A Note on the USPTO's Second Set of Proposed AIA Rule Changes

The America Invents Act of 2011 (AIA) established three new post-grant review proceedings to be administered by the Patent Trial and Appeals Board (PTAB): inter partes review (IPR), the transitional post-grant review for covered business method patents (CMB), and post-grant review (PGR). Upon establishment, the AIA also gave the United States Patent and Trademark Office (USPTO) broad authority to amend these proceedings. On August 20, 2015, the USPTO officially published its second set of proposed rule changes affecting these three newly established AIA post-grant review proceedings. These proposed rule changes, more broad in scope than the first set of rule changes issued in March 2015 (which largely addressed page limitations and other changes of simple scope), address more substantive issues and aim to address public comments and suggestions received specifically during the USPTO’s listening tour in April and May of 2014 as well as throughout the first several years of the new proceedings.

These proposed rule changes cover several aspects of the patent review process including the claim construction standard, new testimonial evidence submitted with a patent owner's preliminary response, sanctions/certifications similar to FRCP Rule 11, and word count issues. When initially soliciting comments, the USPTO grouped suggestions into the following ten categories: (1) the claim construction standard; (2) a patent owner’s motions to amend; (3) a patent owner’s preliminary response; (4) additional discovery; (5) obviousness; (6) real party interest; (7) multiple proceedings; (8) extension of one year period to issue a final determination; (9) oral hearing; and (10) general, catchall topics.

Claim Construction

As for the claim construction matter, the USPTO asked, “Under what circumstances, if any, should the Board decline to construe a claim in an unexpired patent in accordance with its broadest reasonable construction in light of the specification of the patent in which it appears?” 79 FR at 36476. After review of several varied comments, the USPTO concluded to continue application of the Broadest Reasonable Interpretation (BRI) standard to claims in an unexpired patent at issue in an AIA proceeding. This conclusion is unsurprising in that the Federal Circuit recently concluded that the USPTO is authorized to apply this BRI standard and that the standard is in line with legislative intent. In re Cuozzo Speed Techs., LLC, No. 2014-1301, 2015 WL 4097949, at *7-8 (Fed. Cir. July 8, 2015). The USPTO also received comments suggesting changing the claim construction standard for specific circumstances only. These suggestions were adopted by the USPTO in part. Claims in unexpired parents that will expire prior to the issuance of a final decision will now be held to a Phillips-type claim construction standard as set forth in Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc).

Patent Owner's Motions To Amend

In regards to a patent owner’s motion to amend, one of the most debated of the proposed changes, the USPTO asked, “What modifications, if any, should be made to the Board's practice regarding motions to amend?” 79 FR at 36476. Importantly, the PTAB had already clarified motions to amend in MasterImage 3D, Inc. v. RealD, Inc. at the time comments for this question were received. Consequently, in responding to comments, the USPTO relied heavily on the interpretations in that case and chose to adopt the rules that suggested continuing this practice of amendment and interpretation through precedential opinions. The USPTO notes that it will “continue to make improvements and clarifications via the rule-making process, by updating the Office Patent Trial Practice Guide, and by designating opinions as precedential or informative, as warranted.”

Patent Owner’s Preliminary Response

The USPTO asked, “Should new testimonial evidence be permitted in a Patent Owner Preliminary Response? If new testimonial evidence is permitted, how can the Board meet the statutory deadline to determine whether to institute a proceeding while ensuring fair treatment of all parties?” 79 FR at 36476. Here, it was concluded to allow a patent owner to file new testimonial evidence with her preliminary response. To comply with the three month deadline for issuing a decision on institution, the USPTO settled that there can be no cross-examination before institution.

Additional Discovery

To address the concerns regarding additional discovery, the USPTO asked, “Are the factors enumerated in the Board's decision in Garmin v. Cuozzo, IPR2012-00001, appropriate to consider in deciding whether to grant a request for additional discovery? What additional factors, if any, should be considered?” 79 FR at 36476. Here it was decided to continue use of the Garmin factors on a case-by-case basis. The USPTO provides guidance on its website and in the Office Patent Trial Practice Guide on the issue of additional discovery and will continue to update these resources as needed.

Obviousness

Framing the issue of obviousness, the USPTO asked, “Under what circumstances should the Board permit the discovery of evidence of non-obviousness held by the Petitioner, for example, evidence of commercial success for a product of the Petitioner? What limits should be placed on such discovery to ensure that the trial is completed by the statutory deadline?” 79 FR at 36476. As with additional discovery, the USPTO states that it provides guidance on its website and will revise the Office Patent Trial Practice Guide to reflect suggestions on an as needed basis.

Real Party in Interest

The USPTO asked, “Should a Patent Owner be able to raise a challenge regarding a real party in interest at any time during a trial?” 79 FR at 36476. It was concluded that, in general, a patent owner may raise a challenge regarding a real party in interest or privity at any time during a trial proceeding. Suggestions limiting the timeframe in which these challenges may be raised and suggestions mandating the providing of certain documents by both parties were not adopted due to various fairness and hardship reasoning.

Multiple Proceedings

In soliciting comments, the USPTO posed several questions regarding multiple proceedings involving the same patent and how those proceedings should be handled. As for how multiple proceedings should be coordinated, the USPTO concluded that its current practice allowing the PTAB discretion to transfer, consolidate, or terminate, as deemed necessary, is the best practice. The USPTO believes that this practice is the most fair, speedy, efficient, and economic practice for handling multiple proceedings. Therefore, when asked what factors should be considered, the USPTO relied on the aforementioned benefits and argued that a discretionary, case-by-case, balance between the fairness, speediness, efficiency, and economic factors should be weighed to make consolidation, transfer, and termination decisions. Several other specific situations were posed in the multiple proceedings questions and comments; however, the USPTO denied changes to the Office Patent Trial Practice Guide in most and argued to continue its current practices.

Extension of One Year Period to Issue a Final Determination

It was asked, “What circumstances should constitute a finding of good cause to extend the 1-year period for the Board to issue a final determination in an AIA trial?” 79 FR at 36477. As with each question posed, several varied opinions were expressed in the comments. The USPTO resolved that it will continue to strive to meet the one-year statutory time period.

Oral Hearing

The USPTO asked, “Under what circumstances, if any, should live testimony be permitted at the oral hearing? What changes, if any, should be made to the format of the oral hearing?” 79 FR at 36477. As for now, the USTPO will continue to make oral hearing decisions on a case-by-case analysis. The USPTO denied adopting comments allowing new evidence to be presented at the final oral hearing, arguing that doing so would be unfair to the opposing party. Several additional, specific suggestions were made regarding technology used in PTAB trials, the time at which PTAB courtrooms open, and reserving time for rebuttal.

General Topics

As a catchall question, the USPTO asked, “What other changes can and should be made in AIA trial proceedings? For example, should changes be made to the Board's approach to instituting petitions, page limits, or request for rehearing practice?” 79 FR at 36477. Thirty seven comments and suggestions were received in response.

In the Federal Register notice, the USPTO also proposed adopting FRCP Rule 11-type certifications and sanctions in order to prevent any misuse of the AIA proceedings and invited the public to comment on confidentiality and privilege matters. As the popularity of these proceedings continues to increase, and as the USPTO continues to revise and refine these rules, remaining informed and involved in the USPTO proposed rule changes is imperative.