers going forward.

  • IPR fees will increase from $23,000 to $30,500. Request increases will be $5,000 and institution increases will be $2,500.
  • PGR and CBM fees will increase from $30,000 to $38,000. The request will increase by $4,000 and the institution increase will be $6,000.
  • Appeals to the PTAB after a proceeding will increase from $2,800 to $3,500. The notice of appeal, appeal forwarding, and the fee for an oral argument could mean a total of $4,800 in government fees for a large entity.
  • There has been a notable increase in prosecution fees with an additional $100 required by large entities, an additional $50 required by small entities, and an additional $25 required by mico entities to be paid for the first RCE. Every subsequent RCE will be $200 for large entities, $100 for small entities, and $50 for micro entities. 
  • Information disclosure statements have increased to $60 for large entities, $30 for small entities, and $15 for micro entities. 

One area in the PTAB fees has decreased. Reexamination requests that are less than 40 pages will not be discounted 50 percent relative to existing costs.

Post-Grant Pilot Program

The idea behind the post-grant pilot program was that AIA trial proceedings contain prior art and arguments that could be useful for determining the patentability of related applications currently being examined. The program was meant to help patent examiners use the information presented during AIA trials to enhance the examination of related patent applications. 

During the pilot, the USPTO emailed the examiners AIA trial information that related to their assigned applications. This streamlined access to the content of the trial by giving the examiners the most relevant information.

After the pilot program was completed, the USPTO surveyed the examiners to find out how they felt about the experience. The survey showed that the examiners found the PTAB information to be incredibly useful. They also found that 46 percent of the examiners referred to at least one of the references from the AIA trial information during the examination of their own cases.

In light of the discoveries made during the post grant pilot program, the USPTO upgraded the examiners' desktop applications so that they could access the contents of related AIA trials.

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