Post Grant Challenges: Strategic and Procedural Considerations

EDITOR’S NOTE: This is a follow-up article to Deciding Whether a Post Grant Challenge is Right for You. If you’re not sure whether how to decide whether a PGC is the right choice please start with that article first.

If you’ve decided that a PGC is right for you, there are a few other related strategic considerations that you may want to evaluate before proceeding: preliminary response, joinder, stay, and amendment.

Preliminary Response

You may want to consider keeping your cards in your pocket by not filing a preliminary response. If you file a preliminary response, it may provide the petitioner a road map to cure their deficiencies via a second petition or reveal the defects of your position to them. So if the petition is sloppy in some respects it may be in your best interests to not file. On the other hand, not filing a preliminary response may work against you. For every petition the PTAB goes through the preliminary claim construction based upon the evidence given. So if you put in your preliminary response, that will give the APJs additional information to consider when doing claim construction. “I might [initially] be guided by the petitioner’s insights if there’s no patent owner response. If you don’t file a response some times you read between the lines, and assume petitioner[‘s argument] is better,” says Judge Michael P. Tierney, Lead Administrative Patent Judge of the PTAB at the PTO. Then again, APJs thoroughness will likely and generally trump any bias. Just to give you perspective on what other people are doing, eighty-one percent filed a preliminary response with IPR and CBM in 2013, and as of November 21st of this year 77 percent filed a preliminary response, according to a recent AIA Progress Statistics report.


35 U.S.C. §315(c) allows the Office to join a party to an IPR where party properly files an IPR petition that warrants institution of an IPR. In the case of joinder, the Board can extend out the one year (plus six month buffer) timeline, because the one year rule does not technically apply (See 35 U.S.C. §316(a)(11)). However, joinder is not just automatic. In addition to falling within the one-month time limit prescribed by 37 C.F.R §42.122(b), the Board looks at other factors in determining whether to grant a joinder request. One of the key factors should you seek to be joined is timeliness in filing, because the Board doesn’t want to prejudice the patent owner or the third party by delaying resolution of IPR by having another party come in late. For example, if IPR is instituted and you keep adding parties and starting over, that will harass patent owners. The Board is cognizant of this timeliness issue, so if you’re past the one month mark it will look especially carefully at why it needs to delay the proceeding. The other factors considered are whether is the request was opposed, the impact on schedule of existing IPR, whether the potentially joining party seeks to expand the proceeding or whether they’re keeping it on track, whether the potentially joining party seeks to add new grounds of unpatentability, and whether that party seeks to add new claims.

The Dell v. Network-1 Security Solutions, Inc., IPR2013-00385, Paper 17 (P.T.A.B. Jul. 29, 2013) is an example of an acceptable joinder request. Here the party basically photocopied issues, grounds on which petition had been instituted, evidence basis, and so on,  saying they wanted to go forth on the same stuff. This is what we call a me-too petition or a tag along. In contrast, in Sony Corp. et al. v. Network-1 Security Solutions, Inc., IPR2013-00386, Paper 16 (P.T.A.B. Jul. 29, 2013) the party seeking to join actually brought in an additional claim beyond what had been instituted. It turns out they had independently filed a petition on these issues before and it had been denied. They were trying to bring it back through the joinder provision. Unsurprisingly, their request to join was denied.



There are several varieties of a stay. With post grant proceedings we’re talking mostly about discretionary stay. Every district court has inherent right to do this. Judges are generally favorable to granting stays with more being granted than not. “All a judge has to do is get burned once by not granting a stay, going to trial to the end, and then having claims invalidated by the Board and then having to have an appeal,” says John J. Marshall, law professor at Villanova University School of Law, previously Of Counsel at Drinker Biddle. The initial stay before a petition is granted is short. Then after the petition is granted, the district court judges are more likely to grant a stay, because IPR will simplify issues that might be important to the district court judge. That quick timeline is one of the factors that helps you get a stay for concurrent litigation and getting ammunition for use in district court claim construction. In fact, you may find that these factors are so persuasive that if a defendant in district court case files a petition for IPR, and you, as another defendant, can’t join because you are past the one month joinder cutoff, you still may be asked to stay your case until other defendant’s IPR concludes. As of October 2013, contested stay motions pending IPR petitions have a 68.5 percent grant rate and those pending CBM petitions have an 83 percent grant rate, according to a Finnegan infographic based on the published PTO AIA statistics. Those are really good rates. It’s something to consider even in districts like Delaware or East Texas.

