Source: https://www.wolfgreenfield.com/publications/articles/2015/preparing-for-changes-in-aia-post-grant-amendment-practice
Timestamp: 2019-04-25 11:58:53+00:00

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However, the tide may be turning. There are signs suggesting that patentees will soon have a more realistic chance to amend claims during America Invents Act (AIA) post-grant proceedings. Further, past statistics are presumably slanted by missteps that patentees made when previously filing motions without fully understanding the Board’s requirements.
Stakeholders thus should anticipate at least a modest—and perhaps a substantial—rise in the success rate for motions to amend. Laid out in this article are certain practical guidelines that patentees and potential challengers should consider when preparing for this change and navigating the present uncertainty.
Nevertheless, there are indications inside and outside the PTO that patentees may soon enjoy somewhat greater flexibility to amend claims during IPRs and other AIA proceedings.
Recent Federal Circuit Decisions. When the Federal Circuit decided In re Cuozzo Speed Technologies and affirmed the “broadest reasonable interpretation” (BRI) standard for interpreting patent claims during IPRs, commentators touted the decision as vindicating the Board and the status quo.11 Yet Cuozzo and the Federal Circuit’s more recent decision in Microsoft v. Proxyconn may ultimately undermine Idle Free.
First, the court solicited input concerning the “proper interpretation” of 37 C.F.R. § 42.121(a)(2) and asked whether this regulation constitutes an exhaustive list of reasons for which the Board can reject proposed amendments. The request referred specifically to Idle Free, implying that the Board’s decision exceeds the scope of the rule.
Challengers who use AIA procedures submit themselves to the AIA’s estoppel provisions, limiting invalidity defenses that can be raised against a patent claim for which the Board issues a final written decision in an IPR, CBM, or PGR. This is a particular concern for IPRs and PGRs, as the statutory estoppel includes all grounds “that the petitioner reasonably could have raised during” the PTO proceeding.39 Because challengers are entitled to raise arguments against proposed amendments, challengers might be estopped from later raising invalidity arguments against amended claims.
The current uncertainty surrounding amendment practice and the possibility of estoppel creates both risks and opportunities for prospective challengers as well as patentees.
Accused infringers should assess potential amendment-related risks when deciding whether to utilize AIA post-grant options. The possibility of amendments should also help shape tactics (e.g., which claims to challenge, what invalidity grounds to raise, etc.) if one decides to proceed.
At present, aggressive IPR or CBM requests have become a near-automatic response for many accused infringers. Cancellation rates are high, and many district courts grant stays almost as a matter of course. Further, it is normally possible for defendants to develop solid “backstop” invalidity positions based on § 101, § 112, and/or “physical” prior art (as opposed to patents and printed publications) to hold in reserve in case the patentee prevails in an IPR and the challenger is therefore estopped from raising invalidity defenses based on paper references that the challenger raised or reasonably could have raised with the Board.
As discussed above, however, the tables may be tilting toward more liberal amendment practice. Accused infringers should weigh the possibility of the Board allowing amended claims that could be essentially immune from printed publication attack or even § 112 challenges (i.e., if courts aggressively interpret the AIA estoppel provisions) and which may also be a poor fit for whatever physical prior art the defendant identified as a backstop.
Granted, it will often make sense to pursue IPR, CBM, or PGR even if the anticipated liberalization materializes. Particular specifications may not support narrowing amendments at all—let alone claims that cover accused products. Even if troublesome new claims did emerge, the patentee could only enforce them prospectively and even then may be limited by intervening rights.44 The point simply is to make an informed decision.
Patent owners responding to AIA proceedings likewise should take potential amendment practice seriously, notwithstanding the discouraging statistics. Here again, the key is to make an informed decision. Even assuming that more liberal amendment policies do materialize, many patentees may still rationally reject this option given the negative impact on damage claims. In the inter partes reexamination era, sophisticated patentees rarely amended existing claims, but instead added new claims. This tactic is not possible in AIA proceedings given that the Board normally requires patentees to cancel an existing claim for each new claim they want to add.45 Instead, however, patentees may propose “conditional” amendments—to be entered only if the Board concludes that the original challenged claims are not patentable.
Strategic Considerations for Petitioners. There are a handful of specific amendment-related guidelines that potential IPR, CBM, and PGR petitioners should consider when deciding whether to file and, if so, how best to proceed.
