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The preliminary response allows patent owners who have been hit with an inter partes review case to strike back before a decision on whether to institute a trial is made. Jacob Moore and Tianran Yan of Foley & Lardner discuss when you should and shouldn’t file one.
Since the inception of the inter partes review (IPR) in September 2012, more than 4,000 IPR petitions have been filed by patent challengers (petitioners); the US Patent and Trademark Office’s (USPTO) Patent Trial and Appeal Board (PTAB) has instituted trials in almost 70% of the cases.
For completed IPR proceedings with a final written decision by the PTAB, 86% ended with at least some claims being invalidated. Perhaps as a result of petitioner success in IPR proceedings, the popularity of using the PTAB as a forum for challenging patent validity is on the rise, with the number of petitions filed increasing year-on-year by more than 30%.
With the increased reliance on the PTAB for assessing patent validity, now more than ever patent owners should consider pre-institution strategies for defending their patent rights in an IPR. With this in mind, this article reviews a valuable tool for thwarting the institution of IPRs: the patent owner’s preliminary response.
Filing a preliminary response is optional, but it gives the patent owner a pre-trial opportunity to prevent invalidation by persuading the PTAB not to institute an IPR trial. A successful preliminary response can result in the IPR petition being denied outright, with the patent owner’s patent remaining intact. This article reviews strategy considerations and practice tips associated with the decision of whether to file a preliminary response.
Reasons to file
Even though preliminary responses are optional, it may often be to the patent owner’s advantage to file one. Indeed, the preliminary response affords the patent owner the chance to colour the board’s view of the petitioner’s arguments and any expert testimony cited by the petitioner. It also allows the patent owner to point the board to specific evidentiary information supporting the patent’s validity. Moreover, if a preliminary response is not filed, the board’s decision on institution rests on the petitioner’s unrebutted arguments about patentability. For these reasons, filing a preliminary response is widely believed to increase a patent owner’s chance of denying IPR institution.
Even when a preliminary response does not prevent institution, it may be partially successful by persuading the PTAB not to institute a trial on certain grounds proposed in the petition or on certain claims challenged by the petitioner.
Reasons not to file
That being said, in limited circumstances a patent owner should at least consider refraining from filing a preliminary response. For instance, the ultimate goal of a preliminary response is to prevent institution of an IPR trial, but conducting a full trial and obtaining a favourable final written decision from the PTAB provides some benefits to a patent owner. In particular, such a result stops the petitioner from raising the same invalidity grounds in a district court proceeding, thereby precluding a district court judge or jury from invalidating the patent claims on those same grounds (if raised by the same party).
As a result, the patentability decision is made by the PTAB instead of, for example, a less experienced jury. While this option may seem attractive at face value, it must be counterbalanced against (i) the negative consequences of an unfavourable IPR decision; (ii) settlement-related effects of an IPR denial; and (iii) the impact of an IPR denial on the perceived strength of a patent, which is likely to influence a district court judge or jury’s view of patent validity in a later litigation proceeding. A patent owner should also consider differences in claim construction standards used at the board and district courts respectively, keeping in mind that these standards are evolving.
Another potential benefit of not filing a preliminary response is to avoid giving an opponent an early indication of arguments that will be used to defend patentability. This may be more of a concern in cases of parallel litigation, where the litigation team would prefer not to give the infringer early warning of such arguments and defences.
Procedurally, if a patent owner decides to file a preliminary response, it must be filed within three months of being notified that a challenger’s petition has been accorded a filing date. Substantively, the preliminary response is “limited to setting forth the reasons why no IPR should be instituted” and cannot include “new testimony evidence beyond that already of record, except as authorised by the board.”
“The preliminary response affords the patent owner the chance to colour the board’s view of the petitioner’s arguments and any expert testimony cited by the petitioner.”
