Alert September 11, 2012

U.S. Patent and Trademark Office Issues Final Rules for Contested Patent Cases

The U.S. Patent and Trademark Office (“PTO”) has published the final rules for handling contested patent cases, including post-grant review of patents based on prior art. The PTO has also published final rules in a number of other areas relative to the America Invents Act (“AIA”), which we will summarize at a later date.

Patent Trial and Appeal Board

The Patent Trial and Appeal Board (“PTAB”) replaces the existing Board of Patent Appeals and Interferences and has the final duties:

(1) review adverse decisions of examiners upon an application for patent;

(2) review appeals of reexaminations;

(3) conduct derivation proceedings; and

(4) conduct inter partes and post-grant reviews. AIA § 7.

PTO Rules Governing Trial Practice Before the PTAB

The PTO has created a consolidated set of rules governing trial practice before the PTAB. These rules apply to inter partes review, post-grant review, the transitional program for covered business method patents, and derivation proceedings.

The PTO has also created consolidated rules under 37 C.F.R. § 90 regarding judicial review of PTAB decisions.

Preponderance of the Evidence

Section 42 mandates that the default standard is a “preponderance of the evidence” standard. The PTO has granted the PTAB greater discretion regarding trial management.


The PTO kept the final cost of the inter partes procedure at a base level of $27,200 and allowed an incremental increase of $600 per claim where over 20 claims are contested.

For post-grant review and business method patent review, the fees are $35,800 for up to 20 claims and $800 for each additional claim.


Parties are to be represented by a PTO-registered practitioner as lead counsel and will only allow pro hac vice representation by unregistered counsel upon a showing of good cause.

Trial Practice Guide

The PTO has published a Trial Practice Guide that to advise the public on the general framework of the rules, including the structure and times for taking action in each of the new proceedings.

The Guide provides an explanation of the AIA requirements relating to the proceedings, an overview of the rules and how they work together, as well as some commentary regarding issues that the PTO expects to arise under this new forum.

Board Decision to Decline to Institute a Proceeding

The Board can decline to institute a proceeding where the Board determines that it could not complete the proceeding timely.

As an example, the Board can exercise its discretion to decline to institute a petition that seeks review of several hundred claims based upon a thousand references and the patent owner demonstrates that a determination of patentability would require testimony of dozens of non-party controlled witnesses in foreign countries for which the testimony would need to be compelled.

Inter Partes and Post-Grant Review

The AIA created new inter partes and post-grant review proceedings that take effect on September 16, 2012 and that are conducted before the PTAB.

The inter partes review provisions apply to any patent that issued before, on, or after September 16, 2012.

The post-grant review provisions generally apply to patents issuing from patent applications subject to the first-inventor-to-file provisions of the AIA, which come into force on March 16, 2013.

An inter partes petitioner can request that the PTAB cancel one or more claims of a patent only on a ground that could be raised under 35 U.S.C. §§ 102 or 103, and only on the basis of prior art consisting of patents or printed publications. The petitioner has the burden of proving unpatentability by a preponderance of the evidence. A petition for inter partes review may be filed after the later of either:

(1) nine months after the grant of a patent or issuance of a reissue of a patent; or

(2) if a post-grant review is instituted, the termination of that post-grant review.

Following the filing of a petition for inter partes review, the patent owner has the right to file a preliminary response that with reasons why no inter partes review should be initiated.

PTO Initiation of Inter Partes Review

The PTO cannot initiate an inter partes review unless it determines that there is a reasonable likelihood that the petitioner will prevail with respect to at least one of the challenged claims.

The PTO must grant or deny the petition within three months after:

(1) receiving a preliminary response to the petition; or

(2) if no preliminary response is filed, the last date on which such response may be filed.

The PTO's decision whether to initiate an inter partes review is final and not appealable.

Inter Partes Review Actions

During inter partes review, the patent owner may file one motion to amend the patent by (1) canceling any challenged patent claims and (2) for each challenged claim, proposing a reasonable number of substitute claims.

Claim amendments to the claims cannot enlarge the scope of the claims or introduce new matter.

Additional motions to amend may be permitted at the joint request of the petitioner and patent owner to advance a settlement or as permitted by regulations prescribed by the PTO. A party to the inter partes review can appeal the final written opinion of the PTAB. When the PTAB issues a final written opinion, the petitioner and real party-in-interest cannot request or maintain a proceeding before the PTO with respect to any reviewed claim on any ground that the petitioner raised or could have raised during the inter partes review.

Estoppel also applies in certain civil actions and proceedings before the United States International Trade Commission.

Post-Grant Review

Post-grant review is available only for nine months after a patent issues and provides broader grounds for challenge.

A patent can be challenged based on prior art of patents or printed publications, as well as on other grounds, including those asserted as a defense to patent infringement under sections 101, 102, 103 and 112 of the patent statute with the exception of best mode.

Standard for Review

The standard for review is different.

The review can be authorized if the Director determines that information presented in a petition, if not rebutted, “would demonstrate that it is more likely than not that at least one of the claims challenged in the petition is unpatentable,” or if “the petition raises a novel or unsettled legal question that is important to other patents or patent applications.”

