INTER PARTES
The America Invents Act was signed into law in September 2011, and many biotech companies are still trying to make sense of the new legislation. Eldora Ellison and Eric Steffe consider one of the most important changes.
Final procedural rules have not yet been implemented by the US Patent and Trademark Office (USPTO), and it remains to be seen how the USPTO will adjudicate the new proceedings created under the America Invents Act (AIA). Despite these changing times, at least one thing is certain: on September 16, 2012, inter partes re-examination (IPX) proceedings will be replaced by inter partes review (IPR).
While these two proceedings for challenging patents share many features, there are important differences. The biotech industry has had cold feet when it comes to challenging patents by IPX, which is perhaps remarkable in light of
the ‘success rate’ that patent
challengers have enjoyed in this proceeding. According to USPTO statistics, only 11 percent of IPX certificates confirmed all claims as being patentable; in 44 percent, all claims were cancelled and in 45 percent the claims were amended. Such claim cancellations and amendments are particularly significant to challengers when the patent is involved in concurrent litigation, and 70 percent of patents undergoing IPX are involved in litigation.
For example, claim amendments may extinguish past damages, as well as create intervening rights to continue to sell a product. And the recent In re NTP case confirms that it is fair game to attack a patent’s asserted priority date in re-examination, even when the patent arises from a series of continuation applications. Such NTP-style attacks should be of particular interest to challengers in the life sciences, particularly pharma and biopharma, since enablement and written description issues arise frequently in these technical areas.
In pharma and biopharma, product launch dates projected to occur years from now may make companies hesitant to instigate any proceeding prior to September 16, 2012. Further, the new IPR proceedings do have certain features that patent challengers may fi nd attractive. For example, in contrast to IPX, which is available only to challenge patents fi led on or aſt er November 29, 1999, IPR will be available for challenging any patent. Second, IPR proceedings should be resolved more quickly than experience has shown it has taken to resolve IPX proceedings.
www.worldipreview.com
T ird, IPR will allow for limited discovery and can be settled without creating an estoppel, neither of which is available for IPX. Finally, IPR will be decided directly by Administrative Patent Judges (APJs), who may be more likely to appreciate nuanced legal arguments. Under IPX proceedings, APJs are not involved until appeal, aſt er examiners in the Central Re-examination Unit have fi rst decided the case. T erefore, for companies with product launch dates in the future, knowledge that IPR proceedings are available may provide some comfort.
Nonetheless, there are several reasons such companies should consider IPX before it goes by the wayside.
“IPX OFFERS AT LEAST ONE SUBSTANTIVE ADVANTAGE OVER IPR: WHEREAS CHALLENGES FOR DOUBLE PATENTING CAN BE BROUGHT IN RE-EXAMINATIONS, THEY CANNOT BE BROUGHT IN IPR.”
Some parties will be barred from seeking IPR
Although IPR will be available for any patent, it will not be available to all potential challengers. IPR will not be available to a challenger (or its privies) that had been served with a complaint for infringement of the patent more than one year before petitioning for IPR. An accused infringer who was served before September 16, 2011, will be time-barred from petitioning for IPR on the patent in suit. Other accused infringers must also be cognisant of the one-year time bar. Additionally, IPR is not available to a challenger who sought a declaratory judgment of invalidity of the patent prior to petitioning for IPR.
The nine-month waiting period for IPR may be undesirable
IPR will not be immediately available upon issuance of a patent. Rather, IPR proceedings can first be brought after nine months following issuance of the patent, or after nine months following issuance of a reissue patent. For a patent that is involved in a post-grant review (PGR) proceeding, IPR cannot be brought until conclusion of that proceeding. It appears that it was an oversight for Congress to make the nine-month waiting period for instigating IPR effective before PGR becomes available to patent challengers. With limited exceptions, PGR is available only for patents filed after March 16, 2013. When effective, petitions to instigate a PGR proceeding will be permissible for nine months after a patent or a broadening reissue patent is issued. The nine- month waiting period for IPR was intended to work in conjunction with the nine-month window for petitioning for PGR. Accordingly, for example, if a problematic patent issues on September 4, 2012, IPR may not be sought until June 5, 2013.
Once IPX is replaced by IPR, the nine-month waiting period for petitioning for IPR may eliminate the possibility of using an inter partes challenge at
the USPTO as leverage
in settlement or licensing negotiations. Likewise, an accused infringer may be unable to point to an IPR proceeding as a factor to be considered by a court in deciding a motion for a preliminary injunction. Additionally, the USPTO will limit the number of IPR proceedings that can be filed in each of the first four years. Once the annual limit is reached, later-filed petitions will be deemed untimely.
IPR typically will be more expensive than IPX
Although IPX is not inexpensive (USPTO fee of $8800), IPR proceedings will be much more expensive. The USPTO has proposed that the fees will be based on the number of challenged claims, as follows:
Life Sciences Intellectual Property Review 2012 19
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