Maschoff Brennan



USPTO Announces Second Round of Proposed AIA Rule Changes

August 31, 2015

By Mark Ford and Kristian Blomquist

On August 19, 2015, the USPTO announced a second round of proposed rule changes to proceedings under the America Invents Act (“AIA”) (e.g., Inter-Partes Reviews (“IPR”), Post Grant Reviews (“PGR”) and Covered Business Methods (“CBM”)). (The proposed rule changes can be found here: Federal Register). The USPTO conducted a “listening tour” in April and May to poll practitioners regarding their experiences with AIA proceedings and what can be improved.

The proposed changes are based on comments received during the tour and cover the following ten topics: (1) the claim construction standard, (2) motions to amend, (3) patent owner preliminary responses, (4) additional discovery; (5) additional discovery regarding secondary considerations of obviousness; (6) real party in interest challenges; (7) simultaneous proceedings relating to the same patent; (8) extensions to the statutory one-year period to issue a final decision; (9) oral hearings; and (10) general topics. Each of these topics is discussed individually and a table is provided that includes practitioner comments and whether the recommendations were Adopted, Adopted in Part, or Not Adopted by the USPTO in the proposed changes. Some comments were Already in Use, or Already in Progress by the USPTO.

(1) The Claim Construction Standard

Practitioner Comments USPTO Response
The PTAB should continue applying the broadest reasonable interpretation standard when construing terms of an unexpired patent in an IPR proceeding, PGR proceeding, or CBM proceeding. Adopted
The PTAB should change the claim construction standard to the standard set forth in Phillips v. AWH Corp. for some or all of the following circumstances: (a) Unexpired patents where the ability to amend claims is no longer present in the trial; (b) unexpired patents where the patent will expire prior to the final decision; (c) unexpired patents subject to a terminal disclaimer prior to final decision; and/or (d) unexpired patents when the parties to the trial have each filed claim construction briefings in another tribunal on terms at issue in the trial. Adopted in Part

The PTAB currently applies the broadest reasonable interpretation (“BRI”) standard in construing claim terms at issue in AIA proceedings.  The BRI standard differs from the standard used in district court litigation, where claim terms are construed consistent with the Phillips standard. While these standards are similar, they are sufficiently different since some claim terms may be construed differently depending on which standard is applied.

The USPTO proposes to continue use of the BRI standard in most circumstances in AIA proceedings. Supporting this proposal is In re Cuozzo Speed Techs., LLC, where the Federal Circuit stated: “There is no indication that the AIA was designed to change the claim construction standard that the PTO has applied for more than 100 years.” In re Cuozzo Speed Techs., LLC, No. 2014- 1301, 2015 WL 4097949, at *7-8 (Fed. Cir. July 8, 2015).

The one circumstance that the USPTO proposes to adopt a different standard is when the patent at issue will expire before the PTAB issues a final decision. The USPTO proposes use of a Phillips­-type standard in this circumstance in order to compensate for the fact that there is no opportunity for patent owners to amend claims.

(2) Motions To Amend

Practitioner Comments USPTO Response
The PTAB should continue using the current rules and practices for motions to amend, but provide consistent guidance through precedential opinions or other means. Adopted
Eliminate the opportunity to amend claims in AIA proceedings based on the premise that AIA proceedings are better designed to be expedited proceedings for determining claim patentability, not an examination. Not Adopted
Shift the burden of establishing invalidity to the patent challenger, or adopt an intermediate position to reduce the burden on the patent owner by requiring that the patent owner bear only the burden of proving patentability over the cited art in the petition or asserted grounds of unpatentability. Adopted in Part
Patent owners should not be required to cancel a challenged claim in order to submit a substitute claim and/or should be permitted to propose more than one substitute claim per challenged claim. Not Adopted
Motions to amend should be liberally allowed and be evaluated in the same way that the entry of a supplemental response in prosecution is evaluated (under 37 CFR 1.111(a)(2)). Not Adopted
The USPTO should provide additional guidance in conferences regarding motion to amend practice, including guidance on what prior art the patent owner needs to distinguish in a motion to amend, whether a new prior art search is required, whether providing information similar to the accelerated examination support documents (ESD) would be sufficient for a patent owner to carry its burden, and clarifying that a reissue application can be utilized after a final written decision as an examination mechanism for amending claims and that the burden of persuasion for permitting the PTAB to consider a motion to amend is not the same as the burden of proof as to the patentability of any claims that are the subject to a motion to amend Adopted in Part
The PTAB should allow patent owners to cure minor defects in motions to amend, such as the failure to construe a claim term that the PTAB deems necessary or failure to provide written description support for the substitute claim language and that the petitioner should be allowed to respond to these further comments by the patent owner. Not Adopted
The USPTO should rescind the patent owner estoppel provision of 37 CFR 42.73(d)(3). Not Adopted
Allow the patent owner to file its motion to amend at a different time than when it files its patent owner response. Not Adopted
Claim cancellations should take place immediately when a patent owner concedes the unpatentability of an existing claim and files a non-contingent motion to amend. Not Adopted
Patent owners should be allowed to convert a motion to amend from an IPR into an ex parte reexamination of the substitute claims of the motion are denied. Not Adopted

