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Post-Issuance Proceedings in the America Invents Act

Andrei. Iancu and Ben Haber*

I. Introduction
President Obama signed the "America Invents Act" 1 ("the Act") on September 16, 2011. This Act represents the culmination of many years of intense political debate, and marks the most significant change in patent law for almost 60 years. One key provision of the Act makes substantial changes to post-issuance review of patent validity within the United States Patent and Trademark Office (PTO). When the provisions are implemented, 1 year post enactment, the PTO may become more viable as an alternative to district court litigation, for both patentees and potential infringement defendants with patent validity questions.

The first American patent act was signed into law in 1790. For most of the time since then, there has been no way to challenge an issued patent's validity outside of federal court. Only relatively recently, in 1980, did Congress create the first Reexamination process that could be requested by third parties. As first created, this process did not allow the requester to participate in the proceeding after making the Reexamination request. It was not until 1999, with the creation of Inter Partes Reexam, that a third party could participate and actively oppose an issued patent. This latter procedure, however, was not quickly adopted by the patent bar because there were several

* Andrei Iancu is a partner at Irell and Manella LLP in Los Angeles, California, and Ben Haber is an associate at Irell and Manella LLP and a J. D. candidate, class of 2012, at Loyola Law School of Los Angeles. The views expressed in this article are those of the authors only, and do not reflect the views of Loyola Law School, Irell and Manella LLP, or any of its clients. 1 This Act was called S.23 in the Senate, passed March 8, 2011, and H.R. 1249 in the House, passed June 23, 2011. These two bills were substantially similar, but did contain a few minor differences. Rather then reconcile the differences, the Senate abandoned its version of the Act and passed H.R. 1249 without amendment. Since H.R. 1249 is the version of the act which that was enacted, all citations in this document refer to H.R. 1249.

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procedural defects: it was costly, time consuming, had potentially detrimental effects regarding both estoppel and appeal, and applied only to patents which issued on applications filed after November 1, 1999. Some of these problems were addressed with subsequent legislation, yet some issues persisted. The current American system exists in stark contrast to practice in other countries. For example, opposition proceedings are available to challenge the validity of patents recently issued by the European Patent Office. Additionally, both pre- and post- issuance opposition has long existed for United States trademarks. It is against this backdrop that Congress revamped the options available in the PTO for post-issuance review of recently issued patents. This article will describe the postissuance proceedings available in the PTO when the America Invents Act is fully implemented. In part II, we provide brief summary of the procedures that were available before passage of the Act. In part III, we provide a detailed description and analysis of the options made available by the Act. Finally in part IV, we conclude that Congress clearly intends to make the PTO a viable alternative to district court litigation for answering questions of patent validity.

I. Current Ex Parte and Inter Partes Reexam

Prior to passage of the Act, the only postissuance review options have been Ex Parte Reexam and Inter Partes Reexam. In an Ex Parte Reexam only the patentee and the PTO participate, while the patentee,

PTO, and the third party requester all participate in an Inter Partes Reexam. See 35 U.S.C. 302, 311. Accordingly, if the third party wants to play a part in the ultimate resolution, they must request an Inter Partes Reexam. Both types of Reexam are only based on 102 and 103 patents or printed publications that raise a substantial new question of patentability. 35 U.S.C. 301, 302, 311. The PTO Director ("Director") orders a Reexam after a requester raises this substantial new question of patentability. 35 U.S.C. 303, 312. Experienced patent examiners conduct the Reexam in much the same way as primary examination. 35 U.S.C. 305, 314. The examiner considers the patent in light of the newly presented prior art and issues rejections as appropriate. The patentee then responds with either argument or amendment to the claims. See 35 U.S.C. 132, 133. The third party requester in an Inter Partes Reexam may also respond to each of the patentee's arguments or amendments. 35 U.S.C. 314. This amendment-and-response examination continues until the examiner either issues a final rejection or allows the claims. If the participants are dissatisfied with the actions of the examiner, either may appeal to the Board of Patent Appeals and Interferences (BPAI). The BPAI will either send the case back to the examiner or issue their own final decision. Only after this, either party , may appeal to the Federal Circuit. 35 U.S.C. 306, 315. There is currently no time limit on the process, and Ex Parte Reexam can take upwards of 24 months, while Inter Partes Reexams could last upwards of 3 years.

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See http://www.uspto.gov/patents/EP _quarterly_report_March_2011.pdf;

http: / / www.uspto.gov /patents /IP_quar terly_report_March_2011.pdf. Once a final decision is reached in an Inter Partes Reexam, the third party requester is estopped from raising in a later civil action any invalidity grounds that it raised or could have raised during the Reexam. 35 U.S.C. 315. The current system has been widely criticized because these options are limited and flawed in several key aspects. As an initial matter, since they are limited to invalidity grounds based only a small subset of prior art, the PTO is simply not available to adjudicate many potential invalidity controversies. Additionally, Ex Parte Reexam appears to some commentators as somewhat biased for the patentee; only the patentee's arguments are presented to the examiner and claims are cancelled only 11 % of the time. By the same token, Inter Partes Reexam has been argued to favor the 3rd party requester; claims subject to Inter Partes Reexam are canceled or narrowed 87% of the time. Perhaps most importantly, however, is the amount of time they take to reach finality. This large amount of timeand resulting uncertaintyhas increasingly been questioned. Also, the relationship of PTO proceedings to district court proceedings has never been clear. Estoppel and other concerns cautioned practitioners away from these procedures. In light of these criticisms, the Act substantially changes the post-issuance review options of recently granted patents to address some of these concerns.

