2019 Post-Grant Report

[co-authors: Emma Brown, Lauren McGovern, James Cosgrove]

However, it is notable that a comparison of 2019 and 2018 statistics reveals about a 30 percent decline in filings. Under the guidance of its newly appointed chief judge, Scott Boalick, who assumed his new role in March 2019, the PTAB announced a new Pilot Program granting patent owners new options for motions to amend and a second update to the America Invents Act (AIA) Trial Practice Guide (TPG) relating to recent precedential decisions. Incidentally, 2019 also marked the eighth anniversary of the AIA. We saw important decisions from the Supreme Court in Return Mail—barring the federal government from initiating post-grant challenges—and from the United States Court of Appeals for the Federal Circuit in Arthrex, challenging the constitutionality of administrative patent judges.

The PTAB Bar Association continued its momentum and had another dynamic year, including its third Annual Conference in March as well as its second annual Leader Summit in November. Both conferences were well attended by practitioners, in-house counsel, and members of the bench. The association also submitted an amicus brief in the Supreme Court Click-to-Call case and released its inaugural report on Women at the PTAB, prepared by the association’s Women’s Committee. The fourth Annual Conference is scheduled for March 11-12, 2020.

Fish & Richardson’s 2019 Post-Grant Report takes a deep dive into the cases, trends, and statistics that shaped post-grant practice throughout the year and postulates how they may affect practitioners going forward.

In 2019, the U.S. Patent and Trademark Office (USPTO) published two updates to the PTAB’s Trial Practice Guide. First, in July, the USPTO published a substantive update to provide additional guidance about PTAB practice. Second, in November, the USPTO published a second edition of the practice guide to incorporate the August 2018 and July updates into the original August 2012 practice guide. The November update was largely clerical, as the second edition merely consolidates all updates into a single document and provides slight revisions to ensure consistency across all sections.

The July update largely revised the TPG to reflect precedential or informative decisions and other established developments that had occurred since the August 2018 update. Two of the more significant changes relate to claim construction and the procedure for evaluating multiple challenges to a single patent.

As to claim construction, the July update is noteworthy because it was the first update to address the USPTO’s change in the claim construction standard from the broadest reasonable interpretation to Phillips. The update explains how the PTAB strives to resolve claim construction issues before deciding whether to institute a review, and it requires a petitioner to include in the petition a statement identifying a construction the petitioner wishes to advance and any evidence that supports that construction. In fact, the update confirms that the petitioner can respond to claim constructions raised by the patent owner or the board but cannot raise new claim constructions that were not advanced in the petition.

The July update also provides guidance on how the PTAB will evaluate claim construction decisions made by a district court or the International Trade Commission. Although the standard is now the same and the board will consider decisions that are timely made of record, the board will not simply adopt constructions made in other forums. Rather, the board will make its own decisions on claim construction, taking into account the degree of similarity between the records in the different proceedings and whether the other construction is final.

With these updates, the board has expressed a clear desire for parties to advance claim construction positions early, and it expects parties to be candid about constructions offered in different forums. Indeed, the board strives to prevent situations where a party changes an interpretation based on arguments from the other party or developments in another forum. For these reasons, it is more important than ever to develop claim construction positions early and to coordinate claim constructions across proceedings involving the same patent.

As to multiple petitions, the July update confirms the board’s disfavor of multiple petitions against a single patent, explaining how the board generally considers a single petition sufficient to balance fairness, timing, and efficiency concerns of patent owners. The new guidance does not eliminate the potential for institution of multiple petitions, but it places the burden on the petitioner to explain why “more than one petition is necessary” and requires the petitioner to provide a ranking of petitions when multiple petitions are being filed.

To enable petitioners to meet this burden, the July update introduces a new procedure that allows petitioners to file a separate paper, limited to five pages, to rank the petitions and explain why the differences between the petitions justify institution of more than one. The update provides two examples of justifications for multiple petitions: (1) “when the patent owner has asserted a large number of claims in litigation” or (2) “when there is a dispute about priority date requiring arguments under multiple prior art references.”