The PTO's final rules relating to inter partes and post-grant review differ from the proposed rules.

The final rules clarify that the one-year period for completing the review may be adjusted by the PTAB in the case of joinder.

Petition for Inter Partes or Post-Grant Review

The final rules require the petition for inter partes or post-grant review to include a certification of standing and an identification of the challenge, the specific statutory grounds on which the challenge is based, how each challenged claim is to be construed, how each construed claim is unpatentable and the exhibit number(s) of the supporting evidence.

The petitioner must certify that it is not estopped from requesting review of the challenged claims, as opposed to the patent, on the grounds identified in the petition.


For service, the final rule eliminates the requirement that the petitioner contact the PTAB to discuss alternate routes of service and provides that:

(1) the petitioner may serve the patent owner electronically upon agreement of the parties;

(2) personal service is not required; and

(3) service may be by EXPRESS MAIL® or by means at least as fast and reliable as EXPRESS MAIL®.

Amendment of Challenged Claims

The final rules allow the patent owner to file motions to amend the challenged claims. A motion to amend may be denied where:

(1) the amendment does not respond to a ground of unpatentability involved in the proceeding; or

(2) the amendment seeks to enlarge the scope of the claims or introduce new subject matter.

Motion to Amend

A patent owner can file one motion to amend after conferring with the PTAB only if the motion is filed no later than the filing of the patent owner's response.

The PTAB is authorized to allow additional motions to amend only where there is a good-cause showing or a joint request of the petitioner and patent owner to advance a settlement. The PTAB considers whether the petitioner has submitted supplemental information after the time period that the patent owner had to file a motion to amend. A reasonable number of substitute claims is presumed to be one substitute claim per challenged claim, which can be rebutted by a demonstration of need.


For joinder of proceedings regarding the same patent, the final rules provide that the patent owner or petitioner may request joinder as long as the request is filed as a motion no later than one month after the institution date of any inter partes or post-grant review for which joinder is requested.

For inter partes review, the time period set forth in 37 C.F.R. § 42.101(b), providing that the petition must be filed within one year of being served with a complaint alleging patent infringement, does not apply when the petition is accompanied by a request for joinder.

Filing Supplemental Information

The final rules provide that a petitioner who seeks to submit late information, or information that is not relevant to a claim under review, must show why the information reasonably could not have been obtained earlier and that consideration of the information is in the interests-of-justice.

Discovery Practice

The parties are given more flexibility to agree to the scope of discovery. International deposition procedures have been made more flexible, and some of the details regarding "information that is inconsistent with a position" advanced by a party have been modified.

The overall structure of discovery remains as it was previously proposed.

Reasserting Through a New or Amended Claim

A patent owner or applicant is estopped from reasserting, through a new or amended claim, subject matter that was denied protection during a PTAB proceeding.

Construction of the Claims

The claims in an inter partes or post-grant review are given their broadest reasonable construction in light of the patent specification. The PTO continues to believe that a broader interpretation is warranted because unlike a proceeding in a court, a proceeding before the PTO gives the patent owner an opportunity to amend claims.

Business Method Patents

The AIA includes a transitional program for covered business method patents that expands the applicability of the post-grant review procedures to business method patents.  This program is intended to provide financial services firms an avenue for challenging a patent before the PTO that does not properly claim a patent eligible process, machine, manufacture or composition of matter.

The transitional program applies the procedures of the post grant review set forth above with some modifications. The transitional program applies only to patents related to a financial product or service. The program excludes patents for technological inventions.

The PTO has provided scant guidance regarding how it will determine if a patent is for a technological invention, stating that whether the invention recites a technological feature and solves a technical problem using a technical solution will be considered in the determination.

The PTO is unlikely to take a narrow view regarding the bounds of what patents will be considered covered business method patents. A financial services patent challenged as being directed to ineligible subject matter is almost certain to be determined to be a covered business method patent and not for a technological invention. How many more patents will be accepted and deemed not directed to technological inventions remains to be seen.

The transitional program is not limited to patents that are subject to the first-inventor-to-file provisions of the AIA – any issued patent for a covered business method may be challenged.

However, only those who have been sued or charged with infringement under may challenge a patent under the transitional program. A petition to institute a transition proceeding must be filed between September 16, 2012 and September 15, 2020. A petition under the transitional program may not be filed when a petition for post-grant review may be filed.

Any legal challenge to the validity of a claim may be raised in a transitional proceeding with the exception that for patents not subject to the AIA’s first-to-file-provisions only limited prior art may form the basis of the challenge.

In essence, the prior art is limited to that which demonstrates that the invention was known or used by others in the United States, or patented or described in a printed publication either 1) before the invention by the patentee or 2) more than one year before the patentee applied for the patent.

Other AIA-related Developments

The PTO rules also address new “derivation proceedings” applicable after the transition to “first inventor to file” provisions on March 16, 2013. As the time frame for these provisions nears, we will report on the ongoing developments regarding derivation proceedings.

As mentioned above, this alert only addresses the final rules implementing AIA provisions for contested patent cases.