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16 September 2021PatentsMuireann Bolger

Q&A: Shouvik Biswas, Aaron Lukas and Blake Coblentz on the America Invents Act

This week marks the ten year anniversary of America Invents Act (AIA), which became law on September 16, 2011. Also known as the Leahy-Smith Act, the AIA was designed to modernise the US patent system but its detractors have argued that the Act’s provisions could stifle innovation.

The AIA also led to the controversial creation of the Patent Trial and Appeal Board (PTAB). In the second of a three-part series this week presenting the views of US lawyers, WIPR asked partners from US firms Morrison & Foerster and Cozen O’Connor to share their thoughts on the effects of the AIA.

Shouvik Biswas, of counsel, PTAB litigation group of Morrison & Foerster’s Washington, DC office

What is the significance of this anniversary?

Ten years after its passage, we now have a clear sense of whether the AIA lived up to its promise. It clearly has. The post-grant proceedings established by the AIA have created a true alternative to patent litigation. While many feared that the AIA would favour larger established companies and stifle start-up formation in the US, these prophecies have not come to pass. The AIA has reduced the expense of patent litigation and kept the US patent competitive with the rest of the world

What changes has the AIA experienced since it was signed into law?

While the law itself has not changed since it passed, the way in which the USPTO has implemented the law has evolved significantly. In the early days of the post-grant proceedings created by the AIA, there was a perception that the PTAB was pro-petitioner, and would more than likely find challenged claims unpatentable.

But the USPTO’s implementation of the AIA has evolved to level the playing field and give patent owners a meaningful and robust opportunity to defend their patents. Significantly, the USPTO changed the claim construction standard from broadest reasonable interpretation to the Phillips standard in 2018 and provided the patent owner with a comprehensive motion to amend the process a year later that affords patent owners a meaningful opportunity to amend claims that are being challenged in the PTAB.

How has the AIA impacted patent litigation over the past decade?

The AIA, and specifically the post-grant proceedings created by the AIA, have become an integral part of patent litigation strategy. Defendants now have a choice of whether they want to pursue their invalidity case against a patent in the PTAB or before a jury with each choice having its own implications. PTAB judges usually have a technical background in addition to their legal background and are more likely to understand complex technical arguments, but on the other hand, they will scrutinise the technical merits of a case more closely than perhaps a lay jury would.

The AIA has also allowed for potential defendants to strike at patents before they are even brought into a district court infringement case, and often post-grant proceedings can be used as a tool to deter potential accusers from initiating patent litigation.

Aaron Lukas, member, Cozen O’Connor

How has the AIA impacted patent litigation over the past decade?

The AIA’s main impact on patent litigation over the past decade has resulted from post-grant challenges through inter partes reviews (IPRs) and post-grant reviews (PGRs). Specifically, the lower burden of proof for an invalidity challenge at the PTAB compared to US district courts has resulted in defendants in many lawsuits choosing to file IPRs or PGRs on patents asserted against them.

Many district courts, and especially those with backlogged dockets, have granted motions to stay district court proceedings so that IPR or PGR proceedings, and, in some cases, any resulting appeal, can be concluded.

This resulted in many district court cases being stayed for up to two to three years while IPR and PGR proceedings (and related appeals) were completed. In response, the Western District of Texas has arisen as a preferred venue for patent owners to file suit based on that court’s propensity to move cases to trial before a final written decision can be issued in a post-grant proceeding.

What changes, if any, are on the horizon that would impact the AIA?

We expect that any further changes to the AIA will be incremental, with IPR and PGR post-grant proceedings being a predictable part of the patent landscape for decades to come. Recent reforms to PTO processes and rules implemented under the AIA have focused on protecting patent owners by, for example, giving the PTAB discretionary denial capability under Fintiv (discussed above).

Suggestions for further reforms have focused on improving patent owners’ due process rights by, for example, suggesting that the decision to institute a proceeding be done by a different PTAB panel than the one that decides patent validity. Conversely, some have suggested broadening the invalidity ground that can be raised in an IPR proceeding by, for example, including patent eligibility under 101 and indefiniteness under 112(b) in IPR proceedings. But we do not expect to see legislation passed in the near term that would significantly impact the AIA.

Blake Coblentz, member, Cozen O’Connor

What is the significance of this anniversary?

At the ten-year mark, we are finally at a time where a majority of the newly issued patents were reviewed by the PTO under the AIA rules. As these patents are asserted in litigation and/or are challenged in IPR and PGR proceedings, we will see the substantially rewritten 35 USC § 102 and what counts as prior art comes into play more and more.

What changes has the AIA experienced since it was signed into law?

The major changes include the creation of post-grant proceedings such as IPRs and PGRs, which themselves have experienced several significant changes since the AIA was signed into law on September 16, 2011.

Initially, the PTAB was free to exercise discretion and institute IPR or PGR proceedings on only certain challenged claims or certain grounds. In 2018, the Supreme Court in SAS Institute v Iancu (2018) did away with that by requiring the PTAB to institute an IPR or PGR on all of the challenged claims and grounds for unpatentability presented in a petition or to deny the petition.

In practice, given the higher stakes at the institution phase of a proceeding, this has resulted in petitioners being more selective in the arguments and grounds they present. Another significant change came about after the PTAB designated the decision in Apple v Fintiv (2020) as precedential.

The Fintiv decision outlined a  six-factor test for the board to consider in determining whether to exercise discretionary denial and has been one of the driving forces behind a falling institution rate since the inception of IPRs and PGRs. Fintiv has created a strong incentive for petitioners who are involved in parallel district court proceedings to file an IPR or PGR challenge as soon as possible if a complaint is filed against them in district court.

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