Senate Bill for STRONGER Patents Act Aims to Address Key PTAB Patent Owner Woes

by | Jul 3, 2017 | PTAB News

By Doug Pearson

On June 21, Senators Chris Coons (D-Del), Tom Cotton (R-Ark), Dick Durbin (D-Ill), and Mazie Hironoa (D-Hawaii) introduced a bill entitled the “Support Technology & Research for Our Nation’s Growth and Economic Resilience Patents Act of 2017” (or “STRONGER Patents Act of 2017”).  The bill, consistent with its “STRONGER patents” label, favors patent owners in significant ways.  It includes a variety of provisions relating to claim construction, burden of proof, presumption of validity, standing, estoppel, limitations on other proceedings and appeals, deference to federal court judgments, makeup of judge panels, and post-grant amendment practice that would strengthen the hands of patent owners in AIA reviews and make it more difficult to find claims unpatentable (and easier to amend) in IPRs  and PGRs.  The bill also includes other provisions not specifically related to AIA reviews including those that would establish a presumption in favor of an injunction upon a finding by a court of infringement of a patent not proven invalid or unenforceable, end fee diversion of USPTO fees, eliminate the single-entity rule for defendants that intentionally cause infringement of a patent, empower the Federal Trade Commission to crack down on abuses of patent demand letters, set a one year time limit on filing a request for reexamination after being served with a complaint, and others.  There is a lot in this bill, and significant proposals relating to IPRs and PGRs are discussed below.  For those who want to dive deeper, links to additional information are provided at the end of this article, and the full text of the bill may be found here.  Some of the main take aways for AIA reviews (addressed in the order presented in the bill) are discussed below.  Links to redlined versions of the statutory sections showing the proposed changes for the IPR subsections prepared for the sake of this article are also provided (redlines to the PGR subsections are not provided because they are substantially the same as those for IPRs from a substantive standpoint).

