Aia Post-grant Review & European Oppositions: Will They Work in Tandem, or Rather Pass Like Ships in the Night?

• Publication year: 2012

NORTH CAROLINA JOURNAL OF LAW & TECHNOLOGY VOLUME 14, ISSUE 1: FALL 2012

AIA POST-GRANT REVIEW & EUROPEAN OPPOSITIONS: WILL THEY WORK IN TANDEM,

OR RATHER PASS LIKE SHIPS IN THE NIGHT?

Filip De Corte,* Anthony C. Tridico,** Tom Irving,*** Stacy D. Lewis**** & Christina N. Gervasi*****

Perhaps the new post-grant review proceeding in the United States was conceived in the likeness of a European opposition, but as it moved from conception to reality, a unique American administrative proceeding was created that does not bear much resemblance to its European inspiration. This Article describes features of both post-grant review and European oppositions and argues that the differences between them mean they will not work in tandem, but rather will generally pass like ships in the night. Notably, the ships will not necessarily crash either, and they could even be part of the same fleet.

1. INTRODUCTION

   The Leahy-Smith America Invents Act of 2011 (“AIA”) 1

   effects the first major overhaul of the U.S. patent system since the

   
   

   * Ph.D.; Chief Intellectual Property Counsel Europe for Cargill, an international producer and marketer of food, agricultural, financial, and industrial products and services.

   ** Ph.D.; Managing Partner at Finnegan, Henderson, Farabow, Garrett & Dunner, L.L.P. (Brussels, Belgium).

   *** Partner at Finnegan, Henderson, Farabow, Garrett & Dunner, L.L.P. (Washington, DC).

   **** Law Clerk at Finnegan, Henderson, Farabow, Garrett & Dunner, L.L.P. (Washington, DC).

   ***** U.S. Patent Agent and J.D. Candidate at the University of Dayton School of Law (2013).

   1. Pub. L. No. 112-29, 125 Stat. 284 (2011) (codified as amended in scattered

      sections of 35 U.S.C.). Portions of the Leahy-Smith America Invents Act were not codified in 35 U.S.C., so some of the changes it makes to U.S. patent law will be found only in the text of the AIA.

      
      

      93

      
      

      venerable Patent Act of 1952. 2 There were significant but unsuccessful prior attempts at reform in the ten years leading up to the passage of the new law.3 The motivation for reform came from widespread frustration with the United States Patent and Trademark Office (“USPTO”) over an ever-growing backlog of patent applications awaiting examination4 and suggestions that the USPTO was allowing too many “weak” patents.5 There also was (and is) frustration with patent litigation over “runaway” discovery, increasing time and costs, and the rise of non-practicing entities (“NPEs”) winning very large damage awards.6 However,

      
      

   2. Pub. L. No. 82-593, 66 Stat. 792 (1952) (codified as amended at 35 U.S.C.

      §§ 1–376 (2006)).

   3. E.g., Patent Reform Act of 2009, S. 515, 111th Cong. (2009); Patent Reform Act of 2007 S. 1145, 110th Cong. (2007); Patent Reform Act of 2005, H.R. 2795, 109th Cong. (2005); see also FED. TRADE COMM’N, TO PROMOTE INNOVATION: THE PROPER BALANCE OF COMPETITION AND PATENT LAW AND

      POLICY (2003).

   4. The AIA amended 35 U.S.C. § 299 in specific response to the rise of lawsuits brought by non-practicing entities. For any civil action commenced on or after September 16, 2011, joinder of defendants is only allowed if the claim for relief arises from “the same transaction, occurrence, or series of transactions” and “questions of fact common to all defendants . . . will arise in

      the action.” 35 U.S.C. § 299(a) (Supp. V 2011). The statute specifies that

      simply having the same patent as the basis for the infringement allegation is not enough for joinder. See 35 U.S.C. § 299(b) (2006). The case of Optimum Power Solutions LLC v. Apple Inc. was one of the first to see a judge apply the new AIA joinder provision. No. C11-1509SI, 2011 WL 4387905 (N.D. Cal. Sept. 20, 2011). The plaintiff proposed ten defendants. Id. at *1. The district court dismissed the case against all but one of the defendants. Id. at *3.

   5. “Weak” patents are those that are easily designed around. See ZHEN LEI & BRIAN D. WRIGHT, WHY WEAK PATENTS? 1–2 (2009), available at

      http://ageconsearch.umn.edu/bitstream/49279/2/Lei_Wright_AAEA_2009.pdf. The resources spent on innovation and then obtaining the patent become worthless because the patent obtained is easily circumvented. Id. at 1 (“Weak

      patents incur social costs without commensurate social benefits.”).

   6. NPEs are companies that do not make or practice invention themselves, but rather apply for or acquire patents solely to obtain a licensing revenue stream or obtain money through adverse litigation judgments. See

      PRICEWATERHOUSECOOPERS LLP, 2011 PATENT LITIGATION STUDY 34 (2011).