The USPTO proposes continuing to use the current rules regarding motions to amend with the additional change of providing an official definition of the terms “prior art of record” and “prior art known to the patent owner” in AIA proceedings. The proposed definition of “prior art of record” is art discussed in the prosecution history, art of record in the current proceeding, and any art of record in any other proceeding before the PTAB involving the patent. The proposed definition of “prior art known to the patent owner” is “prior art that the patent owner makes of record.”                                                   

(3) Patent Owner Preliminary Response

Practitioner Comments USPTO Response
Patent owners should be allowed to rely on new testimonial evidence in their preliminary response to the petition, given that the petitioner may rely upon such evidence in their petition. Adopted
Petitioners should be allowed to submit a reply to the patent owner’s preliminary response. Adopted in Part

The USPTO proposes allowing patent owners to file new testimonial evidence with their preliminary response. This proposed change would not provide the right of cross-examination of a declarant before an AIA proceeding is instituted. The USPTO also proposes amending the rules to provide that any factual dispute that is material to determining whether to institute an AIA proceeding be resolved in favor of the petitioner.

Allowing patent owners to file new testimonial evidence will allow them to include any information or material that is discovered before the preliminary response is filed and should improve the results of AIA proceedings for patent owners. Resolving matters in favor of the petitioner will preserve a petitioner’s right to challenge statements made by the patent owner in the preliminary response, since the petitioner will be allowed to challenge the statements during the AIA proceeding.

Regarding the petitioner’s right to submit a reply to the patent owner’s preliminary response, the USPTO proposes to change the rules to provide expressly that a petitioner may seek leave to file a reply to a preliminary response including new testimonial evidence, so that the USPTO may allow a reply when the circumstances so warrant.

(4) Additional Discovery

Practitioner Comments USPTO Response
The PTAB should continue to use the Garmin factors. Adopted
The PTAB should provide rule-based guidance on the “interest of justice” standard. Not Adopted
The PTAB should continue to place emphasis on maintaining the one-year trial schedule by encouraging parties to raise discovery issues early in the proceeding, even during the pre-institution stage. Adopted
The PTAB should apply Factor 2 of Garmin as a per se rule. Not Adopted
The PTAB should consider the specificity of the request, require parties to identify requested documents with the greatest possible specificity, and reject broad, amorphous requests that do not reasonably identify responsive documents. Other comments urged the USPTO to add the following additional factors, ensuring that the Garmin factors would be applied correctly and permitting additional discovery when it is actually warranted: (1) Whether the information is solely within the possession of the other party; (2) whether the information already has been produced in a related matter; and (3) whether the discovery sought relates to jurisdictional issues under 35 U.S.C. 315 and 325. Not Adopted
The PTAB should combine Factor 4 and Factor 5 of Garmin. Not Adopted

Currently, the USPTO uses the Garmin factors to determine if additional discovery should be allowed during an AIA proceeding. The Garmin factors are: (1) More Than A Possibility And Mere Allegation; (2) Litigation Positions And Underlying Basis; (3) Ability To Generate Equivalent Information By Other Means; (4) Easily Understandable Instructions; and (5) Requests Not Overly Burdensome To Answer.