For one, potential challengers should scrutinize the written description to assess whether it would support any new claims that pose a viable infringement threat while working around the prior art under consideration. This is a task unfamiliar to many patent litigators given that patentees cannot amend their claims in court. Yet this limitation in litigation also explains why there will be situations in which accused infringers are better off raising particular prior art references in court than in an AIA proceeding. If a defendant secures a judgment of invalidity, the claim is dead. If the defendant instead files an IPR petition advancing the same arguments, the patentee could potentially amend the claim to work around the art and return to court with a patent that would be particularly difficult to challenge given the possibility of estoppel (as discussed above) and the practical difficulty of overcoming the Board’s imprimatur.
Challengers likewise should consider potential amendment practice when searching for prior art and selecting among the available options. There are obvious benefits to litigating validity issues at the Board rather than in court. If accused infringers can locate prior art to support a persuasive technical story that the underlying concepts in the patent are not inventive, it often will be preferable to file an IPR. Such references often exist, but are not necessarily the first materials that come to light. For example, it may be easy to find prior art publications from the named inventors that anticipate the claims, but omit certain other aspects of the specification that could translate into amended claims still posing an infringement risk. In such a situation, challengers should dig deeper for references that teach the specification as a whole.
Further, challengers should be wary of invalidity theories that turn on claim constructions straining the limits of “the broadest reasonable interpretation” standard. This is sound advice in any event, but will be particularly important if the Board begins granting motions to amend more frequently. Even if the Board credits a proposed construction that is on the edge of what is reasonable in light of the specification, patentees may be able to alter language and circumvent the prior art.
In addition, challengers should think twice before challenging claims that do not pose a genuine infringement risk. IPR and CBM petitions today sometimes contest all claims as a matter of course to maximize the pressure on the patentee while avoiding any chance of the patent coming back to haunt the challenger later (e.g., if the patentee is allowed to amend infringement contentions). However, increasing the number of challenged claims also increases the patentee’s flexibility when proposing amendments given the Board’s presumption that patentees can only propose one amended or substitute claim for each challenged claim.
Challengers should also anticipate potentially threatening amendments and be ready to oppose them even before the patent owner seeks to amend. Once the patentee files the actual motion, challengers typically have no more than three months to respond. Here again, locating the right prior art and persuasively connecting it to an underlying narrative (i.e., regarding the patentee’s lack of a genuine inventive contribution) is important for ensuring that challengers will have the necessary ammunition when the time comes.
There are also several practical steps that challengers facing a motion to amend should discuss with the appropriate engineers and/or supply personnel.
Indeed, challengers may elect to stockpile inventory and appeal as a matter of course (assuming a good faith basis) any Board decision that grants a motion to amend. Intervening rights would be available for products manufactured or imported prior to the Federal Circuit’s decision, even in situations where the challenger has not made any design-around efforts.
Strategic Considerations for Patentees. There are also a handful of specific guidelines that patentees should consider when facing AIA proceedings.
For one, patentees should look beyond current statistics and consider whether it makes sense to propose amendments. Recent events suggest that the Board may be growing more receptive and in any event could have its hand forced by the PTO (via new rules), Congress (via amendments to the AIA), or perhaps even the Federal Circuit (via a decision that follows through on the threat in Proxyconn). Further, many motions to amend in the past have failed because of procedural defects that experienced counsel today should be able to avoid.
While there are alternatives (e.g., reissue) for narrowing claims, a successful amendment in an AIA proceeding will typically take effect faster.50 The challenger may also be limited by statutory estoppel provisions, as discussed above.
Patent owners should also keep in mind the constraints (e.g., absolute intervening rights, as discussed above) that claim amendments create when seeking damages even after the AIA proceeding is complete. While “conditional” motions to amend allow patentees to hedge their bets and narrow a claim only if the Board deems the original version unpatentable, there may be situations—particularly under a liberalized amendment regime—where bringing such a motion tips the scales in favor of the Board cancelling the original claim.
It will likely become incrementally easier for patentees to amend claims during IPRs and other AIA post-grant proceedings. There are a series of practical steps that patentees and potential challengers should take to prepare for this shift and make fully informed decisions.
