United States: AIA Reviews: New Rule Packages Illustrate The PTO's Evolutionary Approach To Rulemaking

Originally appeared in PTAB Monitor: Developments in Inter Partes Review Practice

The America Invents Act (AIA) tasked the Director of the Patent Office with creating rules for implementing post-grant proceedings (e.g., covered business method, post grant, and inter partes reviews). But while the Director enacted a rule set in 2012, the Director's view was that the rules were to be evolutionary. In the words of Director Michelle K. Lee, "[t]he USPTO issued rules and guidance for the new AIA proceedings in 2012. Despite best efforts, we never envisioned that our rules or guidance would be perfect at the outset, but instead anticipated making refinements along the way."1

So, in 2014, the Patent Office conducted a nationwide "listening tour" and, in response, considered and instituted a number of rule changes for post-grant proceedings. These changes are important both to clients and practitioners because post-grant challenges have become a key component in the enforcement and defense of patent rights.2 Notably, the Patent Office rule changes illustrate that the rules of post-grant proceedings are not set in stone and that the Patent Office is sensitive to issues of fairness. The most important areas addressed by the Patent Office's 2016 rule changes are as follows:

Claim Construction Standard

Importantly, the Patent Office considered but ultimately declined to change one of its most contentious rules—that for any unexpired patent examined in a post-grant proceeding, the Patent Office will use the Broadest Reasonable Interpretation (BRI) claim construction standard, as opposed to the Phillips claim construction standard used in District Court proceedings. Notably, by the time that the Patent Office issued its decision to keep the rule unchanged, the Court of Appeals for the Federal Circuit had already affirmed the Patent Office's use of the rule,3 and the Supreme Court later agreed.4 But the Patent Office did clarify that for patents that are set to expire within 18 months of the petition, either party can request a Phillips-type claim construction standard.

The Patent Owner Can Submit New Testimonial Evidence with a Preliminary Response

One of the most important changes to the PTAB practice is the new ability of Patent Owners to submit testimonial evidence in support of their preliminary Patent Owner statements (submitted prior to an Institution Decision). Before May 2, 2016, a petitioner was able to submit a petition challenging the validity of a patent along with supporting testimonial evidence (e.g., an expert declaration), but the patent owner was only able to argue against institution and could not submit any supporting testimonial evidence. The Patent Office changed its rule to correct the apparent asymmetry by "allow[ing] a patent owner to submit new testimonial evidence with its preliminary response."5 In the six months since this rule change, roughly 31 percent of Patent Owners preliminary responses filed have included such declarations. However, notably, in the four decisions on institution that have resulted therefrom, the Board instituted trial in all four cases despite the Patent Owner having submitted a declaration with its preliminary response. See Amneal Pharms. LLC. v. Purdue Pharma L.P. et al., IPR2016-01028, Paper 12 at 36-37 and IPR2016-01027, Paper 13 at 29 (instituting trial even though the patent owner submitted a declaration with regards to secondary considerations of nonobviousness); see also AM General LLC v. UUSI LLC, IPR2016-01050, Paper 17 at 25-26 (instituting trial even though the patent owner submitted a declaration attempting to distinguish the prior art).

It may well be the case that this rule change does not bring a substantial shift in institution decisions because "any factual dispute created by [the patent owner's] testimonial evidence that is material to the institution decision will be resolved in favor of the petitioner solely for purposes of determining whether to institute a trial."6 The Patent Office still has only three months after receiving the preliminary response to decide whether to institute review, which is not enough time to "allow generally for cross-examination of a" patent owner's declarant or to resolve factual disputes. Therefore, declarations that only raise a battle between experts will not be enough to avoid institution. For example, in Akamai Techs. v. Limelight Networks, Inc., the Patent Office received expert declarations from both the petitioner and patent owner regarding the construction of a claim term and ultimately determined that since they created a "genuine issue of material fact" the Patent Office credited the petitioner's declaration and instituted trial. IPR2016-01011, Paper 8 at 13.

