Patent Owner's Preliminary Response to Petition for Inter Partes Review

Summary

This is a template for a patent owner's preliminary response to a petition requesting institution of an inter partes review (IPR) before the Patent Trial and Appeal Board (PTAB or the Board), an adjudicative body within the United States Patent and Trademark Office (USPTO). This template includes practical guidance and drafting notes. The IPR Petition and Patent Owner's Preliminary Response to the Petition IPRs are trial proceedings conducted by the PTAB to review the patentability of one or more claims in a patent, and are available for any patent. Any person other than the patent owner may file an IPR petition to cancel one or more patent claims on the grounds of either anticipation (35 U.S.C. § 102) or obviousness (35 U.S.C. § 103), and only based on prior art consisting of patents or printed publications. 35 U.S.C. § 311. For more background on the petition, see Petition for Inter Partes Review and Inter Partes Review – Drafting an IPR Petition. Once a patent owner is served an IPR petition, it has the right to file a preliminary response requesting a denial of institution for failure of the petition to meet any applicable statutory requirements. 35 U.S.C. § 313. Common Grounds For Challenging An IPR Petition: • The threshold standard for institution of an IPR has not been met. I.e., the petition and patent owner's preliminary response fail to show a reasonable likelihood that the petitioner will prevail on at least one of the challenged patent claims (see 35 U.S.C. § 314(a)). • The petition is precluded by a statutory bar. Statutory bars include 35 U.S.C. §§ 315(a)(1) and 315(b), or failure to identify all real parties in interest as required by 35 U.S.C. § 312(a)(2). • PTAB discretion to deny. The PTAB may exercise its discretion to deny institution on other grounds, such as based on prior petitions on the challenged patent, parallel patent litigation, or because the same or substantially the same arguments in the IPR petition were already presented to the USPTO before the patent issued (for further information, see discussion of discretionary denials below). Each of these grounds for challenging the petition is discussed further below. For further discussion of requirements and strategic considerations for responding to a petition for IPR, see Patent Owner's Preliminary Response to a Petition for Inter Partes Review. For an overview of IPR, PGR, and covered business method review (CBM) procedures, see Post-issuance Procedures for Challenging Patents: IPR, PGR, and CBM. Initial Considerations When Receiving an IPR Petition • Service of Petition: Petitions must be served on the attorney of record on the patent itself, as established in the USPTO's Patent Center system. Petitioners may, but are not required to, serve the petition on other counsel, such as litigation counsel. After being served with an IPR petition, the first deadline comes 21 days after service, at which date counsel for the patent owner must file and serve mandatory notices. 37 C.F.R. § 42.8(a)(2). Mandatory notices must identify the real party in interest, any related matters, lead and backup counsel, and service information. • Notice of Filing Date (preliminary response due 3 months later): The PTAB will issue a Notice of Filing Date Accorded once the clerical matters of the petition are verified. The Notice of Filing Date Accorded starts a three-month clock for filing the preliminary response. In rare circumstances, the preliminary response has been due in less than three months, but only when the patent owner has agreed to such a change (e.g., in cases with copycat petitions or petitions accompanied with motions for joinder). See, e.g., IPR2016-00664, Paper 5 (May 6, 2016). Filing an early preliminary response may also make it easier for the Board to deny institution if there is an obvious reason for institution denial (e.g., a statutory bar). • Preliminary Response Filing/Waiver (institution decision due 3 months later). Filing the preliminary response also sets the Board's deadline for the institution decision; the PTAB has three months from the filing of the preliminary response to make its institution decision. 