The USPTO proposes the continued use of the Garmin factors since the USPTO believes these factors are highly flexible and allow for a case-by-case analysis. Factor 5 of Garmin requires discovery to not be overly burdensome to answer. The USPTO also proposes placing emphasis on basing its decisions relating to additional discovery on factor 5.

(5) Additional discovery Regarding Secondary Considerations of Obviousness

Practitioner Comments USPTO Response
The PTAB should permit discovery of evidence of non-obviousness held by the petitioner in all cases, in cases where the request is narrowly tailored, in very rare cases, or in all cases apply the Garmin factors. Adopted in Part
A patent owner seeking additional discovery regarding the petitioner’s product in support of a commercial success non-obviousness argument should have to show that the challenged patent claims read on the petitioner’s product, that the product was commercially successful, and that the alleged success resulted from the patented feature. Several other comments suggested that requiring a patent owner to prove such a nexus between the evidence being sought and the claims places too high a burden on the patent owner. One comment urged the PTAB to allow a patent owner to obtain secondary consideration evidence from the petitioner when the patent owner presents a good-faith argument that there is a nexus between such evidence and the claims, such as by infringement contentions offered in the related district court litigation. Several comments recommended that a patent owner should be permitted to obtain additional discovery from a petitioner when the patent owner demonstrates that the petitioner is reasonably likely to possess evidence of secondary considerations, relaxing the first Garmin Factor. A few other comments suggested that the PTAB should permit limited discovery of the petitioner’s evidence of secondary considerations when the patent owner has presented a sufficient showing of a nexus. Adopted in Part
The PTAB should permit the patent owner to serve a limited number of focused interrogatories and requests for production related to secondary considerations, and provide a schedule for the discovery. Not Adopted

In order to be allowed additional discovery relating to secondary considerations the PTAB uses the Garmin factors as discussed above. The patent owner must meet the standard of a conclusive nexus between the claimed invention and information being sought through additional discovery.

The USPTO proposes the continued use of the Garmin factors when a party requests additional discovery to show non-obviousness through secondary considerations. The USPTO also proposes lowering the standard of proof that the patent owner must meet from the “conclusive nexus” to a standard of “some nexus” between the claimed invention and the information being sought through additional discovery.

Lowering the burden on the patent owner will make it easier for information indicating secondary considerations for overcoming obviousness arguments to be obtained and introduced in an AIA proceeding. The USPTO asserts that lowering the standard will allow the patent owner a better opportunity to develop arguments regarding secondary considerations. A standard of “some nexus” was not fully explained by the USPTO and will likely be subject to further discussion during the sixty days after the August 19, 2015, Federal Register post.

(6) Real Party-in-Interest Challenges

Practitioner Comments USPTO Response
The PTAB should allow a patent owner to raise a challenge regarding a real party-in-interest or privity in the patent owner’s preliminary response, or at any time after institution if the patent owner provides a reasonable explanation as to why it could not have raised such a challenge earlier in the proceeding. Adopted in Part
Rules should require both parties to provide certain documents associated with the real party-in-interest or privity of the parties. The parties should be required to provide the following information: (1) joint defense group agreements, (2) indemnity agreements, (3) identification of counsel representing a defendant in related litigations, (4) identification of parties participating in the preparation of the petition or in the review, and (5) identification of all parties funding the expenses associated with the review. Not Adopted
The PTAB should allow patent owners to discover information concerning a real party-in-interest freely at any time. Not Adopted
The PTAB should provide additional guidance regarding issues concerning real party-in-interest or privity, including specific questions and factors that petitioners should consider in determining what entities to identify, which would allow petitioners and patent owners to evaluate these issues early and in a more efficient manner. Not Adopted
The PTAB should establish a rule or precedential opinion stating that the existence of a real party-in-interest and privity are determined based on the facts in existence at the time of petition filing. Not Adopted
The PTAB should permit petitioners to correct the identification of real parties-in-interest without affecting the filing date if a “good faith attempt” was made to satisfy 35 U.S.C. 312(a). Not Adopted
The PTAB should confirm that the petitioner bears the burden of producing evidence that it has standing, as well as the burden of persuasion on the issue. Not Adopted

The USPTO proposes keeping the rules that allow a patent owner to challenge the real party-in-interest any time during trial. According to the USPTO, allowing a patent owner to file a real party-in-interest challenge during any point during trial balances efficiency with fairness.