III. Newly Created or Modified Post-Issuance Review Options

The Act substantially revamps the options available for the post-issuance review of patents. It significantly modifies the existing Inter-Partes Reexam process (and renames it Inter Partes Review), creates a new process for the Post-grant Review of recently issued patents and a transitional program for Post-grant Review of certain business method patents, creates a Supplemental Examination process to correct disclosure errors made during patent prosecution, and increases the scope of information which can be cited against issued patents. Some of these new post-issuance review options are largely "opposition" proceedings: they provide a potential infringement defendant an alternative forum to contest a patent's validity. These opposition proceedings will be more "trial-like," rather then the traditional "amendmentand-response" format of primary examination. Infringement defendants may be drawn to the lower evidentiary burden, and potential for a faster answer to validity questions. On the other hand, defendants were slow to accept the prior Inter Partes Reexam process because of procedural defects. It remains to be seen if the Act's provisions will provide a marked improvement over the prior Ex Parte and Inter Partes Reexam options, but what is certain is that Congress intended to make post-issuance review at the PTO a more attractive proposition. We will discuss each of the available review options in turn. The various options are summarized in the table on the following page.

Oprrently Available Options Current Ex 1?arte Reexam" Current Inter Partes Reexam Any person other than the patent owner Substantial new question of patentability* Patents and printed publications Modified Inter Partes Review Any person other than the patent owner Reasonable likelyhood to prevail Patents and printed publications After 9 months post-issue; OR after Post-grant Review;
AND

Who Can File

Any person

Threshold

Substantial new q uestion of patentability Patents and printed publications

New/Modified Options from the America Invents Act Transitional Post-grant Review Supplemental Examination of Business Methods Any person other than the patent owner that has been Any person other than the Only the patent owner sued for infringement based on patent owner a covered business method patent More likely than not that claim More likely than not that claim Substantial new question of patentability* invalid invalid Post-grant Review Any invalidity ground; OR a novel legal question Any invalidity ground; OR a novel legal question Information believed to be relevant

Citation of Prior Art

Any person

N/A Patents and printed publications; OR any written statement subMitted by patentee to Federal Court

Invalidity Grounds

Time to File

Any time during the enforceability of a patent

Who Can Participate

Only patentee

No later than 1 year after service of infringment complaint" Patentee, parties requesting Inter Partes Reexarn, and other Patentee and single party requesting Inter Partes Reexam joined parties at the discretion of the PTO director Amendment-and-response No Patent examiners Yes, on issues that were raised or could have been raised, when appeals exhausted Yes, on issues that were raised or could have been raised, when appeals exhausted All parties may appeal to BPAI, and then to Federal Circuit 311-318 'Upon Enactment and before Trial-like Yes Patent Trial and Appeal Board Yes, on issues that were raised or could have been raised, when PTAB issues decisison Yes, on issues that were raised or could have been raised, when PTAB issues decisison All parties may appeal to Federal Circuit

Any time during the enforceability of a patent filed after Nov. 1999

Up to 9 months post issue of a patent subject to First-to-File

Any time after service of infringment complaint"

Any time before inequitable conduct is charged with particularity in a civil action

Any time

Patentee, parties requesting Patentee, parties requesting Inter Partes Reexam, and other inter partes reexam, and other joined parties at the discretion joined parties at the discretion of the PTO director of the PTO director Trial-like Yes Patent Trial and Appeal Board Yes, on issues that were raised or could have been raised, when PTAB issues decisison Yes, on issues that were raised or could have been raised, when PTAB issues decisison All parties may appeal to Federal Circuit 321-329 Trial-like Yes Patent Trial and Appeal Board Yes, on issues that were raised or could have been raised, when PTAB issues decisison Yes, but only on issues actually raised, when PTAB issues decisison All parties may appeal to Federal Circuit H.R. 1249 sec. 18(a)-(d) *Program available beginning in i 2020 2012 and sunsets in Review used on all patents, regardless of filing date.

Only patent owner Amendment-and-response No Patent examiners No Prior art considered under Supplemental Examination cannot be grounds for inequitable conduct in
subsequent civil actions

Only party submitting information Submission of information only No N/A N/A

Procedure Pre-decision Settlement Who Conducts the Procedure Estoppel in the PTO

Amendment-and-response No Patent examiners No

Estoppel in Civil Actions

No

N/A

Appeal Code Sections - 35 U.S.C.