35 U.S.C. § 314. If you determine that institution of the petition is highly likely or unlikely based on the threshold standard at 35 U.S.C. § 314(a), and a preliminary response will have little impact, you may wish to waive the preliminary response. This will expedite the institution decision, as the PTAB has a statutorily mandated deadline of three months from the filing of the preliminary response or waiver thereof to issue its institution decision. See 35 U.S.C. § 314. For example, waiving the preliminary response may be advantageous if co-pending district court litigation is stayed, as it will likely reduce the time for the stay by up to three months. Challenging the Grounds Asserted in the Petition In crafting a preliminary response, the decision whether to include particular arguments challenging the grounds asserted in the petition requires a balancing of risk versus reward. For example, if institution occurs, focusing the preliminary response on a dispositive limitation gives the petitioner a roadmap to the arguments likely to be made in the post-institution patent owner response. Additionally, asserting your best arguments in the preliminary response, without an opportunity to fully develop a factual record supporting patentability, runs the risk that the Board will find your arguments unpersuasive at the institution stage, which can lead to an uphill battle post-institution. Arguments you can make at the preliminary response stage with minimal negative impacts could include dispositive claim construction issues that are likely to be raised or have already been raised in co-pending litigation. Also, where an asserted ground is clearly deficient on a limitation and the deficiency is apparent even without expert testimony, you should include arguments highlighting that deficiency at the preliminary stage. Potential arguments to include are: • Showing how the petitioner's claim interpretation for the challenged claims is unreasonable • Explaining how the prior art fails to meet one or more limitations of the claims, and rebutting arguments by petitioner such as the missing limitation is obvious or inherently disclosed • Attacking the petitioner's reasons for combining two or more references on an obviousness ground, such as an asserted motivation to combine or reasonable expectation of success • Pointing out the petition's inadequate or excessive reliance on expert testimony, as opposed to the intrinsic record, to support the asserted unpatentability arguments • Challenging whether non-patent literature cited in the petition qualifies as a printed publication For further discussion of possible arguments to include in a patent owner's preliminary response and disfavored preliminary response arguments, see Patent Owner's Preliminary Response to a Petition for Inter Partes Review. Statutory Bars to an IPR Petition Various statutory bars may prevent institution of an IPR: 1. One-Year Post-Complaint Petition Deadline: One bar is the requirement that the IPR petition be filed within one year of service of a complaint alleging infringement of the challenged patent. 35 U.S.C. § 315(b). If a petitioner inadvertently files late, or if the petition is not complete as of the filing date, you can rely on this bar in the preliminary response. For summaries of precedential and informative decisions by the PTAB on whether the one-year time bar under 35 U.S.C. § 315(b) prevents institution of an IPR, see PTAB Decision Tracker: Inter Partes Review Institution Denial under 35 U.S.C. § 315(b) (One-Year Time Bar). 2. Petitioner's Declaratory Judgment Complaint Alleging Invalidity: Another statutory bar that prevents institution is if the petitioner has filed a declaratory judgment complaint alleging invalidity of the patent challenged in the IPR petition. See 35 U.S.C. § 315(a)(1). It is important to note that declaratory judgment complaints alleging noninfringement, and counterclaims alleging invalidity, do not create a bar to institution. For summaries of precedential and informative decisions by the PTAB on whether to institute an IPR under 35 U.S.C. § 315(a)(1), see PTAB Decision Tracker: Institution Denial under 35 U.S.C. § 315(a)(1) and 35 U.S.C. § 325(a)(1) (Civil Action Bar). 3. Real Parties In Interest Must Be Named: A petition must also name all real parties in interest. 35 U.S.C. § 315(c). If the petition does not name all real parties in interest, it is incomplete and is not assigned a filing date until that requirement is met. Thus, the filing date may fall on the wrong side of the one-year Section 315(b) bar. Some petitioners may purposefully or inadvertently fail to name subsidiaries or parent companies that have control over the petition's contents and/or filing, or other companies that have paid for the petition to be filed. This may be revealed using documents and information from co-pending litigation, or public documents (e.g., SEC filings, press releases, etc.). However, even if the PTAB finds that one or more real parties in interest were not named, it may allow correction without resetting the filing date if the omission was not intentional or prejudicial. See, e.g., Xactware Solutions, Inc. v. Pictometry International Corp., Case IPR2016-00593 (PTAB Nov. 3, 2016) (Paper 28). For summaries of precedential and informative decisions by the PTAB on whether a petition for IPR or post-grant review (PGR) complies with the threshold requirement to identify all real parties in interest, see PTAB Decision Tracker: Identifying the Real Party in Interest under 35 U.S.C. § 312(a)(2) and 35 U.S.C. § 322(a)(2). Discretionary Denial of IPR Institution Even when the threshold standard is met and there is no statutory bar, the PTAB has the discretion to deny the institution, primarily in the three situations discussed below. 