1 To date, the Board has only granted five motions to amend involving substitute claims. See Reg Synthetic Fuels LLC v. Neste Oil Oyj, IPR2014-00192, Paper 48 (June 5, 2015); Chicago Mercantile Exchange, Inc. v. 5th Market, Inc., CBM2013-00027, Paper 38 (Mar. 23, 2015); Riverbed Tech., Inc. v. Silver Peak Sys., Inc., IPR2013-00403, Paper 33 (Dec. 30, 2014); Riverbed Tech., Inc. v. Silver Peak Sys., Inc., IPR2013-00402, Paper 35 (Dec. 30, 2014); Int’l Flavors & Fragrances Inc. v. United States, IPR2013-00124, Paper 12 (May 20, 2014).
2 37 C.F.R. § 42.121(a) (concerning IPRs); 37 C.F.R. § 42.221(a) (concerning PGRs and CBMs).
3 37 C.F.R. § 42.121(b) (IPRs); 37 C.F.R. § 42.221(b) (PGRs and CBMs).
4 Idle Free Systems v. Bergstrom, IPR2012-0027, Paper 26 at 7 (June 11, 2013).
5 Idle Free Systems v. Bergstrom, IPR2012-0027, Paper 66 at 33 (Jan. 7, 2014).
7 Idle Free, Paper 66 at 33 (citing 37 C.F.R. § 42.20(c)).
8 E.g., Volusion, Inc. v. Versata Software, Inc., CBM2013-00017, Paper 19 (Dec. 20, 2013) (extending Idle Free guidance to CBMs).
9 Corning Optical Commc’ns RF LLC v. PPC Broadband, Inc., IPR2014-00441, Paper 19 at 4 (Oct. 30, 2014).
11 E.g., Federal Circuit Blesses PTAB Rules on Claim Construction, Trial Grant, Amendment Limits, 89 PTCJ 877, 2/6/15.
12 In re Yamamoto, 740 F.2d 1569, 1571-72 (Fed. Cir. 1984) (affirming BRI in reexamination).
13 In re Cuozzo Speed Techs., LLC, 778 F.3d 1271, 1280-81 (Fed. Cir. 2015).
14 Cuozzo itself did not squarely present this issue and easily disposed of the motion to amend because it would have broadened the challenged claims.
15 Microsoft Corp. v. Proxyconn, Inc., No. 2014-1542, at 2-3 (Fed. Cir. June 16, 2015).
18 Oral Argument at 9:18-13:02, 19:09-25:55, Microsoft Corp. v. Proxyconn, Inc., No. 2014-1542 (Fed. Cir. Apr. 7, 2015) available at http://oralarguments.cafc.uscourts.gov/default.aspx?fl=2014-1542.mp3.
19 Order Requesting Letter from Parties (Doc. 49), Microsoft Corp. v. Proxyconn, Inc., No. 2014-1542 (Fed. Cir. Apr. 13, 2015).
22 Letter from Intervenor Michelle K. Lee, Director, PTO (Doc. 50) at 7, Microsoft Corp. v. Proxyconn, Inc., No. 2014-1542 (Fed. Cir. Apr. 27, 2015).
23 Microsoft Corp., at 25.
24 Id. at 25 n.4.
27 Helferich Patent Licensing, LLC v. CBS Interactive, Inc., No. 2014-1556 (Fed. Cir. Apr. 8, 2015).
28 Oral Argument at 26:52-35:15, Helferich Patent Licensing, LLC v. CBS Interactive, Inc., No. 2014-1556 (Fed. Cir. Apr. 6, 2015) available at http://oralarguments.cafc.uscourts.gov/default.aspx?fl=2014-1556.mp3.
29 Federal Circuit Affirms Three Cases Without Opinion Two Days After Oral Arguments, 89 PTCJ 1607, 1607-08, 4/10/15.
30 PTAB’s Quick-Fixes for AIA Rules Are to Be Implemented Immediately (Mar. 27, 2015), http://www.uspto.gov/blog/director/.
31 Amendments to the Rules of Practice for Trials Before the Patent Trial and Appeal Board, 80 Fed. Reg. 28,561 (May 19, 2015).
32 PTAB’s Quick-Fixes for AIA Rules Are to Be Implemented Immediately (Mar. 27, 2015).
33 Boardside Chat: Discovery in AIA Trials, United States Patent and Trademark Office (June 2, 2015), http://www.uspto.gov/sites/default/files/documents/Boardside%20Chat%20slides%206.2.15.pdf.