      Sometimes they are derogatively referred to as “patent trolls.” What is a Patent Troll?, PATENTLY-O (May 12, 2006, 6:30 AM), http://www.patentlyo.com/paten

      
      

      those earlier attempts at U.S. patent reform never gathered sufficient political will and were unsuccessful in resolving differences between stakeholders in the patent community with very different priorities. 7 Examples of such stakeholders with competing visions of change were individual American inventors and large multi-national corporations facing global competition, software and high-tech industries making products with a very short shelf-life, and innovative pharmaceutical companies facing years of regulatory approval between the date of invention and getting a product to market after Food and Drug Administration

      approval. Finally, the 112th Congress managed to broker what can fairly be labeled a compromise agreement, and the new law was signed by President Obama on September 16, 2011.8 Those who support the new law hope that it will make prosecuting patents more efficient, reduce patent litigation in the U.S. federal district courts by providing more extensive post-grant cancellation proceedings in the USPTO, foster innovation, and ensure that the United States is globally competitive in technological areas.

      In an effort to achieve those goals, the AIA altered several aspects of U.S. patent law.9 This Article will focus specifically on one such change: post-grant review. Post-grant review (“PGR”) is a new administrative proceeding in the USPTO, whereby a third party may provide information in the hope that the USPTO will reconsider and cancel the original patent claim.10 There are two other possible PGR outcomes: The claims are maintained by the USPTO without change (i.e., they withstand post-grant review) or at least one claim may be amended at the USPTO to preserve the patentability of that one claim.11 If at least one claim is amended,

      
      

      t/2006/05/what_is_a_paten.html; see generally Peter J. Stern & Timothy G. Doyle, Trends and Developments Regarding Nonpracticing Entities in the U.S., 61 CHIZAI KANRI 445 (2011) (exploring the relationship between traditional companies and NPEs).

   7. See sources cited supra note 3.

   8. Leahy-Smith America Invents Act, Pub. L. No. 112-29, 125 Stat. 284 (2011) (codified as amended in scattered sections of 35 U.S.C.).

   9. Id.

   10. Id. at sec. 6.

   11. See id.

       
       

       the claim as amended at the USPTO may no longer cover a third party’s allegedly infringing product, which is as good for the third party as if the claim had been cancelled.12

       Before the AIA, the cancellation options before the USPTO available to a third party were third party prior art submissions,13 ex parte reexamination, 14 and inter partes reexamination. 15 Those options were criticized by the patent community as inadequate in the case of third party prior art submissions; too narrow in scope, and too lengthy in pendency in the case of ex parte reexamination; and too risky in the case of inter partes reexamination in view of its estoppel provisions.16 In addition, there were (and are) many concerns about using the judicial system to resolve patent disputes in the United States, including, but not limited to cost, nearly unlimited discovery, lay juries, and lengthy pendency.

       PGRs are intended to be quasi-judicial administrative proceedings that will help relieve some of the burden of patent litigation from the U.S. federal courts. At first blush, it may seem strange to add to the USPTO’s responsibilities when it was already struggling to meet its workload, but the promises of increased staff and improved efficiency may be sufficient to address this issue.17

       In creating a proceeding to meet the objective of relieving the

       U.S. federal courts and to answer the shortfalls in the old, pre-AIA system, as exemplified above, American legislators initially looked to the example of opposition proceedings in the European Patent

       
       

   12. See id.

   13 See 35 U.S.C. §§ 301–302 (2006).

   14 See id. §§ 302–307.

   15 See id. §§ 311–319.

   1. COMM’R FOR PATENTS, U.S. PATENT AND TRADEMARK OFFICE, EX PARTE

      REEXAMINATION FILING DATA (2012), available at http://www.uspto.gov/patent s/stats/EP_quarterly_report_June_30_2012.pdf. Average pendency for an ex parte reexamination, for example, for the time period July 1981 to June 2012 was 25.4 months. Id.

   2. Interview with David Kappos, Director, USPTO, at American Intellectual Property Law Association Annual Meeting (Sept. 30, 2011) (indicating that the

   USPTO is seeking to fill as many as 2,000 new Patent Examiner positions and

   150 new Administrative Patent Judge positions).

   
   

   Office (“EPO”) as a model for a PGR.18 The EPO opposition is ingrained in multinational patent practice, and operates as a revocation proceeding where third parties can challenge the validity of European patents in the EPO. Although conceived in the likeness of an EPO opposition, by the time the AIA passed, PGR had morphed into a uniquely American administrative proceeding that does not bear much resemblance to its European inspiration. In practice, the AIA will operate much differently than an EPO opposition, although both the EPO opposition and PGR are designed as revocation or cancellation proceedings that should be less expensive than litigation in the courts.

   This Article describes and compares features of both PGRs and European oppositions, and argues that the differences between them mean they will not necessarily work in tandem, but rather will generally pass like ships in the night. If PGRs and oppositions worked in tandem, there could be procedural

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