The Patent Trials Appeals Board (PTAB) of the United States Patent and Trademark Office (USPTO) had requested comments on 10/20/20 to its proposed rule to codify its current discretionary denial policies and practices (i.e., denial of a patent review for reasons other than the case’s merits). This proposed rule (Docket Number PTO-C-2020-0055) has received 843 comments as of its Thursday deadline of 12/03/20.
The Director of the USPTO, under current law, is not obligated to grant Inter Partes Review (IPR) or Post Grant Review (PGR) unless the petitioner demonstrates “a reasonable likelihood” of prevailing on the merits. There have been cases, however, where patent holder has requested an IPR or PGR to be denied for reasons other than the merit of the petitioner’s claim (e.g., the existence of parallel petitions, proceedings in other tribunals, etc.) and the PTAB has used its discretion to deny the review.
The PTAB use of discretionary denials has increased significantly over the past few years. These discretionary denials of IPR and PGR has had a compounding affect as several of the PTAB decisions have been designated as precedential, i.e., decision have a binding effect on subsequent reviews. The PTAB states that it has done so in an effort to increase consistency, efficiency, and fairness in the review process. Principally, there have been three situations in which the PTAB has found review not necessary:
serial petitions;
parallel petitions; and
proceedings in other tribunals.
An example of serial petitions is found in PTAB’s precedential General Plastic Co. decision. Specifically, the PTAB “recognize[d] the potential for abuse of the review process by repeated attacks on patents” by the same party. This decision set forth seven nonexclusive factors that the PTAB will consider when deciding whether to institute an additional “follow-on” petition filed by the same party. The PTAB in its Valve decisions further extended this restriction on serial petitions to include co-defendants that coordinate serial attacks against the same patent.
For parallel petitions, the PTAB has denied review in cases where the same issue is being petitioned in multiple forums (e.g., district court) at the same time. In the PTAB’s view, one petition should be sufficient to resolve the issue of patentability in most instances.
For proceedings in other tribunals, the PTAB has denied review in situations where there is already an ongoing case in another forum that may analyze the issue and render a decision before the PTAB would be able to issue its final decision. The PTAB established a six-factor test in its precedential Fintiv and NHK Spring decisions as to when denying a review in such cases is appropriate.
Several comments have been filed for and against this new proposed rule. U.S.A. Senator Christopher A. Coons of Delaware and Mazie K. Hirono of Hawaii, have stated that the changes enacted by the USPTO have helped repair a system that was "tipping the scales away from the inventors who helped build America and toward infringers who steal the fruits of their labor." Inventor Josh Malone, a vocal critic of the PTAB, said "it is crucial that the office establish procedures on the use of discretion that account for the unique harms to small practicing entities." He said patent challenges often involve powerful corporations "[weaponizing] the PTAB to crush a smaller competitor with superior technology."
Others have come out against these new rules. Specifically, at least five comments warned that codifying rules about discretionary denials will have a harmful effect on the cost of prescription drugs. Public Citizen, Consumer Action and the Coalition Against Patent Abuse each said that denying petitions that otherwise have merit will delay how long it takes for generic drugs to get on the market.
Sources:
Valve Corp. v. Elec. Scripting Prods., Inc., IPR2019-00062, 2019 WL 1490575 (PTAB Apr. 2, 2019).
Valve Corp. v. Elec. Scripting Prods., Inc., 2019 WL 1965688 (PTAB May 1, 2019).
Apple Inc. v. Fintiv, Inc., IPR2020-00019, 2020 WL 2126495 (PTAB Mar. 20, 2020).
NHK Spring Co., Ltd. v. Intri-Plex Techs., Inc., IPR2018-00752, 2018 WL 4373643 (PTAB Sept. 12, 2018)