Changes to federal law have modified how a party can challenge a United States patent. Prior to September 16, 2012, a party interested in challenging the validity of a patent for want of novelty and non-obviousness could file a request for inter partes reexamination. That request, if granted by the United States Patent and Trademark Office (USPTO), provided the party with a voice during subsequent review of the patent by the USPTO. Many parties used inter partes reexamination when confronted with a lawsuit for patent infringement to provide for two potential bites at the apple; one through the courts and a second through the USPTO.

Inter partes reexamination is no longer available (last day, Sept. 15, 2012) at the USPTO. Instead, a challenger may now seek inter partes review (IPR), which is applicable to all issued patents. IPR may be requested any time that is nine months after the patent has issued. The process must be concluded by the USPTO within eighteen months from the institution of the review (it should be concluded in a year or less, but the USPTO may extend this deadline up to eighteen months for discretionary reasons).

Similar to inter partes reexamination, IPR only involves determinations of novelty and non-obviousness of a patent in light of prior patents, published patent applications and other printed publications. This leaves out patent invalidity due to a prior commercial sale, prior public use, and other reasons. Preponderance of the evidence is the legal standard applied in an IPR, and the party challenging the patent bears this burden. Simply put, the party challenging the patent needs to show it is more likely than not that at least one of the claims lacks novelty or is obvious to a skilled artisan.

Unlike inter partes reexamination, IPR is conducted in front of three administrative law judges instead of a single patent examiner. These three administrative law judges are members of the Patent Trial and Appeal Board (PTAB), which replaced the old Board of Patent Appeals and Interferences (BPAI) within the USPTO. In the old system of inter partes reexamination, an appeal of an adverse decision by a patent examiner was handled by the BPAI, followed by an appeal to a federal court (usually to the Court of Appeals for the Federal Circuit). Consequently, IPR streamlines the patent review process for any appeal of an adverse decision directly to the federal court system. At the same time, IPR resembles more of a court proceeding than review of a patent by a patent examiner. The published rules governing IPR provide for discovery and filing of motions with the PTAB on various matters - something absent during inter partes reexamination.

IPR also carries with it the new requirement that a party requesting IPR must not have previously filed a complaint in a federal court challenging the validity of the patent. What is unexpected is that this prohibition applies with equal force to allegations of invalidity that do not, at least in part, rely on prior patents, published patent applications and other printed publications. In other words, if a party filed a lawsuit alleging a patent was invalid due to public use or a prior sale of the claimed invention - both issues that cannot be raised during IPR – then the party would nonetheless be barred from filing a request for IPR. Likewise, a party requesting IPR cannot do so more than one year after the party has been served with a complaint alleging infringement of the patent. This includes instances where the party was served with a patent infringement complaint despite the complaint being subsequently dismissed without prejudice.

IPR also carries with it certain estoppel provisions. For example, if the party challenging the patent loses its bid to have a claim cancelled, then that party is barred from seeking review of that claim before the USPTO at any later time using the same evidence or evidence that the party should have known about. Likewise, if the party challenging the patent loses its bid to have a claim cancelled, then that party is barred from seeking review of that claim by a court at any later time using the same evidence or evidence that the party should have known about. But a party may continue to challenge the patent for want of novelty and non-obviousness based upon a commercial sale, a public use, for example.

In order to request IPR, the petitioner needs to: (1) file a petition identifying the patent claim(s) challenged; (2) supply a copy of the evidence used to challenge the claims, (3) supply a discussion of the evidence supporting the challenge of invalidity; (4) pay the requisite fee ($27,200 for the first 20 claims, $600 for each additional claim); (5) identify the real party in interest; and (6) certify that the foregoing petition was served on the patent owner.

After IPR has been instituted, the patent holder and the patent challenger can agree to terminate the IPR. If this occurs, then no estoppel attaches to the challenger either at the USPTO or in the federal courts. The USPTO rules governing IPR provide that a settlement agreement between the parties can be maintained in confidence, but the rules also provide that disclosure of this settlement agreement will be allowed by the USPTO to parties showing necessary cause. Consequently, any settlement should be drafted with the presumption that its contents will be publicly available.