United States: Impact Of Post-Grant Review Proceedings On Patent Owners And Petitioners Under The PTO’s Proposed Rules

Last Updated: May 8 2012
Article by Carl L. Benson, Noah M. Lerman and Stephen Schreiner

One of the objectives of the recently enacted America Invents Act ("AIA") is to broaden the opportunity to challenge the validity of patents with quick and effective alternatives to district court litigation.  Toward this end, Congress has created four new procedures for challenging the validity of patents: inter partes review proceedings ("IPR"), post-grant review proceedings ("PGR"), the transitional program for covered business method patents ("CBM"), and derivation proceedings.  In February, the U.S. Patent & Trademark Office ("PTO") issued proposed rules governing these four new proceedings.  The PTO stated that fashioning the rules required a delicate balance of competing interests: the public's interest in ridding the patent landscape of invalid patents on the one hand, and patent owners' interests in protecting the value of their inventions and not being unfairly harassed, on the other.  Although the PTO will not finalize these rules until the end of July, the PTO's statements at recent cross country "road shows" indicate that these rules likely serve as a good preview of the final rules the PTO will ultimately issue. 

To achieve the goals of a streamlined patent review process, the PTO's proposed rules use the same procedural structure for the four new proceedings.  All of the new proceedings will be reviewed before the newly created Patent Trial and Appeal Board ("PTAB").  The common procedural framework seeks to allow judges of the PTAB to seamlessly transition between proceedings and handle an increased caseload.  This procedural framework, however, applies only to the newly created proceedings; the current procedures for ex parte reexamination will remain intact.     

Initiation of Post-Grant Review Proceedings

Generally, the new procedures begin with the filing of a petition that identifies all of the claims challenged.  For each claim, the petitioner must also identify the grounds and supporting evidence for review.  The patent owner will then have an opportunity to file a preliminary response to the petition, providing any reasons why the proceeding should not be instituted.    

After the patent owner files a preliminary response, the PTAB will determine whether to go forward with a trial, and if so, whether to narrow the claims and issues for review.  The PTO has explained that reducing the claims and issues for review will ensure the completion of the trial within 12 months.    

Conduct of Post-Grant Review Proceedings

After the PTAB has determined whether to institute a proceeding, it will issue a scheduling order setting the deadlines for responses, oppositions and discovery – a new feature to post-grant patent review.  Under the proposed rules, parties will have the opportunity to conduct much more rigorous discovery than was allowed in prior reexamination proceedings.

According to a template scheduling order issued by the PTAB, discovery between the parties will be sequenced, such that each party will take a turn conducting discovery before submitting a motion or opposition.  The scope of allowable discovery is divided into two categories: routine discovery and additional discovery.  Routine discovery is generally the same across PGRs, IPRs and CBMs, and includes (i) the production of any exhibit cited in a paper or testimony, (ii) the cross-examination of declarants and (iii) the disclosure of any information that is inconsistent with a position advanced during the proceeding.  The scope of "additional discovery" allowed depends on the type of proceeding.  Parties seeking additional discovery in IPRs must demonstrate that the additional discovery is in the "interest of justice," while parties seeking additional discovery in a PGR or CBM must demonstrate only "good cause," a slightly lower standard.  

With IPRs, PGRs and CBMs sharing many of the same procedures, the different standards for discovery are one of the many factors that are sure to play a role in a petitioner's decision on which form of proceeding to initiate.  In addition to the differences in the standards for discovery for each proceeding, petitioners will also look to the differences in the requirements for satisfying the burden of proof and standing to decide which proceeding to initiate.

