The United States Patent and Trademark Office (USPTO) has published a request for comments on a proposed pilot program pertaining to the institution and conduct of post grant administrative trials. The America Invents Act (AIA), which was signed into law on September 16, 2011, provides for the following post grant administrative trials: Inter Partes Review (IPR), Post-Grant Review (PGR), and Covered Business Method Review (CBM). These new administrative procedures became available on September 16, 2012, one year after the signing of the AIA.
The USPTO currently has a panel of three Administrative Patent Judges (APJs) determine whether to institute a trial, and then normally has the same panel conduct the trial, if a decision is made to institute a trial. The USPTO is now considering a pilot program where the determination of whether to institute an IPR would be made by a single APJ. If the decision is to institute a proceeding, two additional APJs would be assigned to the IPR, joining the APJ who decided to institute the trial. (more…)
The America Invents Act (AIA) created three new ways to challenge the validity of claims in already-issued patents. The AIA was signed into law on September 16, 2011, but the new post grant proceedings did not become available until one year after the signing, on September 16, 2012. These three new post grant proceedings are post-grant review, inter partes review, and covered business method review (the latter a variety of post-grant review that is limited to business methods relating to the financial industry).
Inter partes review has been extraordinarily popular due to the fact that the rules are stacked in favor of the challenger. Indeed, recently, Scott McKeown (a partner at Oblon Spivak and co-chair of the Oblon post grant practice group) wrote on his blog that the Patent Trial and Appeals Board (PTAB) “offers unprecedented speed with none of the patentee safeguards of the district court.” The biggest safeguard that a patentee enjoys at the district court is a presumption of validity. The presumption of validity does not attach in a post grant administrative proceeding. That’s a significant benefit to the challenger.
Written by James Bessen, Boston University School of Law, and Research on Innovation, and Michael J. Meurer, Boston University School of Law.
The America Invents Act requires the GAO to “conduct a study of the consequences of litigation by non-practicing entities… and assess [t]he economic impact of such litigation on the economy of the United States ….” Although we found it hard to get very excited about the smorgasbord of patent reforms bundled together in the AIA, this provision made us smile, and feel a little bit hopeful. Perhaps this signals a growing taste on the part of Congress for evidence over anecdote as the basis for patent policy-making. We’ve recently conducted two empirical studies of NPE patent litigation which we hope will prove useful to the GAO and other policy-makers.
One study, The Direct Costs from NPE Disputes, estimates the costs of NPE assertions based on a survey of defendant firms. We find that the aggregate accrued payments for outside counsel, licenses, and other direct payments to resolve patent disputes are large and growing rapidly; they totaled $29 billion in 2011, up from $6.5 billion in 2005.
The other study, The Private and Social Costs of Patent Trolls, estimates the cost of NPE litigation based on stock market reaction to the filing of lawsuits. We find that the filing of NPE patent lawsuits is associated with an $80 billion average annual loss of share value for defendant firms over the years 2006-2010. The higher costs in the second study are not surprising because rational investors take account of the direct costs enumerated above and also indirect costs such as business disruptions arising because researchers’ and managers’ attention is diverted from productive activity to litigation related issues, delays in product development and new product introductions caused by litigation concerns, and costs arising from litigation worries that spill over to suppliers and customers.
By now you have certainly heard about the most revolutionary change to the U.S. patent laws since at least 1952, and most likely since the inception of the first patent laws in the U.S. in 1790. The America Invents Act (AIA) is poised to change patent practice from the ground up. The bill was signed into law by President Obama on September 16, 2011, and some minor provisions went effective immediately, or nearly immediately.
The next wave of changes comes online on September 16, 2012, and the United States Patent and Trademark Office is feverishly working on multiple final rules packages that will be required for the implementation of that next wave of changes. So far, the only one that has been released is the final rules package relative to third-party submissions of prior art during prosecution. See USPTO Publishes Final Rule on Preissuance Submissions.
The United States Patent and Trademark Office will once again take to the road in the Fall of 2012 to discuss implementation of the America Invents Act (AIA). The USPTO is planning to host eight (8) roadshows during September 2012 to share information about new final rules implementing provisions of the America Invents Act that become effective on September 16, 2012. The Roadshows are free and open to the public, and pre-registration is not required. Nevertheless, seating will be limited and is available only on a first-come, first-served basis. The USPTO has posted the agenda
for these Roadshows on their website.
The USPTO will webcast the roadshows during the first week (from Minneapolis, Alexandria, and Los Angeles) and post videos of those events on the micro-site. Copies of any written materials will also be made available on the USPTO micro-site devoted to the AIA Roadshows.
While attorneys are certainly invited to attend these Roadshow presentations, no CLE credit is available for attending any Roadshow event.