Chapter §22.02 Inter Partes Review

JurisdictionUnited States

§22.02 Inter Partes Review

[A] Introduction

[1] 2012 Implementation

The AIA-implemented inter partes review proceeding replaced and expanded inter partes reexamination, which was eliminated as of September 16, 2012.20 Sections 311 through 319 of the Patent Act as amended by the AIA govern inter partes review.21 The USPTO's rules governing inter partes review are codified in Title 37 of the Code of Federal Regulations, Chapter 1, Subchapter A, Part 42, Subpart B ("Inter Partes Review").22

Petitions for inter partes review could be filed with the USPTO beginning on September 16, 2012, and such petitions could challenge existing patents (i.e., patents filed for or issued prior to the AIA's implementation).23 Commentators observed that "[t]he fact that any U.S. patent (not just those eligible for inter partes reexam) may be subject to an IPR proceeding could be significant, especially for older and potentially broad patents in the biotechnology and pharmaceutical sectors."24

[2] Statistical Information

As of April 2020, more than seven years after USPTO implementation of inter partes review, thousands of patent challengers had used the new proceeding. In fact, appeals pending at the Federal Circuit from the USPTO (presumably primarily appeals from IPR decisions rather than appeals from ex parte examinations) outstripped the number of appeals pending from the federal district courts for the first time in 2016.25 The trend continued in 2017 and beyond.26 Commentators described inter partes review as "gaining traction as the 'go-to' mechanism for invaliding patents and defending against nonpracticing entities."27

From September 16, 2012, the first date on which inter partes review petitions could be filed, through March 31, 2020, the USPTO received a total of 10,504 petition filings seeking inter partes review ("IPR"), which amounted to 93% of the 11,307 total petitions filed for all types of AIA-implemented post-issuance review (including the Transitional Program for Covered Business Methods Reviews (CBMs) reviews and Post-Grant Reviews (PGRs) as well as IPRs).28 By the end of March 2020, the PTAB had issued final written decisions in 3,143 completed IPR, PGR, and CBM proceedings.29 In the partial fiscal year 2020 (October 1, 2019 to March 31, 2020), approximately 61% of the patents challenged through inter partes review and other AIA-implemented proceedings were directed to electrical/computer-implemented subject matter.30

The large majority of IPRs are being filed defensively, that is, to challenge the validity of patents that have already been asserted in federal district court litigation. A 2017 study reported that "[o]ut of 6,580 IPR challenges filed from 2012 through the end of the second quarter in 2017, . . . about 80 percent had been filed while the challenged patent was already in an active district court case. . . . Out of 6,580 IPR cases, 1338 or approximately 20 percent had been filed to challenge a patent that had not been named in any district court cases."31

As of early 2020, the AIA post-issuance review proceedings (primarily IPRs but also including PGRs and CBMs) have decidedly favored petitioners (i.e., validity challengers). In the cumulative period of September 16, 2012 through March 31, 2020, the PTAB held all instituted claims unpatentable in 1,961 (or 62%) of the 3,143 completed AIA reviews (IPRs, PGRs, and CBMs) in which the Board issued final written decisions.32 An additional 18% of the completed AIA reviews held at least some instituted claims unpatentable.33

The Federal Circuit is deciding a growing number of appeals from the Board's decisions in AIA post-issuance reviews (note that the number of appeals to the Federal Circuit from the USPTO (presumably primarily IPR decisions) now surpasses the number of appeals from federal district court decisions).34 As of May 15, 2019, the Federal Circuit had decided a total of 484 appeals from PTAB final decisions in IPRs.35 The appellate court is siding with the USPTO in the large majority of cases. "[I]n its appeals from IPRs, the Federal Circuit affirmed the PTAB on every issue in 358 (73.97%) cases, reversed or vacated the PTAB on every issue in 66 (13.64%) cases, issued a mixed outcome in 47 (9.71%) cases, and dismissed 13 (2.69%) cases."36

These appeals from PTAB decisions in AIA post-issuance reviews have come to represent a significant part of the Federal Circuit's work product. Notably, the Federal Circuit had issued more written opinions in AIA appeals than summary affirmances (perhaps signifying the importance the Circuit places on explaining its decisions in these still-new proceedings). Specifically, the Circuit had issued written opinions in about 53% of the IPR and CBM appeals it had decided as of May 15, 2019, with the remaining 47% of IPR and CBM appeals decided using the Circuit's Rule 36 procedure (i.e., summary affirmances without opinion).37

