“In its dialogue of the feedback obtain, the USPTO mentioned that ‘most commenters favored separate briefing’ as a result of ‘it could release area within the petitions and patent proprietor responses to handle the deserves and permit extra fulsome dialogue of discretionary denial points.’”
The U.S. Patent and Trademark Workplace (USPTO) at this time introduced a Notice of Proposed Rulemaking (NPRM) that might be formally revealed within the Federal Register tomorrow and that addresses a subset of points from the controversial April 2023 Advance Notice of Proposed Rulemaking (ANPRM).
USPTO Director Kathi Vidal obtained criticism following the ANPRM, most notably from Congress. In a Home IP Subcommittee assembly held final yr, members of the Subcommittee expressed confusion in regards to the ANPRM and advised Vidal could have been exceeding her authority with a few of the proposals. Vidal tried to make clear that the ANPRM included each stakeholder and USPTO proposals that the Workplace was in search of suggestions on and mentioned some could not in the end make it into the official NPRM, which was initially anticipated by fall of 2023.
In a July 2023 Senate IP Subcommittee hearing, Vidal advised Subcommittee Chair Chris Coons (D-DE) the Workplace would concern two separate NPRMS—one substantive and one procedural.
As we speak’s NPRM proposes to codify a number of adjustments round serial and parallel petitions practices; guidelines for briefing on discretionary denial requests; termination and settlement agreements; and the elements for consideration of discretionary denials. It additionally summarizes the feedback obtained on these matters in response to each the ANPRM and an October 2020 Request for Comments (RFC) on “Discretion To Institute Trials Earlier than the Patent Trial and Attraction Board.” The NPRM additionally famous that “the Workplace continues to contemplate issuing proposed guidelines, with related alternatives to remark, on different matters raised within the ANPRM.”
The Workplace obtained greater than 14,500 feedback on the ANPRM and mentioned that “the overwhelming majority of feedback have been from people, whose views usually fell on the other ends of the spectrum—stating both that AIA evaluation is a vital safety in opposition to unwarranted litigation and unpatentable claims and the Workplace ought to have fewer bases for discretionarily denying evaluation of patents or that AIA evaluation is being misused, for instance, to the detriment of small inventors.”
Serial and Parallel Petitions
The primary of the adjustments proposed within the NPRM is to outline “serial” and “parallel” petitions. The NPRM defines a serial petition as:
“[A] petition that (1) challenges overlapping claims of the identical patent which have already been challenged by the petitioner, the petitioner’s actual social gathering in curiosity, or a privy of the petitioner; and (2) is filed after (a) the submitting of a patent proprietor preliminary response to the primary petition; or (b) the expiration of the interval for submitting such a response beneath § 42.107(a)(2) or § 42.207(a)(2), or as in any other case ordered, if no preliminary response to the primary petition is filed.”
Based on the NPRM, feedback have been combined as as to whether the definition of a serial petition ought to embody petitions filed by events aside from the unique petitioner, and opinions additionally diverse on what diploma of relationship between the events is enough to convey a subsequent petition beneath the definition of a serial petition. The NPRM in the end is proposing that making use of the frequent regulation ideas of “actual social gathering in curiosity” and “privity” to discretion within the serial petition context “carries out Congress’s need that the Director steadiness considerations about harassment in exercising discretion.”
A parallel petition is outlined as:
“[T]wo or extra petitions that (1) problem the identical patent and (2) are filed by the identical petitioner on or earlier than: (a) the submitting of a patent proprietor preliminary response to any of the petitions, or (b) the due date set forth in § 42.107(a)(2) or § 42.207(a)(2) for submitting a patent proprietor preliminary response to the primary petition (if no patent proprietor preliminary response to the petitions is filed).”
Feedback obtained to the ANPRM proposal on this level included considerations that the definition was overly restrictive as a result of it centered on petitions difficult the identical patent slightly than overlapping claims of the patent. However the NPRM mentioned the Workplace is transferring ahead with the “identical patent” definition so as “to offer a mechanism for the Board to evaluation submitting behaviors to evaluate whether or not there are any abuses or misuses of the post-grant procedures, together with ones which will place unwarranted and pointless burdens on the patent proprietor (e.g., submitting, with out rationalization, a number of petitions difficult a single patent the place every petition challenges a single declare of the patent).”
Nonetheless, mentioned the NPRM, if a petition that’s thought of parallel challenges totally different claims “or totally different artwork related to the totally different declare units,” the PTAB can nonetheless train its discretion to institute each petitions.
Discretionary Denial Briefing
The NPRM’s proposal to permit briefing on discretionary denial in a separate request is probably probably the most substantive contained in at this time’s NPRM, Stephen McBride of Carmichael IP advised IPWatchdog. The rule would permit a patent proprietor to individually file a request for discretionary denial with out Board authorization, “restricted to addressing any relevant discretionary establishment points and elements.” Each the patent proprietor’s briefing and the petitioner’s opposition can be restricted to 10 pages, whereas the patent proprietor sur-reply can be restricted to 5 pages. The Board might nonetheless train its discretion to authorize the patent proprietor to incorporate discretionary denial points within the patent proprietor preliminary response “when the circumstances warrant.”
