Post-Grant Review (PGR) is an entirely new inter partes procedure to the U.S. patent system that allows third parties to challenge the validity of issued patents during the nine-month period following grant of a patent or issuance of a reissue patent from the U.S. Patent and Trademark Office (USPTO). Patents having an effective filing date under the new first-to-file regime, i.e., an effective filing date on or after 3/16/2013, are eligible for PGR. Any party that is not an owner of the patent and that has not filed a civil action challenging the validity of the patent may file a petition for post-grant review. In contrast to reexamination practice, a petition for PGR can be based on any patentability grounds, including non-patentable subject matter (35 U.S.C. §101), novelty (35 U.S.C. § 102) and obviousness (35 U.S.C. § 103), as well as failure to comply with the requirements of 35 U.S.C. § 112, other than best mode.
Filing the Petition
What may be challenged? Patents having an effective filing date under the new first-to-file regime, i.e., patents having claims filed on or after 3/16/2013.
Possible grounds for filing? Any ground for invalidity, including §§ 101, 102, 103, and 112, which cover: Prior art (lack of novelty and obviousness), lack of enablement, lack of written description, lack of utility, claim indefiniteness, lack of structure for means plus function claim limitations, prior public use, prior sales or offers for sale, non-statutory subject matter, statutory double patenting.
Who can bring? Any person who is not the owner. Limitations – A petitioner is precluded from petitioning for PGR if the petitioner, its real party in interest (“RPI”) or its privy: (i) previously filed an IPR, PGR, or covered business method review (CBM) of a claim that resulted in a final written decision by the Board; (ii) or previously filed a civil action challenging the validity of a claim of the patent (Note: a counterclaim challenging validity does not bar PGR).
Timing? The first nine months after patent issuance or reissuance of broadened claims.
Cost? The fee for filing a petition for PGR is $12,000 to challenge the validity of up to 20 claims and $250 per each additional claim beyond the twentieth. If the petition for review is granted, there is a post-institution fee of $18,000 for challenging up to 15 claims and a $550 fee per each additional claim beyond the fifteenth.
Statutory and regulatory requirements a petitioner must meet in a petition for a PGR? In a petition for a PGR, the petitioner must by statute (i) identify all real parties in interest; (ii) identify all claims challenged and all grounds on which the challenge to each claim is based; and (iii) provide copies of evidence relied upon. The petition must be accompanied by a fee. In addition, the petitioner must by rule (i) identify the grounds for standing; (ii) provide a claim construction for each challenged claim; (iii) specifically explain the grounds for unpatentability; and (iv) specifically explain the relevance of evidence relied upon.
Threshold for granting petition for hearing? Petition for PGR must contain information that “if not rebutted,” demonstrates that it is more likely than not that at least one of the claims challenged in the petition is unpatentable.
This is a higher standard than the reasonable likelihood of success standard for IPR. The “more likely than not” standard requires a greater than 50 percent chance of prevailing, while the “reasonable likelihood” standard includes a 50/50 chance. In the legislative history, Senator Jon Kyl explained the standards differ because “some of the issues that can be raised in post-grant review, such as enablement and § 101 invention issues, may require development through discovery. The office wants to ensure that petitioners raising such issues present a complete case at the onset.” This is consistent with the AIA’s general goals of increasing efficiency in resolving patent disputes while minimizing vexatious litigation tactics. The practical effect of the differing standards remains to be seen.
Alternatively, a petition may be granted if the challenge raises a novel or unsettled legal question.
In instituting a review, the Board may take into account whether, and reject the petition or request because, the same or substantially same prior art or arguments previously were presented to the Office.
A party may request rehearing of the Board’s decision to hear the petition. The request must specifically identify all matters the party believes the Board misapprehended or overlooked, and the place where each matter was addressed. Determinations to institute PGR are final and not appealable by statute.
Pendency? PGRs must be completed within one year from institution of the trial (up to approximately 18 months from filing the petition), with a single six month extension available for a showing of “good cause.”
Before who? The Patent Trials and Appeals Board (PTAB). Each case will be heard by a panel of three technically-trained, patent-savvy judges in a single-phase trial.
Patent Owner Preliminary Response? The patent owner has a right to file a preliminary response to the petition, within a time period set by the Director, that sets forth the reasons why no PGR should be instituted based on failure of the petition to meet any requirement of chapter 32 of title 35, United States Code. A patent holder may challenge the standing of a petitioner in the preliminary response. For example, a patent holder may provide evidence that the petitioner has filed a civil action challenging patentability prior to filing the petition or that the petitioner otherwise is estopped from challenging the patent owner’s claims.
