On April 1, the U.S. Patent and Trademark Office (USPTO) published new rules for the increasingly popular America Invents Act (AIA) proceedings, such as inter partes reviews, covered business method reviews, and post-grant reviews. The new rules are expected to strengthen patent rights and restore balance to these proceedings, which many innovators and patent owners believe unfairly favor patent challengers. Patent challengers have used these AIA proceedings to invalidate patents with a relatively high success rate. The new rules may lead to more patents being spared invalidation in these proceedings.
The most significant change in these new rules pertains to the ability of patent owners to submit an expert declaration before USPTO’s Patent Trial and Appeal Board (PTAB) issues an institution decision. Most petitions are filed with an expert declaration supporting petitioners’ positions. The inability of patent owners to oppose a petition with their own expert declaration made it difficult for patent owners to substantively oppose the petition before institution. Because the USPTO statistics show that the majority of claims for which the PTAB proceeding is instituted are ultimately invalidated, patent owners’ best opportunity to defeat the petition may be to prevent the proceeding from being instituted in the first place. The new rules will increase the ability of patent owners to oppose a petition with their own expert declaration. Thus, the PTAB will be presented with a more balanced view of the parties’ evidence prior to making a decision on institution. The new rules further create a presumption that all disputed material facts in the pre-institution phase will be construed in favor of the petitioner. This should allay the concerns of petitioners that the new rules now put them at a disadvantage because they were unable to cross-examine the patent owner’s expert before the institution decision.
Furthermore, the USPTO declined to adopt a single judge institution pilot program. Under the contemplated program, a single PTAB judge would issue the institution decision in an effort to promote efficiency and reduce bias against patent owners because of a preliminary adverse decision. The proposal, however, elicited a strong negative response from the patent community. Many practitioners feared that too much responsibility would be placed in the hands of a single PTAB judge. The institution decision is a critical part of the proceeding and patent owners’ best chance of prevailing is frequently the ability to prevent the proceeding from being instituted in the first place.
The new rules are effective May 2, 2016, and will apply to all AIA petitions filed on or after this date and to any ongoing AIA preliminary proceeding or trial before the USPTO.