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Getting to know the U.S. Patent Trial and Appeal Board

Originally posted on 12/17/2019 (reformatted).

As of early 2019, there is a new sheriff in town and his name is Chief Judge Scott Boalick. The Deputy Chief Judge is Jackie Bonilla. After a hearing or trial they have the power to invalidate your patent.  Enter the Patent Trial and Appeal Board, acomponent of the U.S. Patent and Trademark Office based in Alexandria, Virginia.1The new chief prior to joining the USPTO in 2007 was a Patent Attorney with the U. S. Navy. Boalic holds a law degree from Georgetown Univ. Law Center and both Engineering Degrees, B.S.E & M.S.E from Univ. of Pennsylvania. Deputy Chief Judge Bonilla graduated from the Univ. of Virginia School of Law and holds a Ph D in pharmacology from the Univ. of Virginia and a B.A in biochemistry from Univ. of California at Berkeley.

The Patent Trial & Appeal Board is the newest “Rocket Docket” for intellectual property disputes.  The America Invents Act of 2011 created the board and it opened its doors on September 16, 2012. The board rivals the District of Delaware and U.S. District Court for the Eastern District of Texas in patent filings.  The board’s mandate is only to decide if patents are valid and not whether they have been infringed. It must resolve cases within a year and under extraordinary circumstances 18 months.

The first satellite office of the USPTO is in Detroit, Michigan named after Elijah J.McCoy.2He is an African-American inventor born in 1844 and died in Detroit in 1929. McCoy has 57 U.S. patents dealing with the lubrication of steam engines.  His automatic lubricator was patented in 1872.

The USPTO in Detroit is located at 300 River Place South, Ste. 2900, Detroit, Michigan 48207. It serves the Midwest Regionthat includes Ohio, Michigan,Illinois, Indiana, Iowa, Kentucky, Wisconsin and Minnesota. The Director is Damian Porcari previously Director of Licensing and Enforcement for Ford Global Technologies LLC in Dearborn, Michigan. The Midwest Regional Office hosts a variety of events such as workshops, training, interview rooms and a bevy of other helpful and informative information.3

The Detroit Public Library is a Patent & Trademark Resource Center. The library offers beginner orientation sessions on searching for patents and trademarks.

DUTIES

The duties of the board are as follows:

  1. On written appeal of an applicant, review adverse decisions of examiners upon applications for patents pursuant to section 134(a);
  2. Review appeals of reexaminations pursuant to section 134(b);
  3. Conduct derivation proceedings pursuant to section 135; and
  4. Conduct inter partes reviews and post-grant reviews pursuant to chapters 31 and 32.4

The three types of post grant challenges (PGCs) available at PTAB are Inter Partes Review (IPR), Covered Business Method review (CBM) and Post – Grant Review (PGR).  PGR can only be petitioned for in the first 9 months after a patent has been issued. IPR has to be filed within the first 12 months. CBM does not have a time limit.

The grounds for challenging a patent under inter parties review are limited to 35 U.S.C. 102 and 103 based on patents and printed publications.

THE BOARD

The Chief Administrative Patent Judge is Scott Boalick who took office on March, 14, 2019.  There are approximately 200 judges hearing cases, all of whom are lawyers with a science or engineering degree. Each case is heard by a panel of three who are dressed in business suits and not robes. The dialogue with the lawyers is polite yet the questions asked by the judges go right to the heart of the dispute. The board does not automatically agree to hear every case filed.  The petitioner in the initial filing must show that it is more likely than not, to prevail. The three Administrative Law Judges issue a decision on whether they will be taking the case and on what grounds of invalidity will be addressed in the proceeding. Trial will only be granted on key substantive issues that are likely to control the written decision. Redundancy in the prior art will not be considered.  If you are not specific in stating why reliance in part is better and why reliance in whole is better in other instances you risk the ground of being dismissed for redundancy. Success is preparation, deep knowledge of the prior art and adherence to the rules.  For example, 35 U.S.C. § 315 (b) (1) provides that an IPR may not be instituted if the petition is filed more than one year after the date on which the petitioner was served with a complaint alleging infringement of the patent.

The key for petitioners is whether district court judges will agree to stay pending parallel litigation while the board reviews the patent’s validity. Defendants in patent litigation are now able to stay district court litigation and go back to USPTO before the Patent Trial & Appeal Board to challenge the validity of a patent.  A district court stay is a big money saver for a client who has been sued for patent infringement because of the significant money expenses involved in both disputes. Therein lies the importance of the critical one year deadline.

The estoppel provisions of the USPTO post grant proceedings are broad. They preclude a petitioner, its real party in interest or privy from challenging the same patent claim in the USPTO or in civil litigation on the grounds that the petitioner raised or reasonably could have raised during the post grant review.5

Amendment of the patent and its claims during a post grant review are rarely granted by the Patent Trial and Appeal Board.  A patent owner may file one motion to amend the patent by canceling any challenged claim or by proposing a reasonable number of substitute claims for each challenged claim.  However, the amendment cannot broaden the scope of the claim challenged or introduce new matter.6  In 2018 the PTO announced its intent to propose new rules aimed at making it easier to amend patents in review proceedings.

Lead counsel must be a registered patent attorney or on motion pro hac vice demonstrating that counsel is an experienced litigating attorney and has established familiarity with the subject matter at issue in the proceeding.7 

In a game changing development, on May 22, 2017, in TC Heartland LLC v Kraft Foods Group Brands LLC, the U. S. Supreme Court reversed the Federal Circuit.  It held that the word “resides” in the patent statute, 28 U.S.C. §1400(b), refers only to the State of Incorporation of thealleged infringer.  For example, a domestic corporation not organized under Texas law and without a regular and established place of business in the Eastern District is no longer amenable to suit there. The ruling will bar many patent owners from filing cases in the Eastern District of Texas, a patent friendly jurisdiction where in 2018 only 15% of patent suits are now filed.  The so-called non-practicing entities (NPEs) also known as patent trolls should be particularly impacted by this decision.

CONCLUSION

The Patent Trial and Appeal Board conducts inter partes review (IPR) and post-grant review (PGR) of U.S. Patents.  The membership includes the Director, Deputy Director, and Commissioner for Patents, Commissioner for Trademarks and the Administrative Patent Judges.  Each appeal, derivation proceeding, post-grant review including covered business method patent review and inter partes review must be heard by at least 3 members of the board, who shall be designated by the Director.       

The advantages of PGCs is speed because the statute requires the proceeding must be completed in 12 months after institution, subject to a good cause extension to 18 months. The claim construction standard has been changed from the “broadest reasonable interpretation” to thePhillipsstandard.  Another benefit is that the PTAB judges better understand patent issues.

In short, the Patent and Appeals Board corrects errors – patents that should not have been issued in the first place.  There is no money if you win at the patent board.  You simply get confirmation that your patent is valid.  If you lose at the patent board it is likely to hurt or destroy any parallel infringement case in district court.  But, if the board upholds the patent, the inventor is in a much stronger position to prevail in winning money damages in district court.

About the Author

James A. Johnsonis a Trial Lawyer ranging from Insurance Coverage under the CGL Policy to Civil & Criminal RICO. He is an active member of the Michigan, Massachusetts, Texas and Federal Court Bars. Jim can be reached at www.JamesAJohnsonEsq.com 

ENDNOTES

  1. 35 U.S.C. § 6(a)       
  2. PL 112-29 §24
  3. http://www.uspto.gov/about-us/uspto-locations/detroit-michigan
  4. 35 U.S.C. § 6(b)
  5. 37 CFR 42.73
  6. 37 CFR 42.121
  7. 37 CFR 42.10(c)

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