5 Things You Should Know About the PTAB’s New Rules Governing Post Grant Administrative Trials

Disappointing some (i.e., Patent Owners) who were looking for a more significant changes to the rules governing inter partes review, post grant review, and/or covered business method review, on April 1, 2016, the Patent Office issued its Amendments to the Rules of Practice for Trials Before the Patent Trial and Appeal Board. About one year earlier, the Office hinted at the possibility of more sweeping proposals for change, but many of the more major proposals were not implemented and only more incremental change was adopted. Here are the five things every Patent Owner and Petitioner must know about the new ground rules governing the most seismic change in patent law in several generations – post grant administrative trials.

1. Expiring Patents May Not Be Subject to the Broadest Reasonable Interpretation Claim Construction Standard.

As we await the Supreme Court’s decision in In re Cuozzo Speed Techs., LLC, where it will decide whether the Office has been properly applying the Broadest Reasonable Interpretation (BRI) to post grant administrative trials, or whether it should have been applying a Phillips-type claim construction standard, the Office has implemented a rule that, for patents that will expire before the end of any trial, a Phillips-type construction can be implemented. 37 CFR §42.100 is amended to state that, if either party certifies that a patent will expire within 18 months from the petition being granted a filing date, it may be appropriate to treat the claims of that patent pursuant to a Phillips-type standard. If your post grant proceeding is directed to an old patent, keep in mind this opportunity to argue claim construction pursuant to Phillips, instead of BRI.

2. Patent Owner May Rely on Witness Testimony in its Patent Owner Preliminary Response.

Patent Owners often felt as if they were fighting with one hand tied behind their backs during the preliminary phase of a post grant proceeding because the Petition often contains testimonial evidence, but the Patent Owner Preliminary Response (POPR) was expressly required not to contain any such testimony. Now, 37 CFR §42.107 has been amended to eliminate the prohibition against presenting new testimony in a POPR. This change loosens the knot tying Patent Owners hand, but does not eliminate it entirely. While the Board can consider this testimony filed with the POPR, if a question of fact is created by such testimony, as compared to the Petition, the testimony shall be viewed in the light most favorable to Petitioner, solely for purposes of deciding whether to institute trial. 37 CFR §42.108. In addition, Section 108 is amended to make clear that Petitioner may seek leave to file a reply to the preliminary response, upon a showing of good cause.

3. Rule 11-Type Certifications Required with Each Filing Before the Board.

Intended to be little-used (hopefully), the Office has provided greater detail on its expectations for counsel and parties participating in post grant proceedings, including providing a procedure for sanctions motions that did not previously appear in the rule. In general, the rule makes clear that each paper in a post grant proceeding must be submitted in good faith, similar to the requirements of Rule 11 from the Federal Rules of Civil Procedure.  More specifically, the papers must comply with 37 CFR §11.18(b), which requires that any signature is a certification that:

“(2) To the best of the party’s knowledge, information and belief, formed after an inquiry reasonable under the circumstances,

(i) The paper is not being presented for any improper purpose, such as to harass someone or to cause unnecessary delay or needless increase in the cost of any proceeding before the Office;

(ii) The other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law;

(iii) The allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery; and

(iv) The denials of factual contentions are warranted on the evidence, or if specifically so identified, are reasonably based on a lack of information or belief.”

Hopefully, we were all living by the spirit of that rule anyway…

4. Sometimes the Length of Briefs Will Be Measured by Pages, and Sometimes They Will be Measured by Word Count.

Lawyers seem to have a never-ending well of creativity in bending rules to their clients’ advantage. This creativity extends to such mundane issues as the font style that might allow a few extra words to fit into a Petition or Patent Owner Response. Not up on the difference between Times New Roman and Garamond? No worries, for Petitions, Patent Owner Preliminary Responses, Patent Owner Responses, and Petitioner Replies, there are now word count limits, instead of page limits. In IPR proceedings, the Petition, POPR, and Patent Owner Response can be no longer than 14,000 words and an IPR Petitioner Reply can be no longer than 5,600 words. In PGR and CBM proceedings, the Petition POPR, and Patent Owner Response can be no longer than 18,700 words and the Petitioner Reply no longer than 5,600 words. Page limits govern the remaining briefs, including Motions to Amend, the limit for which was changed in 2015 to 25 pages.

5. What is Not Contained in the New Rules?

One of the bigger storylines relative to the new rules governing post grant administrative trials is what the Patent Office considered changing, but ultimately left standing. For example, a large buzz was created with the Office’s proposal of a pilot program that comprised having one judge consider the merits of a petition at the decision to institute stage, and then have two more judges jump in to consider the patentability of the patent-at-issue in the trial. The Office chose not to implement this program and, instead, the same three-judge panel that decides whether or not to institute trial will also issue the Final Written Decision at the end of the trial. Other changes that were oft-discussed, but not implemented, include: relaxing the restrictions on additional discovery, especially has it relates to secondary considerations and real party-in-interest issues; addressing the interaction between multiple proceedings against a patent (i.e., AIA trial, reexamination, or reissue); liberalizing the use of live testimony at oral hearings; and recognizing privilege for communications with domestic patent agents and foreign patent practitioners. Relative to certain of these issues, the Trial Practice Guide will be amended to provide further guidance to parties, as to the others, time will tell as to whether enough momentum is generated to further change the rules of post grant proceedings.

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Believe it or not, we are still in the infancy stages of the new post grant proceedings that have exceeded almost everyone’s expectations regarding the impact they would have on patent litigation. Indeed, expect all three branches of the government to continue to tinker with the proceedings – the USPTO has stated it will continue to monitor and change the proceedings as conditions warrant; the Federal Circuit and Supreme Court are just recently having a major impact on the way the proceedings are to work; and do not count out Congress to make further changes to the proceedings (after the crazy election season has ended).