America Invents Act: Creating “Rocket Docket” Patent Trials in the Patent Office

1. America Invents Act: Creating “Rocket Docket” Patent Trials in the Patent Office

2. Agenda • Overview of the old and new tools • New tools • Timing • Strategic considerations • Costs • Case studies exploring effectiveness of the new tools • Status of Rules Governing Procedures

3. Pre-9/16/12 PTO Tools

4. Post-9/16/12 PTO Tools

5. Summary of Major Areas of Change * PGRonly available for patents filed on or after 3/16/2013. Practically, PGR will not be implemented until approximately 2015.

6. Timing

7. PGR Challenger’s prior DJ lawsuit forfeits review entirely Patent app. filed after 3/16/13 Patent issues (likely 2015or later) Patent expires “Raised or reasonably could have raised” Estoppel 9 mos. 2 years PGR completed Request for PGR filed • Invalidity based on: • Patents • Printed publications • Prior use/sale • Insufficient disclosure • Etc.

8. IPR: Scenario A (no PGR, no lawsuit) Challenger’s prior DJ lawsuit forfeits review entirely Patent expires Patent issues “Raised or reasonably could have raised” Estoppel 9 mos. 2 years No PGR filed IPR Filed IPR Completed • Invalidity based on: • Patents • Printed publications • Double patenting

9. IPR: Scenario B (lawsuit) “Raised or reasonably could have raised” Patent issues Patent expires Estoppel No PGR filed, > 9 mos. elapsed 1 year 2 years Patentee lawsuit IPR must be filed within 1 year IPR Completed • Invalidity based on: • Patents • Printed publications • Double patenting

10. USPTO Proposed Timeline for Conducting PGR and IPR PO Response & Motion to Amend Claims Petitioner Reply to PO Response & Opposition to Amendment Decision on Petition PO Reply to Opposition to Amendment Final Written Decision Petition Filed PO Preliminary Response Oral Hearing 2 months 3 months 4 months 2 months 1 month Hearing Set on Request PO Discovery Period Petitioner Discovery Period PO Discovery Period Period for Observations & Motions to Exclude Evidence No more than 12 months Proposed Trial Practice Guide: Federal Register 77(27):6868, 09-Feb-2012

11. Procedures – “Rocket Docket” Patent Office Trials Sample Scheduling Order • 4 months for PO response to petition and amendment proposal, • 2 months for Petitioner reply, • 1 month for PO reply to Petitioner’s opposition, • 2-3 months for motions to exclude evidence and oral hearing, and • 2 months for final written decision.

12. Strategic Considerations

13. Maximizing Options Proactive Approach Other Opportunities • Notice letter from patentee • Stalled pre-litigation negotiations • Prior art search reveals new invalidating art • Litigation filed • License expiration Patent Monitoring Freedom to Operate Analysis Post-Grant Challenge

14. Benefits to Challenger • Cancellation of claims - - Avoid infringement • Freedom to operate • Amendment of claims • Intervening rights Patentee admissions Prosecution historyestoppel Createintrinsicevidence

15. Strategic Pros And Cons

16. Strategic Pros And Cons 16

17. Strategic Pros And Cons

18. Estoppel - Inter Partes Review

19. Strategic Timing: Inter PartesReexam v. IPR

20. Strategic Issues: PTO vs. Litigation

21. Practical Considerations and the Governing Rules

22. Procedures – “Rocket Docket” Patent Office Trials • Goal to improve timing over Inter Partes Reexaminations. • May increase likelihood of automatic stay “sticking.”

23. Procedures – “Rocket Docket” Patent Office Trials Appeal by either party to the CAFC

24. Procedures – Petition for an Inter Partes Review Petition = Summary Judgment Motion, Plus: • Identify all real parties in interest. • Identify all claims challenged and grounds on which the challenge to each claim is based. • Provide a claim construction and show how the construed claim is unpatentable. • Include statement of facts, identify the exhibit number of the supporting evidence relied upon to support the challenge and state the relevance of the evidence. • Provide copies of evidence relied upon, including any declarations. • Page limits for IPR (50) and PGR (70).

25. Procedures – Petition for an Inter Partes Review Board will conduct the proceeding so as to reduce the burdens: • Instituting a trial on a claim-by-claim, ground-by-ground basis. • Conference calls with a judge handling the case to decide issues quickly and efficiently and to avoid the burdens associated with filing requests for relief.