(7) Simultaneous Proceedings Relating to the Same Patent

Practitioner Comments USPTO Response
The PTAB should continue to exercise its discretion, on a case-by-case basis, to stay, transfer, consolidate, or terminate multiple proceedings involving the same patent claims. Adopted in Part
The PTAB should promulgate new rules that define the factors that the USPTO will take into account when considering multiple petitions directed to the same patent claims. Commenters advocated for the application of a variety of factors, which fall into three main categories: (1) the impact on scheduling and the USPTO’s ability to meet the deadlines imposed by Congress in AIA proceedings; (2) prejudice to the patent owner; and (3) prejudice to the petitioner. Not Adopted
The PTAB should determine whether to stay co-pending proceedings on a case-by-case basis, or a stay should be imposed upon institution of trial on the same patent. A co-pending reissue or reexamination should be stayed automatically, unless there is a showing of “good cause,” which includes factors such as avoiding: (a) inconsistent decisions by the USPTO; (b) duplicative work for the PTAB; and (c) disruption to the trial schedule. Adopted in Part
The PTAB should not stay AIA trials in favor of a co-pending reexamination or reissue. Not Adopted
Factors should be considered and weighed by the PTAB in determining whether to consolidate post-grant proceedings. These factors should include: (1) type of additional proceeding; (2) time between filing date of initial proceeding and additional proceeding; (3) stage of initial proceeding; (4) duration of additional proceeding; (5) scope of each proceeding; (6) third party filers (same, different); (7) relation between third party filer of additional proceeding and filer of initial proceeding; (8) number of total proceedings filed against the patent; (9) whether the additional proceeding is a reexamination: ex parte reexamination should not be transferred to PTAB because patent owner would lose certain procedural mechanisms such as ability to interview case; (10) whether pending district court litigation has been stayed pending resolution of the reexamination; (11) whether validity of claims at issue in AIA trial is currently on appeal to the Federal Circuit; (12) express interests of the parties in the proceedings; (13) issues raised in the different proceedings; (14) ability of PTAB to reach a timely conclusion of a patentability issue in any proceeding; and (15) saving of costs and resources gained by the parties and the PTAB by consolidation, for example, by coordination of procedures common to the proceedings. Not Adopted
Miscellaneous recommendations on how to handle multiple proceedings: (1) multiple AIA trials concerning the same (or related) patents (or parties) should be consolidated or handled by the same panel; (2) consolidated proceedings should follow the district court model with the same schedule applying to the proceedings; (3) a petitioner should be required to select a single lead and backup counsel, but taking into consideration the interests of the parties, in some circumstances the PTAB may determine coordination should not be required; and (4) panels should consider adjusting page limits in cases where different parties may be asserting different positions. Not Adopted
AIA petitions that raise the same or substantially the same prior art or arguments that were raised in an earlier-filed petition, whether raised by the same or a different petitioner, should be denied. Not Adopted

The PTAB looks at each case by itself and determines how to handle the multiple proceedings based on the facts of each case. The PTAB focuses to ensure fairness and justice occur. The PTAB also takes into account whether the challenges raised in the different AIA proceedings are different or not. If the challenges are the same the PTAB leans more towards joinder, if the challenges are different the PTAB leans towards not joining.

Despite the variety of comments received from practitioners, the USPTO proposes keeping the current rules and did not propose any changes at this time.

(8) Extension to the Statutory One-Year Period to Issue a Final Decision

Practitioner Comments USPTO Response
The PTAB should continue the current strict adherence to the one-year statutory period and advocating that the granting of extensions should be rare. Adopted
The PTAB should be more generous with the use of the option to extend the one-year statutory period under certain circumstances. For example, commenters proposed that an extension of the one-year deadline would be appropriate under the following circumstances: (1) “where a comparative test(s) are deemed necessary;” (2) where there is “delay by the party not seeking the extension;” (3) “if there is a later-filed AIA proceeding on the same patent that will not reach a final decision until after the first proceeding is concluded;” (4) “where additional discovery is sought . . . in regard to secondary considerations or real party in interest;” (5) “in situations in which more time is needed to consider amended claims;” and (6) “where an irreplaceable, key participant becomes unexpectedly unavailable.” Not Adopted
The PTAB should allow extension in complex cases “in the interests of justness, fairness to the parties” and “to conduct a full and fair review of the record.” The commenters described examples of complex cases as including: (1) “where there is a complex situation with multiple proceedings;” (2) when “the [Patent] Owner is involved in multiple proceedings simultaneously;” (3) “when an invention is particularly complex;” (3) “where multiple AIA trials are consolidated or joined;” (4) “where there are a large number of parties involved;” and (5) “where the trial involves complicated discovery issues.” Not Adopted

