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Analyzing Post-Grant Review Proceedings in View of European Opposition Proceedings

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11.17.2011 | Legal Update

An important change to the United States patent system in the Leahy-Smith America Invents Act (AIA) is the introduction of post-grant review (PGR) proceedings that allows third parties the opportunity to request review of any newly issued or reissued U.S. patent based on a broad range of reasons. The laws enacting post allowance proceedings are found in new Sections 321329 of 35 U.S.C. and take effect on September 16, 2012. However, only patents issuing from applications filed on or after March 16, 2013 can be challenged, so these changes will gain particular relevance in subsequent years.

Any party may challenge a patent using the PGR process. However, unlike current re-examination proceedings, a PGR challenge may be for any reason, including non-patentability under any of 35 U.S.C.§§101, 102, 103, and 112 (except for best mode), and for double patenting. A request for PGR must be filed within 9 months of patent issue or reissue. After the period for PGR has expired, third parties can challenge a patent at the U.S. Patent and Trademark Office using inter partes review, which allows a third party to request review of any U.S. patent for double patenting, anticipation, or obviousness. An additional transitional post-grant program exists for business method patents. 

On its face, the new provisions for PGR are very similar to the European Patent Office opposition practice. Thus, a greater understanding of current opposition practice is helpful in determining the risks a newly granted patent will face under the new laws. Some of the more important provisions are:
 

   Post-Grant Review    EPO Opposition 
 Time Period  Patents filed after March 16, 2013 (i.e., filed under new first-to-file provisions)  Not relevant
 Time to Challenge  Within 9 months of issuing  Within 9 months of granting
 Board Composition  The Patent Trial and Appeal Board (reformation of the current Board of Patent Appeals and Interferences), which consists of 3 member panels, none of whom were involved in prosecution of the patent  The Opposition Division, which consists of 3 technically qualified examiners, 2 of whom were not involved in prosecution of the patent
 Basis of Challenge

 Grounds include:

  • unpatentable subject matter
  • anticipation/obviousness
  • 112 (except best mode)
  • double patenting
  • any novel or unsettled legal question

 Grounds include:

  • unpatentable subject matter
  • lack of novelty/inventive step 
  • the invention is not sufficiently described
  • subject-matter of the patent extends beyond the content of the application as filed
 Sufficiency Standard  At least one claim must “more likely than not” be unpatentable, or the petition raises a novel or unsettled legal question  Sufficiency of evidence is immaterial for admissibility of an opposition
 Identity of Third Party  Real party of interest must be identified  A straw man is permissible
 Claim Amendments  Claims may be amended but not broadened; a single motion amending the claims is allowed  Claims may be amended but not broadened; amendments may be allowed up to the date of the oral hearing
 Level of Proof  Preponderance of the evidence  Balance of probabilities (facts are more likely to be true than the other)
 Estoppel  For all grounds the petitioner raised or reasonably could have raised; no estoppel issues if matter is settled prior to decision on the merits  No estoppel
 Civil action  A civil action is stayed if it is filed after PGR is initiated  Infringement proceedings may be stayed depending on the court’s own opinion of the likelihood of the opposition succeeding
 Time frame  Final Decision will be issued within 1 year of the notice of grant of PGR (6 month extension for good cause)  Final Decision takes about 3 years
 Appeals  Federal Circuit  EPO Board of Appeals

 

In Europe, approximately 5% of European patents are opposed. Approximately 1/3 of the opposed patents are maintained as granted, 1/3 are maintained with amended claims, and 1/3 are revoked.1 Comparatively, only about 0.3% of U.S. patents are subject to the currently available, but much more limiting, inter partes re-examination procedure.2 Taking into account the number of patents that are opposed in Europe, it is conceivable that, in comparison to current inter partes re-examination procedures, up to an order of magnitude more U.S. patents will be adjudicated using PGR once the new laws come into effect.

The opposed European patents can be divided by sector, with chemistry patents being opposed the most (7.8% opposed from 2000 to 2008), followed by mechanical engineering (5.6% opposed). The lowest level of opposition is in the electrical engineering sector (2.2%).3 Further refinement shows even more diversity. For example, within the chemistry sector, 2.6% of organic fine chemistry patents, 8.5% of macromolecular/polymer patents, 8.7% of pharmaceutical patents, and 14.0% of food chemistry patents are opposed.4 One of the reasons suggested for this difference is that oppositions are more common when a product is covered by a single patent, such as in pharmaceuticals, in contrast to products covered by multiple patents, such as in microprocessors.5

The characteristics of the patents that are more likely to be opposed within the European opposition system have also been analyzed.  There is no reason to suggest a similar trend would not occur for U.S. PGR proceedings. Factors that increase the likelihood of opposition include: 

  • an increased economic relevance (using the number of designated states as a proxy);
  • a greater number of claims;
  • more references cited; and
  • more forward citations (how many other patents/application cite the patent).

Each of these factors, in some way, relates to the perceived importance of the patent, either by the patentees or by the industry. Some of the factors that affect outcome of the opposition proceedings are the length of pendency (positive correlation with revocation) and number of citations (negative correlation with revocation).6

While the information obtained from the European system can be valuable, there are significant and substantive differences between the new PGR process and European opposition proceedings that must be taken into account as well. Perhaps the greatest difference between the two proceedings is the difference in estoppel provisions. There is no estoppel in Europe, so a third party may be quite willing to oppose an important competitor’s European patent. However, under the new 35 U.S.C. § 325(e), a third party is estopped from raising any issue that was raised or reasonably could have been raised during PGR in both civil and administrative proceedings. Thus, the third party may decide upon a different course of action than PGR in the United States. The third party may either decide to forgo use of PGR proceedings as too risky or to “throw in the kitchen sink” and raise every “reasonable” issue. Alternatively, the third party may be much more likely to exit the PGR process via settlement before a final written decision triggers the estoppel provisions under 35 U.S. C § 328.

The PGR procedure will offer more opportunities to challenge U.S. patents without resorting to litigation. However, the introduction of this procedure will require a careful analysis, both by third parties in the decision of which patents to review and by patent owners to gain an understanding of the risks new patents face under the new law.

1 Statistics for EPO Propositions and Appeals – Update” 2010 by James Wilding, HLBBshaw Ltd.  4.7% opposed in 2009 and 5.2% in 2008, Date of Access, Nov. 2, 2011.

2 U.S. Patent Office IP Quarterly Report June 2011.  Date of Access, Nov. 2, 2011.  (Of note, within these proceedings, 71% of these patents are known to be in litigation.)

3 Scellato et.al., “Study on the quality of the patent system in Europe,” PATQUAL, March 2011.  Date of Access, Nov. 2, 2011.

4 Id.

5 European Commission, Pharmaceutical Sector Inquiry – Preliminary Report, Nov. 28, 2008.  Date of Access, Nov. 2, 2011.

6 See Scellato et. al.

This advisory was prepared by Nutter’s Intellectual Property practice. For more information, please contact your Nutter attorney at 617-439-2000.

This update is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.


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