Sections 6 and 18 of the newly enacted America Invents Act, introducing new statutory provisions 35 U.S.C. §§321-329, created a new post-grant review procedure for third-parties to challenge the validity of a granted patent immediately after issuance similar to that of an opposition under European practice. However, in contrast to the opposition proceedings in Europe, the new post-grant review process is expedited and operates with a limited time frame. Provided below is a summary of some key aspects of this new process.

Effective Date of Post-Grant Review

Generally, this portion of the new legislation will only apply to those applications having a priority date on or after March 16, 2013, 18 months after the enactment of this new legislation. However, for certain “business method patents” in litigation, an analogous proceeding will take effect on September 16, 2012, one year after the enactment of this new legislation.

Who Can Request Post-Grant Review

Third parties (except for certain parties in litigation discussed below) may submit a petition for post-grant review under 35 U.S.C. §322 challenging the validity of one or more of the issue claims on any ground within nine (9) months after issuance of a patent. Unlike reexaminations, a request for post-grant review is not limited to challenges to the validity of the patent claims based on printed publications. Rather, a petition under post-grant review may raise any question regarding the validity of at least one issued claim, including, for example, enablement and written description challenges under 35 U.S.C. §112.

For reissue patents, if the claim at issue is “identical to or narrower than a claim in the original patent from which the reissue patent was issued,” then a petition for post-grant review must be filed within nine (9) months after issuance of the original patent, not the reissue patent.

Almost any third party can submit a petition for post-grant review of a patent. However, 35 U.S.C. §325 prohibits plaintiffs in a court action “challenging the validity of a claim of a patent” from utilizing the post-grant review process. The statute specifically provides that a defendant asserting a counterclaim challenging the validity of a claim of a patent is not barred from using the postgrant review process.

Timing and Procedures

To request a post-grant review, the requestor must file a petition to the United States Patent and Trademark Office (“USPTO”) under 35 U.S.C. §322. As required by this new statutory provision, the post-grant review petition must include the following:

  • identification of all real parties in interest;
  • identification “with particularity” each claim challenged, the grounds on which the challenge is based, and any evidence in support for the challenge to each claim, including copies of references and affidavits/declarations relied upon by the petitioner in its request;
  • a requisite fee (to be established by the USPTO); and
  • any other necessary information by the USPTO (to be established by regulation).

A copy of each of the petition and accompanying documents must be also served on the patent owner. Similar to reexamination proceedings, the patent owner has the opportunity, but the obligation, to file a preliminary response to a post-grant review petition under 35 U.S.C. §323, before the USPTO decides whether a post-grant review should be initiated.

Upon receipt of a petition for post-grant review, the USPTO must make a determination, and notify both the patent owner and petitioner, in writing, as to whether a post-grant review would be initiated. Under 35 U.S.C. §324(a) and (b), a postgrant review can be initiated by the USPTO if:

  • the information presented in the petition “would demonstrate that it is more likely than not that at least 1 of the claims challenged in the petition is unpatentable;” or
  • the petition “raises a novel or unsettled legal question that is important to other patents or patent application.”

The USPTO is required by 35 U.S.C. §324(c) to make this determination within three (3) months after either: the filing of a preliminary response by the patent owner; or if such a response is not filed, the expiration date for the patent owner to file the response. This determination by the USPTO is not appealable.

Although Congress has left much of the procedural details for post-grant review to be determined by the USPTO, the statute provides certain key procedural requirements. Notably, 35 U.S.C. §326(d) specifically provides the patent owner one (1) opportunity to file cancel or “propose a reasonable number of substitute claims” for each challenged patent claim. These amendments “may not enlarge the scope of the claims of the patent or introduce new matter.” Amendments to claims found to be patentable in post-grant review are subject to intervening rights similar to claims in a reissue patent.

In addition, 35 U.S.C. §326(a)(12) requires the USPTO to provide the petitioner with at least one opportunity to submit written comments. The statute also requires the USPTO to provide procedures for either party to request oral hearing, for submission of supplemental information after a petition for post-grant review has already been filed, and for consolidation of multiple proceedings.

Further to those requirements discussed above, the statute also requires the USPTO to establish discovery standards and procedures, specifically:

  • discovery of “evidence directly related to factual assertions advanced by either party in the proceeding”;
  • sanctions for “abuse of discovery, abuse of process, or any other improper use of the proceeding”; and
  • protective orders for exchange and use of confidential information.

