PTAB Speed Increases Likelihood of Amendment 

Prior to passage of the America Invents Act (AIA), patent reexamination was the only option available for patent challengers at the USPTO. But, patent reexamination lasted for years through appeal, especially inter partes patent reexaminations. For this reason, outside of those few patent disputes where the co-pending litigation was stayed, the reexamination became just another battle of attrition. As litigation costs mounted accused infringers were forced to settle independent of reexamination progress. 

For non-practicing entities (NPEs) losing the patent at the end of a 5-7 year reexamination battle was less of a concern after extracting business value from the patent. So, even where the reexamination produced compelling evidence of unpatentability, amendment of originally issued claims was relatively uncommon. This is because amending original claims created obvious intervening rights problems, and might increase the chance of a litigation stay. NPEs preferred losing slowly to a claim amendment that would prevent monetization over several years of reexamination processing and appeals. 

The AIA not only broke the attrition model at the USPTO with its speed, but is forcing amendments of original claims at a much higher rate than in patent reexamination. There has been a significant focus on amendment practice before the PTAB. as such motions have rarely succeeded. For this reason, the PTAB is seeking feedback on motion to amend practice, the Request for Comments on Trial Proceedings Under the America Invents Act Before the Patent Trial & Appeal Board asks:

2. What modifications, if any, should be made to the Board's practice regarding motions to amend? 

As background, there have been 66 motions to amend filed at the PTAB to date, roughly 50% of the final decisions to date. (5 CBM, 61 IPRs). The current success rate (where patent owner tried to substitute new claims as opposed to simple claim cancellation) is 4.1%.  In other words, 95.9% such motions were denied. Clearly such statistics create a public relations issue for the PTAB as being anti-patent. In fairness to the PTAB, the anti-patent label is unfair since the story behind this statistic is far more complex. That said, modifications are in order to drive this statistic to a more reasonable balance.

I have discussed some of the recommendations below in a previous post.

  • Extend the Trial Schedule 6 Months to Allow for Motion to Reissue

35 U.S.C § 316 (a)(11) allows the PTAB to, for good cause shown, extend the 1-year statutory deadline by not more than 6 months. While it is important to keep AIA patent challenges on the fast track for the reasons noted above, where amendment is desired, the extra time might allow the PTAB to leverage additional agency resources. For example, many patentees are now resorting to ex parte reexamination and patent reissues to amend. The office is already doing this work, and it is inefficient as a dual track system. An alternative track to a motion to amend could be a motion to reissue the claims. With the Central Reexamination Unit (CRU) now exclusively handling reissue, given this 6 months of time, this unit might be able to operate in the same manner as a staff attorney of the ITC. An examination of the claims would be performed with a recommendation from the CRU on patentability. If an examination is performed by the CRU, the motion could be simplified as only needing to show cause for the extended schedule. (as opposed to demonstrating patentability outright). The limited number of claim substitutions would still hold, as would the need to demonstrate support for the proposed changes. Oppositions to this motion as an alternative to a motion to amend might be based on a co-pending litigation that is not stayed (stayed litigation would militate in favor of granting the patentee motion). Petitioner opposition to the CRU recommendation would replace or supplement the current opposition filing. A motion to reissue would permit patentees to have their amendment substantively examined, and any denial would be based on the merits as opposed to rigid motion formalities.

  • Allow claims to accompany the motion as an appendix (i.e., so that page count is not impacted)

Current motion to amend practice could be improved by relaxing some formalities that constrain the ability to fully develop the motion, such as page limits. This solution is straight forward enough. Given the 1-for-1 requirement for substituted vs. cancelled claims, not counting the pages of actual claim text toward the 15 page limit for the Motion to Amend is unlikely to adversely impact PTAB scheduling/workload and would free up additional pages for substantive discussion. 

  • Allow the patentee flexibility in page allocation across filings

The typical contingent amendment filing in an IPR includes 75 pages (60 page response + 15 page motion to amend). If a patentee were, for example, able to use 40 pages for the response and 35 pages for their amendment (75 total), the PTAB would likely see increased efficiency by way of fewer conference calls on the topic of page limits and their workload would not increase. To be sure, patentees will argue that the full 60 pages are needed for the patent owner response. Yet, such is rarely the case where a serious attempt at amendment is pursued.

  • Rescind/Modify Rule 42.73(d)(3)(i)

This "patentee estoppel" forecloses all patentably indistinct amendments before the USPTO once an adverse judgement is entered in a PTAB post grant patent challenge. Absent changes to motion to amend practice this rule is especially problematic for patentees with large continuation application portfolios. The PTAB should consider rescinding this rule. It is arguably beyond their rule making ability and will inevitably lead to litigation in the short term. Likewise, coupled with the current statistics, patentees consider it to be adding insult to injury.