The patent owner has no obligation to file a preliminary response and may, but is not required, inform PTAB if it does not intend to file a preliminary response.
Burdens and Standard for challenge? The default evidentiary standard is a preponderance of the evidence, which is more favorable to the petitioner than the “clear and convincing evidence” standard used in district court. In addition, the Office will apply the broadest reasonable construction standard to PGRs, and there will be no presumption of validity.
Patent Owner Actions after PGR is instituted? The schedule for each proceeding will be set by the Board. Ordinarily, a patent owner will have three months to file a response and/or amendment. A patent owner may file one motion to amend the challenged patent claims, subject to the standards and procedures set by the Office, during a PGR. Amendments may cancel any challenged patent claim and/or propose a reasonable number of substitute claims.
Can the petitioner file additional information after PGR is instituted? A petitioner may supplement information provided in the petition for PGR by a motion within one month of the date trial is instituted. Beyond this date, no party will be permitted to submit supplemental information belatedly except upon a showing that the information could not have been earlier presented and that it is in the interests of justice for the Board to consider the information.
Discovery? Unlike inter partes reexaminations, in PGR there will be opportunities for limited discovery, a hearing, joinder, and settlement without creating an estoppel.
Director will prescribe regulations setting forth standards and procedures for discovery of relevant evidence, including that such discovery will be limited to evidence directly related to factual assertions advanced by either party in the proceeding. Routine discovery includes cited documents, cross-examination of declaration testimony, and information inconsistent with positions advanced during the proceeding. The parties may agree mutually to provide additional discovery or either party may file an authorized motion seeking additional discovery.
The standard for additional discovery is “good cause.” Good cause (PGR and CBM) and interests-of-justice (IPR and Derivation Proceedings) are closely related standards, but on balance, the interests-of-justice standard is a slightly higher standard than good cause. While a good cause standard requires a party to show a specific factual reason to justify the needed discovery, interests-of-justice would mean that the Board would look at all relevant factors. The interests-of-justice standard covers considerably more than the good cause standard, and in using such a standard the Board will attempt to consider whether the additional discovery is necessary in light of ”the totality of the relevant circumstances.
Protection of confidential information? The AIA provides that the file of a PGR is open to the public, except that a party may seek to have a document sealed by filing a motion to seal. The AIA also provides for protective orders to govern the exchange and submission of confidential information.
How can a party seek relief? The AIA provides that a party may request relief during a PGR by filing a motion. In addition, the use of conference calls to raise and resolve issues in an expedited manner is encouraged. A party seeking relief may contact the Board and request a conference call, explaining why the call is needed. The Office envisions that most of the procedural issues arising during a proceeding will be handled during a conference call or in a matter of days thereafter.
Hearings? Either party to a PGR may request an oral hearing.
Multiple proceedings for the same patent? Where another matter involving the same patent is before the Office during the pendency of the post grant review, the Board may enter any appropriate order regarding the additional matter including providing for the stay, transfer, consolidation, or termination of any such matter. Joinder may be requested by a patent owner or petitioner.
How does a PGR conclude? Where a PGR is instituted and not dismissed, the Board shall issue a final written decision. The decision shall address the patentability of any challenged patent claim and any new claim added via amendment during the PGR.
Settlements? The AIA permits the parties to a PGR to settle. A settlement terminates the proceeding with respect to the petitioner, and the Board may terminate the proceeding or issue a final written decision.
Rehearing requests? Either party may request rehearing of the Board’s decision. The request must specifically identify all matters the party believes the Board misapprehended or overlooked, and the place where each matter was addressed in the petition.
Estoppel? When a petitioner, its RPI or its privy loses a PGR, it cannot subsequently assert or maintain unpatentability of any challenged claim in any subsequent proceeding at the Office, or challenge validity in a civil action in district court or before the International Trade Commission on any grounds it raised or reasonably could have raised in the PGR. The Office’s final written decision will trigger the estoppels for an unsuccessful party. A patent owner is also estopped from taking action inconsistent with an adverse judgment in a PGR, including obtaining in any patent a claim to substantially the same invention as a finally refused or canceled claim or a claim that could have been filed in response to any properly-raised ground of unpatentability for a finally refused or canceled claim. Also cannot amend its specification or drawing in a way that it was denied during the proceeding.
Appeal? Dissatisfied party may appeal to the Court of Appeals for the Federal Circuit.
Staying power? Civil actions brought by the petitioner or RPI challenging the validity of a claim of the patent filed on or after the date on which the petition for PGR was filed are automatically stayed until certain specified conditions are met.
