Increased Speed and Heightened Threshold Showing for New PTAB Proceedings Drive Stays
The primary business distinctions between the USPTO Patent Trial & Appeal Board (PTAB) proceedings and traditional court based patent invalidity proceedings are the vast improvements in cost, predictability, effectiveness, and speed of PTAB proceedings— but it is the speed and effectiveness that is changing the perspective of the judiciary on staying litigation pending USPTO proceedings.
As most are aware, the old patent reexamination system, at least on the inter partes side, has been replaced by IPR. IPR must be concluded by statute within 12-18 months, a marked improvement over the (roughly speaking) previous 6 year path through the Central Reexamination Unit (CRU), Board of Patent Appeals & Interferences (BPAI) and Court of Appeals for the Federal Circuit (CAFC). These changes are being quickly recognized by courts, several of which have agreed to halt litigation proceedings upon the mere filing of an IPR (months in advance of an Order to grant the IPR petitions).
Previously, when a patent reexamination was the basis for the motion to stay the court proceeding, the strongest plaintiff arguments in opposition were: (1) the significant USPTO delay would prove prejudicial to the plaintiff; and (2) the SNQ standard of patent reexamination led to a 97% grant rate—both of these arguments are now falling very flat.
Most recently in Capriola Corp., et. al., v. LaRose Industries LLC., et al (FLMD), the court considered a motion to stay pending IPR. Here too, the IPR had been filed but not yet instituted. In granting the stay the court explained: (here)
[A]s the plaintiffs state, the standard for the PTO’s granting an inter partes review under AIA is higher than the standard for the former re-examination [A]s the plaintiffs state, the standard for the PTO’s granting an inter partes review under AIA is higher than the standard for the former re-examination . . .In sum, the likelihood of inter partes review appears lower than the earlier likelihood of re-examination but the statutory arrangement promises an expeditious response from PTO on whether to conduct inter partes review. In other words, if the PTO declines inter partes review, little time is lost, but if PTO grants inter partes review, the promise is greater for an important contribution by the PTO to resolution of the governing issues in the litigation. . . .
[B]ecause the PTO apparently will not consume much time unless the PTO perceives an important patent issue within the PTO’s particular expertise; and because an important issue that appears in the litigation also appears to fall within the PTO’s province and particular expertise, prudence commends resort to a stay until either the PTO declines review or, finding an important issue within the PTO’s special province, the PTO grants and completes review to the benefit of the parties, the court, and the public. In other words, the investment of some time at this juncture appears wise.