IPR and PGR Provisions of House Bill Take Aim at Patent Trolls

By: John Bird

    Most of the provisions of the House of Representatives’ recent anti-patent troll bill (Innovation Act of 2013 dated October 23, 2013) are directed towards discouraging patent trolls from filing federal district court infringement actions. However, there are a few provisions that would affect inter partes review (IPR) and post grant review (PGR). These provisions, for the most part, further enhance the effectiveness IPR and PGR in invalidating patents. These include: 

            • Broadening the definition of “used in the practice, administration, or management of a financial product or service” for the PGR transitional program for Covered Business Methods (CBM). A broadened definition would expand the number of patents susceptible to this type of invalidity challenge. 

            • Expanding the type of prior art that can be relied upon in the transitional CBM PGR program to include 102(e) secret prior art and 102(d) prior patent prior art. 

            • Eliminating the 8-year sunset provision for the transitional CBM PGR program. 

            • Removing prior art that “reasonably could have been raised” from the estoppel provisions. This allows would-be patent challengers to start proceedings without the substantial “chilling” effect of not knowing how far estoppel would apply, should the IPR and PGR prove unsuccessful. 

            • Providing that the claim scope in IPR and PGR would be determined according to the Philips v. AWH (Fed. Cir. 2005)(en banc.) standard used in district court litigation, rather than the Broadest Reasonable Interpretation (BRI) standard that the USPTO currently uses in IPR and PGR proceedings. 

    The first four provisions are certainly favorable to a party which is the target of a patent infringement allegation, arming them with more weapons in the patent validity challenge via IPR or PGR. 

    On the other hand, the use of the Philips standard, as opposed to the BRI standard, for claim construction disadvantages the petitioner in an IPR and PGR. The BRI standard currently used in USPTO proceedings makes it more likely for a petitioner to show unpatentability at the USPTO than to show invalidity in a district court. This claim scope provision is most likely motivated by having a more consistent claim scope across forums, thereby providing better certainty for the affected parties. If passed by Congress, the last provision would take some of the teeth out of IPR and PGR.