How Agency Activity is Impacting Patent Litigation This Year

The patent litigation world continues to focus on the explosion of litigation finance, increased enforcement of disclosure requirements in federal court, and the impact of US Supreme Court cases.

But there are also significant developments on the horizon in an alphabet city of areas—the ITC, the PTAB, and the SEP realms. These warrant watching as the year progresses, as they may significantly affect the intellectual property landscape nationally, and sometimes internationally.

International Trade Commission

The commission has been running with only five out of six commissioners and five out of six administrative law judges. Last year saw the ITC hit a record caseload, with 142 active Section 337 investigations pending last quarter.

That burden may be eased by the impending arrival of a new ALJ early this year, as well as a potential for a new commissioner.

In the last 15 years, the ITC has become an increasingly important forum for patent litigation, and a popular choice for many patent owners—including non-practicing entities.

Recent increases in the number of complaints brought by well-financed NPEs have led to calls to amend Section 337 to make it more difficult for these entities to satisfy the ITC’s threshold “domestic industry requirement.”

The bipartisan Advancing America’s Interests Act, which would implement such changes, could be re-introduced this year.

Other ITC-related areas to watch include:

Adjudication of Design-Arounds. Because the ITC’s remedies are prospective only, getting a design-around adjudicated can be very important for an accused infringer.

The ITC’s standards for when and how to adjudicate such design-arounds, and what evidence is necessary, has evolved on the past couple of years, and ongoing investigations continue to involve this issue.

NEXT Advocates Program. Like many district courts and the PTAB, the ITC is now taking active steps to encourage opportunities for junior attorneys to get on-their-feet experience, such as arguing motions or taking witnesses.

The Nurturing Excellence in Trial Advocates program was announced in 2022 by Chief ALJ Clark Cheney and is being increasingly used by ITC litigants.

Covid-19 TRIPS Waiver Inquiry. In December, US Trade Representative Katherine Tai asked the ITC to produce a study on how the global market for vaccines, diagnostics, and treatment has been affected by the current approach on intellectual property.

This was an effort to determine whether to support an expansion of the TRIPS IP waiver. A public hearing will happen on March 29-30, and a written report from the ITC is due in October.

Patent Trial & Appeal Board

The America Invents Act’s IPR estoppel provision prevents a petitioner from arguing in an infringement action that patent claims that are subject of an instituted IPR are “invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review.”

Currently before the Supreme Court in Apple Inc. v. California Institute of Technology is a debate over the meaning of “during.” That is, whether courts must assess “reasonably could have raised” when an IPR petition is filed, or post-institution.

If the former, estoppel is very broad; if the latter, IPR estoppel essentially becomes non-consequential.

Apple filed a petition for a writ of certiorari last September, and in early January, the Supreme Court requested input from the solicitor general on the question presented in Apple’s petition:

Whether the Federal Circuit erroneously extended IPR estoppel under 35 U.S.C. § 315(e)(2) to all grounds that reasonably could have been raised in the petition filed before an inter partes review is instituted, even though the text of the statute applies estoppel only to grounds that “reasonably could have [been] raised during that inter partes review.”

The Supreme Court’s request indicates the court has some interest in the issue. And should the court overrule the Federal Circuit’s broad view of IPR estoppel, the estoppel footprint for all AIA trials would shrink considerably.

For example, post-grant review is typically viewed as far less attractive than IPR given the potential for a larger estoppel footprint at the time of petition filing, because invalidity challenges may be made under § 101 and 112 as well as under 102/103.

If estoppel assessment were to be limited only to what could be added during the proceeding—i.e., post-institution—PGR estoppel would be less impactful, and almost no more onerous than IPR estoppel.

Standard-Essential Patents

Last but not least, SEPs remain at the forefront both here and abroad. Particular SEP-related issues on the horizon include:

US Policy on SEPs. In June 2022, the USPTO, NIST and DOJ withdrew the Dec. 19, 2019 Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments, a Trump-era policy sometimes perceived as being too patent owner-friendly and which endorsed the ability of a patent holder to pursue an SEP-related injunction.

Even though the Biden administration published a draft policy on SEPs in December 2021, the withdrawn 2019 policy has yet to be replaced, and it is unclear whether the Biden administration in 2023 will replace the policy or have no official SEP at all.

Alternative Resolution of SEP Disputes. The USPTO and WIPO signed a memorandum of understanding in July 2022 to work cooperatively to facilitate the resolution of disputes related to standard essential patents.

Given the complexity and global nature of recent SEP disputes, alternative dispute resolution may be an attractive, cost-effective option to resolve such disputes. SEP practitioners will be watching closely to see if ADR for SEP disputes gains traction in 2023.

Innovation and technology-related areas remain increasingly important, and intellectual property often forms the backbone of these parts of the economy in the US and abroad.

Practitioners and litigants should stay abreast of these developments in the ITC, the PTAB, and the SEP arena this year and beyond.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

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Author Information

Scott McKeown is a partner in Ropes & Gray’s intellectual property litigation practice and chair of the firm’s Patent Trial and Appeal Board (PTAB) group.

Steve Pepe is a partner and chair of Ropes & Gray’s intellectual property litigation practice. He is an accomplished trial lawyer who focuses on patent litigation in nearly every significant patent jurisdiction.

Matthew Rizzolo is a partner in Ropes & Gray’s intellectual property litigation practice and leads the firm’s practice in Section 337 actions before the United States International Trade Commission.