34 E.g., June 4, 2015 Prepared Statement by Sen. Chuck Grassley, http://www.judiciary.senate.gov/imo/media/doc/06-04-15%20Grassley%20Statement.pdf (noting markup of PATENT Act and stressing that language concerning claim amendments was “a placeholder,” subject to further negotiations).
35 During Hearing, Lee Identifies Provisions of H.R. 9 Administration Does, Doesn’t Support, 89 PTCJ 1698, 1700, 4/17/15.
36 Reg Synthetic Fuels LLC v Nestle Oil Oyj, IPR2014-00192, Paper 48, at 19 (June 5, 2015).
38 E.g., note 9 supra; Toyota Motor Corp. v. Am. Vehicular Scis. LLC, IPR2013-00419, Paper 32 at 4 (Mar. 7, 2014).
39 35 U.S.C. §§ 315(e)(2) & 325(e)(2). By contrast, CBM estoppel extends only to issues that the petitioner actually raised. Leahy-Smith America Invents Act , Pub. L. No. 112-29, § 18(a)(1)(D), 125 Stat. 329, 330 (2011).
40 E.g., Scott A. McKeown, PTAB Accepts First Contested Claim Amendment, Now What?, Patents Post-Grant, http://www.patentspostgrant.com/ptab-accepts-first-contested-claim-amendment (Jan. 7, 2015) (noting that “this issue will be litigated somewhere down the road,” and questioning whether it would be equitable to apply estoppel to amended claims given procedural restrictions).
41 While IPR petitions cannot directly raise § 112 defects, challengers can assert them in opposition to a motion to amend. E.g., Larose Indus. v. Capriola Corp., IPR2013-00120, Paper 24 at 3 (Oct. 17, 2013). Section 112 defects in amended claims arguably are grounds that the petitioner “reasonably could have raised” during the IPR review.
42 35 U.S.C. § 321(b) (defining permissible scope of PGR).
44 35 U.S.C. § 318(c) (IPRs) and 35 U.S.C. § 328)(c) (PGRs) incorporate 35 U.S.C. § 252, which governs the effect of reissued claims. Most reform proposals would leave this law unchanged.
45 This is another aspect of current amendment practice that appears unlikely to change.
46 Granted, all of those proposed amendments would need to be “responsive” to a ground of unpatentability under the current rules.
47 E.g., BIC Leisure Prods. v. Windsurfing Int’l, 1 F.3d 1214 (Fed. Cir. 1993) (affirming that absolute intervening rights applied under 35 U.S.C. § 252 to bar damages as to products in inventory or on order as of issue date of reissued patent). Section 252 also limits damages based on claims amended or added during AIA proceedings. See 35 U.S.C. §§ 318(c) & 328(c).
48 35 U.S.C. §§ 318(b) & 328(b). This is later than the applicable date for statutory estoppel, which takes effect upon the Board’s final written decision.
49 35 U.S.C. § 321(c). Further, PGRs are only available for post-AIA patents, examined under the first-to-file procedures.
50 Reissue pendency times are falling, but remained 3.5 years in 2014. Saving Patents from Inter Partes Review with Reissue, 90 PTCJ 2213, 5/22/15. In AIA proceedings, amendments will typically take effect (even assuming appeal) approximately two years after the motion to amend. See http://www.cafc.uscourts.gov/images/stories/Statistics/med%20disp%20time%20merits_table.pdf (10.0 month median time for resolving PTO appeals, FY04-13).
51 Cf. Microsoft Corp. v. i4i, 131 S. Ct. 2238, 2251 (2011) (“When warranted, the jury may be instructed to consider that it has heard evidence that the PTO had no opportunity to evaluate before granting the patent.”).
52 Although Rule 56 does not apply to AIA proceedings, 77 Fed. Reg. 48,612, 48,638 (Aug. 14, 2012), the PTO maintains that patentees must “make of record any additional prior art material to patentability known by the patent owner.” PTAB’s Quick-Fixes for AIA Rules Are to Be Implemented Immediately (Mar. 27, 2015), http://www.uspto.gov/blog/director/. Further, Therasense defines materiality without reference to Rule 56. 649 F.3d 1276, 1294 (Fed. Cir. 2011).

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