Facing an inter partes review (IPR) challenge is a new experience for many patent owners. But since their creation by Congress in 2011, IPRs have quickly become a preferred avenue for accused infringers and other interested parties to challenge the validity of an issued patent. In most cases, a patent owner should not be surprised when they receive a petition for IPR, since approximately 87% of patents challenged in IPRs are involved in copending litigation. Any patent owner considering asserting a patent should assume that at least one IPR will be filed by each accused infringer. Nevertheless, being pulled before the Patent Trial and Appeal Board (PTAB) to defend the validity of your duly-issued patent is an unwelcome and potentially expensive endeavor.
What should a patent owner do when they receive an IPR petition? First, they should immediately consult with counsel experienced with IPR procedures and educate themselves on what an IPR entails, conduct a cost-benefit analysis, and evaluate the likelihood of success in fending off the challenge. Second, the team of patent owner and counsel should form a comprehensive strategy for obtaining early termination of the proceeding and maintaining protection for the patented invention.
What Does an IPR Entail?
An IPR is an administrative proceeding that allows third parties (“petitioners”) to challenge the validity of an issued patent at the USPTO’s Patent Trial and Appeal Board. Unlike in litigation, a patent is not presumed to be valid in an IPR proceeding, which makes it an attractive option for challenging a patent’s validity.
An IPR has two phases: a preliminary phase and a trial phase. The preliminary phase is initiated when a petitioner files a petition with the PTAB asserting that one or more claims of the challenged patent are invalid in view of prior art patents or printed publications. Petitions are often accompanied by a supporting declaration from a technical expert retained by the petitioner. The patent owner then has approximately three months to file an optional preliminary response. A panel of three administrative patent judges will then consider the petition and any preliminary response to determine whether the petition shows a reasonable likelihood of success with respect to at least one challenged claim. If so, the panel will institute trial on all the challenged claims. If not, the proceeding is terminated and the petitioner (in most cases) has no right to appeal.
The trial phase includes limited discovery, such as depositions of the technical experts and further briefing by the parties. Trial typically culminates in an oral hearing before the panel, which involves oral arguments by the parties, but usually no live witness testimony. The trial phase concludes with a final written decision regarding patentability of the challenged claims. In nearly all cases, the written decision is issued within 12 months of the institution of trial.
Next Steps: Digging In
After retaining qualified counsel, the patent owner should conduct a cost-benefit analysis, e.g. the value of the patent versus the cost of fighting the challenge, in view of the likelihood of success. If defense of the patent is warranted, the patent owner must decide whether to file a preliminary response, which is the patent owner’s only opportunity to terminate the proceeding without trial. Counsel must analyze the petition and asserted art for substantive and formal defects, such as whether the asserted art qualifies as a printed publication, or whether the petitioner failed to file the petition within one year of being served with a complaint for infringement of the challenged patent.
Another important consideration is whether to retain a technical expert to prepare a declaration to support the preliminary response. If there is copending litigation, any claim construction and patentability arguments must be coordinated in advance with litigation counsel to ensure that positions taken at the PTAB do not adversely affect litigation positions. And all of this should be done as quickly as possible in view of the three-month deadline to file the preliminary response.
A number of additional issues need to be considered early on:
- Counsel should investigate whether there are any other circumstances that could warrant denial of trial, such as these:
- Upcoming trials in any copending litigation
- Prior IPR challenges to the patent by the same or a related party
- Prior art asserted in the petition that was already substantively considered by the USPTO during the patent’s prosecution or in later proceedings.
- Although discovery procedures are limited, are there facts that suggest that targeted discovery could uncover information that warrants a denial of trial?
- Is there any evidence of the real-life impact of the patented invention—for example, commercial success or copying of the invention by others—that could be marshalled to support the patentability of the claimed invention?
- Are there any shortcomings in the challenged claims that could be remedied in a motion to amend during trial, a pending continuation application, or a reissue application?
Each of these questions should be considered as soon as possible so the patent owner can mount their best defense and because the short timeline of an IPR proceeding leaves little room for delay if trial is instituted.
These are just some of the considerations patent owners must address when facing an IPR. Although patent owners need not panic, they should act expeditiously to maximize the chances of winning at the preliminary phase or, if necessary, at trial.