The Twilight of US Post-Grant Oppositions

December 16, 2011

Today marks the beginning of a period in which USPTO inter partes post-grant opposition proceedings will gradually disappear for many important US patents.

Patents issuing after December 16, 2011 will be subject to challenge under the new inter partes review provisions, but will also be subject to the 9-month delay period imposed by § 311(c)(1). For example, patents issuing next Tuesday (December 20) will not be subject to inter partes review in a period extending from September 16, 2012 until September 20, 2012. The 9-month postponement of inter partes review will apply to all patents subject to the new Act, and no review will be possible of patents issuing on the effective date (September 16, 2012) until June 17, 2013.

The Act further provides in § 6(c) that current inter partes reexamination will cease on September 16, 2012. The consequence of this provision is that beginning on the effective date, there will be a 9-month hiatus in which neither form of inter partes review will be available for newly-issued patents, extending until June 17, 2013.

Furthermore, the Act not merely delays, but actually eliminates any possibility of post-grant opposition for many of the most important patents, which are involved in litigation. USPTO statistics indicate that 258 requests for inter-partes reexamination were filed in 2009. Of all inter partes reexaminations, the Office estimates that 71% are involved in litigation (for all years). For comparison, in 2009 there were 2295 dispositions of patent cases by district courts, of which 11% were finally adjudicated, 48% were settled, and 41% were dismissed. Although the number of district court patent cases in which inter-partes reexamination has been invoked is imprecise, it is reasonable to conclude they have been a factor in about 10% of district court patent infringement cases which were settled or finally adjudicated. Based on partial-year USPTO statistics, it seems likely that over 500 inter partes reexamination requests will be filed in 2011. These are clearly among the most important US patents, and the number of inter partes reexaminations is increasing.

For most patents involved in current litigation, inter partes review is categorically excluded by the Act. Section 315(b) provides that an inter partes review may not be instituted if the petition requesting the proceeding is filed more than one year after the date on which the petitioner is served with a complaint alleging infringement of the patent. No petition for inter partes review can be filed before the effective date, and any petition relating to a patent in ongoing litigation in which the petitioner was served with a complaint before September 16, 2011 is thus barred. For patents involved in current litigation, the defendants may lose any opportunity for USPTO inter partes post-grant opposition, including current inter partes reexamination, on the effective date.

For these reasons, it is critical for defendants in recently-filed patent infringement suits to determine whether they will seek inter-partes reexamination before September 16, 2012, to avoid the complete loss of USPTO invalidity challenges as an alternative to decision by the district court. Quite evidently, preparation for inter partes reexamination must begin well before that date.

The window for filing a petition for inter-partes review is considerably narrowed for patents involved in future litigation, to as little as 3 months if the patentee files an infringement action and serves the complaint on the day a patent issues. A petition can only be filed after 9 months have elapsed, and is barred in one year. Furthermore, if a post-grant review is instituted during the 9-month period, the 9-month deadline for seeking inter partes review is automatically extended under § 311(c)(2). In many if not most infringement cases, inter partes review will be extinguished for a defendant if another party successfully seeks post-grant review. There are certainly interesting possibilities for leveraging in these circumstances.

The new post-grant review provisions have an effective date of September 16, 2012, under uncodified § 6(f)(2), subject to a most important proviso that they shall apply only to patents described in § 3(n)(1). That section states that the amendments only apply to patents that contain a claim having an effective filing date on or after March 16, 2013. Post-grant review will therefore only be available to challenge patents that issue from applications filed on or after that date, which will gradually end the eclipse of inter partes oppositions.

This limitation on post-grant review has led to a general view that a “dead zone” of inactivity imposed during prosecution of applications filed on or after the effective date will postpone the use of post-grant review for a number of years. In my view, this is a statistical fallacy.

It seems likely that post-grant review will initially be confined to a relatively small number of patents that are either involved in or expected to result in litigation, based on experience with inter partes reexamination. The USPTO is currently issuing patents in as little as one month from the date of filing an application, through accelerated examination procedures, and is likely to sharply reduce the pendency of applications in prioritized examination under 35 USC § 2(b)(2)(G). The patents involved in expedited prosecution are by definition sufficiently important to justify considerable additional costs, such as a $4800 filing fee under Act § 11(h), and are thus more likely to be subject to post-grant review challenge.

Contrary to the expectation that post-grant review will languish in a “dead zone” for years, the new opposition procedure may come suddenly to life with respect to a new class of submarine patents, which issue from accelerated examination prior to publication of the applications. One clear advantage to patent owners of the accelerated examination procedures is that a potential opponent will not have time to prepare a detailed post-grant review petition and evidence including fact and expert declarations, as prosecution proceeds after publication of an important application. If a patentee who surfaces with such a patent immediately files suit, it also limits the likelihood of later inter partes review.

These conclusions are at best speculative until the USPTO issues final regulations implementing the post-grant opposition and expedited examination procedures. It is nonetheless prudent for current or potential infringement litigation defendants to review any post-grant opposition strategy immediately, to avoid possible foreclosure.