1. Multiple Proceedings. The PTAB may deny institution if a petition raises "substantially the same prior art or arguments previously... presented to the Office." 35 U.S.C. § 325(d). Thus, if a petition applies the same prior art with arguments similar to those used in a reexamination, previous IPR, or other proceedings, the Board may consider this factor to weigh against institution. See, e.g., Hospira, Inc. v. Genentech, Inc., IPR2017-00739 (PTAB July 27, 2017) (Paper 16) (informative); Medtronic, Inc. v. Robert Bosch Healthcare Systems, Inc., IPR2014-00436 (PTAB June 19, 2014) (Paper 17) (informative); ZTE Corp. v. Contentguard Holdings Inc., nIPR2013-00454 (PTAB Sept. 25, 2013) (Paper 12) (informative). For summaries of precedential and informative decisions by the PTAB on whether to deny institution of an IPR or PGR under 35 U.S.C. § 325(d) because the same or similar prior art or arguments were previously presented, see PTAB Decision Tracker: IPR and PGR Institution Denial under 35 U.S.C. § 325(d) (Multiple Proceedings). 2. Prior Petitions. The PTAB also may exercise its discretion to deny institution of a petition if it is a second or subsequent challenge of the same patent by the same petitioner. In General Plastic Industrial Co. v. Canon Kabushiki Kaisha, 2017 Pat. App. LEXIS 9839 (PTAB September 6, 2017), the PTAB identified the following seven nonexclusive factors that it will consider in such a situation: • Whether the same petitioner previously filed a petition directed to the same claims of the same patent (this factor may also now apply where a different petitioner filed the earlier petition—see Valve Corp. v. Elec. Scripting Prods., Inc., 2019 Pat. App. LEXIS 4777, at *10 (PTAB May 1, 2019)) • Whether, at the time of filing the first petition, the petitioner knew of the prior art asserted in the second petition or should have known of it • Whether, at the time of filing of the second petition, the petitioner had already received the patent owner's preliminary response to the first petition or received the Board's decision on whether to institute review in the first petition • The length of time that elapsed between the time the petitioner learned of the prior art asserted in the second petition and the filing of the second petition • Whether the petitioner provides adequate explanation for the time elapsed between the filings of multiple petitions directed to the same claims of the same patent • The finite resources of the Board • The requirement under 35 U.S.C. § 316(a)(11) to issue a final determination no later than one year after the date on which the director notices the institution of the review 3. Parallel Patent Litigation. Further, the PTAB may deny institution in view of parallel patent litigation. In Apple Inc. v. Fintiv, Inc., 2020 Pat. App. LEXIS 13179, at *3 (PTAB March 20, 2020) ("Fintiv"), the PTAB identified the following six factors that it will consider when exercising its discretion to deny an IPR in view of parallel patent litigation: 1. Whether the court granted a stay or evidence exists that one may be granted if a proceeding is instituted 2. The proximity of the court's trial date to the Board's projected statutory deadline for a final written decision 3. The investment in the parallel proceeding by the court and the parties 4. The overlap between issues raised in the petition and the parallel proceeding 5. Whether the petitioner and the defendant in the parallel proceeding are the same party —and— 6. Other circumstances that impact the Board's exercise of discretion, including the merits In the USPTO's INTERIM PROCEDURE FOR DISCRETIONARY DENIALS IN AIA POSTGRANT PROCEEDINGS WITH PARALLEL DISTRICT COURT LITIGATION dated June 21, 2EQW022, the PTAB clarified that it will not deny institution of an AIA trial proceeding under Fintiv in the following circumstances: • The petition presents compelling evidence of unpatentability • When a request for denial under Fintiv is based on a parallel ITC proceeding –or– • When a petitioner stipulates that it will not assert in a parallel district court proceeding, the same grounds