Saving Patents from Inter Partes Review with Reissue
Reproduced with permission from BNA’s Patent, Trademark & Copyright Journal, 90 PTCJ 2108, 05/22/2015. Copyright  2015 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com
One of the quickest ways to derail a patent enforcement lawsuit is to petition the U.S. Patent & Trademark Office (PTO) for review of the asserted patent in a post-grant proceeding such as inter partes review (IPR). The PTO institutes IPR trials in response to more than three quarters of petitions1
and finds about 79 percent of claims reaching a final decision unpatentable.2
While the patent owner’s first line of defense is proving its patent protects truly inventive technology, sometimes the patent claims are written broadly, such that amendments focusing the claims on that inventive technology are necessary to save valuable patent rights.
While claim amendments are allowed in an IPR trial, the IPR process limits the type of amendments that can be made and requires patent owners to make a case for amendment under tight deadlines and page limits, such that in only a handful of IPR trials have claim-saving amendments been allowed.
The PTO recently announced a rule change that will make it procedurally easier to offer amendments. However, a more lenient procedure will not remove the substantive hurdles of getting amendments approved in an IPR. Amendment in an IPR requires that the patent owner prove that any amendments result in claims that are patentable relative to any prior art known to the patent owner—requiring the patent owner to first prove, among other things, what it believes the state of the art to have been. Yet, amendments can only be made to respond to the issues raised in the IPR trial. Moreover, the patent owner does not have the flexibility to add claims, which could enable claims to be tailored to the infringer’s products.3
Other PTO proceedings also allow amendments, including pursuing claims in a continuing application, ex parte reexamination, and reissue. A continuing application is likely to be the most flexible of all options, but often there is no continuing application pending. Reexamination allows more flexibility in making amendments than IPR, particularly in regards to adding claims that can be structured to cover a competitor’s product. Reissue affords patent owners even more flexibility, particularly if filed early in the life of a patent. But reissue historically took so long that its value was often diminished, particularly when a competitor was in the market, and time for getting enforceable patent rights was tight.
Reissue is changing, however, and its typical pendency times have fallen dramatically in recent years. With the threat of IPRs growing, it is time for a fresh look at reissue to consider whether it can assist a patent owner in avoiding what have so far been the harsh consequences of IPR. Reissue is not without its own tradeoffs, but properly employed, it can leave a patent owner in a stronger position down the line. It should be considered early on when setting strategy in response to an IPR challenge.
When amending claims, speed matters. A patent owner typically cannot seek damages for conduct that occurred before the amendment becomes effective.4
For many years, reissue pendency time trailed the other amendment options by a wide margin. Whereas the PTO is required to complete IPRs within about 1.5 years of filing5
and must conduct ex parte reexaminations with ‘‘special dispatch,’’6
nothing mandates any urgency for reissue. Consequently, the average pendency of reissued patents was 5.3 years in 2009 compared to 2.3 years for ex parte reexamination.7
Reissue has changed since then, and the PTO has become better at processing and approving reissued patents. The average pendency time of reissue fell to just 3.5 years in 2014.
The chart below depicts this trend:
Even as the average pendency time declines, high variability remains, with some applications pending for over 10 years. These abnormal cases distort the averages, and examining the median pendency times better reveals the magnitude of the change. Between 2009 and 2014, the median pendency time of reissued patents declined from 4.5 years to 2.1 years. In comparison, the median pendency of ex parte reexaminations is currently only slightly lower, at about 1.7 years.8
This dramatic change is made clear in the next chart, which shows that the third quartile in 2014 is lower than the median in 2009 and the median in 2014 is lower than the first quartile in 2009:
The magnitude of the decline is even larger when examining just the most common technology types of reissued patents. The 10 most common International Patent Classifications (IPCs) assigned to reissued patents are the following, in order of most common to least:
1. H04 (Electric Communication Technique)
2. G06 (Computing; Calculating; Counting)
3. H01 (Basic Electric Elements)
4. A61 (Medical Or Veterinary Science; Hygiene)
5. G01 (Measuring; Testing)
6. G11 (Information Storage)
7. H03 (Basic Electronic Circuitry)
8. C07 (Organic Chemistry)
9. G02 (Optics)
10. G09 (Educating; Cryptography; Display; Advertising; Seals)
The median pendency times of reissued patents with many of these IPCs demonstrate substantial declines. For example, H04 (Electric Communication Technique) declined from 5.6 years in 2009 to 2.0 years in 2014, G11 (Information Storage) declined from 6.1 years in 2009 to 1.7 years in 2014, and C07 (Organic Chemistry) declined from 4.8 years in 2009 to 1.4 years in 2014. G01 (Measuring; Testing) lagged behind the other most common IPCs by declining from 3.9 years in 2009 only to 3.3 years in 2014.
The chart below illustrates these changes:
As with all elements of a strategy when valuable patent rights are at stake, it is important to watch for changes. Despite the seemingly desirable trend, preliminary data for reissued patents in 2015 shows an increase in pendency time. It is possible that this increase is nothing more than a result of the limited snapshot of data available for 2015. However, one explanation that bears watching is that in the summer of 2014, the PTO assigned examiners who previously handled reexaminations to handle reissue applications.9 The longer times could just be delays associated with new examiners coming up to speed. However, if the longer times are the result of these examiners used to handling reexaminations rejecting more claims in reissue, the desirability of reissue as a strategic response to an IPR may need to be reevaluated. Though this data warrants further observation, the declining pendency times over the last few years highlight reissue as a viable option in some situations to amend patent claims subjected to IPR.
