Seeking balance: four years of the PTAB

After four years of experience implementing the provisions of the America Invents Act (AIA), which governs inter partes reviews (IPRs), post-grant reviews (PGRs) and covered business method reviews, the Patent Trial and Appeal Board (PTAB) continues its efforts to improve the proceedings for petitioners and patent owners.

Three primary sources of authority have shaped PTAB procedures over these last four years: (1) select decisions from the PTAB itself which are designated “informative”; (2) PTAB rule changes; and (3) appellate decisions of the US Court of Appeals for the Federal Circuit and Supreme Court. A combination of these three forces has led to an improved set of proceedings which strive to provide better balance for petitioners and patent owners within the statutory constraints of the AIA. However, they are still very much a work in progress, and continued evolution is likely in a number of areas.

Informative PTAB decisions

One of the very first PTAB decisions to be designated “informative” (the 27th IPR filed after passage of the AIA) was Idle Free Systems v Bergstrom, which set tight limits on a patent owner’s ability to amend claims during AIA proceedings. In particular, this decision held that a patent owner may substitute only one claim for an existing claim, may not present amendments that are not responsive to a ground of unpatentability, and must carry a burden “to persuade the board that the proposed substitute claim is patentable over the prior art of record, and over prior art not of record but known to the patent owner”.

These limitations on the ability to amend claims have become a hallmark of AIA proceedings, an issue which continues to be frequently challenged on appeal. Despite some relaxation brought about in certain appeal decisions and subsequent informative PTAB decisions, the burden remains difficult to meet for most patent owners. If the patent owner does not have a pending continuation application in which to introduce amended claims, its other options are to seek reissue or ex parte reexamination.

Unrestricted ability to amend is one of the problems that plagued inter partes reexamination, the proceeding that we had before the enactment of the AIA. Patentees could add as many claims as they wanted with any number or type of amendments, which led to long pendency and created a great deal of extra examination work for the US Patent and Trademark Office (USPTO). While the AIA provides a right to amend, it also sets a one-year limit on the proceedings, which means that open-ended amendment practice would have made it very difficult for the PTAB to complete the proceedings on time. This explains the PTAB’s early adoption in Idle Free of strict limits on the right to amend.

“The Federal Circuit has generally upheld (with a few exceptions) the heavy restrictions imposed by the PTAB on a patent owner’s right to amend.”

A later informative decision ( Masterimage 3D v Reald) partly rolled back the broad scope of prior art that needs to be addressed in a motion to amend by the patent owner, which had made it difficult to complete a motion to amend within the prescribed page limits set by PTAB rules. Further liberalisation of the right to amend may come about through the decisions discussed below, but overall, the success rate for motions to amend remains very low (5%, according to USPTO statistics).

Rule changes

After an extensive fact-gathering period that involved public meetings and solicitation of written comments from the public, the PTAB proposed and then implemented a set of rules changes on May 2, 2016. The most important change is the ability for a patent owner to present new evidence in a preliminary response. The ultimate impact of this will depend on the quality of evidence a patentee can generate within the three-month period for filing a preliminary response, but it may potentially allow some patentees to prevent institution in situations where they otherwise would not be able to do so under existing rules which bar the use of newly created testimony and evidence at the pre-institution stage.

Given the short time period, patent owners that believe they have patents which may be targeted in AIA proceedings will want to consider lining up experts in advance and collecting evidence that may be useful to include in a preliminary response. In addition, a petitioner may seek leave to file a reply to the preliminary response in an IPR or PGR, but any such request must make a showing of good cause. So far, the PTAB has granted leave to file a reply to a preliminary response in limited situations where the patent owner did present new testimonial evidence in its preliminary response.

Other changes that have occurred through PTAB rulemaking in the first four years include expanded page and word limits for certain filings, and a certification that must be made by those filing papers in AIA proceedings as an added layer of assurance that the proceedings are not being initiated to harass a party or abuse the process. An overview of the rule changes is shown in Table 1.

Table 1: Changes in PTAB rules