Pursuant to 35 U.S.C. §326(a)(11), the USPTO must issue a final written decision in postgrant review within one (1) year after the USPTO initiates the process and notifies the parties of its decision to institute post-grant review. The statute allows the USPTO to extend this deadline “for good cause shown” by no more than six (6) months, unless there is joinder of multiple proceedings. The final written decision may be appealed within 60 days of the written decision by either party only to the United State Court of Appeal for the Federal Circuit.

Estoppel Effect and Effects on Litigation

Under the post-grant review process, the petitioner bears the burden of proving invalidity “by a preponderance of the evidence,” which is a lower standard than the “clear and convincing” evidentiary standard for proving invalidity in court pursuant to the Supreme Court’s decision in Microsoft Corp. v. i4i Ltd., 564 U.S. ____ (2011). However, upon the issuance of a final decision for post-grant review by the USPTO, the petitioner, or its real party in interest, is estopped from challenging the same claims considered during the post-grant based on “any ground that the petitioner raised or reasonably could have raised during that post-grant review.”

Pursuant to 35 U.S.C. §327, if the petitioner and patent owner settle and request termination of the post-grant review before the USPTO issues its final decision, estoppel will not attach to the petitioner, or its real party in interest. To request termination of post-grant review, the settlement agreement must be in writing and submitted to the USPTO. Either party can request that the USPTO treat the settlement agreement as “business confidential information,” which is only made available to “Federal Government agencies on written request, or to any person on a showing of good cause.”

The statute also provides limitations to when a court can grant a stay of litigation. In particular, under 35 U.S.C. §325(a)(2), if a petitioner for postgrant review initiates a court action “challenging the validity of a claim of a patent” after submission of the petition, the litigation is automatically stayed until: the patent owner moves the court, the patent owner sues the petitioner for infringement, or the parties jointly move to dismiss the court action. In addition, under 35 U.S.C. §325(b), if the patent owner files an infringement action against a potential infringer within three (3) months after the issuance of the patent, the court cannot stay consideration of the patent owner’s motion for a preliminary injunction on the basis that a petition for post-grant review has been filed.

Transitional Process for Business Method Patents

The statute also provides a transitional process similar to that of the post-grant review for certain “covered business method patents.” As defined by the statute, a “covered business method patents” is a patent that “claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions.” This transitional process may be applied to certain covered business method patent issued after the effective date for this transitional provision, September 16, 2012, that is not otherwise available for post-grant review.

This transitional process is only available to entities that have been sued for infringement of a covered business method patent or “has been charged with infringement under that patent.” In addition, challenges to the validity of a claim under the transitional proceeding is limited only to those grounds based on: (1) prior art available under 35 U.S.C. §102(a), as the statute existed prior to the new legislation, and (2) prior art that discloses the invention more than 1 year “before the date of the application for patent” in the USPTO, and “would be described by section 102(a),” as the statute existed prior to the new legislation, “if the disclosure had been made by another before the invention thereof by the applicant for patent.”

Additional key differences between the transitional process and the post-grant review process discussed above include:

  • limitations to the court’s ability to stay proceedings based on post-grant review is not available for the transitional process;
  • the statute directs the court to determine whether a stay would be appropriate by weighing three (3) factors:
    • whether a stay would simplify the issues for trial,
    • whether discovery is complete and a trial date has been set, and
    • whether stay would unduly prejudice the non-moving party;
  • estoppel effect of a final decision by the USPTO against the petitioner, or its real party in interest, is limited only to proceedings before the USPTO and does not apply to court acts; and
  • amendments to claims found to be patentable under the transitional process are not subject to intervening rights of third parties.

Conclusion

The new post-grant review process provides interested third parties with an opportunity to challenge claims of an issue patent in an expedited proceeding before the USPTO. However, the statute provides a narrow window to submit a petition requesting post-grant review. Therefore, following the effective date of this new process, it may be useful to regularly monitor prosecution of any patent applications of interest, and identify and collect relevant evidence prior to issuance of a patent, to maximize the effect of any challenge to validity of a granted patent claim raised in a petition for post-grant review, particularly in view of the potential for estoppel. In addition, to reduce risk of third party challenges to any subsequently issue patents, it may be beneficial, to the extend possible, to submit patent applications before this new avenue for challenging the validity of issue claims comes into effect on March 16, 2013, and thereby rendering such applications ineligible for post-grant review.