New U.S. Opposition Proceedings Provide Strategic Avenues for Patent Challengers

November 04, 2011

The 2011 America Invents Act radically revises the U.S. system of post-grant patent review, by providing 4 new post-grant opposition proceedings in addition to existing ex parte reexamination. The strategic use of interrelated post-grant proceedings will provide complex and rapid avenues for challenging the validity of important U.S. patents, and create a specialist bar of post-grant patent practitioners. The new derivation, post-grant review, and inter partes review procedures will be adversarial, and will often require deposition testimony and cross-examination of witnesses and experts, as under existing interference practice.

Three mantras of the U.S. patent reform movement have been (1) that post-grant opposition proceedings must provide an effective vehicle for weeding out invalid patents; (2) that the “first-to-invent” interference system must end; and (3) that a first-to-invent derivation system must remain under the guise of a “first filer to invent” regime.

Broadly speaking, the 2011 Act proposes to realize these goals by adopting a new post-grant review proceeding and revising existing inter-partes reexamination to create an “inter partes review.” The bill retains existing ex parte reexamination, which can be invoked as an alternative to the more complex inter-partes review proceeding. Interferences will eventually end, but a new “derivation” proceeding retains many of their basic features, requiring a priority of invention determination if the first to file a patent application derived the claimed invention from another, prior inventor.

Under the elaborate system established by the Act, the U.S. will have 6 different procedures for post-grant opposition of issued patents (derivation and post-grant review proceedings, inter partes review, ex parte reexamination, business method patent review, and interferences), as well as a new pre-grant “protest” procedure. As generally shown in the following chart, multiple post-grant opposition proceedings could be copending, although inter partes review can only be sought after the 9-month window for requesting post-grant review, or the termination of a post-grant review proceeding.

The most important new opposition procedures are post-grant review, inter-partes review, and derivation.

The new law permits multiple post-grant review proceedings, which can be initiated up to 9 months after the date of patent grant. The scope of post-grant review is not limited to prior art patents or publications, but instead may be based on any ground of invalidity that could be raised in district court litigation, including lack of written description, nonenablement, or patent-ineligible subject matter. If post-grant review is initiated after a 2-month period for the patent owner’s response to the petition and a 3-month period for USPTO consideration, the USPTO has 12 months to complete review (which can be extended to 18 months in “exceptional” circumstances). A final USPTO decision on validity could issue within about 17 months of patent grant.

An inter partes review can first be requested 9 months after patent grant, unless a post-grant review is pending. If so, the request for inter partes review can only be filed upon termination of the post-grant review. After a request for inter partes review is filed, the patent owner has a period to respond, and the USPTO has 3 months to consider the request, and if a proceeding is initiated, 12 additional months to reach a final decision (extended to 18 months in “exceptional” cases). A final USPTO decision could issue within about 2 years of patent grant.

Derivation proceedings must normally be requested within 1 year of initial publication of a patent application, but PTO consideration may be deferred until after a final decision in a post-grant or inter-partes review. Any number of ex parte reexamination requests may also be filed at any time after a patent issues.

In addition to the new patent opposition proceedings, the Act establishes a new post-grant “supplemental examination” that provides a way for patent owners to “cure” inequitable conduct by submitting information concealed from the USPTO during original examination. Ex parte reexamination and inter partes review proceedings are limited to consideration of prior art patents or publications, but a supplemental examination may consider any “information” submitted by the requestor.

The strategic ability to challenge issued U.S. patents is vastly expanded by the multiple opposition procedures created by the 2011 Act, particularly in view of the very short period permitted for a final USPTO decision, and statutory limitations on the patentee’s ability to amend or add claims during the proceedings. These advantages of the opposer are countered by severe estoppel consequences that follow an adverse USPTO decision upholding the validity of the challenged claims.

Although the contours of opposition practice will not be established for several years, it is clear that the new USPTO proceedings will provide an efficient parallel path for district court defendants to seek early resolution of invalidity contentions, in relatively inexpensive proceedings conducted by Administrative Patent Judges who are familiar both with patent law and the involved technologies. The 2011 Act is likely to transform patent infringement litigation, by diverting invalidity defenses to a forum more favorable for defendants.