The USPTO’s recent proposed rules attempt to level the playing field for patent holders.  When AIA post-grant proceedings were first implemented, the primary goal was to curb perceived patent exploitation on the part of patent owners.  But the USPTO’s recent proposed rules respond to concerns that perhaps the initial rules governing AIA trial practice favored patent challengers, leaving patent owners at a disadvantage when trying to protect otherwise legitimate inventions.  While the proposed rule changes are not yet in effect, there are a few key adjustments that are worth noting as they affect AIA trial strategy, even at this early stage.

Claim Construction

In terms of claim construction, the USPTO applies a different and broader standard (broadest reasonable interpretation) than the district courts (the Phillips standard).  The rationale was that a patent holder has the ability to amend claims at the USPTO, but district court litigants do not.

But this dual standard did not account for situations in which a patent owner has no viable opportunity to amend the claims even at the USPTO, for example, where a patent would expire before the final decision in an AIA proceeding.  To address such situations, the USPTO has proposed to apply a Phillips-type standard, thereby making the claims less prone to be invalidated.

In all other situations, the USPTO will continue to apply the “broadest reasonable interpretation” to all claims in unexpired patents at issue in AIA proceedings.  See In re Cuozzo Speed Techs., LLC, No. 2014-1301, 2015 WL 4097949 at * 7-8 (Fed. Cir. July 8, 2015) (clarifying that this approach is reasonable under the USPTO’s rulemaking authority and consistent with legislative intent).

Testimonial Evidence

Currently, AIA petitioners are allowed to present and rely on testimonial evidence in challenging a patent, but a patent holder was not afforded the same opportunity.  The result was criticized as unfair.  In response, the USPTO has proposed allowing a patent owner to present testimonial evidence in a preliminary response to a petition.  If such supporting evidence is submitted, cross-examination of witnesses submitting such testimony would be permitted only after institution of the proceeding.

Rule 11 Type Certification

The USPTO has proposed to include a Rule 11-type certification for all papers filed with the Patent Trial and Appeal Board (PTAB), and a provision for sanctions for non-compliance that would apply to practitioners and parties.  Pursuant to this change, patent owners would have an additional tool to defend their patents against frivolous challenges.

Motions to Amend

The USPTO has proposed additional clarification with respect to motions to amend.  In filing such motions, a patent owner must argue for the patentability of the proposed substitute claims over the prior art of record, including any prior art provided in view of the patent owner’s duty of candor and any prior art and arguments submitted by the petitioner.  The proposed substitute claims must be narrower than the original claims and once the patent owner has made such a prima facie showing, the burden of production shifts to the petitioner.  The petitioner may then present evidence and arguments, including additional prior art.  The patent owner will then have an opportunity to respond, although the ultimate burden of persuasion remains with the movant (patent owner) to demonstrate the patentability of the amended claims.

Comments for Broader Privilege Protection

While there are no current proposed changes on the issue of privilege, the USPTO is presently seeking comments on the topic of attorney-client privilege and other discovery limits on PTAB proceedings.  At the very least, this indicates that the USPTO is considering extending the privilege for communications between patent holder/applicant clients and their non-attorney patent agents and foreign patent practitioners in the same way that the privilege is currently recognized for communications between clients and their US attorneys.  Since potential changes would broaden the scope of privilege to non-attorney patent practitioners, such a change would favor patent holders, at least in terms of protecting communications that would otherwise be open to discovery in a patent challenge and potentially used to challenge the patent. 

Next Steps

At this stage, patent owners should position themselves to avail of the amended rules once they go into effect.  This includes steps to:

  1. consider testimonial evidence (e.g., expert declarations) that can be relied upon in the response to a patent challenge;
  2. evaluate claim constructions under the Phillips standard if the patent is soon to expire;
  3. in a motion to amend, carefully craft substitute claims and address any responsive arguments completely;
  4. consider whether petitioners have conducted a proper investigation of the patent such that the petition is not frivolous; and
  5. keep measures in place to preserve the confidential nature of communications between non-attorney agents and clients to avoid waiver, in the event that the privilege will be deemed to extend.