By Andrew Williams --
As we have previously reported, the USPTO has been seeking feedback on the PTAB trial proceedings established by the Leahy-Smith America Invents Act. A Federal Register notice from June 27, 2014, contained a "Request for Comments on Trial Proceedings Under the America Invents Act Before the Patent Trial and Appeal Board." The deadline for submission was extended until October 16, 2014. Nevertheless, eleven comments were filed by the original deadline. These can roughly be divided up into three categories: (1) companies, (2) individuals, and (3) intellectual property associations. Last month, we reviewed the comments received from various companies (although, in the interim, comments were received from one more -- IBM) (see "PTAB Update -- A Review of the First Round of Comments (Part 1)"). This post will review the comments from the third subgroup -- intellectual property associations.
The Patent Office received comments from four different associations: (1) the Intellectual Property Owners Association ("IPO"), (2) the New York Intellectual Property Law Association ("NYIPLA"); (3) the Houston Intellectual Property Law Association ("HIPLA"); and (4) the Japan Intellectual Property Association ("JIPA"). In the Federal Register notice, the USPTO outlined 17 issues, or questions, for which the Office is most interested in receiving public comments. As opposed to the companies and individual, whose comments generally focused on one or a few main topics, the associations (except the JIPA) addressed most or all of the 17 questions.
Even though these associations took the opportunity to answer many of the questions, their comments did contain distinct themes. For example, IPO was concerned with fairness with regard to the treatment of the patent owners and petitioners. For example, in response to the question whether new testimonial evidence should be permitted in a Patent Owner Preliminary Response, IPO argued that "[f]airness requires that the patent owner be allowed" to present such evidence. On the other hand, NYIPLA referred often to the PTAB roundtables that occurred last spring, including the one that they helped coordinate in New York. In response to many of the questions, NYIPLA began by citing the discussions that occurred at these roundtables. Finally, even though the JIPA responded to only 3 issues, it was distinctly from the point of view of companies outside the U.S. seeking to obtain patent protection in the U.S. Its goal was in providing recommendations to effectively implement the PTAB system in view of intellectual property systems in other countries.
In this post, we will group the comments regarding two of the most discussed issues since the formation of the PTAB -- claim construction standards and motions to amend.
Claim Construction Standard
One of the most common complaints against Patent Office's regulations implementing the AIA's post-issuance review proceedings has been the adoption of the broadest reasonable interpretation ("BRI") standard for claim construction. The BRI standard is used during the prosecution of patent applications and in reexamination proceedings. The justification for the use of this standard is that the patent applicant or owner has the ability before the Office to amend the claims. Therefore, because it is theoretically possible to amend claims in PTAB proceedings, the Office adopted the same standard. Likely because there has been such criticism of this standard, the Patent Office's first question was "Under what circumstances, if any, should the Board decline to construe a claim in an unexpired patent in accordance with its broadest reasonable construction."
IPO was clearly against the use of BRI to construe the claims of an unexpired patent. The submitted comments pointed out that AIA trials are not patent examinations, but rather adjudicative proceedings like litigation. As such, they should have the same standard as that applied by the Federal courts – the standard as outlined in the Phillips case – "the ordinary and customary meaning . . . as understood by one of ordinary skill in the art, the prosecution history pertaining to the patent, and prior judicial determinations and stipulations relating to the patent." The problem arises that different standards can place the patent owner in the untenable situation where the validity of the claims is judged by a broad construction before the PTAB, but infringement is judged by a narrow construction in federal court. Moreover, IPO took issue with the rationale for BRI, because "[t]he patent owner's ability to amend . . . is very limited and, in practice, nearly illusory." In fact, the only motion to amend that has been granted was unopposed by the petitioner. IPO concluded that "[t]he PTAB may have exceeded its rulemaking authority in applying BRI to claim construction in AIA trial" because the rules do not consider the impact on the balance of rights between the patentees and accused infringers.