No

Patentee may appeal to BPAI, and then to Federal Circuit 302-307

: The current Ex Parte Reexam is not significantly modified by the America Invents Act

No 257 'If the information submitted raises a substantial new question of patentability the
procedure is conducted as an Ex Parte Reexam.

No 301

311-319 *Modified Inter Partes Review modified Inter Partes Review is completely replaces the Current Inter Partes Reexam. 1 year available, threshhold is raised post enactment. Review based to a Reasonable likelyhood to on all patents, regardless of preva I Mina date.

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A. Modified Inter Partes Review

The current Inter Partes Reexam is heavily modified and renamed "Inter Partes Review". Importantly, as in the prior procedure, an Inter Partes Review must still be based only on patents or printed publications that qualify as 102 or 103 prior art. H.R. 1249 6 at 41, 3:5. The rest of the process, however, has been significantly revamped. See H.R. 1249 6 at 40-56. The major difference is that the entire procedure will be conducted in a more trial-like fashion, and can only be filed 9 months after patent-issuance or after the completion of any pending Post-grant reviews, whichever is later. Additionally, a defendant to an infringement action cannot request Inter Partes Reexam more then 1 year after being served with the complaint. H.R. 1249 6 at 45, 1:8. The process will be presided over by the Patent Trial and Appeal Board, staffed with Administrative Law Judges, rather then examiners. There will be opportunities for discovery, a hearing, witnesses, joinder, and settlement. The process must be completed within 1 year, except that an extra 6 months may be added on a showing of "good cause."' These changes make Inter Partes Review a very different procedure then what was previously available.

act requires that the Director promulgate regulations regarding, among other things: fees for Inter Partes Review, H.R. 1249 6 at 40, 16:19; substantive content of the petition requesting Inter Partes Review, H.R. 1249 6 at 47, 7:12; procedures for conducting an Inter Partes Review, H.R. 1249 6 at 47-48; the process by which Inter Partes Review files will become publicly available, H.R. 1249 6 at 47, 1:6; procedures for the discovery of relevant evidence, H.R. 1249 6 at 47, 16:22; sanctions for abuse of the process, H.R. 1249 6 at 47, 23:25; providing the patentee an opportunity to amend the patent, H.R. 1249 6 at 48, 14:21; provisions for joinder of parties and claims, H.R. 1249 6 at 49, 7:8; and the right to an oral hearing, H.R. 1249 6 at 48, 22:23.

2. Petitions
In order to spark an Inter Partes Review, a third party must submit a petition to the Director. Essentially, the petition is simply a written request which identifies the patent at issue, and identifies why the requestor believes the patent to be invalid. The Director will determine whether or not to begin the Inter Parted Reexam process based on this petition. To initiate an Inter Partes Review, a requester may petition the Director begin-

1. Director's promulgation of regulations

The Act describes a skeletal framework for the revamped Inter Partes Review. The act mandates that the Director shall promulgate appropriate regulations to flesh out the procedure no more than 1 year after enactment. H.R. 1249 6 at 53, 15:19. The

2 Additionally, further time may be added in cases involving complex joinder issues.

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ning only 9 months after the patent's issue or reissue, or after the termination of a Post-grant Review, which ever is later. H.R. 1249 6 at 41, 6:12. Additionally, a defendant to an infringement action cannot request Inter Partes Reexam more then 1 year after being served with the complaint. H.R. 1249 6 at 45, 1:8. This is a key change, as there was previously no limit on whenor even how manyInter Partes Reviews could be filed by infringement defendants in ongoing litigation. The petition must identify, with particularity, each claim challenged, the grounds upon which it is challenged, and the specific evidence which supports those grounds. Further, the petition must identify the real party in interest. H.R. 1249 6 at 41, 19:25. The petition itself will ultimately be available for public inspection. H.R. 1249 6 at 42, 13:15. A patentee has the opportunity to respond to the petition and argue that reexamination is unwarranted. H.R. 1249 6 at 42, 17:22. The Director must respond to the petition within 3-months from the receipt of the patentee's response, or the deadline for response, whichever is earlier. H.R. 1249 6 at 43, 6:13. The Director may not authorize an Inter Partes Review unless the petition and response show "that there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged." H.R. 1249 6 at 42-43. Not only has the threshold for initiating an Inter Partes Review been altered, the mandate to the Director has been altered as well. In the prior 313, the Director was required to initiate an Inter Partes Review if the petition raised a substantial new question of patentability. See 35 U.S.C. 313. Proposed 314, however, is worded in the negative, with no affirma-