Patent owners are granted a separate, five-page paper to respond to petitioner justifications and explain why more than one petition is unnecessary. A patent owner can avoid multiple petitions by offering stipulations that resolve a disputed issue, such as stipulating that it will not contest a dispute about a priority date that differentiates two petitions.

With these changes, the board is seeking to limit multiple attacks against a single patent. Although the board’s jurisprudence on discretionary denial was already trending in this direction, the July update confirms that the board places the burden on petitioners to justify why multiple petitions against a single patent are needed.

In 2019, the PTAB issued the first precedential decisions from the Precedential Opinion Panel. The USPTO revised its standard operating procedures in the last half of 2018, which included a new path for establishing precedential decisions that have binding authority on future PTAB panels. In particular, the mechanism of the Precedential Opinion Panel was intended to serve the USPTO’s “interest in creating binding norms for fair and efficient Board proceedings, and for establishing consistency across decision makers under the [AIA].” See PTAB Standard Operating Procedure 2, p. 2. The Precedential Opinion Panel will normally, by default, consist of the director, the commissioner for patents, and the chief judge.

In 2019, the director acted in three cases to review earlier board decisions for purposes of providing a Precedential Opinion Panel decision (POP decision). The first POP decision was provided in March and addressed the issue of “same party joinder.” See Proppant Express Investments, LLC v. Oren Technologies, LLC, IPR2018-00914, Paper 38, 3-5 (Mar. 13, 2019). The second POP decision, issued in August, addressed the issue of whether the one-year window to file a petition is triggered by a deficient litigation complaint. See GoPro, Inc. v. 360Heros, Inc., IPR2018-01754, Paper 38, 2 (Aug. 23, 2019). Last, a third POP decision addressed the question of what must be shown in a petition to sufficiently establish that a textbook or other non-patent reference qualifies as a “printed publication.” See Hulu, LLC et al. v. Sound View Innovations, LLC, IPR2018-01039, Paper 20 (Dec. 20, 2019). In all these cases, the Precedential Opinion Panel acted in response to a request for rehearing from a party in an inter partes review (IPR) proceeding, provided notice to the public that the Precedential Opinion Panel would act in that particular adjudication, invited briefing from the parties and other amici, and participated in an oral hearing.

Even though such POP decisions are binding on PTAB panels in future cases, there remains a lively debate as to whether the Federal Circuit should afford deference to such “precedential” decisions—namely, a level of deference often referred to as Chevron deference. Chevron U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984). Under this doctrine, a court is obligated to defer to an agency’s rules that interpret an ambiguous statute if the agency’s interpretation is reasonable. United States v. Mead Corp., 533 U.S., 218, 226-27 (2001). Recently, a Federal Circuit panel voiced concerns about whether such POP decisions should be given deference during appellate review because they are not the result of formal notice-and-comment procedures. See Facebook, Inc. v. Windy City Innovations, LLC, Appeal No. 2018-1400 (Fed. Cir., oral hearing Aug. 6, 2019) (questioning the effect of the POP decision in Proppant Express). In particular, U.S. Circuit Judge Plager commented during oral hearing that “[t]hey can’t get Chevron deference in any sense, so you should put that out of your mind.” Id. Additionally, Chief U.S. Circuit Judge Prost questioned why the USPTO had not yet intervened in this appeal, explaining that “I don’t understand why they haven’t intervened because there is a very important question of joinder here.” Id. Several days after the oral hearing, the Federal Circuit panel ordered additional briefing, including briefing from the USPTO on this specific issue.

The USPTO submitted a brief in September that explained why the decisions of the Precedential Opinion Panel should be entitled to Chevron deference. Namely, the USPTO cited the Supreme Court’s Mead decision to demonstrate that Congress can delegate...