relied on in the petition or any grounds that could have reasonably been raised in the petition. The guidelines also clarify that when the PTAB applies the second Fintiv factor, it will consider the likely speed to trial or resolution of the district court case. In particular, the PTAB will weigh this factor against exercising discretion to deny institution under Fintiv if the median time-to-trial is around the same time or after the projected statutory deadline for the PTAB's final written decision. For summaries of precedential and informative decisions by the PTAB on whether to institute an inter partes review (IPR) under 35 U.S.C. § 314(a), including decisions applying the General Plastics factors and the Fintiv factors, see PTAB Decision Tracker: Inter Partes Review Institution under 35 U.S.C. § 314(a). For additional information and strategic considerations relating to discretionary denials, see Coordinating PTAB Proceedings with Parallel District Court Patent Litigation. Content and Formatting of the Preliminary Response The preliminary response is limited to setting forth the reasons why no IPR should be instituted under 35 U.S.C. § 314, and can include supporting evidence. 37 C.F.R. § 42.107(a). As noted, these reasons may include challenges to the sufficiency of the grounds asserted in the petition, the existence of statutory bars to IPR institution, and reasons why the PTAB should exercise its discretion to deny institution. While the preliminary response may not include any amendment to the claims, the patent owner may file a statutory disclaimer under 35 U.S.C. § 253(a), disclaiming one or more claims in the patent. See 37 C.F.R. §§ 42.107(d), (e). The benefit of filing a disclaimer is that no IPR will be instituted based on disclaimed claims. 37 C.F.R. §§ 42.107(e). The preliminary response is subject to a limit of 14,000 words, the same word limit applicable to the IPR petition. See 37 C.F.R. § 42.24. The word count limit does not include a table of contents, a table of authorities, a certificate of service or word count, or appendix of exhibits. Nor does it include a listing of facts which are admitted, denied, or cannot be admitted or denied. See id. Before filing, ensure that every page of the preliminary response has been numbered to facilitate review and quick reference to a particular page during the proceedings. Also, make sure that you have complied with all formatting requirements. Such requirements include using 14-point, Times New Roman proportional font (with normal spacing), double line spacing (except in claim charts, headings, tables of contents, tables of authorities, indices, signature blocks, and certificates of service), and margins of least 2.5 centimeters (1 inch) on all sides. See 37 C.F.R. § 42.6 for all formatting requirements. The preliminary response is to be filed electronically. If filed by means other than electronic filing, it must (A) be accompanied by a motion requesting acceptance of this submission and (B) identify a date of transmission where a party seeks a filing date other than the date of receipt at the Board. 37 C.F.R. § 42.6(b). The preliminary response must be served on counsel of record for the petitioner. Under 37 C.F.R. § 42.6(e)(1), by agreement of the parties, service may be made electronically. Service may also be performed by Priority Mail Express® or by means at least as fast and reliable as Priority Mail Express®. Personal service is not required. File all supporting documents referenced in the preliminary response as exhibits. See 37 C.F.R. § 42.63(a). A patent owner must number its exhibits in the range of 2001–2999. See 37 C.F.R. § 42.63(c). Each exhibit must be labeled with the patent owner's name, and each page must be numbered. 37 C.F.R. § 42.63(d). Each party is responsible for maintaining its own exhibit list that includes the exhibit number and a brief description of each exhibit. See 37 C.F.R. § 42.63(e). A relatively recent development is the use of an expert witness declaration to support positions in the preliminary response. See 37 C.F.R. § 42.108(c). However, statistics have shown that the difference in institution rates between cases in which a patent owner has provided testimonial evidence and those in which the patent owner forewent testimonial evidence is minimal, so you may want to consider withholding the use of an expert declaration at the institution stage. For further discussion of when to use an expert to support a preliminary response and related considerations, see Patent Owner's Preliminary Response to a Petition for Inter Partes Review. For more on PGRs and other AIA proceedings, see Post-issuance Procedures for Challenging Patents: IPR, PGR, and CBM.