tive mandate: an Inter Partes Review cannot be ordered unless the threshold is met. H.R. 1249 6 at 42-43. This may leave the Director discretion to deny an Inter Partes Review even if the threshold is met. Additionally, prior 312 required the Director to determine whether the petition raised a substantial new question of patentability and act accordingly; the charge to the Director was to determine the threshold condition and begin the Inter Partes Review if the threshold was met. Proposed 314, on the other hand, requires that the Director determine whether or not to institute an Inter Partes Reviewnot specifically directed to a determination of the threshold conditionbased on the petition and response. H.R. 1249 6 at 43, 6:9. The current charge to the Director is to determine whether or not to institute an Inter Partes Review, but only if the threshold is met. The Director may thus retain some discretion in determining whether or not to proceeddiscretion lacking in the prior procedure. 3. Proceedings Once initiated, Inter Partes Reviews will be conducted by the Patent Trial and Appeals Board (PTAB)the renamed Board of Patent Appeals and Interferencesrather than by patent examiners. H.R. 1249 6 at 49, 18:21. This change is important because it makes the process much more trial-like than the prior procedure. Presumably, the process will be presided over by 3 Administrative Law Judges. H.R. 1249 7 at 76, 20:25. Additionally, the proceeding will consist of trial-like mechanisms not available in the prior amendment-and-response format, including: discovery of relevant evi dence, right to an oral hearing, potential joinder of parties and actions, and an

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opportunity to amend the claims at issue. Claim amendments cannot broaden the scope of claims or add new matter. H.R. 1249 6 at 50, 12:14. The requester bears the burden of proving the claims invalid by a preponderance of the evidence. H.R. 1249 6 at 50, 15:18. Most importantly to defendants, this burden is lower then the clear and convincing evidence required to overcome the 282 presumption of validity applied in district court.

new question of patentability," should the patent still be presumptively valid, regardless of the parties' settlement? In this case, the Director can terminate the Inter Partes Review without a ruling on the merits. On the other hand, proposed 317 gives the Director discretion to continue an Inter Partes Review and issue a decision invalidating or upholding the claims even after a settlement. H.R. 1249 6 at 51, 5:7.

4. Settlement
After it begins, the patentee and requester can agree to terminate an Inter Partes Review at any time before the issuance of a decision by the PTAB. A written settlement may be reached with respect to any or all of the third parties. H.R. 1249 6 at 50-51. If all participants settle, then the PTO may either terminate the proceedings or issue a final written decision. H.R. 1249 6 at 51, 4:7. Additionally, no estoppel will attach to any petitioner that settles before the PTAB decides the case. H.R. 1249 6 at 51, 1:4. Settlements must be filed in writing with the PTO, but may be kept confidential if requested. H.R. 1249 6 at 51, 8:21. It is unclear what effect a settlement would have on the validity of the patent at issue, but this provision raises several intriguing questions. Settlement may be a preferable resolution to conflicts in district court, but patents are unique because they implicate broader public rights. While the parties could reach a mutually agreeable decision amongst themselves, the PTO may choose not to allow their private agreement to effect the validity of the patent. Because patents are a matter of public rights, should validity be decided by private entities? Since under the new standard there need be no "substantial

5. Decision and appeal

Because of the prior procedure's long duration and resulting criticisms, the Act sets a strict deadline for completion of an Inter Partes Review. If the Inter Partes Review does not settle, then the PTAB must issue a final written decision within 1 year of granting the petition. The Director may extend this deadline up to an additional 6 months on a showing of good cause. H.R. 1249 6 at 48-49. The Director must publish a final written decision in a certificate that cancels un patentable claims, confirms patentable claims, and incorporates amended claims as appropriate. H.R. 1249 6 at 52, 5:13. Additionally, any new or amended claims may create intervening rights as defined by 35 U.S.C. 252. H.R. 1249 6 at 52, 14:23. Should any party be dissatisfied with the PTAB's ruling, all parties have the right of appeal to the Federal Circuit, and any party to the Inter Partes Review may participate in the appeal. H.R. 1249 6 at 53, 4:9. This direct appeal to the Federal Circuit should shorten the duration at the PTO. Since examiners conducted the prior procedure, appeal had to first be taken to the BPAI before being heard by the Federal Circuit. Eliminating the need for an intermediate appeal should speed along the process.

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It is important to note that the requirement to complete an Inter Partes Review within 1 year will likely challenge the PTO's resources. The current Inter Partes Reexam process can be, extremely lengthy, with some of the earliest taking more than 7 years. Even current Ex Parte Reexams take an average of 24 months. Further, the PTO has historically had both funding and personnel shortages, and may be hard-pressed to meet the required deadlines. Since the proceedings will generally be more "trial-like,"--including discovery, witnesses, and an oral hearing, among other thingsthis may further increase the burden on the PTO. The Director's rulemaking will have to deal with this potential added burden.