Since IPR and PGR serve as the AIA counterparts to the pre-AIA inter parte reexamination, comparing stays in that situation might provide us with some insight. In the case of inter parte reexamination, there are some jurisdictions at least historically which have commonly stayed jurisdiction pending reexamination and others that will not even consider it, explains Roger Brooks, partner at Cravath, Swaine & Moore LLP, at the Milbank Tweed Forum on the Market for IP Rights at NYU School of Law. In fact the reexamination process coupled with stay often served as a multi-year delaying tactic for people have ought to have been paying royalties. If the PGC proceedings at the PTAB slow and if IPR follows any of the same trends that were present with inter parte reexamination, maybe stays won’t be such a for-granted consequence of filing a petition. “I know the new statute edicts that they do this thing quickly… yeah, good luck with that,” says Brooks.

Just as a tangential litigation strategy point, if you don’t get a stay, or the judge is not really looking to stay, maybe you ought to consider buying a stay, says Samir Pandya, Senior IP Counsel of the Global Litigation Group at SAP. You stipulate to the claimant that there’s going to be a stay and you pay them X amount. Maybe it’s the amount it would take you to litigate the stay motion anyways, or maybe it’s two or three times that, or maybe it’s a more significant number that gets applied toward your settlement. But regardless the 68.5-plus percent grant rate seems to leave little room for worry.

This case is even better for CBM, which has four factors, outlined by §18 of the AIA, for judges to look at when determining whether to granting a stay which are whether stay will simplify issues and streamline trial, whether discovery is complete and trial date is set, whether stay will unduly prejudice moving party, and whether stay will reduce the burden of litigation. This statute also says, to keep judges in line, that a failure to grant a CBM petition stay is immediately reviewable. If you file CBM petition, that’s sufficient for a stay most of the time.

If you wanted to strategically use a stay and are threatened by patent owner and you have standing for declaratory judgement, you can file a claim for declaratory judgement after you file a petition for IPR. You’d want to wait to file the declaratory judgement until the petition is granted, because you don’t want to file a declaratory judgement only to find your petition was denied. The stay will remain until someone takes moves to lift stay, and even if they do move to lift it, the judge might not find a compelling reason to lift the stay prior to the start of the case.


The AIA provides that patent owners may file a motion to amend the patent by canceling the challenged claims and proposing a reasonable number of substitute claims. 35 U.S.C. §316(d) and 326(d). The Board “appreciate[s] that the ‘just’ resolution of the proceeding consideration supports allowing a patent owner an opportunity to propose a substitute claim for each challenged claim, and also recognize that every substitute claim to be briefed by the parties and analyzed by the Board adds to the cost of the review in terms of both time and expense.” Idle Free Systems, Inc. v. Bergstrom, Inc., IPR2012-00027, Paper 26 at 4 (P.T.A.B.  Jun. 11, 2013)

The Board in Idle Free focuses on the general rule being one-for-one substitution, which can only be rebutted by a demonstration of need due to special circumstances. Wanting to have back up options in case one claimed is proved unpatentable is not a special circumstance good enough to overcome the one-for-one substitution rule. (Id. at 6). This is of course evaluated on a case-by-case instance. So if for example they were to say the patent owner wanted to get rid of 45 claims but substitute five claims for claim number two and have total number of claims in amendment be six or seven claims, that would probably be fine, says Tierney.

The Board looks at the rationale behind the claims, and substituted claims are to be discussed on claim-by-claim basis with special attention to making sure the new claim does not broaden claims or add new matter. Requirements for substitute claims, as described in Idle Free are as follows: 1) Make a showing of patentable distinction over all other proposed substitute claims for the same challenged claim; 2) Make a showing of patentable distinction over prior art; and 3) When applicable, make a showing of patentable distinction over a substitute claim for another challenged claim. (Id. at 6-7).

PGCs Tomorrow

“I hope, from an in-house perspective PGC continues to help. I hope the scope of various challenges increases. There’s a lot of various legislation out there being proposed, lot of CBM stuff pending. I think it’s a good thing…the original intent of all this is to lower the number of low quality patents out there and find alternative low cost options to litigate patents…There’s a greater chance of success, and the incentive is, yes, we can fight back,” says Pandya.

There’s a lot that remains to be seen about the success of PGC options and certainly a lot we have to figure out about the interactions between PTAB proceedings and district court proceedings, especially after the fast-tracking of the Innovation Act. For now, we can only survey the incomplete landscape and methodically evaluate whether this forum is going to be the right one for one particular client, at one particular time, in one particular case.


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