The U.S. Patent and Trademark Office (USPTO or PTO) recently released proposed rules and fees for the post-grant procedures authorized by the America Invents Act (AIA).  The new post-grant procedures, which will take effect on September 16, 2012, include supplemental examination, inter partes review, post-grant review and a transitional program for covered business method patents.  In addition, the USPTO also proposed significantly increased fees for ex parte reexamination.  

Supplemental Examination

Supplemental examination can only be requested by the patent owner.  Under the proposed rules, each request for supplemental examination would be limited to 10 items of information.  In addition, each request must include an identification of each aspect of the patent to be examined; identification of each issue raised by each item of information; a separate detailed explanation for each identified issue; an explanation of how each item of information is relevant to each aspect to be examined and of how each item of information raises each of the identified issues.  The patent owner must submit a copy of each item of information and a summary of the relevant portions of any submitted document over 50 pages in length. 

Within three months following the filing date of the request, the proposed rules contemplate that the USPTO will determine whether a substantial new question of patentability affecting any claim of the patent is raised by the items of information and issue a supplemental examination certificate.  If a substantial new question of patentability is raised, an ex parte reexamination will be ordered.  The proposed rules also contemplate that ex parte reexamination subsequent to supplemental examination proceeds in the same manner as a regular ex parte examination, with the exception that the patent owner does not have the right to file a patent owner’s statement.  In addition to printed publications, items of information that may be considered in a supplemental examination include transcripts of audio and video recordings, as well as affidavits and declarations.

Inter Partes Review

Inter partes review will essentially replace inter partes reexamination starting September 16, 2012.  No requests for the present inter partes reexamination will be accepted after September 15, 2012.  A petition for inter partes review may be filed by a person who is not an owner of the patent after  nine months from the grant of a patent or issuance of a reissue of a patent or, if a post-grant review is instituted, from the date of termination of the post grant review, whichever is later.  Inter partes review will be limited to §§ 102 or 103 issues and only prior art in the form of patents or printed publications will be considered.  Under the proposed rules, the petition must identify the real party or parties of interest; identify each claim challenged; give the grounds on which the challenge is based; and show the evidence that supports the grounds for the challenge.  The evidence, copies of patents and printed publications in support of the petition and any affidavits or declarations (e.g., of experts) must accompany the petition.  Under the proposed rules, the patent owner has the right to file a preliminary response to the petition explaining why no inter partes review should be instituted.  Within three months after receiving the preliminary response (or the expiration of the preliminary response period) the proposed rules contemplate that the USPTO will determine whether there is a reasonable likelihood that the petitioner would prevail with respect to at least one of the claims challenged, (i.e., the statutory standard for initiation of a proceeding).  If the threshold is met, an inter partes review will commence. 

As envisioned by the rules, an inter partes review would be conducted before a panel of at least three judges of the Patent Trial and Appeal Board (the Board), and the petitioner would have the burden of proving unpatentability by a preponderance of the evidence.  Under the new statute (and the proposed rules) an inter partes review may not be instituted if, before the date the petition for review is filed, the petitioner or real party in interest filed a civil action challenging the validity of a claim of the patent.  However, a counterclaim challenging the validity does not constitute a civil action challenging the validity for the purposes of requesting inter partes review.  Similarly, an inter partes review may not be instituted if the petition is filed more than one year after the petitioner, the real party in interest or privy of the petitioner is served with a complaint alleging infringement of the patent.  Under the preclusion rule of the AIA, after the conclusion of an inter partes review, the petitioner may not subsequently request a proceeding before the USPTO on any ground that the petitioner could have raised during inter partes review.  During the inter partes review, the patent owner may file one motion to amend the patent, such as cancellation of any challenged patent claim, or propose a reasonable number of substitute claims (for a challenged claim).  However, an amendment may not enlarge the scope of claims.  As mandated by the AIA, a final determination in an inter partes review would normally issue within one year after the date on which the USPTO instituted the review. 