6. Relation to other proceedings

Another stumbling block on the path to wide adoption of the prior procedures has been the relationship of post-issuance review to other proceedings. The threat of various unforeseen estoppels has cautioned some practitioners away from these proceedings. Additionally, district courts have not always been consistent in their treatment of proceedings pending at the PTO. To address these uncertainties, the Act sets out the relationship of an Inter Partes Review to other proceedings, both in district court and in the PTO. Firstly, an Inter Partes Review cannot be instituted by a party that: 1.) has filed a civil-action contesting the validity of the patent, ,H.R. 1249 6 at 44, 1:6, or 2.) has been served a complaint alleging infringement of the patent more than 1 year before filing the Inter Partes Review petition3, H.R. 1249 6 at 45, 1:8. A counter-

claim of patent invalidity in an infringement action does not act as a civil action that would bar an Inter Partes Review. H.R. 1249 6 at 44, 20:24. If the petitioner files a civil action challenging the patent's validity after requesting Inter Partes Review, the civil action will be automatically stayed until the patent owner moves the court to Jiff the stay, the patent owner files an action alleging the requester's infringement, or the requester moves to dismiss the civil action. H.R. 1249 6 at 44, 7:19. It is interesting to note that the Act contains no provision to lift the stay when the PTAB issues a decision or the matter otherwise settles. Essentially, after settlement, the civil action will resume only if the patentee so requests. The third party requester may only move the court to dismiss the action, not to resume it. During the matter's pendency at the PTO, the Director has the authority to stay, transfer, consolidate or terminate any other pending proceeding involving the same patent. H.R. 1249 6 at 45, 17:24. Once decided, a requester may not maintain a PTO proceeding with respect to the same claim on any ground that it raised or reasonably could have raised during the decided Inter Partes Review. H.R. 1249 6 at 46, 1:9. This provision seems to estopp "proceedings" at the PTO, not only Inter Partes Reviews. It remains to be seen how "proceeding," as used in this code section, will be interpreted. If "proceeding" is narrowly construed, then the third party requester may be freer to return to the PTO many times. If it is broadly construed, then the third party's return options will be more limited. It is likely

3 The prohibition against instituting an. Inter Partes Review more than 1 year after being served with an infringement action does not appear to have a temporal limit. Accordingly, a party may not be able to request an Inter Partes Review if it was served with an infringement action in a pending, settled, or decided suit before this provision's enactment. The new procedures will be implemented 1 year after enactment, so any defendant in a suit pending upon enactment may be time-barred based on the infringement filing.

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that "proceeding" will be broadly construed to ensure that all issues are brought out as quickly as possible to encourage prompt resolution of all validity questions. Further, the petitioner is estopped from assertingin a district court or the International Trade Commissionthe invalidity of the claim on any ground that it raised or reasonably could have raised during the Inter Partes Review. H.R. 1249 6 at 46, 10:21. . Estoppel attaches when the the PTAB issues its final written decision. Id. This does not appear to require the exhaustion of all possible appeals, as required by current 315. Current 315 states that estoppel applies when the claim is finally determined to be valid, which is interpreted to include the exhaustion of all possible appeals. 35 U.S.0 315. The language for the new statutes instead expressly states that estoppel applies once the PTAB issues its final written decision, thus before the exhaustion of all possible appeals.

ease the burden on the PTO as it begins to implement the procedure. B. Post-grant Review In addition to modifying Inter Partes Review, the Act also creates the new Postgrant Review procedure. This new procedure addresses one of the key deficiencies of the currently available post-issuance review options: the limited subset of invalidity grounds which may be asserted. Post-grant Review may be requested on any invalidity ground. The Post-grant Review procedure in the Act is largely the same as Inter Partes Review described above, with a few notable exceptions. These include the range of potential grounds for invalidity, the time window to file, the grounds on which the Director will grant the petition, and the relation to certain other proceedings. Most importantly, however, Post-Grant Review must be filed in the 9 month window after a patent's issue; the window in which Inter Partes Review cannot yet be filed. The remainder of the procedure is exactly as described for Inter Partes Reviews, and these identical features will not be repeated. See H.R. 1249 6 at 56-72.

7. Implementation
Inter Partes Review will be available for all current patents and applications, and all future issued patents, beginning 1 year after the statute's enactment. H.R. 1249 6 at 53-54. This is different then the current procedure, which was only available to patents issued on applications filed after November 29, 1999. The new procedure, on the other hand, is available to any patent, regardless of when its application , was filed. For the first 4 years of the program's availability, the Director may limit the number of Inter Partes Review requests that the PTO accepts. H.R. 1249 6 at 54, 3:14. Essentially, Congress is providing the PTO with some flexibility in the amount of cases it accepts, in order to

1. Potential invalidity grounds

Post-grant Review can be requested on any invalidity grounds contained in 35 U.S.C. 282. H.R. 1249 6 at 57, 10:14. This includes any type of invalidating prior artincluding patents or printed publications, failure to comply with the requirements of 35 U.S.C. 112 or 251, or any other unpatentability grounds contained in Part II of Title 35. See 35 U.S.C. 282. Post-grant Review focuses only on the portions of 282 relating to invalidity; not the portions relating to defenses, non-

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infringment, or unenforceability. Importantly, Part II of Title 35 includes unpatentability grounds that are not based on prior art at all. These include patentable subject matter and utility under 101, for example.

