New USPTO Procedures and Rules, Effective September 16, 2012
The America Invents Act (AIA), enacted in September 2011, made many changes in US patent law. Many of those changes became effective on different dates. Several changes that became effective September 16, 2012 pertain to procedures for the United States Patent & Trademark Office (PTO) to reconsider the validity of patents. To implement these changes, the PTO announced new rules governing these procedures. These new rules, published in August 2012, also govern the procedure established by the AIA for third parties to submit prior art for consideration in a pending patent application. That provision of the AIA also becomes effective September 16, 2012.
Ex Parte Reexamination
No new rules were announced for Ex Parte Reexamination, a procedure that remains unchanged by the AIA. One change in Ex Parte Reexamination is the fee required upon the filing of a request for Ex Parte Reexamination. Effective September 16, 2012, that fee is increased from $2,520 to $17,750.
Under the Ex Parte Reexamination procedure, the patent owner or any other party may request ex parte reexamination of any patent at any time. The requester, however, cannot participate in the reexamination proceedings unless the requestor is the patent owner. A patent owner may request reexamination to strengthen the presumption of a patent’s validity by confirming its validity over prior art that might otherwise be the basis of a validity challenge.
The PTO will grant a request for Ex Parte Reexamination if the request raises a substantial new question of patentability based on patents and/or printed publications not considered in the original examination of the application on which the patent is based or which presents patents and publications that were considered in a different light. Only obviousness and novelty issues may be considered. The patent is reexamined giving the claims their broadest reasonable interpretation, as if it were a new application, by a special examination unit in the PTO. To the benefit of a patent challenger, who might have to face a higher standard of proof if the validity challenge is made in a court proceeding, a patent undergoing reexamination is not presumed valid and a mere preponderance of evidence is sufficient to justify a finding of patent invalidity.
No estoppel results from or applies to an Ex Parte Reexamination. Therefore, even if prior art submitted in an Ex Parte Reexamination is not found to affect the validity of the patent, the same prior art may form the basis of a validity challenge in later litigation. Of course, a finding by the PTO that the reexamined patent is not invalid may impair the effectiveness of that later challenge
An earlier litigation finding that the patent is not rendered invalid by a specific prior art reference, does not prevent that reference from being asserted in a later request for reexamination in the PTO where the standards governing validity differ from those used in infringement litigation.
Supplemental Examination is a new procedure available to patent owners as of September 16, 2012. It may be applied to any patent, regardless of filing or priority date.
Supplemental Examination is a new procedure that allows a patent owner to request the PTO to consider, reconsider or correct any information that may be relevant to the validity of a patent. Once submitted, that information may not be used as the basis to allege that the patent is unenforceable for inequitable conduct (also known as fraud on the patent office). The request for Supplemental Examination is not limited to information that may raise questions of validity based on novelty or unobviousness. In this respect Supplemental examination differs from Ex Parte Reexamination. Nevertheless, if the PTO determines that the newly submitted information does raise a question regarding the validity of the patent, the PTO may institute an Ex Parte Reexamination to consider that question. This may provide a way for a patent owner to get the benefit of an Ex Parte Reexamination that it could not have requested directly. This procedure also more clearly insulates the patent owner from charges of inequitable conduct as compared to Ex Parte Reexamination. In fact, in a recent PTO publication, the PTO indicated that it expected patent owners to elect Supplemental Examination exclusively in place of Ex Parte Reexamination. Note, however, Supplemental Examination may not be used to counter an inequitable conduct charge after that charge has been made in litigation. With respect to possible inequitable conduct charges, however, it should be an effective preemptive tool.
The government fee, upon filing of a Request for Supplemental Examination, is $5,140, but an additional fee of $16,120 is required if an Ex Parte Reexamination is ordered by the PTO.
Inter Partes Review and Post Grant Review
Inter Partes Review replaces Inter Partes Reexamination as of September 16, 2012. Both permit participation of a third party requestor in the review process. Both are limited to consideration of novelty and unobviousness questions based on patents or printed publications. No Inter Partes Reexamination may be requested after September 16, 2012. But after that date, Inter Partes Review may be requested of any U.S. patent, issued more than 9 months prior to the request. While Inter Partes Reexamination did not permit discovery, Inter Partes Review does permit some limited discovery. Survey evidence indicates the average cost to a party for Inter Partes Reexamination averaged about $128,000, not including appellate costs. Since the government fee for that proceeding was relatively low, that was largely attorney’s fees. With discovery and the significantly higher government fee ($27,200), Inter Partes Review will likely be significantly more expensive than Inter Partes Reexamination.
Post Grant Review will permit patent validity challenges not limited to novelty and unobviousness questions and not limited to patents and printed publications as the basis for the challenge. But Post Grant Review must be requested within 9 months of patent issuance. Limited discovery is permitted, as in Inter Partes Review, but with the wider latitude given for challenges not based on novelty and obviousness, the cost for Post Grant Review will likely be significantly greater that than of Inter Partes Review, starting with a minimum government fee for Post Grant Review of $35,800. Except for Post Grant Review of business method patents, for which there is special provision, no Post Grant Review will likely be initiated before 2014. This results from the limitation of Post Grant Review generally to patents with an earliest priority date after March 16, 2013.
