Why it matters: The Leahy-Smith America Invents Act of 2011 created the Patent Trial and Appeal Board and three types of post-patent grant review proceedings meant to overhaul and streamline the existing processes for reconsidering patentability. The first review proceedings under the new system were instituted in September 2012, and the United States Patent and Trademark Office (PTO) has been continuously monitoring and soliciting public comment for ways to improve it ever since. Here, we look back over three years of statistics to see how the system has been working to date, and look ahead to see recent proposals made by the PTO for how the system can be improved going forward.

Detailed discussion: The Leahy-Smith America Invents Act of 2011 (AIA) created the Patent Trial and Appeal Board (PTAB) and three types of post-patent grant review proceedings—inter partes review (IPR), post-grant review (PGR), and the transitional post-grant review for covered business method patents (CBM)—meant to overhaul and streamline the existing processes for reconsidering patentability. The first review proceedings under the new system were instituted in September 2012, and the following gives a broad overview of the significant activity and trends before the PTAB for the three-fiscal-year period ended October 31, 2015 (taken from statistics published on the PTO website):

  • Total petitions filed with PTAB (cumulative from 9/16/12): 4,090
    • Number of IPRs: 3,684 (90%)
    • Number of PGRs: 13 (0%)
    • Number of CBMs: 393 (10%)
  • Total review proceedings instituted (includes joinders): 1,778
    • IPRs: 1,579 (90%)
    • PGRs: 3 (0%)
    • CBMs: 196 (10%)
  • Total number of IPRs that reached final disposition: 630
    • Results:
      • All instituted claims unpatentable: 453 (72%)
      • Some instituted claims unpatentable: 91 (14%)
      • No instituted claims unpatentable: 86 (14%)
  • Petitions filed by technology center (TC) (to date for FY 2016):
    • Electrical/computer: 49%
    • Mechanical/business method: 26%
    • Bio/Pharma: 17%
    • Chemical: 8%
    • Design: 0%

* Data for the three-fiscal-year period ended 10/31/15 unless otherwise noted

The results show that IPRs are by far the most popular of the post-grant reviews, constituting approximately 90% of petitions filed (with approximately half filed in the electrical/computer TC so far in FY2016 alone). Also, the majority of those IPRs that reached final determination—72%—found 100% of the instituted claims to be unpatentable. To the extent that they related to claims for software patents, this last statistic can be directly attributable to the U.S. Supreme Court's July 2014 decision inAlice Corp. v. CLS Bank, as the PTAB applies the Alice test to find more and more computer-implemented/Internet-based software patents to be based on "abstract ideas" that are patent-ineligible under Section 101 of the Patent Act .

In a blog entry posted on August 19 on the PTO's website to introduce proposed amendments to the PTAB rules of practice (discussed below), PTO Director Michelle K. Lee relayed these statistics through July 30, 2015, and was happy with the PTAB "state of the nation" to date: "Although the total number of petitions filed to date reflect around three times more than what we initially anticipated, we are especially pleased that the PTAB has nonetheless maintained a perfect record in rendering all its final decisions within the mandated time frame of one year. (And without using the six-month "good cause" extension for any trial or employing the temporary safety-valve "cap" provided by Congress to decline further petitions.) We are also pleased that those final PTAB decisions that have been appealed to the U.S. Court of Appeals for the Federal Circuit (CAFC) have been affirmed at a very high rate. Taken together, the demand for these new proceedings (as reflected by the large number of filings) and the results we are seeing at the CAFC appear to indicate that the PTAB proceedings are succeeding in their Congressional mandate to effectively and efficiently resolve patent validity disputes, while providing timely, low-cost alternatives to district court litigation."

Director Lee went on to state, however, that the PTO recognizes that the system can be improved "based on our and the public's experiences with the proceedings." To that end, the PTO has been actively cultivating public comment over the past three years to its Rules of Practice (Rules) (instituted in 2012) and the manner in which new review proceedings are conducted in order to "fine tune" and improve them so as to bring them in line with the reality of practice before the PTAB. On August 20 the PTO published its most sweeping proposed amendments to the Rules to date in the Federal Register, titled "Proposed Changes to Rules of Practice for Trials Before the Patent Trial and Appeal Board." In addition to addressing comments received about requests for additional discovery, live testimony, and confidential information, Director Lee said that the proposed improvements are meant to:

  • Allow patent owners to include, with their opposition to a petition to institute a proceeding, new testimonial evidence such as expert declaration. Director Lee said that "this change responds to commentary raising concerns that patent owners are disadvantaged by current rules that let petitioners' evidence go unanswered before a trial is instituted."
  • Impose a new requirement on practitioners before the PTAB, akin to the Rule 11 requirements in federal courts, to give the USPTO a more robust means with which to police misconduct.
  • Clarify that the PTAB will use the claim construction standard used by federal district courts for patents that will expire during proceedings and therefore cannot be amended, while confirming the use of broadest reasonable interpretation (BRI) for all other cases.
  • Recognize the PTAB's development of motions-to-amend practice through its own body of decisions, including a recent decision that clarified what prior art a patent owner must address to meet its burden of proof of patentability in the first instance.

