How Inter Partes Review Differs From District Court Patent Litigation
The America Invents Act of 2011 es- tablished several new proceedings at the U.S. Patent and Trademark Office (PTO) that allow parties to challenge the validity of issued patents. The most popular of these proceedings is inter partes review (IPR), which permits a party to challenge patents on anticipation and obviousness grounds using patents and printed publications.
IPR is an adversarial process that involves discovery and depositions, is subject to the Federal Rules of Evidence, and culminates in oral argument. Although IPR in these respects resembles patent litigation, there are significant differences between the two that patent attorneys—particularly litigators who wish to participate in IPR—should bear in mind. This article highlights some of those differences.
IPRs are controlled by the Patent Trial and Appeal Board (Board) and are managed on a day-to-day basis by administrative patent judges (APJs).1 APJs must be "persons of competent…scientific ability"2 and are commonly drawn from the ranks of former patent practitioners and patent examiners; thus, APJs already should be familiar with the relevant law and technology when they come to the proceedings.3
The adversaries in an IPR are the party challenging the patent (petitioner) and the owner of the patent being challenged (patent owner). Each must be represented by a lead and a back-up counsel.4 While lead counsel must be registered to practice before the patent bar, back-up counsel need not be so registered and may be admitted pro hac vice upon a showing of good cause.5 For example, the Board recently admitted an unregistered attorney pro hac vice as back-up counsel in an IPR upon a showing that she was an experienced litigator and had "an established familiarity with the subject matter at issue."6
Named parties in an IPR must identify any "real parties-in-interest" to the Board.7 This allows the Board to identify potential conflicts and to prevent a real party-in-interest from challenging a patent if it has been estopped from doing so pursuant to an earlier proceeding.8 Although a determination as to who is a real party-in-interest is fact dependent, some bright lines can be discerned. An entity that funds and directs control of an IPR, for example, will likely be considered a real party-in-interest.9
Unlike litigation, which can be initiated with a simple notice pleading, an IPR begins with the submission of a petition showing that "there is a reasonable likelihood that the petitioner would prevail with respect to at least one of the claims challenged."10 The patent owner thereafter may submit a preliminary response opposing the petition, and the Board's decision to grant or deny a petition based on the petition and preliminary response is nonappealable.11 In view of these obstacles, a petitioner should be prepared to present its best arguments and proofs in its first submission to the Board. Notwithstanding this initial inconvenience, an IPR petitioner ultimately enjoys a lower burden of proof than a litigant: Whereas invalidity in litigation must be proven by clear and convincing evidence, invalidity in an IPR need only be established by a preponderance of evidence,12 and based on the broadest reasonable interpretation of the challenged claims.13
If the Board decides to grant the petition and initiate IPR proceedings, it will issue a scheduling order setting deadlines for the parties' subsequent submissions, including the patent owner's response to the petition and the petitioner's reply thereto; the owner's motion, if any, to amend the challenged patent claims and the opposition and reply thereto; and motions to exclude evidence and oppositions and replies thereto.14 One month later, the APJ assigned to the IPR will hold an initial conference call with the parties to discuss any motions they intend to file and any changes to the scheduling order deadlines.15 As in litigation, some of these deadlines can be changed by stipulation.16 Unlike in litigation, the entire IPR proceeding must be completed within a year after the date the IPR is initiated.17 Parties to an IPR thus must either cooperate or communicate with the APJ by conference call to resolve disputes in an expeditious manner.
IPR motions generally will not be entered without prior authorization of the Board,18 which must be secured during the initial or subsequent conference calls with the APJ.19 (Some exceptions include motions to seal, requests for rehearing and motions to exclude evidence.20) A party cannot appeal the Board's decision on a motion, though it may request rehearing within 14 days of the decision.21 Such a request, however, does not toll the deadline for any action that must be taken under the decision.22 In view of these considerations, parties to an IPR should not expect to rely routinely on motions to seek relief from IPR rules and Board decisions.23
Discovery in IPR is far from the open-ended process it is in litigation. Whereas litigants typically conduct discovery of each other simultaneously and in advance of substantive arguments to the court, parties to an IPR are expected to conduct discovery on a sequential basis, according to the schedule of written submission to the Board.24 For example, after the IPR is instituted, the patent owner should depose the declarants who supported the petition; after the patent owner has filed its response to the petition, the petitioner should depose the declarants who supported the response; and after the petitioner has filed its reply to the response, the patent owner should depose the declarants who supported the reply.
IPR discovery is limited not only in terms of time but also scope. There are three basic forms of IPR discovery: "mandatory initial disclosures," "routine discovery," and "additional discovery."25 Importantly, none of these is subject to the Federal Rules of Civil Procedure (FRCP).
"Mandatory initial disclosures" in fact are not mandatory: They may be either agreed upon by the parties, or granted upon a motion if the parties do not agree.26 These initial disclosures identify potential witnesses and sources of relevant information within a party's possession, custody or control.
"Routine discovery" includes exhibits cited in a paper or testimony and cross-examination of the opposing party's declarants.27 Litigators should note that "routine discovery" also imposes a duty on the parties to disclose any non-privileged, relevant information that is inconsistent with a position advanced by a party during the proceedings.28 This duty goes beyond discovery obligations imposed by the FRCP For example, a patent owner who relies on unexpected results to rebut an allegation of obviousness is expected to provide the petitioner, unprompted, with any nonprivileged evidence that is inconsistent with those results.29
"Additional discovery" must either be agreed upon by the parties or granted upon a motion showing that such discovery is in "the interests of justice."30 The following factors discussed by the Board in Garmin Int'l v. Cuozzo Speed Tech.31 typically are considered in determining whether the "interests of justice" are met: (i) there must be more than a possibility and mere allegation that useful information will be found; (ii) the additional discovery cannot simply seek the opposing party's positions and the bases therefor; (iii) information that a party can reasonably figure out or assemble without a discovery request would not be in the interests of justice; (iv) instructions for additional discovery should be easily understandable; and (v) requests for additional discovery should not be overly burdensome.32 Board decisions often focus on the first factor, which requires a showing of "usefulness," i.e., that the additional discovery would be favorable in substantive value to a contention of the party moving for discovery. 33 As Garmin notes, the "usefulness" standard is higher than the basic relevance standard applicable to discovery in litigation.34 In view of the high "usefulness" standard and the other Garmin factors, motions for additional discovery are often denied.