A Patent and Trademark Office pilot program making it easier for patent holders to fend off administrative challenges has made it tougher for the challengers to void patents, intellectual property attorneys say.
The agency March 15 launched a pilot program that allows patent owners to seek guidance from the PTAB in defending their claims, and gives them a new opportunity to amend claims.
Giving patent owners a second stab at amending claims could lead to a frenzy of filings before the oral hearing, costing petitioners both time and money, Scott McKeown, chair of Ropes & Gray LLP’s PTAB practice, said.
“From a strategy perspective, you want to inflict pain on the other side. You want to make it more expensive. You want to have them writing more briefs,” McKeown said. “You want to keep them busy during critical times during the trial. And that’s what the pilot program will allow you to do as a patent owner.”
The agency has rarely allowed patent owners to amend patent claims in validity disputes, including inter partes reviews, denying 90 percent of such motions in administrative trials from fiscal year 2013 to fiscal year 2018. Its Patent Trial and Appeal Board gained a reputation over those years for being unfriendly to patent holders.
But the pilot program now allows amendments to be “a routine part of the IPR practice,” Michelle Armond, co-chair of the Patent Office Litigation practice group at Knobbe, Martens, Olson & Bear LLP, said.
“In the seven years we’ve had IPR proceedings, motions to amend have been rarely successful,” Armond said. The PTO, she said, “is trying to do a reset and make motions to amend a lot more user friendly.”
Still, the pilot program is “kind of a second blow” to petitioners, Armond said. The first was an October 2017 ruling by the U.S. Court of Appeals for the Federal Circuit. The court said in Aqua Products, Inc. v. Matal that challengers bore the burden of proving that patent holders’ proposed claims changes weren’t patentable.
Motions to amend during PTAB proceedings doubled in the fiscal year following the ruling, reaching a record high of 114 since the PTO began collecting data. The agency published a request for comments on a proposed pilot program in October 2018. In announcing the program, PTO director Andrei Iancu said the claims amendment process “is not working as intended.”
PTAB trials last one year from institution to final decision, with the initial motion to amend due twelve weeks in. The pilot allows new filing deadlines in the weeks leading up to the oral hearing, a period already rife with other filing deadlines.
“What we have is a whole lot of new evidence coming in at the very end of the proceeding,” said Scott Kamholz, a PTAB trial lawyer at Covington & Burling LLP and former PTAB judge.
Kamholz said the PTAB is “doing its best” to balance competing demands in setting up a motion to amend system, but petitioners now have “a relevant complaint” because of the compressed timeline.
The pilot program would allow patent owners availing themselves of the revised motion to amend options to make challengers draft extra briefs up to a week before the oral hearing and “distract them from preparing,” McKeown said. That is, patent owners can draft their initial amendment “only going part of the way,” get PTAB and petitioner feedback, then “go in with your final best offer at time where they’re in a severe time crunch against oral hearings and other final filings,” he said.
“Not only are you going to use the pilot, but you’re going to take advantage of the second chance if for no other reason because it’s going to inflict pain. And there’s some tactical advantage on keeping the other side busy at these critical points in the trial,” McKeown said.
To be sure, attorneys disagree about whether the pilot program will mean more patent owners will try to amend their patent claims.
McKeown doesn’t predict that the pilot program will unleash a surge of patent amendment motions. The same patents that are challenged at the PTAB are often embroiled in patent infringement litigation, and amending claims could wipe out past damages for patent owners.
The PTO “doesn’t anticipate other effects on petitioners” besides the additional costs from responding to motions to amend, Scott Boalick, the PTAB’s chief judge, said. “The pilot program is not necessarily designed to address the rate at which motions to amend are filed, but rather to give patent owners a meaningful opportunity to amend, should they choose to do so,” he said.
But Monte Falcoff, a patent attorney at Harness, Dickey & Pierce, P.L.C., said he believes the pilot’s “two shot” approach will lead more people to attempt to amend patent claims at the PTAB. The program is “a strong push in the effort to make things a little more patent-owner friendly,” he said.
“The pendulum was at an initial extreme position, but we’ve gotten so much outrage from patent owners about killing such a high percentage of patents, that the pendulum is being pushed again toward at least a neutral position by the director of the Patent Office, and properly so,” Falcoff said. “It does create a burden for the petitioner. Is it significant or undue? No, I don’t think it is.”
Likewise, Knobbe Martens’ Armond said that the pilot is “a very strong signal with these very favorable rules for patent owners that the Patent Office is open for business now on motions to amend.”
Whether the pilot program will stick around after the board reviews it, she noted the “only thing you can say with certainty with IPR proceedings is they’re going to change.”