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Patent Owners Beware: Preliminary Response in Inter Partes Review Takes On New Significance

Steven A. Abreu

Steven A. Abreu | Partner, Trademark Chair View more articles

Steven is a member of our Trademark Practice Group and Litigation Practice Group

Inter partes review (“IPR”) has become the forum of choice for challenging the validity of a patent. Introduced in 2012 as part of the America Invents Act, it is a relatively new proceeding in the U.S. Patent and Trademark Office conducted by a panel of judges from the Patent Trial and Appeal Board (the “Board”). IPRs begin with a petitioner requesting that the IPR be instituted. Within three months of the request, the patent owner may choose to file a preliminary response arguing that the IPR should not be instituted.

If the Board is persuaded that the petitioner has not demonstrated a reasonable likelihood that it will prevail in its challenge of at least one claim, the IPR will be denied. Conversely, the Board may institute the IPR if it determines that the petitioner has a reasonable likelihood of invalidating at least one claim. If the IPR is instituted, the patent owner must respond with a “patent owner response” within three months of the institution date. The petitioner then gets a chance to file a “reply to the patent owner response.” The parties may also have an opportunity for oral argument thereafter. The entire procedure will be concluded with a final written decision from the Board within one year of the institution of the IPR.

Before May 2, 2016, the Board’s regulations provided an unfair advantage to petitioners at the pre-institution stage. Specifically, petitioners could have an expert in the field provide expert testimony in support of the petition, whereas patent owners were not allowed to use their own expert to support arguments made in the preliminary response. This oddity in the law allowed petitioners to rely on an expert to advance their claim-construction theory, while patent owners could only rely on attorney argument. The rules have since changed to allow patent owners as well to submit expert testimony in the preliminary response.

Even with this change, patent owners remain at a disadvantage in the pre-institution phase because of time constraints. Petitioners usually have months, even up to a year, after being sued for infringement to file their petition. Patent owners, by contrast, have only three months to provide their preliminary response. While petitioners have ample time to find an expert and put together the petition, patent owners have to find a suitable expert and prepare the preliminary response in a matter of months.

In view of recent case law developments, the preliminary response and supporting expert declaration may be more important than ever. In SAS Institute, Inc. v. ComplementSoft, LLC, the Federal Circuit decided a procedural issue and in doing so may have unwittingly placed a large burden on patent owners during the pre-institution phase of an IPR.

After SAS filed a petition, the Board instituted the IPR and adopted a claim construction for a term used in the patent. The IPR proceeded all the way through oral argument using the first claim construction. However, when the Board issued its final written decision, it adopted a new and different claim construction presented by neither of the parties.

SAS appealed the decision and asked the Federal Circuit to remand the case so that SAS could present evidence of unpatentability under the new claim construction. The court obliged, throwing out the part of the Board’s decision relating to the claim construction and sending the case back so the parties could address the Board’s new construction of the claim term.

As a result of SAS Institute, the Board must now provide parties with an opportunity to present argument whenever it adopts a new claim construction. The Board is required by law to reach a final written decision in IPRs within one year of the date of institution. Given this strict time constraint, SAS Institute, with its potential for requiring more steps in the proceeding, may disincline the Board to adopt a new claim construction late in the proceeding. Accordingly, the construction that is adopted at the time of institution is now more likely to remain in effect in the final written decision.

As a result, the claim construction case urged by patent owners in the preliminary response may be of critical importance. Patent owners no longer have the excuse that they were unable to present expert testimony and are cautioned to ensure that the claim construction proposed in their preliminary response is complete and well considered. More than ever, patent owners must act quickly to find a reliable expert and assemble an effective claim construction argument within the three-month deadline.

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