26. Procedures – “Rocket Docket” Patent Office Trials Post-Grant Review Inter Partes Review U.S. District Court • “Evidence directly related to factual assertions advanced by either party in the proceeding.” • Depositions not expressly identified. • Depositions of witnesses submitting affidavits or declarations. • What is otherwise necessary in the interest of justice. • Any nonprivileged matter that is relevant to any party’s claim or defense. • Includes any documents or other tangible things and the identity and location of persons who know of any discoverable matter. • Depositions of inventors, prosecuting attorneys, experts, employees.

27. Procedures – “Rocket Docket” Patent Office Trials Routine Discovery Additional Discovery • Documents cited. • Cross-examination for submitted testimony. • Information inconsistent with positions advanced during the proceeding. • Any discovery beyond routine discovery. • Can include additional live testimony. Requestby any party for additional discovery* * A party seeking additional discovery in IPR and derivation must demonstrate that the additional discovery is in the interests of justice. A party seeking additional discovery in PGR will be subject to the lower good cause standard.

28. Proposed Filing Fees (Single Patent)

29. Comments on the Rules – Legal Organizations Legal Organizations • Filing of a Petition with option to file “Supplemental Information” • Preliminary response using testimonial evidence • Initial evidentiary disclosures • Motions to amend claims - reasonable number • Pro Hac Vice not freely granted • “Reasonably could have raised” estoppel • Standard for claim construction - “Broadest Reasonable Construction” • Fees • Page limits • Timing of PO response • ABA • AIPLA • IPO • Association of Corporate Counsel • International Federation of IP Attorneys

30. Comments on the Rules – Companies Companies • Page Limits • Discovery • Scope of direct examination • Preliminary response by PO with testimonial evidence • Fees • Intel • Microsoft • Verizon • Google • Cisco

31. Potential Pitfalls Short Response Time Discovery • Respond to claim construction • Analyze prior art • Consider expert & secondary considerations • 4 months • Extensions unlikely • Ramifications of claim amendments Patentee Drafting Petition Discovery Petitioner • Grounds to raise? • Impact of standard of review? • Impact of claim constructions on litigation? • 2 months • Extensions unlikely • Responding to amendments & secondary considerations

32. Case Studies

33. Case Study #1: PGR (“All In”) Win PGR: freedom to operate, litigation over “Raised /reasonably could have raised” Estoppel Lose PGR: litigation resumes PGR (all invalidity bases) FTO analysis identifies patent X, issued 3 months ago, and multiple invalidity arguments • Best circumstances for use: • Strong, but complex invalidity positions • Strong prior use/sale, 101, 112 arguments • Strong 103, no 102, arguments • Decent non-infringement position File DJ action (stayed) Effectively infringement only

34. Case Study #2: IPR (“The Hedge”) Win IPR: freedom to operate, litigation over “Raised /reasonably could have raised” Estoppel Lose IPR: litigation resumes IPR (patents /printed pubs.) FTO analysis identifies patent X, issued 12 months ago, strong printed art and prior use/sale • Best circumstances for use: • PGR not available • Complex invalidity positions • Prior art positions, both printed and not printed • Strong 103, no 102, arguments • Weak non-infringement position File DJ action (stayed) Infringement, §112, and prior use/sale invalidity defenses

35. Case Study #3: IPR (“The Choice”) 3-6 year proceeding through appeal (potential litigation stay throughout); risk of conversion to IPR process Pre-9/16/12, receive invitation to license IP reexam (patents /printed pubs.) Win IPR: freedom to operate, litigation over “Raised /reasonably could have raised” Estoppel Lose IPR: litigation resumes IPR (patents /printed pubs.) Infringement, §112, and prior use/sale invalidity defenses File DJ action (stayed)

36. Case Study #4: Ex Parte Reexam: Old School Win ex parte reexam: freedom to operate, litigation over (No “estoppel,” but potentially argument estoppel) Ex parte reexam FTO analysis identifies patent X and multiple invalidity arguments Ex parte reexam Lose reexam: litigation resumes • Best circumstances for use: • Need to preserve some prior art based invalidity arguments for litigation • Weak non-infringement positions • Cost is a factor Litigation on all issues Patent Owner files lawsuit (stayed)