The United States Patent and Trademark Office (USPTO) has released the final set of the latest round of changes to the rules governing inter partes review, post grant review, and other AIA trial proceedings before the Patent Trial and Appeal Board (PTAB). The rules, which the USPTO promotes as strengthening the position of patent owners, were published in the Federal Register on April 1, 2016, and will go into effect on May 2, 2016.
The “headline” change is that the PTAB will now allow for “new testimonial evidence” to be submitted with a patent owner’s preliminary response, thus allowing a patentee the opportunity to rebut fact and expert testimony offered with the petition with testimony of its own. 37 C.F.R. § 42.107. While this change is indeed significant, its punch is softened somewhat because the USPTO states that “any factual dispute created by testimonial evidence that is material to the institution decision will be resolved in favor of the petitioner solely for purposes of determining whether to institute a trial.” The USPTO does point out that “[t]he mere existence in the record of dueling expert testimony does not necessarily raise a genuine issue of material fact” (citing Mortgage Grader, Inc. v. First Choice Loan Servs., No. 2015-1415, 2016 WL362415, at *8 (Fed. Cir. Jan. 20, 2016)), but in practice this standard may make patent owners think twice before submitting new testimonial evidence with the preliminary response.
Another noteworthy change is the addition of a “Rule 11-type certification” for papers filed with the Board, going above and beyond the standard “duty of candor” owed to the USPTO. 37 C.F.R. § 42.11. This rule change predominantly affects petitioners, as the amended rule allows for sanctions to be imposed if a petitioner failed to conduct adequate pre-filing investigation before filing its petition.
The final notable change is that the PTAB will shift from page limits to word counts for petitions and responses, similar to practice in appellate courts. 37 C.F.R. § 42.24. This change will allow parties to present their arguments more persuasively, by using figures and diagrams instead of merely walls of text.
Perhaps most interesting is what did not change – the standard for claim construction in AIA trial proceedings (with one small exception, noted below). The debate over whether the PTAB should use the “broadest reasonable interpretation” (BRI) standard or the district court Phillips standard has been ongoing since the passage of the AIA. Many patent owners view the BRI standard as unfair given that IPR, PGR, and CBM proceedings are adjudicative, district court-alternative proceedings that provide very limited opportunity to amend the patent claims. In one of the first PTAB final decisions to be appealed to the Federal Circuit, the appellate court agreed with the USPTO that the rulemaking authority granted by Congress allowed the USPTO to adopt the BRI standard in AIA proceedings. In re Cuozzo Speed Techs., LLC, 793 F.3d 1268, 1278 (Fed Cir. July 8, 2015), cert. granted sub nom., Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 890. The Supreme Court granted cert on the issue, and the case is set to be heard on April 25, 2016 and decided later this term. The rule is being amended, however, to apply the Phillips district court standard to patents that would expire before reaching a final written decision.
In the few years since passage of the AIA, the USPTO has shown a willingness to listen to feedback from the patent community and to quickly act on proposed rule changes. The agency has acknowledged the criticism that it tended to be an unfavorable venue for patent owners, and this latest round of rule changes appears to be the latest step toward balancing the scales.