2. Time window
As opposed to an Inter Partes Review, a Post-grant Review must be filed within 9 months of patent issuance. H.R. 1249 6 at 57, 15:18. Additionally, the 9 month window applies to the date of a patent's reissue only if the claim was broadened during the reissue process. If the claim in the reissue is unchanged or narrowed from the original, then the 9 month window applies to the original patent's issue date. H.R. 1249 6 at 63, 18:24. This distinction does not appear in the Inter Partes Review section, implying that an Inter Partes Review must be filed 9 months after a reissue, regardless of the scope of the resulting claims. Also, there is no restriction on filing Post-grant Review based on ongoing infringement litigationas is the case for Inter Partes Review. The fact that Postgrant Review can only be filed in this limited window, while Inter partes Review can be filed any time 9 months after issue is a key distinction.4 Inter Partes Review will consider a much smaller --set of invalidity grounds, but will be available to potential infringement defendants for a much longer timepotentially for the entire term of a patent.

may grant a petition are also slightly dif ferent from an Inter Partes Review. The request may be granted if: 1.) the information in the petition, if unrebutted, makes it more likely than not that the challenged claim is invalid', or 2.) the petition raises novel or unsettled legal questions that are important to other patents or applications. H.R. 1249 6 at 59, 12:23. Further, when evaluating the threshold condition, the Director is not required to consider the patentee's responseas opposed to Inter Partes Review. The fact that the Director may accept a petition because of novel or unsettled legal theories is especially intriguing. The PTO does not have the authority to substantively create law or rules; legal questions regarding patent law are reserved for the Federal Circuit. The Act may thus grant discretion that increases the PTO's ability to consider and decide novel legal questions. Additionally, in evaluating a petition, the Director may take into account whetherand reject a petition because the same or substantially similar prior art or arguments were previously presented to the PTO. H.R. 1249 6 at 62, 15:20. "Previously presented" is not limited to previously presented in a Post-grant Review. Accordingly, to the extent that arguments were previously present in any proceeding before the PTO, such as primary examination, Inter Partes Review, Ex Parte Reexam, etc., the Director has the discretion to reject the petition.

3. Grounds to grant a petition

The grounds upon which the Director

4. Relation to other proceedings

All of the relations to other proceedings

4 This raises another interesting observation. These timing rules become effective one year post enactment, but the first patent subject to Post-grant Review will not be available for another several years. This means that, until the first patent subject to Post-grant Review is available, there will be a 9-month gap post-issuance in which none of these "trial-like" proceedings could possibly occur. 5 The wording here, while similar, is slightly different than the comparable wording for Inter Partes Review. It is not clear from the act why the wording is different, so it is not clear what effect this slight variation will have. The comparable language for inter Partes Review requires a "reasonable likelihood" of success. To the extent that a "reasonable likelihood" of success is easier to establish then "more likely then not," it may be easier to spark an Inter Partes Review than a Post-grant Review.

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that apply to Inter Partes Reviews also apply to Post-grant Reviews, with one addition regarding preliminary injunction requests. If the patentee files an infringement action within 3 months of the patent's issuance, a court may not stay its consideration of a preliminary injunction motion on the basis of a Post-grant Review. H.R. 1249 6 at 61, 17:24. Additionally, it is unclear how a Post-grant Review will relate to Inter Partes Review. The grounds on which a petitioner can rely when requesting a Post-grant Review encompass the limited scope of prior art that may form the grounds for an Inter Partes Review. Accordingly, a petitioner for Post-grant Review may be barred from later filing an Inter Partes Review, since he reasonably could have raised any of the same issues in the first proceeding.

on an application so filed, the first patent may not be available for an additional number years. Accordingly, the first possible Post-grant Review will not likely occur for another several years, at a minimum. C. Post-grant Review

of Business Method Patents

Because of the ongoing and continually mounting criticism of business method patents, the Act mandates the creation of a transitional program to review any covered business method patent. It is important to recognize that "covered business methods" are limited to those relating to a "financial product or service." This seems to limit this provision's applicability to only patents in the financial industry, but this is far from certain due to ambiguities in the statutory text.' The Director has 1 year to promulgate rules defining this program. H.R. 1249 18 at 119-20. For the most part, the rules governing this program will be the same as those governing Post-grant Review, with the exception of proposed : 321(c), post-issuance time to file; 325(b), regarding stays of preliminary injunctions; 325(e)(2), estoppel in civil actions and before the ITC; and 325(f), limitations based on reissued patents. H.R. 1249 18 at 120, 4:13. Additionally, there is a slight limitation to the prior art available to assert invalidity under 102 or 103. H.R. 1249 18 at 120-21. All other Post-grant Review rules remain applicable to the transitional Post-grant Review of covered business method patents.

5. Implementation
Post-grant Review will be available 1 year post enactment. Importantly, however, Post-grant Review is only available for patents issued on applications filed under the new First-Inventor-To-File rules. See H.R. 1249 at 70, 19:25; H.R. 1249 at 23-24. This is different than Inter Partes Review, which is available on all patents, regardless of filing date. Because of this limitation, Post-grant Review, once implemented in 12 months, will simply not be available for some patents; Inter Partes Review will be the only possible third party review option. Oddly, this means that the program will be effective before there are any patents on which it could possible apply; the FirstInventor-To-File rules are not effective until 18 months post-enactment. H.R. 1249 at 2324. Additionally, since the patent must issue

1.. Covered business method patent

A covered business method patent is "a patent that claims a method or correspon-

6 Commentators have described this code section as being championed by the financial services industry, and directed at a specific non-practicing entity which owns a hotly contested business method related to check clearing. This may or may not be the case, but the procedure potentially has broader applicability. It remains to be seen if the program's applicability will be narrowly or broadly construed.

