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.
Complicating matters further for the patentee is the fact that the PTAB is granting petitions at a rather high rate. They have backed off from the 95% that were being granted, but the overall granting of petitions is still around 80%. What this means is that if you are facing a post grant challenge petition, there is a very good chance it will be granted, and if it is granted, there is a very good chance you will lose all claims.
There are, however, strategies available to attempt to ward off post grant challenges for those who have not yet had a patent issue, or who still have the opportunity to file a reissue application to broaden patents obtained, or who still have one or more pending applications open at the Patent Office.
Filing a post grant proceeding challenge is not inexpensive. This is not to say that it is cost-prohibitive or even expensive, particularly when compared to the costs to fighting a patent in court where even an average patent case can easily rack up $2 million to $3 million in attorneys fees to defend. Still, the filing fees for a petition are not irrelevant. The petitioner in an inter partes petition must pay $23,000 for the right to challenge 20 or fewer patent claims. There is also an additional fee of $600 per claim in excess of 20 claims. The fees are even greater for covered business method petitions, where the initial filing fee is $30,000 for 20 or fewer claims challenged, with an additional fee of $800 for each additional claim challenged over 20. It will easily cost every penny of $300,000, start to finish, for an inter partes review, and some firms quote over $1,000,000 in fees, start to finish.
So, with a proper patent prosecution strategy, you can make post grant proceedings extremely expensive to pursue. Patent owners must modify their prosecution strategies to make their patents and portfolios less susceptible to post grant challenges. This strategy must take into account the cost of filing a petition by a challenger. Patent owners must obtain enough claims and enough patents to make it extremely expensive for a challenger to go down the path toward an administrative trial.
This patent strategy will require patent owners to obtain patent claims with numerous dependent claims that cover as many variations as possible, but also to ensure that the dependent claims build on one another little by little so as to create a claim set that refers back to as many previous claims as possible. By doing this, you increase the number of claims that need to be challenged and, therefore, also increase the other side’s costs. This is true because USPTO explains: “for fee calculation purposes, each claim challenged will be counted as well as any claim from which a claim depends, unless the parent claim is also separately challenged.” 77 FR 157 (August 14, 2012) 48619.
Tags: patent, patents, post grant fee, post grant proceedings, PTAB, USPTO
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