“On the whole, this proposal is nice information for Petitioners as a result of the Petition not has to handle discretionary denial points and the Petitioner will get a proper of response,” McBride mentioned. “The timing of the briefing (due a month earlier than the preliminary response) and the steerage for the supplemental briefing to consult with the preliminary response for deserves discussions seem more likely to generate vital pushback from commenters.”
In its dialogue of the feedback obtain, the USPTO mentioned that “most commenters favored separate briefing” as a result of “it could release area within the petitions and patent proprietor responses to handle the deserves and permit extra fulsome dialogue of discretionary denial points.” Whereas the discover acknowledged that some commenters have been involved that separate briefing would favor petitioners “as a result of it could give a petitioner an automated proper to answer a patent proprietor preliminary response,” the Workplace mentioned the NPRM addresses that by limiting the petitioner’s opposition to the problems raised within the discretionary denial request, “after which permitting a patent proprietor the chance to file a reply temporary restricted to responding to the petitioner’s opposition.”
Termination and Settlement Agreements
The NPRM would revise the provisions for termination of a continuing in view of a settlement to make clear that the PTAB “could terminate a continuing by itself initiative earlier than or after establishment” and that “the events could collectively transfer for termination of a continuing, earlier than or after establishment.”
Based on the NPRM, the settlement rate for America Invents Act (AIA) proceedings has been roughly 30% per yr since FY2020, and 50% of these have been pre-institution settlements every year. For that purpose, the Workplace is proposing adjustments that might “be certain that pre-institution settlement agreements are filed with the Workplace, just like post-institution settlement agreements.”
Whereas some feedback opposed this requirement on the grounds that the statute solely requires post-institution settlements be filed, the NPRM defined:
“The statute requires the submitting of settlement agreements made in reference to, or in contemplation of, the termination of a continuing that has been instituted, and is silent on AIA pre-institution settlement. The proposed rule is promulgated throughout the Director’s authority to prescribe rules establishing and governing an [inter partes review] IPR beneath the AIA provisions.”
Components for Discretionary Denial
Lastly, the NPRM proposes to codify present PTAB practices for discretionarily denying inter partes evaluation (IPR) proceedings. 37 CFR § 42.108(c) can be revised so as to add the particular issues for denial of each petitions and joinder and paragraphs e by way of g can be added, addressing issues for denial of parallel petitions difficult the identical patent; the elements for establishment of serial petitions; and discretion based mostly on beforehand offered artwork or arguments.
In its dialogue of the feedback obtained on this matter, the NPRM famous that some commenters mentioned discretionary denial contradicts Congressional intent by depriving events of their skill to problem patents by way of AIA proceedings and a few mentioned the Director doesn’t have the authority to preclude serial and parallel petitions. However the NPRM mentioned congress granted the Director the authority to institute evaluation of publish grant proceedings and nowhere requires it. Additional, discretionary denial is warranted beneath 35 U.S.C. 316 and 326, “which require that ‘the Director shall contemplate the impact of any such regulation on the financial system, the integrity of the patent system, the environment friendly administration of the Workplace, and the flexibility of the Workplace to well timed full proceedings instituted beneath this chapter,’” mentioned the NPRM.
The Director was additionally granted the authority to ascertain rules governing how the AIA might be applied and in the end “the language and intent of the above statutes subsequently help evaluating whether or not parallel or serial petitions advance the mission and imaginative and prescient of the Workplace to advertise innovation or the intent behind the AIA to offer a less-expensive different to district court docket litigation when exercising the Director’s discretion to institute.”
The proposal implements present USPTO apply relating to the requirement that petitioners should display why parallel petitions must be allowed to proceed. “The proposed rule strikes a steadiness between denying all parallel petitions and instituting all parallel petitions that meet the statutory threshold for establishment in 35 USC 314(a) and 35 USC 324(a) by requiring a exhibiting by the petitioner of fine trigger as to why a couple of petition is critical,” mentioned the NPRM.
With respect to adoption of the General Plastics factors, that are an inventory of things the PTAB considers when deciding to institute an IPR, particularly relating to serial petitions, the NPRM mentioned that elements 6 and seven—which bear in mind “(6) the finite sources of the Board, and (7) the requirement to concern a remaining dedication not later than one yr after the date on which the Director notices establishment of evaluation”—aren’t proposed for regulatory adoption. That is “in gentle of stakeholder suggestions that events lack enough data to opine on the finite sources of the Board and the Board’s skill to concern a remaining dedication inside one yr,” mentioned the NPRM.
Among the extra controversial points within the ANPRM that didn’t make it into at this time’s proposal are discretionary denial of petitions brought by any “for-profit entity” that has not been sued or threatened with infringement of the challenged patent and the “compelling merits” normal for establishment. And lots of practitioners stay hopeful that the PREVAIL Act, which addresses additional and more substantive changes, should still transfer ahead.
Feedback on at this time’s NPRM are due by 60 days from April 19, 2024, and should be submitted by way of the Federal eRulemaking Portal by getting into the docket quantity PTO-P-2023-0048 on the homepage and clicking “search.”