[3] Timing and Procedure

For newly granted patents under the AIA's first-inventor-to-file regime, a petition for inter partes review cannot be filed until nine months after the grant (i.e., not during the nine-month window for filing a petition for post-grant review38). If a petition for post-grant review is filed and granted, the post-grant review must be terminated before inter partes review can be sought.39

Unlike a reexamination proceeding, an inter partes review is decided in the first instance by a three-member panel of the Patent Trial and Appeal Board (PTAB) rather than a single examiner. Notably, the review proceeding is to be conducted expeditiously; the Patent Act requires a final determination within one year of the institution of inter partes review, absent a showing of good cause for a six-month extension.40

The Patent Act also requires that the USPTO issue regulations concerning the conduct of inter partes review, including issues such as discovery standards and procedures, protective orders, patent owner response and amendment of claims, and oral hearings.41 The USPTO issued final regulations on these issues in August 2012.42 Technical corrections to the final regulations were issued in March 2013.43

In June 2016, the U.S. Supreme Court issued its first decision reviewing the AIA-implemented proceedings to challenge patent validity. In Cuozzo v. Lee,44 the Court broadly affirmed the USPTO's authority to issue regulations governing inter partes review, and in particular those requiring use of a controversial (and later-rejected) "broadest reasonable construction" standard for claim interpretation. The Court also affirmed the position of the agency (and the Federal Circuit) that, barring certain limited exceptions, no appeals can be had from decisions by the PTAB to institute inter partes review. The very important Cuozzo case is examined in detail elsewhere in this chapter.45

[B] Scope

Like reexamination,46 inter partes review is limited with respect to the scope of issues that the petitioner can raise. The inter partes review petitioner can request to cancel as unpatentable one or more claims of a patent "only on a ground that could be raised under section 102 [novelty] or 103 [nonobviousness] and only on the basis of prior art consisting of patents or printed publications."47 This significant limitation on the scope of review is a carryover from reexamination,48 and also represents one of the major distinctions between inter partes review and post-grant review, discussed infra.49

[C] Institution

[1] "Reasonable Likelihood" of Prevailing Standard

The threshold standard for the grant of a petition for inter partes review is not a "substantial new question of patentability" as in reexamination.50 Rather, the USPTO will not institute inter partes review unless the petitioner's petition and any response thereto by the patentee "show[] that there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition."51

Whether this new threshold was intended to raise or lower the bar as compared to the reexamination "substantial new question of patentability" standard is unclear. Given that the AIA provides new ways to challenge the validity of issued patents, it is reasonable to interpret the statutory text as lowering the threshold.52 Nevertheless, the AIA's legislative history suggests that Congress intended a heightened standard.53

[2] Claim Interpretation for Institution Decision

When deciding whether to institute an inter partes review, the PTAB was until November 2018 required to apply the "broadest reasonable construction" ("BRC") rule for the interpretation of challenged patent claims.54 The then-governing USPTO regulations provided that "[a] claim in an unexpired patent shall be given its broadest reasonable construction in light of the specification of the patent in which it appears."55

The BRC rule, which applies in ex parte examination of original applications for patent,56 proved controversial as applied in inter partes review.57 The BRC rule was generally thought to result in broader claim scope than that reached by application of the Phillips standard in federal district court,58 making claims relatively easier to find unpatentable in an IPR proceeding. Critics contended that application of a BRC standard had to go hand-in-hand with liberal opportunity to amend the claims, but such opportunity has not proven widely available in IPR proceedings.59

In July 2015, the Federal Circuit approved the USPTO's application of the BRC rule in IPRs in In re Cuozzo Speed Techs., LLC.60 The Cuozzo decision has a rather tortured history (as described infra61), and may be seen as narrowly limited to its particular facts. Nevertheless, the USPTO in August 2015 issued Proposed Rules that reaffirmed the Board's use of the BRC rule in almost all circumstances involved in IPRs, based largely on the July 2015 Cuozzo Circuit panel opinion.62

In June 2016, the U.S. Supreme Court unanimously confirmed the agency's authority to...

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