United States: IPR’s Limited Grounds Prove Challenging For Petitioners

The post-grant inter partes review (IPR) procedure was introduced in September 2012 as a replacement for inter partes reexams, and as a faster, cheaper alternative to litigation.1 In an IPR, a petitioner can challenge a patent by asserting that the patent is invalid because prior art patents or printed publications anticipate or render obvious the patent claims.

A year after the procedure's introduction, questions about its implementation and efficacy are starting to be answered. From a potential petitioner's standpoint, early results provide reason for optimism. For one thing, the statutorily quick IPR timeframe appears to be working as advertised—final decisions are being issued within a year of the decision to institute the procedure. In addition, roughly 70 percent of the IPR petitions filed have been granted by the Patent Trial and Appeal Board (PTAB), and of those, the board has agreed to review about 95 percent of the claims raised.

Of potential concern, however, is the PTAB's tendency to grant IPRs on only a subset of the grounds raised in a petition—about 50 percent on average. The remaining grounds are typically denied as cumulative or redundant. The PTAB has justified these denials as necessary for the "just, speedy, and inexpensive resolution of every proceeding" as specified in C.F.R. § 42.1(b). Unfortunately for petitioners, the denied grounds may still count as grounds that were "raised or reasonably could have been raised"—and therefore subject to estoppel under 35 U.S.C. § 315(e).

If the references cited by petitioners were truly "cumulative or redundant," this potential estoppel might be less troubling. The teachings of references are rarely identical, however, and minor differences can become major differentiators in ways that are difficult to predict at the outset of a proceeding. Depending on arguments made by a patent owner, certain art may ultimately be stronger or weaker relative to other, similar art—yet the petitioner is likely foreclosed from bringing in any grounds (and associated references) that were previously denied.

An additional complication is that all references do not have the same prior art status. One reference may qualify as (pre-AIA) §102(a) prior art (which can be "sworn behind"), while another reference may qualify under §102(b) (which cannot). If the PTAB discards the §102(b) reference as redundant, the patent owner may then be able to swear his or her way out of invalidity. The frustrated petitioner may then be estopped from ever challenging the patent based on the §102(b) reference. The PTAB may even consider obviousness grounds redundant with respect to anticipation grounds, despite the different legal standards for assessing these bases for invalidity. Anticipation is an all-or-nothing proposition: either all of the claim elements are found in a single reference or they are not. A slightly narrower claim construction can derail an anticipation argument, as can a slightly different reading of a reference. Obviousness is more flexible, as it allows a petitioner to submit multiple references to supply all of the required claim elements. Its flexibility may, however, give the patent owner more maneuvering room.

From a petitioner's standpoint, it may be desirable to go in with both types of arguments, and pivot based on the how the proceeding unfolds—but the PTAB's stance on redundancy may thwart this approach.

Footnote

1 For additional discussion of the IPR procedure and estoppel effects, see http://www.mofo.com/files/Uploads/Images/120307-Patent-Litigation-Strategy.pdf .

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Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

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