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ding apparatus for performing data processing or other operations used in the practice, administration, or management oft a financial product or service, except that the term does not include patents for technological inventions." H.R. 1249 18 at 124-25. To assist in the program's implementation, the Act calls for the Director to issue regulations for determining whether a patent is for a technological invention. H.R. 1249 18 at 125, 3:7. While "business method" patents are often criticized, defining whether a patent is a covered business method under this definition will be difficult. The proposed code provides a definition, but is chock-full of ambiguities: What is "data processing"? What are "other services"? What is a "financial service"? What is a "technological invention"? Business method patents represent a significant investment and income to the patent's holders, and this transitional program calls these patents' validity into question. Patent holders will fiercely fight the identification of their patents as "covered business methods," while potential defendants will strongly argue the opposite. This is the heart of the transitional program, so patentees will want to narrow this provision's applicability as much as possible. Defendants, on the other hand, should strive to exploit and broaden the ambiguities as much as possible. This provision and definition are very likely to be the subject of ongoing debate and fierce legal wrangling.

exists before the enactment of this Act, or prior art disclosed 1 year before the filing date of the patent at issue that would be covered by 102(a) had the disclosure been made by one other than the inventor. H.R. 1249 18 at 121, 1:19. All other grounds for invalidity under the new Post-grant Review procedure remain unchanged and available to a petitioner in the transitional program.

3. Timing
Most importantly, there is no timing restriction based on the patent issue date. Post grant review can be implemented at any time after the issuance of a covered business method patent, but only after the petitioner has been sued or charged with infringement. H.R. 1249 18 at 120, 10:20. This provision does not have a temporal limitation. In other words, the transitional program applies to all covered business method patents, regardless of when they were filed, unlike regular Post-grant Review, and similar to Inter Partes Review. Consequently, a defendant that has been charged with infringement in a suit that is pending, settled, or even decided before enactment may be allowed to file a petition under the transitional program. This raises further questions relating to prior civil actions. How far back does this extend? Would a defendant in a suit that settled 5 years ago and is now under an injunction or forced royalty arrangement be able to file a petition under the transitional program? The plain text of the bill may allow this to occur. Additionally, the transitional program has a sunset provision-8 years postimplementation, H.R. 1249 18 at 122, 22:25after which time the program will terminate. Accordingly, any review under the transitional program must be filed

2. Scope of prior art for invalidity under 102 or 103

If the petition for review under the transitional program asserts invalidity on grounds raised by 102 or 103, then only a limited subset of 102 prior art may be used, H.R. 1249 18 at 120-21: only prior art as defined by 102(a), as it

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within the 8 year window following the program's implementation; implementation will be 1 year post- enactment, i.e. September 16, 2012. As long as a request is filed before the program sunsets in 2020, review will proceed even after the program terminates, as needed. H.R. 1249 18 at 123, 4:10.

4. Relationship to other proceedings

The relationship to certain other proceedings from Inter Partes Review and Postgrant Review do not apply to the transitional program. The key provisions in this regard are the ability of defendants in ongoing infringement suits to request a stay, and the estoppel effect of a review under the transitional program. When considering whether to grant a stay based on a review requested under the transitional program, a district court is directed to consider whether: 1.) a stay will simplify issues for trial, 2.) discovery is complete or a trial date has been set, 3.) a stay would unduly prejudice the nonmoving party, and 4.) a stay would reduce the burden of litigation on the parties or court. Further, a party may take an immediate interlocutory appeal to the Federal Circuit regarding the district courts decision. H.R. 1249 18 at 123-24. Also, estoppel in later civil actions only applies to issues that the petitioner actually raised in the review under the transitional program, H.R. 1249 18 at 121-22, rather than the raised or reasonably could have raised standard from Post-grant Review and Inter Partes Review.

and identifies the relationship of such cited information to later filed opposition proceedings. This is important because it allows potential infringement defendants to preemptively compile a broad range of adverse information, before ever filing any opposition proceeding. H.R. 1249 6 at 72-75. As in the current law, information can be cited at any time and by any party. H.R. 1249 6 at 72, 22:23. Additionally, prior art cited can only consist of patents or printed publications, and must be accompanied by a written statement describing their relevancy to at least one claim. H.R. 1249 6 at 72-73. The Act also expands upon the information that may be cited to include statements filed by the patentee in a federal court or the PTO, in which the patentee took a position on the scope of a claim in the patent. H.R. 1249 6 at 73, 3:6. Other documents, such as pleadings and evidence from the proceeding in which the patentee made the statement, may be submitted along with the statement. All of this submitted information will be included in the patent's official file wrapper. H.R. 1249 6 at 73, 14:18. This information, however, will not be used by the PTO for any purpose other than determining the proper meaning of a claim in a proceeding under 304, Ex Parte Reexam, 314, Inter Partes Review, or 324 Post-grant Review. H.R. 1249 6 at 73-74.