A major difference between reexamination procedures and the new Inter Partes and Post Grant Review procedures is the forum in which each is heard. Reexamination was and is conducted by special patent examiners with a procedural format like that of the original patent examination process. Inter Partes Review and Post Grant Review will be conducted by a board of Administrative Patent Judges (APJs) that will oversee discovery, the introduction of evidence, etc. according to pre-established rules, and eventually issue a decision. A threshold question for the APJs is whether a request for Inter Partes Review or Post Grant Review establishes, more probably than not, that at least one claim will be found unpatentable.
The Inter Partes Review and Post Grant Review procedures established by the AIA may significantly change how challenges to the validity of US patents will be handled in the future. Accused patent infringers often rely on patent invalidity as a defense. But in U.S. courts, patents are presumed valid and subject to a standard of proof that can be satisfied only when the proof of invalidity is more than a mere preponderance of the evidence on that point. In contrast, when patent validity is tested by Inter Partes or Post Grant review (and in patent reexamination), the patent is not presumed valid and a mere preponderance of the evidence is sufficient for the patent challenger to prevail.
For these reasons, parties accused of infringement, or sued for infringement, will likely resort to Inter Partes or Post Grant Review in order to challenge patent validity whenever they can do so. They may not do so if they have filed a Declaratory Judgment action, asking for an order of invalidity, or if they were sued for patent infringement on the patent in question more than a year before the request for Inter Partes Review. A consideration for a party considering challenging patent validity with one of these new procedures is that if the challenge is unsuccessful for any claim, the requester is later barred from challenging validity of that claim in another PTO or court proceeding on any basis that it raised or reasonably could have raised in the Inter Partes or Post Grant Review.
The costs involved in Inter Partes Review or Post Grant Review will likely be significant but may reduce considerably the cost of related litigation, or render such litigation unnecessary. That may be the determinative factor that drives use of the new procedures.
Third Party Submission of Prior Art With Regard To Pending Patent Applications
The new rules for Third Person Submission of Prior Art in a pending patent application place limits on when such submission may be made and the number of references that may be submitted (up to 10). Submissions must be made in patent applications before the earlier of: (a) the date a notice of allowance is given or mailed in the application; or (b) the later of (i) six months after the date on which the application is first published by the USPTO, or (ii) the date of the first rejection of any claim by the examiner during the examination of the application. While the PTO accepted third party submissions of prior art prior to September 16, 2012, there was no limit on the number of references that could be submitted.
The new rules also require that a concise statement of the relevance of the submitted art to the pending application be submitted to the PTO. Such a statement had not previously been permitted.
Pre-AIA procedures for a third party to file a formal protest to the grant of an application or a request for the institution of a public use proceeding remain in effect. These procedures are limited, however, in that they cannot be filed after an application has been published or allowed.
None of these procedures prevent the third party from raising the same issues in later litigation. Strategic consideration should be given , however, to the fact that the effectiveness of arguments based on the cited references may be compromised.
For more on all of these new procedures, please see www.RPpostgrant.com
Summary of the new procedures effective as 9/16/2012:
|Effect||Main features||Forum||New Fees||When to use|
|Ex Parte Reexam||– no rule change
– fee up 7 times
|– anyone can file request on any granted patent at any time
– no participation from requester unless patent owner
– limit to novel and nonobv’s basis
– lower bar (than court proc) for proving invalidity (patent not assumed valid, only need mere preponderance evid)
|PTO – special unit||Official Fee: $17,750||– patent owner confirming validity of its patent that might face challenge
-non-patent owner challenging validity of a patent owned by another
|Supplemental Examination||New||– patent owner, any granted patent, any time, prior to litigation
– not limit to novel and nonobv’s basis
– isolate patentee from ineq. conduct
– PTO may issue ex parte should they find merit on request
|PTO – special unit||Official Fee: $5,140 + $16,120 (if converted to ex parte)
|– patent owner confirming validity or shielding patent from charge of inequitable conduct
– may lead indirectly to ex parte reexam, without usual reexam limits to published prior art and novelty/obviousness consideration only .
|3rd Party Submission||Rule Change||– third party challenge on pending app
– requires concise statement on relevance (new)
|PTO – normal examination||$0 for first 3 references by one party, $180 per submission of up to 10 references each||– request that a third party’s patent app be not issued, but decision may impact effectiveness of later challenge (if patent granted)|
|Inter Partes Reexamination||Replaced||Obsolete, repl’d by inter parte review, except for reexams already in progress||–||–|
|Inter Partes Review||New||– third party challenge on validity of granted patent issued more than 9 months.
– limited to novelty and nonobv basis
– references limited to granted patents and pub pat app
– allows limited discovery
– more expensive than old Inter Partes Reexam
– lower bar (than court procedure) for proving invalidity (patent not assumed valid, only need mere preponderance of evidence)
|Board of APJ||Official Fee: $27,200||-3rd party challenging patent validity more than 9 months after patent grant
-when sued for patent infringement, defendant may use this to invalidate accusing party’s patent rather than pursuing court procedures for lower review standard and cost saving
– may not use when DJ filed or more than 1 yr after being sued
|Post Grant Review||New||– third party challenge on validity of granted patent issued within 9 months and earliest filing date after 16 March 2013.
– basis not limited to novelty and non-obviousness
– references not limited to granted patents and published pat apps
– allows limited discovery, but broader scope b/c of broader basis
– more expensive than Inter Partes Review
– lower bar (than court proc) for proving invalidity (patent not assumed valid, only need mere preponderance of evidence)
|Board of APJ||Official Fee: $35,800||Same as Inter Partes Review, except:
– patent granted < 9 months.
– broader basis on merit
– more expensive