AIA Post-Grant Proceedings, Ever-Evolving . . .

Patent stakeholders should note that the Patent Offices is once again considering several changes to post-grant trial proceedings. With the passage of the America Invents Act in 2011, new post-grant proceedings became available at the Patent Office that allow for third-parties to challenge the patentability of issued patents. Many stakeholders consider these proceedings useful in mitigating patent infringement liability. The proceedings are ever changing to be more efficient and equitable for all parties, thus practitioners will want to stay updated.

Recent changes and proposals include: (a) the utility of the Phillips claim construction standard in all AIA post-grant proceedings, (b) a pilot program to allow for a preliminary decision on patentability with motions to amend and (c) a proposed rule change for the burden of persuasion on motions to amend after Aqua Products (en banc).

Phillips in AIA Trials

The Patent Trial and Appeal Board is abandoning the broadest reasonable interpretation (or BRI) standard and implementing the Phillips standard in claim construction. Changes to the Claim Construction Standard for Interpreting Claims in Trial Proceedings Before the Patent Trial and Appeal Board, 83 Fed. Reg. 51,340-359 (Thursday, October 11, 2018)(to be codified at 37 CFR §§42.100, 42.200 & 42.300). Under Phillips, claim construction begins with the language of the claims. Words are generally given their ordinary and customary meaning which is the meaning that the term would have to a person of ordinary skill in the art in question at the time of invention. The specification is the primary source for determining the meaning of a disputed term. The prosecution history is also a part of the intrinsic record of the patent. Where ambiguity persists, extrinsic evidence such as expert testimony and dictionaries may be useful in determining meaning. The BRI standard potentially reads on a broader universe of prior art than Phillips. It gives the broadest interpretation of claim terms within reason considering the specification’s and prosecution history’s teachings. The policy behind the BRI standard is that the Office should err on the side of inclusivity with respect to the prior art’s teachings pre-issuance to encourage narrower claim drafting and avoid surprise to “the public” about what the claims cover. After issuance “the public” has an interest in a more conservative construction to again avoid surprise about claim scope thus claims are interpreted with errs on the side of exclusivity under Phillips. The BRI claim construction standard still applies in other proceedings before the Office involving unexpired claims.

Criticisms of the BRI standard were raised in 2016 with the Supreme Court’s decision in Cuozzo which ultimately confirmed that the Patent Office was entitled to have a different standard for post-grant claim construction than in district court litigation. Despite all that trouble, the Patent Office has nevertheless decided to change its post-grant trial claim construction standard to Phillips for all claims. See 37 CFR §§ 42.100(b), 42.200(b) and 42.300(b) (as amended)

[A] claim of a patent, or a claim proposed in a motion to amend… shall be construed using the same claim construction standard that would be used to construe the claim in a civil action under 35 U.S.C. 282(b), including construing the claim in accordance with the ordinary and customary meaning of such claim as understood by one of ordinary skill in the art and the prosecution history pertaining to the patent.

The Office has stated that the change should lead to greater uniformity and predictability between fora and increase judicial efficiency overall since most petitions regard patents that are involved in federal court litigation as well.

This will apply to existing and substitute claims in inter partes reviews, post-grant reviews and covered business method patent reviews. While pending petitions will remain unaffected – only applying Phillips for expired or soon-to-be-expired patents, all claims will be subject to a Phillips construction for petitions filed on or after November 13, 2018.

The Board will take into consideration a district court’s or ITC’s prior claim construction submitted in a timely fashion. See 37 CFR §§ 42.100(b), 42.200(b) & 42.300(b)(as amended)(“[a]ny prior claim construction determination concerning a term of the claim in a civil action, or a proceeding before the [ITC], that is timely made of record in the… proceeding will be considered.”). Moreover, the Board will apply the doctrine of construing claims to preserve their validity.

Comments Requested for PTAB Motions to Amend

The PTAB wants to hear from stakeholders on planned revisions to the Board’s motion to amend process. Request for Comments on Motion to Amend Practice and Procedures in Trial Proceedings Under the America Invents Act Before the Patent Trial and Appeal Board, 83 Fed. Reg. 54,319-326 (Monday, October 29, 2018). The amendment process is controversial now as grant rates for the motions are only about 10%.

The Board is considering pursing a new pilot program that would involve a preliminary non-binding decision by the Board that provides information to the parties regarding the merits of a motion to amend. The pilot, if implemented, would apply to all motions to amend. Under the program, after receiving the preliminary decision a patent owner may revise their motion to amend. Most motions are denied today based upon §§102 & 103. Perhaps a second bite at the apple, given feedback from the Board on patentability, will increase the grant rate.

Under the program, a petitioner will also have an opportunity to file an opposition to the revised motion and preliminary decision. The patent owner will then have an additional opportunity to reply before oral hearing. Petitioners will also have another opportunity for a sur-reply. Where a petitioner chooses not to oppose the motion(s) to amend, the Board may, in its discretion, solicit patent examiner assistance from the Central Reexamination Unit for an advisory report and any needed searching. Motions will be decided, of course, within the 12-month statutory period for final written decisions.

It will be interesting to see if this program will make the amendment process more user friendly for patent owners willing to narrow their claims. Amendment filings have increased since the burden of persuasion was moved to petitioners after Aqua and amendments should be even more desirable now that all a patent’s claims must be reviewed with the institution of a post-grant proceeding after SAS Institute. The Board is interested in feedback on everything from what information the preliminary decision should include to whether the amendment process should be changed at all.

Additionally, the Board is seeking input regarding whether the Office should continue to allocate the burden of persuasion on motions to amend to the petitioner as well as “any suggestions” the public may have on motions to amend before the Board. The Office is considering engaging in rulemaking to clarify the burden structure on motions to amend. The Board through Western Digital (an informative opinion) and a guidance memo clarified that the burden of establishing unpatentability is on the petitioner post-Aqua. However, an Aqua majority did leave the PTO with authority to allocate said burden in whatever way it deemed fit via amendment to the Code of Federal Regulations. The Office would like to know whether stakeholders see this amendment to the Code as helpful or necessary, what are the advantages and disadvantages of amending the regulations, and essentially how this burden should affect findings of unpatentability?

Take advantage of these opportunities to provide comments; all responses must be received by December 14, 2018 to TrialRFC2018Amendments@uspto.gov.