Post-Grant Review

Under the AIA, a petition for post-grant review may be filed by a person who is not an owner of the patent no later than nine months after the date of the grant of the patent or the issuance of a reissue patent.  However, no petition may request post-grant review for a claim in a reissue patent that is identical to or narrower than a claim in the original patent if nine months have elapsed from the grant of the original patent.  The grounds for seeking post-grant review include any grounds that could be raised under § 282(b)(2) or (3), e.g., §§ 101, 102, 103 and 112 (except for best mode).  Under the proposed rules, the petition must identify all the real party or parties in interest and (as with the inter partes review rules summarized above) must identify each claim challenged and the grounds on which the challenge is based.  The evidence that supports the challenge must be attached.  The patent owner can file a preliminary response to the petition setting forth reasons why no post-grant review should be instituted.  The patent owner cannot present any new testimony evidence in a preliminary response.  However, such evidence may be presented during the trial phase.  The proposed rules contemplate that within three months after receiving the preliminary response to the petition or the expiration of the preliminary response period the USPTO will determine whether there is a reasonable likelihood that the petitioner would prevail with respect to at least one of the claims challenged, and if so, a post-grant review will commence.  Under the proposed rules, a post-grant review will be conducted before a panel of at least three judges of the Board, and the petitioner has the burden of proving unpatentability by a preponderance of the evidence.  Similar to a inter partes review, a post-grant review may not be instituted if, before the date the petition for review is filed, the petitioner or real party in interest filed a civil action challenging the validity of a claim of the patent.  However, under the AIA, a counterclaim challenging the validity does not constitute a civil action challenging the validity for the purposes of requesting post-grant review.  The patent owner has similar rights to amend as explained above for inter partes review.   

Business Method Patents (BMPs)  

The transitional program for covered business method patents applies to issued patents that claim 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.  The program is available for those who have been sued for infringement of the patent or charged with infringement under the patent.  According to the (BMPs) proposed rules, determining whether a patent is for a technological invention will be considered on a case-by-case basis.  The key factors include whether the claimed subject matter as a whole recites a technological feature that is novel and unobvious over the prior art and solves a technical problem using a technical solution.  A person filing a petition for a covered business method patent review will have to identify each claim being challenged, the specific grounds on which each claim is challenged, how it is believed the claims are to be construed and why the claims as construed are unpatentable.  The evidence relied upon, with a citation of the evidence by its exhibit number, must be provided.  A petitioner may request the cancellation as unpatentable of one or more claims of a patent on any ground that could be raised under § 282(b)(2) or (3).  The standard for determining whether a claim is unpatentable is preponderance of the evidence, and claims are given their broadest reasonable construction in light of the specification during the proceeding.  This transitional post-grant review would be conducted before at least a three-judge panel of the Board.  The transitional proceeding for BMPs expires September 16, 2020.     

USPTO Fees

The USPTO fees for the post-grant procedures are steep and there are no discounts for small or micro-entities.  The fee for filing a request for ex parte reexamination would increase from $2,520 to $17,750.  The proposed fee for requesting supplemental examination is $5,180 plus $16,120 for conducting an ex parte reexamination ordered as a result of the supplemental examination proceeding.  The ex parte reexamination fee would be refunded if a reexamination is not ordered as a result of the supplemental examination, but the entire fee must be paid at the time of requesting supplemental examination.  A petition requesting inter partes review would cost $27,200 for review of 20 or fewer claims, $34,000 for review of 21 to 30 claims, $40,800 for review of 31 to 40 claims, $54,400 for review of 41 to 50 claims, $68,000 for review of 51 to 60 claims and an additional $27,200 for review of each additional group of 10 claims.  The proposed fees for filing a petition for post-grant or covered business method patent review would be $35,800 for review of 20 or fewer claims, $44,750 for review of 21 to 30 claims, $53,700 for review of 31 to 40 claims, $71,600 for review of 41 to 50 claims, $89,500 for review of 51 to 60 claims and an additional $35,800 for review of each additional group of 10 claims. 

While noting that the USPTO’s rationale for the high patent office fees is the goal of reducing patent pendency and that the USPTO should recover 100 percent of its costs through fees, Q. Todd Dickinson, the executive director of the American Intellectual Property Law Association (AIPLA), offered his observation that pendency reduction “must be balanced with the costs of entering into and participating in the system; it should not interfere with the primary goal of reform:  pursuit of quality improvement. … If pendency reduction results in either keeping inventors from using the system, or decreasing the quality of the rights they receive, the value of pendency reduction is undermined.”

Public Comments  

The deadline for filing written comments on the proposed rules, which preferably should be sent by e-mail, are March 26, 2012 for supplemental examination; and April 10, 2012 for inter partes review, post-grant review and transitional program for covered business method patents.

Practice Note:  Clients considering ex parte or inter partes reexamination should file their requests by September 15, 2012 to avoid the large fee increases.