One of the first differences petitioners must consider is the burden of proof required for each proceeding.  For PGRs, petitioners must demonstrate that they are "more likely than not" to prevail on at least one challenged claim.  That is, if there is more than a 50% likelihood that a petitioner will prevail on at least one challenged claim, the threshold is met.  In contrast, IPRs can only be instituted if a petitioner demonstrates a "reasonable likelihood" that the petitioner will prevail on at least one claim challenged.  While this standard represents a lower standard than the "more likely than not" standard, a petitioner's chances of prevailing must nevertheless be reasonable.  That is, whereas a petitioner with a 49% likelihood of prevailing will probably meet the threshold, a petitioner with only a 20% likelihood of prevailing will most likely not meet this threshold. 

Next, petitioners must consider whether they have standing to bring a challenge.  To establish standing under the rules, petitioners must be capable of demonstrating that the patent is available for review and that the petitioner is not barred or estopped from requesting a review.

Determining whether a patent is available for review depends on the date the patent is filed, the date the petitioner files for review and the grounds for invalidity.  As to the date the patent is filed, PGRs are limited to patents issuing from a first-inventor-to-file system, while IPRs are available for any patents (i.e., patents issued both before the enactment of the AIA and after the enactment of the AIA).  As to the date the petitioner files for review, IPRs allow petitioners to file any time after the later of (i) nine months after the grant of a patent or reissuance of a patent or (ii) the date of termination of any post-grant review of the patent.  In contrast, PGRs are available only during the first nine months from the issuance or reissuance of a patent.  CBMs have the same requirements as PGRs, and additionally require petitioners to establish that they have been sued or charged with infringement.  Finally, as to the grounds of invalidity, petitioners are only allowed to bring IPRs on the basis of prior patents and printed publications, while PGR petitioners may additionally challenge patents on any form of prior art recognized in the statute, as well as the additional bases of subject matter ineligibility, inadequate written description, lack of enablement and claim indefiniteness.  

The difference in the available grounds to review a patent will undoubtedly be central to a petitioner's decision as to which proceeding to utilize.  Significantly, PGRs offer petitioners a new opportunity to challenge patents on additional bases, which was not possible before the enactment of the AIA.  Petitioners who could show that patents were invalid for prior use by demonstrating that products existed more than a year before the filing date of the patent were often limited to relying on printed publications such as product manuals.  Under the new PGRs, petitioners will now have the opportunity to demonstrate prior use without being confined to printed publications.    

Another critical factor in a petitioner's decision-making will be the costs for bringing each proceeding.  Under the proposed rules, the average filing fee for IPRs is estimated to be $35,800, while the average fee for PGRs and CBMs is estimated to be $47,100.  Although the new fees are a dramatic increase from prior reexamination proceedings, they may still present a cost effective alternative to litigation.   However, the estimated costs for post-grant review proceedings are still higher than the proposed fees for ex parte reexaminations, which under the AIA will increase to $17,750.


The new opportunities to challenge patents for subject matter ineligibility, inadequate written description, lack of enablement or claim indefiniteness, along with the ability to conduct rigorous discovery, has broadened the opportunity to challenge the validity of issued patents.  Petitioners seeking to maximize the opportunities offered by the new rules should closely watch for newly issued patents that may be important to their business, as the first opportunity to challenge patents expires nine months after the patent is granted.  With petitioners closely watching for issued patents to challenge, patent owners should similarly prepare for the possibility they may have to defend against invalidity challenges shortly after a patent is granted.

Goodwin Procter LLP is one of the nation's leading law firms, with a team of 700 attorneys and offices in Boston, Los Angeles, New York, San Diego, San Francisco and Washington, D.C. The firm combines in-depth legal knowledge with practical business experience to deliver innovative solutions to complex legal problems. We provide litigation, corporate law and real estate services to clients ranging from start-up companies to Fortune 500 multinationals, with a focus on matters involving private equity, technology companies, real estate capital markets, financial services, intellectual property and products liability.

This article, which may be considered advertising under the ethical rules of certain jurisdictions, is provided with the understanding that it does not constitute the rendering of legal advice or other professional advice by Goodwin Procter LLP or its attorneys. © 2012 Goodwin Procter LLP. All rights reserved.

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