An Action-Packed Summer for PTAB

uspto_seal_full_colorBy Don Wang

If you spent this past summer looking forward to the most recent Fantastic Four movie, I am deeply sorry for the utter disappointment. However, if you have been following the news of the Patent Trial and Appeal Board (PTAB) instead, this has been a truly great summer! Following the roll-out of the American Invents Act, the United States Patent and Trademark Office (USPTO) started to solicit public comments for a proposed rule change package for trials before the PTAB and has proposed a pilot program to have a single Administrative Patent Judge determine the institution of an Inter Partes Review.

New Proposed Rules on PTAB Trials

On August 19, the USPTO published the highly anticipated proposals to amend the rules for practice before the PTAB, including the Inter Partes Review, the Post-Grant Review, the Covered Business Review and the Derivation Proceeding. Among a wide range of issues related to PTAB trial implementations, the most notable issues include the claim construction standard for PTAB trials, new testimonial evidence for patent owner’s preliminary response, and Rule 11 requirement/certification.

For the claim construction standard, there has been a fierce debate as to whether PTAB trials should adopt the “broadest reasonable interpretation” standard applied in USPTO patent examinations, or the stricter “plain, ordinary, or customary meaning standard” applied in district courts trials. On one hand, PTAB judges, as part of the USPTO, are more familiar with the broadest reasonable interpretation standard applied in the patent examinations. On the other, PTAB trials, as invalidation proceedings, are more akin to the adversarial district court trials than the ex parte examination process. In the proposed rules, USPTO decided to retain the “broadest reasonable interpretation” standard for unexpired patents. However, the Patent Office adopted the “plain, ordinary, or customary meaning standard” for patent claims that will soon expire because there would be no viable opportunity to amend patent claims if the patent expires before a final decision by the PTAB.

In the proposed rule changes, the Patent Office allows patent owners to file new testimonial evidence with a preliminary response when determining whether to institute an Inter Partes Review. Specifically, patent owners can include expert testimony on key elements of the prior art, or raise arguments on claim construction, obviousness and other important issues. An expert can even weigh in on issues that the petitioner did not raise. This change affords patent owners a chance to offer more robust responses at a much earlier stage of the proceeding.

The Patent Office further proposed to amend regulations related to the duty of candor owed to the USPTO to include a Rule 11-type certification on all papers filed with the PTAB with a provision for sanctions for noncompliance. This change will give USPTO “a more robust means with which to police misconduct.”

Pilot Program for One-Judge Institution Decisions

On August 25, the USPTO requested public comments relating to a proposed pilot program where a single Administrative Patent Judge determines whether to institute an Inter Partes Review. Presently, when the PTAB receives a petition for the Inter Partes Review, the Board forms a three-judge panel to determine whether to institute a review. If a review is instituted, typically the same three-judge panel will conduct the trial and issue the final written decision. Under the proposed pilot program, a single judge will make the decision on the institution of a review while the trial is still conducted by a three-judge panel.

As USPTO explains in the notice, the main motive for such a change is the efficiency of conducting an Inter Partes Review “given that the number of petitions filed may continue to increase.” Essentially, this is an attempt to address the high number of Inter Partes Review petitions after the proceeding’s first implementation. However, several commentators have raised due process concerns with such a change because decisions on whether to institute an Inter Partes Review is not appealable to an Article III judge.

The August 19 rule change package and the August 25 pilot program proposal are unlikely to be the last words on the PTAB trial rules. For one thing, the USPTO is still actively soliciting public comments on both topics until October. For another, Federal Circuit starts to take appeals from these PTAB trial decisions, which will likely further alter the standards applied by PTAB.

Image Source: https://www.commerce.gov/media/photo/usptosealfullcolorjpg.

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