PTAB Proposals on House Side

Last week, I summarized the PTAB modifications proposed in the Senate's Patent Act" (S.1137).  While there is an expectation that at least the House will try to bring "Innovation Act" (H.R. 9). to the floor for a vote, meaningful progress seems unlikely. Opposition to the bills has ramped up in recent days from conservative groups, and proponents of competing bills.  Coupled with the looming five week summer recess, it is inevitable that  Congress will kick the proverbial can down the road.

As pointed out previously, a rule package from the USPTO is expected in the July-August time frame that could moot many of these issues.  With that in mind, a delay in legislative action would be prudent.  

That said, here are the current proposals of H.R. 9 that are directed at PTAB practice.

  1. Scope of waiver - PGR

§ 325(e)(2) is modified so that a petitioner, RPI and privy are only barred, after a final written decision, from asserting in a US court any ground that the petitioner raised during the PGR, removing the existing bar that also covers any ground that “reasonably could have been raised.”

(Some feel that the estoppel provision of "raised or reasonably could have raised" is especially daunting for PGR given the ability to raise any ground of unpatentability (i.e., 112, 101, on sale bar, public use, patents and printed pubs.  it is also argued to be  "scrivener's error" in the AIA.)

  1. Claim Construction – IPR(PGR)

§ 316(326) is modified to require claims be construed as in a civil action, i.e., applyPhillips, including construing according to the ordinary and customary meaning as understood by one of ordinary skill and prosecution history.

§ 316(326) is further modified to require the PTO to consider previous constructions by a US court.

(As I have pointed out repeatedly, this is likely to hurt patentees more than help them)

  1. Institution Decision – IPR(PGR)

§ 316(326) is modified to bar institution unless the petitioner certifies the petitioner and RPIs:

  • have no ownership and will not acquire a financial instrument designed to hedge or offset a decrease in market value of a patent owner’s equity security during a period following the filing of a petition (i.e., the hedge fund exception); and
  • have not demanded payment in exchange for not filing an IPR(PGR) unless the petitioner/RPI has been sued for infringement.

(Plainly targets hedge fund filings, but PTAB is likely to take care of that problem on its own. Can't hurt. )

  1. Preliminary Response – IPR(PGR)

§ 313(323) is modified to enable a preliminary response to include affidavits/declarations of supporting evidence and opinions.  

§ 313 is further modified to allow the PTO to accept a reply by the petitioner to respond to new issues raised in the preliminary response.

(PTAB expected to propose a similar modification this summer)

  1. Due Process – IPR(PGR)

§ 316(b)(326(b)) is modified to require the PTO consider the due process rights of the patent owner and petitioner in prescribing regulations.

(The assumption here is that the PTO prescribes regulations that are unlawful, strange.  Due process = full fledged district court litigation to many critics.)

  1. Serial/Redundant Petitions - PGR

The following cases are designated as precedential with respect to § 325(d) and (e):

  • Dell (IPR2015-00549, Paper 10)
  • Zimmer Holdings (IPR2014-01080, Paper 17)
  • Prism Pharma (IPR2014-00315, Paper 14)
  • Unilever (IPR2014-00506, Paper 17)

(Interest is limiting "second bite at the apple" filings. PTAB has had some trouble designating cases precedential given the existing guidelines. That said, given the incoming workflow, these decisions are very closely followed.)

  1. Joinder – IPR

§ 315 is modified to add subsection (c), providing discretion for issue joinder.    

(Like the proposal above, this essentially makes the Destination Maternity decision precedential.)

You can expect all of these proposals to change significantly, or disappear altogether before these bills get anywhere near close to passage (if ever). Still, it is worthwhile to understand the aspects of PTAB practice being scrutinized by opponents.  My expectation is that the vast majority