A patent owner considering reissue to defeat an IPR should be aware that reissue is not a panacea, and it comes with many trade-offs, which should be made in the context of an overall strategy for preserving valuable patent rights for assertion in litigation. Filing for reissue requires the patent owner to admit that the patent is at least partially invalid and surrender it to the PTO for reconsideration.10 Identifying an error can often be finessed, as failing to originally include claims to be added by reissue can often constitute an error adequate to justify reissue. However, submitting a patent to reissue exposes the entire patent, and the PTO could identify issues with the patent other than the identified error and possibly even beyond those already raised in the IPR.
Timing is another important consideration. Even with the declining reissue pendency times, IPR is likely to result in a faster decision. The PTO must generally issue its decision within one year of institution,11 which is shorter than the average time to complete a reissue. One way to accelerate the reissue is ask the PTO to terminate the IPR by finding the challenged claims invalid.12 That is a choice that should not be made lightly. The patent owner will be precluded from seeking claims that are obvious variations of the claims lost in the IPR, even in reissue.13 However, if the IPR continues on, the petitioner can ask the PTO to stay the reissue application until the conclusion of the IPR.14 A delay in the reissue delays opportunities for enforcement and extends the period during which the infringer may be acting without liability.15
A further trade-off is the degree of participation of the petitioner. Reissue is conducted without the IPR petitioner’s participation, providing the possibility of multiple one-on-one exchanges, in writing and sometimes in person, with an examiner who will decide which claims are patentable. The IPR petitioner can submit a protest during the reissue.16 However, the protest is limited to supplying information and a brief explanation of why it is relevant. Such protests are not perceived as effective, and are rare. The petitioner cannot otherwise participate in the reissue application. In contrast, the patent owner in an IPR has one chance to prove the amended claims are valid, and the petitioner can present counter-arguments and evidence to dissuade the judges presiding over the IPR trial from allowing amendments. The cost of this greater latitude to work with the decision maker in the reissue without interference from the petitioner is that the petitioner is not bound by the decision, and can challenge the claims again in a later IPR—an action that the petitioner would probably be estopped from taking if amended claims were allowed in an IPR.
Given the mix of advantages and disadvantages, why choose amendment in reissue over IPR? The answer for many is that the PTO rarely allows amendment during IPR, and when it does, amendment is limited to responding to the petitioner’s invalidity arguments.17 In contrast, reissue (like ex parte reexamination) allows a broader range of amendments, including those that target the competitor’s conduct.18 And, if the reissue is filed within two years of initial issuance of the patent, it is even more flexible than ex parte reexamination regarding the types of amendments that can be made.
With all of the trade-offs, reissue may not be the best solution in all situations. However, with its declining pendency times, it is now a viable solution in many more situations, and it is an option that patent owners cannot afford to overlook.
Understand the litigation goals: Where quickly protecting a market from competition is the patent owner’s primary interest, amending patent claims can break the patent out of an IPR and tailor the claims to the competitor’s conduct. A holistic and creative litigation strategy with an eye toward the ultimate goal can keep the enforcement effort on track.
Be realistic about the patent claims: Even a groundbreaking patent may have claims that are vulnerable to invalidation. Look at those vulnerabilities through the eyes of a post-grant specialist, a litigator, and a patent prosecutor. Recognizing a patent’s weaknesses and strengths before the patent owner’s options to fix the issues disappear allows the patent owner to proactively select the best route to foreclose infringers’ arguments.
Understand all the options: If amendment is to be attempted, the patent owner should consider all the options. Amending via IPR, reissue and ex parte reexamination all have trade-offs that can be critical to a case. A patent owner’s analysis should not stop at amendment via post-grant proceedings, because strategic prosecution of a pending continuation application may also be invaluable. Consequently, patent owners and their counsel need the technical savvy to assess the invention in light of the prior art as a whole, and to bring litigation, post-grant, and prosecution skills to the table. Understanding which route will best secure protection of valuable innovations is no small task, but necessary in the modern world of patent litigation.
IPR2012-00027, Paper 26.
35 U.S.C. § 252.
37 C.F.R. § 42.107; 35 U.S.C. § 314(b); 35 U.S.C. § 316(a)(11) (allowing a six-month extension for good cause).
35 U.S.C. § 305.
(presenting data through Sept. 30, 2013).
(presenting data through Sept. 30, 2013).
35 U.S.C. § 251.
35 U.S.C. § 316(a)(11).
37 C.F.R. § 42.73(b); IPR2013-00136, Paper 36 (P.T.A.B. Nov. 19, 2013) (granting requested termination following reissue application of the challenged claims), available at http://pub.bna.com/ptcj/IPR2013-00136Paper36.pdf
37 C.F.R. § 42.73(d)(3)(i); IPR2014-00187, Paper 19 (P.T.A.B. Aug. 28, 2014) (granting requested adverse judgment and noting that the patent owner estoppel provisions apply), available at http://pub.bna.com/ptcj/IPR2014-00187Paper19.pdf
35 U.S.C. § 315(d); 37 C.F.R. § 42.122(a); IPR2013-00217, Paper 8 (P.T.A.B. May 10, 2013) (ordering stay of pending reissue), available at http://pub.bna.com/ptcj/IPR2013-00217Paper8.pdf
35 U.S.C. § 252.
37 C.F.R. § 1.291.
37 C.F.R. § 42.121; IPR2012-00027, Paper 26 (P.T.A.B. June 11, 2013), available at http://pub.bna.com/ptcj/IPR2012-00027Paper26.pdf
IPR2012-00027, Paper 26.