If a civil action alleging infringement of a patent is filed within three months after the date on which the patent is granted, the court may not stay its consideration of the patent owner’s motion for preliminary injunction against infringement of the patent on the basis that a petition for PGR has been filed or instituted.
Existing case law? None for regular utility patents. Can get sense for where PTO is going with these proceedings from CBM decisions.
The options for challenging a patent should be carefully evaluated. PGR presents a new option for challenging within 9 months of its issuance. During this time frame, using PGR as a means for challenging a patent should be heavily considered. Consider PGR in light of the alternative challenging mechanisms, ex parte reexamination and District Court litigation:
Differences between reexamination and PGR
- PGR is handled by the PTAB, not the Central Reexamination Unit (CRU).
- Stays for co-pending litigation during reexamination have been inconsistent because reexaminations tend to linger unresolved. It is speculated that stays will be much more likely where a PGR has been initiated since PGR has statutory mandate to conclude in 12 months or 18 with “good cause.”
- PGR can challenge any ground of invalidity, reexamination can only challenge on prior art grounds.
- The fee for filing an ex parte reexamination is $12,000. The fee for filing a petition for PGR is $12,000 to challenge the validity of up to 20 claims and $250 per each additional claim beyond the twentieth. If the petition for PGR is granted, there is a post-institution fee of $18,000 for challenging up to 15 claims and a $550 fee per each additional claim beyond the fifteenth.
Differences between District Court litigation and PGR
- AIA intent is to force you to have you choose between bringing validity challenges via PGR or District Court.
- Lead counsel for PGR proceedings must be a registered patent attorney, but because of the discovery and litigation aspects, it will probably be helpful to engage an experienced litigation attorney as well. Keep in mind this is fundamentally a Patent Office proceeding.
- In PGR, patent owner has ability to amend the claims to overcome any issues raised by petitioner. If your challenges are the type that may be amended around, consider this before filing petition for PGR. Your attack may not prevent liability for infringement, if it can be amended around.
- PGR discovery is much more limited than what is available in district court.
- Patent office limits size of PGR petition and charges per claim fees beyond the first 15. It may be difficult to fit all arguments in to cover all the claims, expensive to challenge all those claims and attorney time to prepare the petition. The total cost of PGR is likely much cheaper than traditional litigation, but PGR likely requires more front end preparation and cost than District Court filing.
- PGR Petitioner should have their proposed claim constructions pretty much set when preparing to file petition. Required by rules to have your claim construction position set forth when petition is filed and they will be interpreted under PTO’s broadest reasonable interpretation standard.
- At this point, it is unclear as to whether estoppel attaches only to the reviewed claims in the patent at issue, or if it also covers unreviewed claims that raise common issues. Relatedly, the actual extent of “reasonably could have raised” is also unclear.
Post-Grant Review (PGR) Fast Facts
What is challenged?
- Must allege invalidity of at least one patented claim having an effective filing date under the new first-to-file regime
- Invalidity may be challenged on any grounds, including §§ 101, 102, 103, and 112
- Threshold: Petition must contain information that “if not rebutted,” demonstrates that it is more likely than not that at least one of the claims challenged is unpatentable
When can you file?
- Within the first 9 months after patent issuance or reissuance of broadened claims
Who can file?
- Any non-owner of the patent unless the petitioner, its real party in interest or its privy: (i) previously filed an IPR, PGR, or CBM of a claim that resulted in a final written decision by the Board; (ii) or previously filed a civil action challenging the validity of a claim of the patent (Note: a counterclaim challenging validity does not bar PGR)
What are the fees?
- To file: $12,000 for up to 20 challenged claims, $250 per additional claim
- Post-institution: $18,000 for up to 15 claims, $550 per additional claim
Timeline for proceeding
- Maximum 6 months from filing to decision on the petition
- If granted, 12 months from date of institution until final written decision by the Board
- 6 month extension possible for good cause
- More limited than in district court proceedings
- Parties may mutually agree to an increased scope
- Either party may file an authorized motion seeking additional discovery under “good cause” standard
- The parties may settle and submit a joint motion to terminate without prejudice
- Standard is preponderance of the evidence
- Applies broadest reasonable construction of the claims with no presumption of validity
- Either party may request rehearing of the Board’s decision
- Decision may be appealed to the Federal Circuit
- Attaches upon final written decision
- Petitioner nor real party in interest may not request or maintain a proceeding before the USPTO with respect to the challenged claim or assert in a civil action that the claim is invalid on any ground that the petitioner raised or reasonably could have raised
- Patent owner may not take any action inconsistent with an adverse judgment