AIA proceedings are required to have a final decision issued within one-year of the AIA proceeding being instituted. The PTAB is allowed an extension for certain circumstances but these circumstances are not very common.

The USPTO did not propose any specific circumstances where an extension of time should be allowed and are going to continue striving to hit the one-year deadline.

(9) Oral Hearings

Practitioner Comments USPTO Response
The PTAB should be more willing to permit live testimony of declarants. Live testimony should be considered when requested or when the issues turn on conflicting expert testimony. Not Adopted
The PTAB should revise the definition of “hearing” or “trial” to clarify that live testimony at the final hearing is part of an AIA trial. Not Adopted
The PTAB should alter its format for final oral hearings to allow each party to reserve time for a main and rebuttal argument. Not Adopted
The PTAB should clarify whether the parties are limited to presenting argument on issues specified in the oral hearing request. Adopted
The PTAB should provide the parties with additional days to permit exchange and conference on demonstratives. Adopted
The PTAB should revise its guidelines on the nature of demonstrative exhibits at oral argument to make them more “relaxed.” Not adopted
The PTAB should upgrade their technology resources so that hearings can be held in regional offices. Already in Progress
The PTAB should open hearing rooms at least 30 minutes before the scheduled hearing time to allow the parties to organize themselves and connect any equipment to be used during the hearing. Already in Use
The PTAB should allow a recess during oral argument to confer with an expert when there is a question of specific claim construction. Not Adopted
The PTAB should have all judges of an AIA proceeding available for multiple session final arguments. Adopted in Part

Practitioners may currently request an oral hearing before the PTAB. The PTAB determines whether to allow an oral hearing on a case-by-case basis. The PTAB typically allows an oral hearing if it believes the oral hearing will assist in the final decision

The USPTO proposes to provide more guidance on the PTAB trials FAQ section on their website about whether live testimony is limited to issues specified in the oral hearing request and to make all judges available for multiple sessions.

(10) General Topics

Practitioner Comments* USPTO Response
The PTAB should use word count instead of page limits Adopted
The PTAB should increase page limits for the petitioner’s reply to patent owner’s response and patent owners should be allowed to file a surreply to the petitioner’s reply to address new issues that appear in replies. Adopted in Part
The PTAB should continue outreach by roundtables and webinars. Adopted
The PTAB should amend Rule 42.52(d)(2) to state that cross-examination should ordinarily take place after any supplemental evidence relating to the direct testimony has been served, as opposed to filed, because supplemental evidence is served under Rule 42.64(b)(2), and not filed until after a motion to exclude has been filed, which occurs well after most depositions have taken place. Adopted

* Only practitioner comments that were adopted or adopted in part were included in this table. For a complete list of comments under general topics click here.

The USPTO proposes changing from page count to word count in the petition, preliminary response, patent owner response, and petitioner’s reply brief. The replies to patent owner responses to petitions is proposed to allow a 5,600 word count, the petition requesting inter partes review and petition requesting derivation proceeding are proposed to allow a 14,000 word count, and the petition requesting post-grant review and petition requesting covered business method patent review are proposed to allow an 18,700 word count. The USPTO also recently proposed changing the petitioner’s reply to twenty-five pages. The USPTO proposed to resolve the issue with difference between served and filed included in Rule 42.52(d)(2) and Rule 42.64(b)(2). The USPTO did not propose a specific amendment but instead is seeking more input from practitioners on how to resolve this issue.

The changes to word count and page limits are intended to increase efficiency of the PTAB, and using word count should allow the PTAB to get through filings more efficiently. General topic issues will continue to be heard by the USPTO and will allow more changes to be proposed at later dates.