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Bulletproof your patents to avoid post-grant review disasters

This article appeared in the November 2014 issue of Technology Transfer Tactics. Click here for a free sample issue or click here to subscribe.

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Post-grant reviews have been on the horizon since the America Invents Act (AIA) first came to be, but TTOs haven’t had to worry much about them until now. Patents issued after June 2013 can now be reviewed, and that means there is a growing pool of IP that can be challenged and rights revoked. But it remains to be seen if post-grant actions will be as much of a threat as inter partes review. (For more on inter partes review, see September 2014 TTT, page 129.)

The best bet at this point is to make your patents as airtight and defensible as possible against post-grant challenges.

There could be a sharp increase in post-grant reviews now that there are many more patents in the eligible pool, says Jacob D. Koering, JD, partner with the Freeborn law firm in Chicago. And of course, every patent filed now and hereafter will be subject to post-grant reviews.

“We’re likely to see more and more of these challenges, especially if the early ones go well for those bringing the review. It’s almost a results-driven process,” Koering says. “Post-grant reviews are just getting going now, so it’s still an open question as to whether the post-grant review process will be as popular as the inter partes reviews have been. I think they will be, and TTOs should brace themselves.”

Remember, however, that bringing a post-grant challenge is no sure thing. The challenger faces a number of hurdles, starting with the cost of initiating a review — about $35,000 for challenging 20 claims. Challenging the patent also requires substantial time and effort by the petitioner.

On the other hand, post-grant reviews can be broader than the inter partes review. Unlike the inter partes, the post-grant review is not limited to publications; a patent can be challenged on novelty and obviousness. The post-grant review process also can challenge patents under Section 112, alleging written description problems, enablement issues, or lack of precision.

“A difficulty for the person bringing the challenge is that they have to be ready to challenge the patent on all of those bases at once,” Koering explains. “If they don’t, there is an estoppel that applies. If the post-grant review is granted and the process completes, the petitioner is going to be barred from later asserting any issues that were raised or could have been raised during that process.”

Be wary of competitors

Given those difficulties, Koering suspects the post-grant process will be most commonly used in certain situations but less in others. The key determinants will be the relationship between the petitioner and the patentee, and the evidence that is available to challenge the patent.

That means post-grant reviews will be most likely in industries in which there is significant competition and competitors closely monitor each other’s patent activity, Koering says. In that scenario, competitors will know that the IP is being developed and going through the patent process, he says.

“They will be watching for those patents that will have a significant impact on the industry, and then there will be an immediate need to remove that patent from the industry,” Koering says. “That kind of hyper awareness among close competitors and people who monitor each other’s patent portfolios will generate the most post-grant reviews.”

Competitors will still need to show evidence that the patent should be invalidated. That could take the form of printed material like that used in an inter partes review, but Koering says that is unlikely. A challenger with solid publication evidence will wait out the nine months required before initiating an inter partes review because there is less risk, he explains. Presenting that publication evidence in the post-grant review would bar any further claims against the patent, but the challenger can try again if the evidence is rejected in an inter partes review.

“The most likely scenario for a post-grant review is where somebody has concrete evidence of a prior sale by the patentee, or prior use,” Koering says. “So that would be a competitor who has engaged in a process of selling a particular machine for a period of time that precedes the priority date of the patent.”

The cost of a post-grant review should limit the number of challengers, says Ed Walsh, JD, shareholder with the law firm of Wolf Greenfield in Boston, MA. Only someone with a strong interest in invalidating a patent will be willing to spend the necessary funds, and that challenger must know a great deal about the patent early on, before the post-grant review window closes.

Patent strength is critical

There is no way to completely insulate your patent from a post-grant review, but there are ways to make it less of a target, says patent attorney Robert D. Traver, JD, PhD, with the law firm of Sheridan Ross in Denver, CO. Most TTOs have more invention disclosures than they can afford to file patents on and have to make strategic decisions about which to pursue, and Traver says ensuring the patents you file can withstand post-grant reviews could be one consideration.

One way to try to insulate yourself from post-grant review would be to file many claims, both independent and dependent, making it more costly for competitors to challenge them all. But Traver acknowledges that approach might be difficult for TTOs already facing hard decisions about how to apportion a limited patent budget.

If the experience with inter partes review is any indicator, TTOs could be in for some extra work. “The patent office predicted a few hundred inter partes reviews in the first year and they got a few thousand,” Traver says. “We don’t know that post-grant reviews will follow the same pattern, but the important thing will be to watch the first batch and see what can be learned from them. I’d hope there will be lessons about what best protects you in this process and what makes you more vulnerable.”

Another concern for TTOs is the legal costs associated with defending a post-grant challenge, Walsh notes. The patent prosecution costs are frequently transferred to the licensee, and Walsh says patent holders should consider how to allocate the costs of a post-grant review proceeding. He wouldn’t consider a post-grant review to be “normal prosecution” as covered in most agreements, so an additional clause could be necessary.

Perhaps the strongest defense, Walsh says, is to improve the quality of your patents. The task now is not to just get your patent application through the patent office the first time, but to get it through a second time if someone challenges you in a post-grant proceeding, he explains. Whatever you can do to shore up your patent in the beginning could pay off big during a review.

“I definitely would be thinking about ways to make your patents better with spending more time searching the prior art, thinking about multiple layers of claims strategy instead of just a short application with a couple of claims, and the [Section] 112 challenges,” Walsh says. “Think about what you’ll need in that second round, not just the first pass through the patent office.”

Contact Koering at 312-360-6703 or jkoering@freeborn.com; Walsh at 617-646-8212 or ewalsh@wolfgreenfield.com; and Traver at 303-863-2981 or rtraver@sheridanross.com.


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