HIPLA included four different comments on the issue of the claim construction standard, although, in general, all four took to the position that the BRI standard should not be used for PTAB trials. HIPLA's comments 1, 3 and 4 pointed out the same concern expressed by IPO, that because the ability to amend claims is illusory, BRI should not be used. HIPLA comment 2 focused on the ability to file terminal disclaimers in unexpired patents, in which case the patent owner will not be able to amend its claims. The comment suggested that this route should only be available when (1) a terminal disclaimer is filed for the remaining patent term, and (2) it happens sufficiently early in the proceedings. This would be consistent with the Order in IPR2013-00242, in which the Board used BRI because the patent owner waited until all substantive briefing was completed before filing the disclaimer. The comment concluded by suggesting that the deadline for filing a terminal disclaimer should be at the same time as the deadline for filing a motion to amend the claims.
NYIPLA took the opposite position, suggesting that BRI was a reasonable standard. However, it did note that the Federal Circuit was considering the issue, and therefore it would be prudent to await that decision.
Motion to Amend
As suggested in the comments regarding the claim construction standard, the second hot-button topic related to PTAB trial proceedings is whether the ability to amend claims is real or illusory. Therefore, the Patent Office requested comments on the following question – "what modifications, if any, should be made to the Board's practice regarding motions to amend." All four associations responded to this question.
There is currently a 15-page limit for motions to amend, and this includes the claim listing. As such, even a one-for-one claim substitution of a small number of claims can still take up a substantial portion of the page count. Therefore, it was not surprising that the associations were unanimous in suggesting that the claim listing should not be included in the page count. However, the comments diverged on the issue of whether the page count should be increased.
HIPLA, comment 1, made the argument that claim listings should not be part of the page count because 35 U.S.C. § 316(d) permits a patent owner to file a motion to amend "for each challenged claim." Without a change, HIPLA argued, "[t]he practical effect is that patent owners are only able to propose a small number of proposed amended claims," contrary to the dictates of the statute. However, HIPLA believed that the 15-page limit (or something similar) should be otherwise maintained, because it helps limit the number of issues the patent owner can raise. Without this limit, the streamlined nature of the proceedings cannot be preserved, according to HIPLA.
NYIPLA agreed with HIPLA on the claim listing, but still argued for an increase in the number of pages for the motion. The current 15-page limit, NYIPLA argued, "is too austere to allow meaningful discussion of the motion and prior art references." The JIPA also provided a comment in which it expressed its hope that amended claim listings could be attached separately to the motion to amend. JIPA did not advocate for an increased page count, but suggested that the "proof of patentability" be limited to prior art already of record (as opposed to the prior art in general). This would have the practical effect of freeing up space in the motion.
IPO's comments also advocated for an increase in page limit, for example 40 pages, with the ability to list the claims in an appendix. In addition, IPO had several other substantive comments about the ability to amend claims. First, it argued that the burden of proof concerning patentability should remain with the petitioner, pointing to 35 U.S.C. §§ 316(e) and 326(e) ("the petitioner shall have the burden of proving a proposition of unpatentability by a preponderance of the evidence.") This burden is especially impractical, according to IPO, in view of the 15-page limit and the "substantive requirements imposed by the PTAB," such as showing the patentability over the prior art in the IPR, prior art known by the patent owner, and prior art generally. Because the proposed claims must be narrower in scope, a patent owner should only be required to show a prima facie case of validity, according to the comment.
IPO also included an argument that the patent owner should not be limited to a one-for-one claim substitution. This position was based on the AIA language, which authorizes the filing of a "motion to amend the patent in 1 or more of the following ways: (A) Cancel any challenged patent claim. (B) For each challenged claim, propose a reasonable number of substitute claims." In order to give meaning to "1 or more," the patent owner must be able to maintain all claims (not cancel) and be allowed to propose one or more substitute claims. This is contrary to the Office's current one-for-one presumption of reasonableness. Finally, IPO commented that a patent owner should not be estopped from pursuing similar claims in a continuation application or any other such application, as provided for in 37 C.F.R. § 42.73(d)(3). This again goes to the fairness issue, as the IPO argued that this rule "is unfair to patent owners because it imposes an unwarranted burden that threatens entire portfolios." This, of course, is compounded by the illusory nature of the ability to amend.
Patent Docs will continue to monitor the PTAB website, and report on any additional and interesting comments submitted by the October 16, 2014 deadline.