A First Look at the Impact of Recent Rule Changes on Patent Owner Preliminary Responses

• Author: Paromita Chatterjee - Arvind Jairam - Dinesh N. Melwani
• Position: Paromita (Mita) Chatterjee is an attorney at Paul Hastings in Washington, D.C. Her practice focuses on contentious proceedings before the U.S. Patent and Trademark Office, strategic counseling, and district court litigation, with an emphasis on medical devices. She can be reached at mitachatterjee@paulhastings.com. Arvind Jairam is an associate...
• Pages: 65-68

Published in Landslide® magazine, Volume 9, Number 4, a publication of the ABA Section of Intellectual Property Law (ABA-IPL), ©2017 by the American Bar Association. Reproduced with permission. All rights reserved. This

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On May2, 2016, long-awaited

rule changes went into effect

for practice before the Pat-

ent Trial and Appeal Board (PTAB) of

the U.S. Patent and Trademark Ofce

(USPTO).1 One of the newly imple-

mented rules offers patent owners an

opportunity to provide a more robust pre-

liminary response to a petition for inter

partes review (IPR), covered business

method (CBM) review, or post-grant

review (PGR), with “new” testimonial

evidence. Previously, petitioners could

include testimonial evidence prepared for

the proceeding with their petitions but

patent owners were precluded from doing

so with their preliminary responses,2 an

asymmetric situation that unfairly favored

petitioners, according to some com-

mentators.3 This article reviews tactical

considerations for and against inclusion

of new testimonial evidence4 in patent

owner preliminary responses. The authors

also review IPR proceedings led after

the rule changes took effect, to gauge the

prevalence and impact of new testimonial

evidence submitted by patent owners in

support of their preliminary responses.

Rule Changes and Patent Owner

Considerations

Prior to the May2, 2016, rule changes,

petitioners were permitted to support

PTAB petitions with testimonial evi-

dence, but patent owners were barred

from providing “new” testimonial evi-

dence with their preliminary responses to

such petitions.5 The PTAB had claried

that testimonial evidence that substan-

tively addressed patentability, and that

was created after the ling of the petition

for the proceeding-at-issue, or a related

proceeding, would be considered “new”

and would therefore not be permitted.6

While the Trial Practice Guide identied

certain instances in which patent owners

could seek leave to le new testimonial

evidence, it claried that such evidence

would only be permitted when found to

be in the interests of justice.7

The USPTO, addressing concerns

that this asymmetry in permissible evi-

dence disadvantaged patent owners,

amended the rules to permit patent own-

ers to le testimonial evidence without

any limit on scope with their optional

preliminary responses.8 In the comments

to the amended rules, the PTAB also

claried that just as there is “no negative

inference on [a] patent owner’s choice to

forgo an opportunity to le a preliminary

response, no negative inference will be

drawn if a patent owner decides not to

present new testimonial evidence with a

preliminary response.”9

Because the time frame for the prelim-

inary phase of a PTAB trial proceeding

is limited by statute and generally does

not allow for cross-examination of a pat-

ent owner’s declarant as a matter of right,

the benet to patent owners from this

change has been curtailed under the rules

in at least two ways.10 First, the rules pro-

vide petitioners the opportunity to seek

leave to le a reply to a preliminary

response with a showing of good cause.11

Second, and more importantly, the rules

require the PTAB to view genuine issues

of material fact created by the testimo-

nial evidence “in the light most favorable

to the petitioner solely for purposes of

deciding whether to institute.”12 This

presumption was added to the rules to

preserve a petitioner’s ability to challenge

statements made by the patent owner’s

declarant, which may be done as of right

during an instituted trial.13

Allowing expert testimony in pre-

liminary responses has opened up a

range of considerations for patent own-

ers responding to petitions pursuant to

the America Invents Act (AIA). Pre-

viously, a patent owner only needed

to decide if it would le a preliminary

response during the preliminary phase

of an AIA trial. Now, a patent owner

must also decide whether to include

expert testimony, which may effectively

“lock in” the patent owner’s positions

early in the proceeding. Additionally, a

patent owner must balance the antici-

pated usefulness of the expert testimony

in preventing institution of the proceed-

ing against the possibility of the PTAB

determining that the testimony creates a

factual dispute that may not be resolved

pre-institution. In the latter case, an

expert declaration led with a prelimi-

nary response may preview the patent

owner’s positions to the petitioner prior

to the deposition of the petitioner’s

expert in an instituted trial.14 Further, a

patent owner’s declarant could be sub-

jected to an additional seven hours of

deposition time if the patent owner

relies on testimony of the same declar-

ant in support of its response during the

trial phase of an instituted proceeding.15

Data from Recent Cases (Post–

Rule Changes)

We analyzed IPR proceedings led

after the rule changes took effect to

Paromita (Mita) Chatterjee is an attorney at Paul Hastings in Washington, D.C. Her practice focuses on contentious proceedings before

the U.S. Patent and Trademark Ofce, strategic counseling, and district court litigation, with an emphasis on medical devices. She can be reached

at mitachatterjee@paulhastings.com. Arvind Jairam is an associate at Paul Hastings in Washington, D.C. He focuses his practice in patent

litigation, post-grant proceedings, and patent portfolio analysis, and he formerly worked in patent prosecution and electrical engineering. He can

be reached at arvindjairam@paulhastings.com. Dinesh N. Melwani is a partner at Bookoff McAndrews, PLLC, in Washington, D.C. He leads

the rm’s PTAB practice and specializes in all aspects of patent counseling. He can be reached at dmelwani@bookoffmcandrews.com.

Meeting of the Minds

By Paromita Chatterjee, Arvind Jairam, and DineshN. Melwani

A First Look at the Impact of Recent Rule Changes on

Patent Owner Preliminary Responses