Is This the End of IPRs as We Know Them?
The USPTO has issued a notice of proposed rulemaking, seeking rule changes to seriously curb the impact and availability of inter partes reviews (IPRs). The proposed rules go beyond the discretionary denials to institute IPRs that have become commonplace over the past several months. Instead the new rules specify broad categories of situations in which IPRs “shall not be instituted or maintained,” absent narrowly-defined “extraordinary circumstances.”
First of all, a party seeking an IPR would have to stipulate that if the IPR is granted and proceeds, that the petitioner (and any real party in interest or privity) would not raise grounds of invalidity or unpatentability on the grounds of anticipation or obviousness in any other litigation proceeding. The stipulation would have to be filed in any litigation occurring at the time of the IPR petition, or in any later litigation. This is a wide-ranging estoppel that would commit the IPR petitioner to never challenging the same patent on any prior art grounds (or even on a statutory bar) again, anywhere. This goes beyond the estoppel provided for in 35 USC 318(e), which estops a petitioner on any ground that “the petitioner raised or reasonably could have raised” during the IPR.
Second, IPRs will be denied if the patent claims have survived a post-grant validity review or challenge by anyone (even a party with no connection to the IPR petitioner). This applies to challenges in a wide range of proceedings, including litigation (a District Court trial or summary judgement, a determination by the ITC, or a reversal of a District Court finding of invalidity by the Federal Circuit), in a PTAB final decision (in an IPR or post-grant review (PGR)), or in an ex parte reexamination (other than one filed by the patent owner, or a real party in interest or privity). This is the flip side of the estoppel from IPRs, limiting patent challengers to one challenge on prior art grounds. (Of course the USPTO has no power to prevent multiple prior art challenges in different litigations.) And once such a challenge to a patent has been made (by anyone), the door will be barred to any future IPRs.
Finally, IPRs will not be instituted if it is more likely than not, before the IPR is concluded, that a District Court, the ITC, or the PTAB will have weighed in on validity under 35 USC 102 (anticipation) or 103 (obviousness). This applies even if the IPR petitioner is not the challenger in the other proceeding.
The exceptional “extraordinary circumstances” that might justify an IPR even in the above situations, are notable for what they explicitly exclude. The proposed rules would state that extraordinary circumstances would not include “new or additional prior art, new expert testimony, new caselaw … or new legal argument, or a prior challenger’s failure to appeal.”
The goal of the proposed new rules seems to be to discourage filing of IPRs. (Which they would do if instituted, perhaps close to completely.) The new rules are framed in the USPTO document as a way to strengthen patents by cutting back on serial or parallel validity challenges, and to free up PTAB judges to focus on reducing the backlog of ex parte appeals. But neutering the IPR process will take us back to the time before such procedures were available at the USPTO, when the validity of patents could only be challenged in expensive litigation proceedings, and then only when someone was willing to take the risk of infringing the patent in order to provoke a litigation.
The USPTO notice provides a thirty-day window for interested persons to submit comments on the proposed rules.
As we continue to monitor the installation of new rules, we will do so with an angle toward creating intellectual property strategies that protect our client’s interests. Contact us for more information about these and other topics.
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