Moreover, substantive arguments in a preliminary response are generally restricted to those relevant to §§102, 103 or 112, depending on the petitioner’s asserted grounds for invalidity. (The IPR statute indicates that IPRs should assess patentability only on grounds that could be raised under 35 USC §§102 and 103, and only on the basis of prior art consisting of patents or printed publications. That being said, the PTAB also routinely considers issues raised under 35 USC §112, which are implicated when a petitioner’s arguments under §§102 and 103 are based on so-called intervening prior art—ie, references published after the patent’s priority date but before its actual filing date.)
With this in mind, a successful preliminary response will probably have one or more of the following lines of argument:
- The IPR petition suffers from procedural deficiencies, such as untimely filing or failure to identify the real party in interest;
- The petitioner is statutorily barred from pursuing a review;
- The references and issues raised have already been thoroughly addressed in the original prosecution or another USPTO proceeding (such as a reissue or reexamination proceeding), and any new evidence in the petition is not sufficient to show a reasonable likelihood of unpatentability (the PTAB has discretion to deny a petition in view of earlier proceedings before the office);
- The references asserted to establish that the claims are unpatentable are not in fact prior art (eg, are not publicly accessible);
- The prior art lacks a material limitation found in all of the independent claims;
- The prior art teaches something other than a combination that the petitioner is advocating; and
- The petitioner’s claim interpretation for the challenged claims is unreasonable.
As patent practitioners will recognise, many of the above lines of argument overlap with those traditionally advanced during routine prosecution of a patent application. Thus, it is not surprising that in deciding whether to institute a trial, the board “may take into account whether ... the same or substantially the same prior art or arguments were previously presented to the USPTO”.
Even if “new” prior art is cited in a petition, parallels between the petitioner’s arguments and those raised by an examiner during prosecution can lead the PTAB to deny IPR institution. So, if possible, a preliminary response should point to evidence of record in the prosecution history to support patent validity. Also useful in the context of preliminary response arguments are other publicly available documents, including relevant declaratory evidence and objective evidence of non-obviousness.
Another tactic that patent owners may wish to consider is submitting non-public or confidential evidence that already exists along with a motion to seal and protective order when filing the preliminary response (the PTAB has permitted patent owners to rely on such confidential information in a preliminary response). It is important to keep in mind that the patent owner cannot present new evidence that was prepared after the petition was filed (such as a comparative test or new declaration from an expert, which can only be used after a trial is instituted). If a patent owner intends to present confidential information in a preliminary response, it is important to meet and confer with opposing counsel before filing one in order to agree on a protective order.
Preparing preliminary response arguments—especially §112 arguments—poses myriad traps for the unwary because the arguments often implicate claim construction in view of the patent’s specification and the perspective of a person of ordinary skill in the art. In defining these terms, a patent owner can often demonstrate validity of narrowly-construed claim terms more easily than broadly-construed claims. However, arguing for a narrow construction could adversely affect the value of the patent.
For instance, a patent owner could prevail in an IPR validity proceeding based on a narrow claim construction, but in the process sacrifice a broader claim construction that is needed for infringement-related arguments in a later or parallel litigation proceeding. For this reason, patent owners must be diligent in keeping the ‘big picture’ in mind when responding to IPR petitions.
Given the rising popularity of IPR proceedings as a vehicle for challenging patent validity, patent owners need to consider how best to protect their intellectual property interests in today’s seemingly patent-unfriendly environment. Often, the safest way of maintaining patent validity is to circumvent an IPR institution altogether. With this in mind, patent owners in a potential IPR proceeding should think carefully before forgoing the opportunity to file a preliminary response. If used properly, it is an important tool for maintaining patent validity and maximising the value of a patent portfolio.
Jacob Moore is an associate at Foley & Lardner. He can be contacted at: email@example.com
Tianran Yan is a senior counsel at Foley & Lardner. He can be contacted at: firstname.lastname@example.org
Jacob Moore, Tianran Yan, Foley & Lardner, IPR, patent, PTAB, USPTO, petition, validity,