Similarly, while the Patent Office does not allow "the petitioner to file a reply brief as of right," the Patent Office may allow a petitioner to file a reply upon a showing of good cause. In the six months since the rule changes, petitioners have filed roughly 30 such motions, half of which were granted. Notably, in the Akamai proceeding discussed above the petitioner filed a preliminary reply and the patent owner a surreply (on the issue of standing) and the Patent Office still instituted trial.

But we have yet to see whether this rule change will affect the course and outcome of a PTAB trial, where the Patent Office fairly weighs the strength of the experts against each other without any petitioner tie-breaker. Moreover, while a preliminary Patent Owner declaration may not be enough to dispose of trial altogether, the patent owner can use the opportunity to, through an expert, raise issues of credibility and recast facts before institution, refine those positions throughout trial and ultimately achieve success in a Final Written Decision.


The Patent Office also provided a mechanism to assure a level of good faith dealings by practitioners and parties during post-grant proceedings, by implying certifications with papers submitted in post-grant reviews and exposing practitioners and parties to sanctions if they don't comply, akin to Rule 11 certification in district court practice. The Patent Office amended 37 C.F.R. 42.11 to specify that when a party makes a submission in a post-grant proceeding, the party impliedly certifies, to the best of their knowledge, that: (1) the paper is not being filed for an improper purpose; (2) all legal positions taken therein are warranted by either existing law or a non-frivolous argument to change the law; (3) all factual allegations made therein have (or will likely have) evidentiary support; and (4) all denials of factual contentions are true and have evidentiary support or are reasonably based on a lack of information or belief.7 Sanctions are available against any attorney, registered practitioner or party that violates this rule is or responsible for such a violation.

In the six months since this rule was implemented, there has been only one request for authorization to file a motion for sanctions under the new rule. The request was filed in six separate proceedings. See Hilti, Inc. and Snap-On Inc.v. Milwaukee Electric Tool Corp., IPR2015-01164, IPR2015-01165, IPR2015-01166, Paper 70; Snap-On Inc.v. Milwaukee Electric Tool Corp., IPR2015-01242, IPR2015- 01243, IPR2015-01244, Paper 70. The patent owner alleged that the petitioner paid its declarant for his testimony and to "dig up" confidential documents from a third party. The Patent Office denied the request because the patent owner did not suggest that the rate paid the declarant was unreasonable for the time spent or why any breach of the patent owner's confidentiality by the third party should be attributable to the declarant and Petitioner. While there has only been one ruling thus far under the revised rule, based on the tenor of the Board's decision to date, we can fairly assume that the PTAB will use its sanctions power sparingly.

In addition to the substantive changes discussed above, the Patent Office's 2016 rule changes also touched procedural aspects of PTAB proceedings, namely page limits:

Relaxing Page Limits

Previously, parties to post-grant proceedings were highly constrained by many of the Patent Office's strict page limits. So in rule changes on April 1 and May 2, 2016 the Patent Office changed the page limits on party submission to word limits. While this change may seem small, it allows parties dealing with complicated technologies to effectively use graphics to illustrate complex technological nuances without worrying about page constraints. The Patent Office also expanded the limits for certain submissions for which parties felt especially constrained (i.e., motion to amend, opposition to motion to amend, and petitioner's reply). We expect to see an increased use of illustrations or graphics to explain technology and convey arguments in light of the PTO's rule changes.


It is too soon to know what kind of impact the Patent Office's new rules will have on post-grant proceeding outcomes. But it is clear that the Patent Office cares about the public's perception of post-grant proceedings and is willing to listen to criticisms and take measured rule-changing action in response.

» Read more articles from our latest report, PTAB Monitor: Developments in Inter Partes Review Practice.


2.http://www.uspto.gov/sites/default/files/documents/2016-07-31%20PTAB.pdf at 6.

3.In re Cuozzo Speed Techs., LLC, 793 F.3d 1268, 1278 (Fed. Cir. July 8, 2015).

4.Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 195 L. Ed. 2d 423 (2016)

5.http://www.uspto.gov/sites/default/files/documents/81%20FR%2018750.pdf at 18755; 37 C.F.R. 42.107(a).

6. http://www.uspto.gov/sites/default/files/documents/81%20FR%2018750.pdf at 18755; 37 C.F.R. 42.108(c).

7. See 37 C.F.R. 11.18(b)(2).

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