In addition to transitioning the United States patent system to a first-inventor-to-file regime, another significant aspect of the America Invents Act (“AIA”) was the creation of a more robust system for challenging granted patents.  In particular, third parties may seek to invalidate some or all claims of a patent through Post-Grant Review (“PGR”) and Inter Partes Review (“IPR”), two types of adversarial, administrative proceedings conducted by the Patent Trial and Appeal Board (“PTAB”).  The AIA also created Covered Business Method Review proceedings, which is a transitional proceeding limited to challenging the patentability of a certain class of patents.

Unlike IPR, PGR is available for challenging only those patents that were examined and granted under the AIA rules (“AIA patents”) (by contrast, IPR can be instituted against pre-AIA and AIA patents).  Almost two years have elapsed since the first AIA patent applications were filed, and many of these applications have been granted or are close to being granted.  Although only a few PGR petitions have been filed so far, the use of PGR is expected to expand significantly in the future.  Therefore, it is important to understand the considerations for preparing and filing a petition to challenge an AIA patent through PGR.

In some ways, PGR proceedings are similar to IPR proceedings.  Both permit some discovery within narrow parameters.  The requirements for filing a PGR petition are similar to the requirements for an IPR petition.  For example, both petitions must include a proposed construction of the challenged claims.  Importantly, both types of proceedings create a similar estoppel effect on the petitioner, in that the arguments that are raised or that reasonably could have been raised before the PTAB cannot be the basis of a future invalidity claim.

There are several important distinctions between PGR and IPR.  First, PGR allows a petitioner to challenge a patent’s validity based on a broader range of legal grounds compared to IPR.  An IPR challenge is limited to arguments that one or more claims of a patent are anticipated or obvious, and these arguments may only be based on prior art patents and printed publications.  A PGR challenge, on the other hand, expands these legal grounds to include challenges that are common to invalidity defenses asserted in district court litigation.  For example, in addition to the anticipation and obviousness grounds, a PGR petition may assert that the claimed subject matter is ineligible for patent protection, that the claims are indefinite, that the claims lack enablement (i.e., the specification would not properly enable a person of ordinary skill to practice the invention), or that the claims lack sufficient written description.  Furthermore, a PGR petition can rely on any prior art that may be used during normal examination of a patent, not just patents and printed publications.  This might include evidence of a public use or prior sale of the invention.

Second, the PTAB applies a more rigorous standard when deciding whether to institute a PGR proceeding compared to the standard applied an IPR proceeding.  The PGR petition must show that it is more likely than not that at least one challenged claim is unpatentable.  Under this standard, a PGR petitioner must show that it has greater than a 50% chance of prevailing.  In contrast, an IPR petition must demonstrate a reasonable likelihood that the petitioner will prevail with respect to at least one challenged claim.  Under this standard, an IPR petition must show it has a 50/50 chance of prevailing, which gives the PTAB more discretion on whether to institute trial.  Based on that higher PGR institution standard, it is expected to be comparatively more difficult to persuade the PTAB to institute a PGR proceeding.

Third, the time frame for filing a PGR petition is much narrower than the time frame for an IPR petition.  A PGR petition may only be filed within the first nine months after issuance of an AIA patent.  In contrast, IPR may be filed against an AIA patent only after the nine-month period has elapsed or after the termination of any PGR proceeding, whichever is later.  The smaller window for filing a PGR petition makes it important for parties to regularly search for and monitor the status of patent applications owned by competitors, particularly if parties can identify unpatentability grounds other than anticipation or obviousness or additional prior art that cannot be used in IPRs is available.

Although both IPR and PGR proceedings can require significant time and expense, the costs are much lower than the costs associated with challenging or defending a patent in federal court.  Also, PGR and IPR proceedings are typically resolved much more quickly than litigation, giving the parties more certainty and allowing them to reach settlement more efficiently.  Furthermore, if a petition can be filed within the relatively short nine-month time frame after issuance, PGR will provide a much broader mechanism for a party to challenge the validity of a granted AIA patent.

Practice Tips

• Monitor regularly the patents and pending applications of competitors.

• Monitor competitors’ activities to watch for any potential public use or prior sale prior art.

• If no grounds of unpatentability other than anticipation and obviousness based on patents and printed publications are identified, consider an IPR instead of a PGR.

Trends at the Board

The much anticipated first petition for Post-Grant Review was filed in August 2014.  Two other petitions were filed in September and November 2014.  The first two petitions were dismissed after the parties’ settlement.  The third petition is still pending. 

In Fiscal Year 2014, the number of petitions in AIA Trials nearly tripled (1,494) from the previous year (563).  In the first quarter of Fiscal Year 2015, over 500 petitions in AIA Trials have been filed already.