Director Lee said that the PTO's goal is to publish final rules by the end of the year. In her blog post, Director Lee also gave a "heads up" that the PTO would soon be seeking comment on a proposed pilot program intended to streamline the institution and conduct of post-grant review proceedings. To this end, on August 25, 2015, the PTO published in theFederal Register a request for comments on a proposed pilot program that would have the initial decision of whether to institute a review made by a single administrative patent judge, with two additional judges subsequently assigned once the first judge makes the decision to institute. As the PTO explained, "Having a single judge decide whether to institute trial in a post grant proceeding, instead of a panel of three judges, would allow more judges to be available to attend to other matters, such as reducing the ex parte appeal backlog and handling more post grant proceedings." If the proposed pilot program goes forward, it would be limited to IPRs, last from three to six months, and include IPR petitions selected by the PTO that were filed during a specified time period.

Two other PTO announcements of note: First, on September 1, 2015, the PTO announced that it was commencing a pilot program that would "allow, under limited circumstances, amendments to identifications of goods/services in trademark registrations that would otherwise be beyond the scope of the current identification." The "limited circumstances" under which amendments will be permitted are where they are "deemed necessary because evolving technology has changed the manner or medium by which the underlying content or subject matter of the identified products and services are offered for sale or provided to consumers." The pilot program's duration will depend on the number of requests submitted. Second, on July 15, 2015, the PTO released an update to its 2014 Interim Guidance on Subject Matter Eligibility in response to comments received to provide further information and examples of how the PTO determines subject matter eligibility, including in the areas of claims directed to abstract ideas and laws of nature and how examiners identify abstract ideas.

Last but not least, the PTO recently opened two new regional offices. On October 15, 2015, the PTO opened a West Coast regional office in San Jose, California, to serve California, Nevada, Oregon, Washington, Arizona, Alaska and Hawaii. The PTO's press release stated that the office is intended to "help the West Coast region's entrepreneurs advance cutting-edge ideas to the marketplace, grow their businesses, and more efficiently navigate the world's strongest intellectual property system." The press release further stated that the new office has hired "local talent" from the technological and IP fields for both PTAB administrative patent judges (who will now conduct PTAB post-grant review proceedings out of the new office) and patent examiners to better serve the needs of the region. Director Lee participated in the ribbon cutting and called the new office "a huge step forward for innovators throughout the region" and a local "one-stop shop of resources" for every part of the patent lifecycle, from application through PTAB post-grant review hearings. Then, on November 9, 2015, the PTO announced that it opened a regional office in Dallas, Texas, to similarly help entrepreneurs and innovators in the Southwest region of the country. The new Dallas regional office will serve Alabama, Arkansas, Louisiana, Mississippi, New Mexico, Oklahoma, Tennessee and Texas.

See here to read the "Patent Trial and Appeal Board Statistics as of 10/31/15" published on the PTO website.

See here to read the 8/19/15 post from the PTO website blog titled "Director's Forum: A Blog from USPTO Leadership" under "PTAB Update: Proposed Changes to Rules Governing PTAB Trial Proceedings."

For more on this topic, read the (1) 8/20/15 Federal Register notice filed by the PTO entitled "Proposed Changes to Rules of Practice for Trials Before the Patent Trial and Appeal Board"; (2) 8/25/15 Federal Registernotice filed by the PTO entitled "Request for Comments on a Proposed Pilot Program Exploring an Alternative Approach to Institution Decisions in Post Grant Administrative Reviews"; (3) 9/1/15 PTO notice entitled "Announcement of Pilot Program to Allow Amendments to Identifications of Goods and Services in Trademark Registrations Due to Technology Evolution"; (4) 7/15/15 PTO notice entitled "July 2015 Update: Subject Matter Eligibility"; (5) 10/15/15 PTO press release entitled "USPTO Opens Regional Office in San Jose, California"; and (6) 11/9/15 PTO press release entitled "USPTO Opens Regional Office in Dallas, Texas."