The United States Patent and Trademark Office (USPTO) has recently made some changes to how the Patent Trial and Appeal Board (PTAB) will handle discretionary denials of patents.
The changes came in late February when the USPTO took back the Fintiv memo given by former Director Vidal in 2022. The memo served as a guide for the PTAB decisions when determining discretionary denial.
After the withdrawal of the memorandum, the Chief Judge of the PTAB issued new guidance concerning the implications of these administrative decisions in the form of a memo titled “Guidance on USPTO’s rescission of ‘Interim Procedure for Discretionary Denials in AIA Post-Grant Proceedings with Parallel District Court Litigation”.
The USPTO also made substantial changes to PTAB’s institution decision process, making it a significant change in the department’s approach to this change.
Old Procedure
In the past, petitioners and patent owners would address their discretionary denial arguments in a very brief manner, often forming a very small part of their 14,000-word petition and preliminary response.
The rest of the word limit was used up to address the substantive merits or demerits of the petition. The petitioner would generally attempt to anticipate the patent owner’s arguments.
This led to the PTAB providing a limited additional session to the parties so that they could present their discretionary denial arguments when, for example, the patent owner raised discretionary denial arguments that the petitioner was not able to anticipate.
Interim procedure for initiating AIA proceedings – New Procedure
On March 26, the Office issued a memo regarding an interim procedure for initiating America Invents Act (AIA) proceedings.
The Office states that the reforms in the process are important to have an improved workload management system, to lower the number of pending ex parte appeals, and to bring consistency in AIA institution decisions.
The following changes have been made in the PTAB practice and procedure:
Bifurcated institution decisions
Under the new interim procedure, the decision to institute inter parties review (IPR) or post-grant review (PGR) can be broken down into two key stages, namely,
(i) discretionary considerations, and
(ii) merits or non-discretionary considerations.
The three-judge panel may then proceed with the case in a standard manner, considering the merits of the petition for discretionary denial and whether or not the petition satisfies the statutory conditions for the institution of an IPR and PGR.
If the requirements are not met, the Director will issue a decision where they would decline their discretion to deny institution, and then the petition will be referred to a panel comprising at least three PTAB judges who will issue a final written decision regarding whether to institute based on the merits of the case.
Briefing on Discretionary Denial
Under the new rules, the patent owner’s discretionary denial brief has a deadline of two months after the PTAB issues the Notice of Filing Date Accorded to the petition and one month before the patent owner’s preliminary response (which also has a 14,000-word maximum limit).
The petitioner then has one month to submit a 5,600-word (i.e., maximum limit for the arguments) response to the patent owner’s discretionary denial brief.
In their briefs, the parties can address all discretionary denial considerations established in PTAB precedential decisions, including, e.g., Fintiv (concerning proceedings with parallel district court), General Plastic (concerning multiple petitions), and Advanced Bionics (previously presented arguments considered in an earlier USPTO proceeding).
Parties can also address consideration of denial issues highlighted under 35 U.S.C. § 325(d) in the said briefing.
The revised interim procedure for discretionary denials permits both parties in a PTAB proceeding to brief a wide range of discretionary denial factors. These factors are taken into account to determine whether discretionary denial is appropriate:
- Whether the legitimacy or patentability of the challenged claims was already decided upon by the PTAB or another forum
- Whether there had been legislative or judicial changes since the patent claims were issued that could affect how the patentability matter is decided
- The merits of the unpatentability challenge and whether the challenge rises to the standard of review
- The amount of reliance by the petition on expert testimony, as this can impact the evidentiary value and complexities of the proceeding.
- The settled expectations of the parties, for instance, how long the patent claims have been in force and the extent to which the parties have relied on its validity
- Compelling economic, public health, or national security interests
- Any other considerations bearing on the Director’s discretion under 35 U.S.C. § 314(a) or § 325(d) to manage a reasonable docket and responsibly allocate resources.
The Director may also consider whether the PTAB can achieve pendency goals for ex parte appeals and deadlines for AIA proceedings, and other workload demands in making a discretionary denial in AIA post-grant proceedings of a petition.
While the memo does not specify how the new bifurcated process will affect the patent cases, it appears there will likely be an increase in discretionary denials.
The distinction of the discretionary denial decision from the merits decision, coupled with the ITC’s tendency to set trial dates much earlier than the estimated date for a final decision given by the PTAB judges, makes this new amendment more likely to thrive.
Furthermore, since the new briefing schedule is not a substitute for the standard briefing schedule, patent owners should not expect to gain any efficiencies from this new process. Given the three-month briefing schedule, any post-grant review petition is likely to be needed within one to two months of the ITC proceeding to avoid the risk of discretionary denial.
Hire a Patent Attorney for all your Patent Registration and Litigation Concerns!
The new changes by the PTAB render a significant impact on how the patents will now be registered and the strategy to adopt in their smooth and successful registration. This area of IP law is complex and requires expert guidance to handle the cases.
What you need is a patent attorney who can guide you through the new laws, but most of all, help you with your case using their IP patent expertise.
At Drishti Law, our attorney partner has garnered enough expertise to help you navigate through the new changes in IP law and help you protect your innovation while setting it up for success.
If you have questions about handling patents, their timelines, then reach out to Drishti Law at 773-234-1139 for a free consultation. Our experienced attorneys are here to guide you through the patent registration process, helping to ensure that your brand receives the protection it deserves under state and federal laws.
Sahil Malhotra
Sahil Malhotra is an Intellectual Property Attorney, who founded Drishti (“vision”) law because of his vision in protecting dreams and ideas.
He provided individuals and small businesses with an opportunity to enhance their IP’s value by helping them register trademarks and successfully argue against office actions. In addition to his training and experience, he has been deeply involved in the multifaceted IP portfolio at UIC and continues to be associated with IP organizations and conferences.
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