E. Supplemental Examination
The last post-issuance review option is the newly created Supplemental Examination. This is not an opposition procedure, as it is conducted ex parte, and may only.be filed by the patent ownerunlike the traditional Ex Parte Reexam which may be filed by any party. The purpose of this procedure is to allow a patent owner

D. Citation of Prior Art and Written Statements

Although currently available to a lesser extent, and not an opposition proceeding, the Act expands upon the ability to cite information relating to issued patents,

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to submitafter a patent has issued-information to the PTO to consider, reconsider, or correct, in order to, among other things, preempt a charge of inequitable conduct in a district court. The actual examination is conducted similar to an Ex Parte Reexam, with some exceptions. 1. Request Only the patent ownerwho may not necessarily be the inventorcan request Supplemental Examination. H.R. 1249 12 at 109, 18:22. The Director will establish regulations regarding what may be submitted and considered, but the statute does not expressly limit it to patents and printed publications as in traditional Ex Parte Reexam. H.R. 1249 12 at 112, 11:15. Supplement Examination may be based on "information believed to be relevant to the patent," limited according to the Director's regulations. H.R. 1249 12 at 109, 20:22. It remains to be seen how the Director will define the scope of this "information." After the request has been received, the Director has 3 months to conduct the Supplemental Examination, and issue a certificate indicating whether the submitted information raises a substantial new question of patentability. H.R. 1249 12 at 109-10. 2. Reexamination If there is a substantial new question of patentability, then a reexamination will be ordered, largely adhering to the traditional Ex Parte Reexam procedures. The two differences are that the patent owner does not have a right to file a statement pursuant to 304, H.R. 1249 12 at 110, 4:16, and reexamination will be terminated if the Director uncovers actual or attempted fraud on the PTO, H.R. 1249 12 at 112-13. Should such fraud be uncovered, the

Director shall refer the matter to the Attorney General. H.R. 1249 12 at 11213. The purpose of the reexamination is to consider, reconsider, or supplement the information that was before the examiner during primary prosecution. H.R. 1249 12 at 109, 19:20. If there was an unintentional non-disclosure of material prior art, for example, a patentee may request a Supplemental Examination so that the PTO can evaluate the patent in light of this previously undisclosed information. The threat of referral to the Attorney General may caution patent owners away from this option. If the Director uncovers fraud, the matter must be referred to the Attorney General; the Director retains no discretion. H.R. 1249 12 at 112-13. This is somewhat unusual, since there is no comparable mandate to refer a matter to the Attorney General if fraud is uncovered by the courts. Accordingly, especially in light of the high bars set by Excergen and Therasense that limit a defendant's ability to succeed on an inequitable conduct defense, a patent owner may decide to take his chances in the courts. 3. Effect If a patentee requests a Supplemental Examination, any information considered, reconsidered or corrected cannot form the basis of patent unenforceability under 282, regardless of whether or not the Director finds a substantial new question of patentability. The mere act of submitting the request is enough to shield the patentee. Additionally, whether a patentee requests Supplemental Examination is irrelevant to patent enforceability. H.R. 1249 12 at 110-11. Essentially, Supplemental Examination provides a means to correct inadvertent disclosure errors made during the course of prosecution, in

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order to pre-empt a charge of inequitable conduct. Once a charge has been made in a pending civil action, however, a subsequently filed Supplemental Examination will not protect the patentee. In other words, the request for Supplemental Examination cannot be made after an unenforceability allegation plead with particularitysuch as inequitable conduct. H.R. 1249 12 at 111, 3:25

Iv. Conclusion
The America Invents Act contains provisions that heavily revamp the options available for post-issuance review of patents. The Act significantly modifies the existing Inter-Partes Reexam process, creates a new process for the Post-grant Review of recently issued patents, and introduces a transitional program for Post-grant Review of certain business method patents. The Act also creates a Supplemental Examination process to correct disclosure errors made during patent prosecution, and increases the scope of

information which can be cited against issued patents. These new procedures will substantially impact the strategies of both patentees and potential infringers. While providing some benefit to patentees, with the new avenue to shield against inequitable conduct charges, the greatest benefit appears to have been provided to potential infringers and other patent challengers. Commentators have argued that potential infringers now have tools to drastically increase the transaction costs associated with procuring patents, and can affirmatively act to minimize any downsides. It remains to be seen exactly how the patent community will act to accept these new options, but the Act has the potential to drastically alter the patent landscape. It is clearly the intention of Congress to make the PTO a viable forum for answering questions of patent validity in a true alternative to district court litigation. Patentees and defendants must now determine their strategies in light of this new, and potentially attractive, forum.