By Tom Engellenner
Newly appointed USPTO Director Michelle Lee has responded to public criticism of the post-grant patent review mechanisms provided by the America Invents Act (AIA) by announcing in her blog last week that the government will implement several rule changes. The new rules, which will be implemented in three stages, have not yet been finalized but Director Lee strongly hinted these changes should benefit Patent Owners.
One of the rule changes apparently will make it easier for patent owners to amend their claims that are challenged by petitioners in inter partes review (IPR), covered business method (CBM) review and post grant review (PGR) proceedings.
According to the Director Lee, a first round of “quick fixes” will be released in the spring, followed by a second round of more substantial changes that will be published in the Federal Register for public comment in the summer. A third round of changes will follow involving revisions to the PTAB Trial Practice Guide, which governs the conduct of IPR, CBM and PGR proceedings.
Director Lee characterized the first round of changes as follows:
One of our quick-fix changes will nearly double the number of pages for a motion to amend, granting up to twenty-five pages for the motion along with the addition of a claims appendix (with a commensurate amount of additional pages for the opposition and reply briefing). Another change will nearly double the number of pages for a petitioner’s reply brief, granting up to twenty-five pages. Notably, even before these two changes appear in the first rule package, judges will begin implementing them through scheduling orders effective immediately.
She also provided some information on the more substantive rule changes currently contemplated by the USPTO:
As to our second rule package of more involved changes, we are considering proposing a number of other revisions to rules including: further modifications to the motion to amend process; adjustments to the evidence that can be provided in the patent owner preliminary response; and clarification of the claim construction standard as applied to expired patents in AIA proceedings.
The issue of amendments and how the PTAB should treat them has been a source of considerable controversy. So far the Patent Trial and Appeal Board has made it very difficult to amend claims during AIA reviews. (As of last count, only two substantive amendments have been approved in the nearly two years of AIA proceedings.)
Although the AIA specifically provides for amendments by Patent Owners to avoid prior art cited by a petitioner, under current PTAB practice amendments are routinely denied. The current PTAB rules require that motions to amend show not only that the proposed new claims are patentable over the prior art that is in the record, but also that the proposed claims are patentable over all the prior art that may not be of the record but is known to the patent owner. The PTAB panels have rejected almost all proposed amendments under this standard, determining that the Patent Owner failed in its burden of proving the amended claims are patentable. Essentially, the PTAB requires Patent Owner to prove a negative, e.g., that no prior art or combination of prior art exists that would render the invention unpatentable. Director Lee said the USPTO is contemplating changing the standard for motions to amend so that patent owners will not have the burden of proving a negative:
Additionally, regarding motions to amend, we are contemplating proposed changes to emphasize that a motion for a substitutionary amendment will always be allowed to come before the Board for consideration (i.e., be “entered”), and for the amendment to result in the issuance (“patenting”) of amended claims, a patent owner will not be required to make a prior art representation as to the patentability of the narrowed amended claims beyond the art of record before the Office. Of course, the duty of candor and good faith requires the patent owner to make of record any additional prior art material to patentability known by the patent owner. These contemplated changes would be intended to more noticeably limit the burden on the patent owner, even though the patent owner is the party moving for the change in the patent.
Director Lee’s blog posting also mentioned reform of discovery practices at the PTAB, specifically with respect to the “real party in interest” requirement. Under current practice, PTAB panels often deny discovery because the Patent Owner has failed to demonstrate a priori that meaningful documents or information exists. Lee apparently wants to change this practice:
Further, we understand that the existence of ample discovery to establish the real-party-in-interest (RPI) of the petitioner has been a concern. And we want to be sure that the availability of appropriate RPI evidence does not pose a problem for patent owners.
In addition, Director Lee proposed a “pilot program” to address the perception that PTAB judges who decide to institute a trial rarely change their minds even after the Patent Owner has presented evidence to rebut the petitioner’s position. Currently, a three-judge panel is assigned to a case when the petition is filed. These three judges decide whether the petitioner has demonstrated a “reasonable likelihood” of showing that a challenged claim is invalid – and if so, the PTAB institutes a trial. The same panel then presides over the trial and reaches a final written decision to determine whether the petitioner has demonstrated invalidity of the instituted claims by a preponderance of the evidence.
The pilot program would change the dynamics by having a single judge decide whether a trial should be instituted. A three-judge panel would then conduct the trial. Accord to Director Lee:
[T]o the extent that there has been concern that the judges participating in a decision to institute a trial may not be completely objective in the trial phase, we are considering developing a single-judge pilot program for institution. Under this pilot, a single judge would make the decision on whether to institute a trial. Two new judges would be added to the panel only when and if a trial is instituted. In the interest of efficiency, the first judge would remain on the panel; but in the interest of having “fresh eyes,” the two additional judges would not have participated in the matter prior to institution. After running this pilot for a select number of cases, we would study the results to determine the approach to follow in the future.