  • Amendments to Subsections 316(a) and 326(a) of the statute would require IPR and PGR proceedings to apply the district court claim construction standard instead of the broadest reasonable interpretation presently being applied, bringing the IPR/PGR and district court standards into harmony and potentially narrowing the universe of prior art that might fall within the scope of claim limitations in IPR/PGR proceedings.  See redline here.
  • Amendments to Subsections 316(e) and 326(e) include text to affirm the presumption of validity of patents involved in post-grant proceedings and require unpatentability be proven by clear and convincing evidence instead of by a preponderance of the evidence as presently applied, again bringing the IPR/PRG and district court standards into sync and raising the bar for finding claims unpatentable in IPR/PGR proceedings.  See redline here.
  • Amendments to Subsections 311(d) and 321(d) would narrow the universe of potential petitioners by imposing a standing requirement for petitioners that would preclude a person from filing a petition unless the person, or a privy/real party in interest, has been sued for infringement of the patent or “charged with infringement of the patent.”  The amendments explain that someone is “charted with infringement” when there is a controversy involving the patent significant enough such that the petitioner would have standing to file a declaratory judgment action in federal court.  See redline here.
  • Amendments to Subsections 314(a) and 324(a) would preclude institution on a claim in a petition if an IPR or PGR were previously instituted for that claim.  These proposals contain no language indicating that they are petitioner specific.  So these amendments appear to permit institution of only one IPR or PGR on a claim in a patent, period, and (at least for now) include no provision for different petitioners to have separate opportunities to challenge a given claim in a patent.  These proposed amendments are particularly strong in favor of patent owners, since traditional notions of collateral estoppel generally permit new litigants who have not had an opportunity to litigate an issue to have their opportunity to do so under fundamental fairness considerations.  Litigants other than a first IPR/PGR petitioner would still be able to challenge patent claims, but their forum would be at district courts, not the PTAB.  See redline  here.
  • Amendments to Subsections 314(d) and 324(d) would make a decision by the PTAB not to institute final and nonappealable.  In contrast, presently, a decision by the PTAB on whether to institute is final and nonappealable.  This proposed change would preclude a petitioner’s ability to appeal a non-institution decision.  In addition, new Subsections 314(e) and 324(e) would provide for interlocutory review of decisions to institute on any basis except for review of the PTAB’s determination that the petitioner would prevail with respect to at least one challenged claim.  So while petitioners would be effectively precluded from appealing decisions not to institute, the amendments would permit patent owners to promptly appeal institution decisions on at least some grounds (e.g., on the basis that the petitioner failed to identify a real party in interest).  See redline here.
  •  Amendments presented as Subsections 315(c)(1) and 325(c)(1) would provide for deference to federal court and ITC decisions by precluding institution of an IPR/PGR of a patent claim if a court or the ITC has entered a final judgment that decides the validity of the patent claim under section 102 or section 103, and from which an appeal to the CAFC may be taken, or from which an appeal to the CAFC was previously available but is no longer available.  The amendments to these sections do not explicitly recite that they are defendant specific.  So these amendments appear to  preclude a different petitioner not a party to the prior court proceeding that rendered a final judgment on invalidity under section 102 or section 103 from bringing its own IPR/PGR.  See redline here.
  • Further amendments presented as Subsections 315(c)(2) and 325(c)(2) would provide for additional deference to federal courts and the ITC by requiring a stay of an ongoing IPR/PGR of a patent claim pending a final decision of a district court or the ITC where the district court or the ITC has entered a final judgment that decides the validity of a patent claim under section 102 or section 103 and from which an appeal to the CAFC may be taken.  Other amendments to these subsections would require termination of the IPR/PGR if district court or ITC determination of the validity of such a patent claim were finally upheld.  See redline here.
  • Amendments to Subsections 315(e)(1) and 325(e)(1) (renumbered (f)(1) in each instance by technical amendments) would preclude a petitioner, or privy/real party in interest, who has petitioned for review of a claim of a patent in an IPR/PGR from petitioning for a subsequent IPR/PGR for that patent on any ground the petitioner raised or could have raised in the initial petition, unless charged with infringement of additional claims after the filing of the initial petition.  Presently, the current statute imposes a similar limitation only when an IPR/PGR results in a final decision under section 318(a).  While the present statute, therefore, permits petitioners to file multiple petitions, the proposed amendments would limit petitioners to filing only one IPR/PGR petition unless later charged with infringement of additional claims.  See redline here.
  • Amendments to Subsections 315(e)(2) and 325(e)(2) (renumbered (f)(2) in each instance by technical amendments) would preclude a petitioner or privy/real party in interest who obtains an institution decision a claim of a patent in an IPR/PGR from asserting in district court or the ITC an invalidity argument based on Sections 102 (anticipation) and 103 (obviousness) of the statute unless the invalidity argument is based on allegations that the claimed invention was in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.  The current statute imposes a similar limitation when an IPR/PGR results in a “final decision” under section 318(a).  The current statute therefore permits petitioners to bring parallel invalidity arguments in district court or the ITC where a final decision has not been rendered in the IPRs, but the proposed amendments do not provide for that flexibility for petitioner-defendants.  This provision would effectively preclude bringing invalidity arguments in district court or the ITC that are parallel to those in the IPR/PGR, even where a final decision has not been rendered in the IPR/PGR.  See redline here.
  • New Subsections 315(g) and 325(g) would provide a clarifying definition of a real party in interest as a person that directly or through an affiliate, subsidiary, or proxy, makes a financial contribution to the preparation for, or conduct during, an IPR/PGR on behalf of the petitioner.  See redline here.
  • Amendments to Subsection 6(c) of the statute would preclude a member of the PTAB who participates in a decision to institute an IPR/PGR from hearing the review.  Presently, the same panel of administrative patent judges that decides to institute an IPR/PRG hears the review.  This amendment is intended to address a common complaint of patent owners, namely, that a PTAB panel that decides to institute a review is predisposed to thereafter find challenged claims unpatentable.  See redline here.
  • Entirely new Subsections 316A and 326A, which would replace Sections 316(d) and 326(d), respectively, would provide specific provisions for making claim amendments in IPR/PGR proceedings.  These sections are lengthy, and some highlights are presented below.   See the full text of Subsection 316A of the bill here.
    • Sections 316A and 326A would set out the requirements of a motion to amend, the requirements of a petitioner’s response, and the patent owner’s response. If the patent owner’s prima facie showing of patentability over the grounds raised in the petition is not rebutted, the patent owner would be entitled to the substitute claim.  In the course of this process, additional evidence could  be brought forth.
    • Sections 316A and 326A would also permit the PTAB to order an expedited (and nonbinding) patentability report from a patent examiner, for which any party to the IPR/PGR would have the right to reply. Ordering such a patentability report would expressly constitute good cause for purposes of Section 316(a)(11) to extend the one-year period for review.  In the course of this process, additional evidence could  be brought forth.
    • Sections 316A and 326A would permit a patent owner, upon showing good cause, to terminate the IPR/PRG in favor of an “expedited IPR reexamination” or “expedited PGR reexamination” having a set of provisions governing that process, and for which such reexamination would be completed (excluding appeals) within 18 months of initiation.

A press release regarding the STRONGER Patents Action of 2017 from the office of Senator Coons may be found here.  Section-by-section high-level summaries of the bill from the Office of Senator Coons may be found here and here.  A one-page background piece from the Office of Senator Coons may be found here.

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Doug Pearson

Partner at Jones Day
Doug Pearson, a former Navy physicist and inventor, assists clients before the USPTO's Patent Trial and Appeal Board (PTAB) and helps clients develop strong patent portfolios. He also litigates patents before the U.S. International Trade Commission (ITC) and district courts. With 19 years of patent experience, a Ph.D. in Applied Physics, and experience in electronics, semiconductors, digital health, telemedicine, data analytics, big data, artificial intelligence (AI), robotics, cloud computing, medical devices, materials science, optics, communications, and defense industry technologies, Doug has helped clients obtain hundreds of U.S. and international patents and successfully assisted clients on case-dispositive litigation issues.