Guest Post on New Inter Partes Reexamination Standard

Guest Post by Jon E. Wright and Joseph E. Mutschelknaus of Sterne Kessler Goldstein & Fox, PLLC1

On September 16, 2011, the America Invents Act (“AIA”) changed the threshold standard for initiating inter partes reexamination. The new standard requires a requester to demonstrate that:

[T]he information presented in the request shows that there is a reasonable likelihood that the requester would prevail with respect to at least 1 of the claims challenged in the request.

America Invents Act – Sec. 6(c)(3)(A)(i)-(ii). We refer to the new standard as the “RLP” standard. The RLP standard is significant because it matches the future standard for initiating inter partes review under the AIA.

This post addresses the new RLP standard. First, we review case law surrounding the “reasonable likelihood” standard as it exists in other contexts such as preliminary injunctions. Next, based on our analysis of every single post-AIA inter partes reexamination the PTO has acted upon, we analyze how the Office has been applying the new RLP standard in reexamination orders. Finally, we consider how inter partes reexamination requests (and future petitions for inter partes review) should be structured for the best chance at meeting the RLP threshold.

The “Reasonable Likelihood” Standard

Patent practitioners are familiar with the “reasonable likelihood” standard in the context of preliminary injunctions. For a court to grant a preliminary injunction, a patentee must demonstrate four factors, one of which is a “reasonable likelihood of success on the merits.” Ranbaxy Pharm., Inc. v. Apotex, Inc., 350 F.3d 1235,1239 (Fed. Cir. 2003). This standard may be instructive in learning how the Office will deal with the new RLP standard for current inter partes reexamination requests and inter partes review petitions later this year.

According to the Federal Circuit, the reasonable likelihood of success standard for preliminary injunctions must be made “in light of the presumptions and burdens that will inhere at trial on the merits….” Id. In the context of inter partes patentability proceedings at the Office, claims do not enjoy the presumption of validity that they do before a district court. Rather, the standard of proof before the Office is the “preponderance of evidence” standard. MPEP § 706.I. The same is true for the new inter partes review proceedings. See AIA § 316(e). Therefore, Requesters (or Petitioners) must demonstrate a “reasonable likelihood” that they can invalidate at least one claim of the patent for which reexamination is sought under the preponderance of the evidence standard.

But what does this really mean? In the context of preliminary injunction proceedings, the Federal Circuit has stressed that “[a]t this preliminary stage, the trial court does not resolve the validity question….” New England Braiding Co., Inc. v. A.W. Chesterton Co., 970 F.2d 878, 882-83 (Fed. Cir. 1992). Rather, the decision maker “must … make an assessment of the persuasiveness of the challenger’s evidence, recognizing that it is doing so without all evidence that may come out at trial.” Id. This is just as true in inter partes reexamination (or review) because both parties to the proceeding are permitted to submit additional evidence in support of their positions, at least during the first round of replies and comments.

Moreover, in addition to recognizing that it may not have all the facts, the decision maker must also assess the persuasiveness of the evidence. This may include making credibility determinations. As the Federal Circuit stated in New England Braiding, “[a] credibility determination is well within the court’s province when ruling on a preliminary injunction motion.” Id.

If the preliminary injunction standard for determining a reasonable likelihood of success on the merits is any guide, we can thus surmise the following with respect to requests for inter partes reexamination (or future petitions for inter partes review):

  • The request or petition must be based on “evidence,” which at the initial stage will likely be limited to prior art patents or printed publications;
  • The request or petition must reviewed by the Office under the “preponderance of evidence” standard, with the burden placed on the requester or petitioner;
  • The request or petition need not conclusively demonstrate unpatentability;
  • The Examiner (or Board) may properly make credibility determinations; and
  • The Examiner (or Board) must make an assessment of the persuasiveness of the evidence and accompanying argument set forth by the requester or petitioner, recognizing that it does not have all the evidence.

As shown next, the Office appears to be adhering to these standards.

The Office’s Application of the RLP Standard

As of the date of this post, the Office has acted on forty-two (42) requests for inter partes reexamination that were filed on or after September 16, 2011. The authors analyzed each one to determine how the Office is implementing the new RLP standard. Anecdotal evidence suggests that the Central Reexamination Unit is still struggling with the new standard. But nonetheless, several observations can be made from these orders.

First, despite the change, early data suggests that the Office continues to be granting reexaminations at about the same rate under the new RLP standard as it was under the old “substantial new question” or “SNQ” standard. In fiscal year 2011, for example, the Office granted 342 inter partes reexamination requests out of 366 total decisions. That accounts for a 93% grant rate under the old SNQ standard. Of the 42 orders issued under the new RLP standard, 38 have been granted (at least in part), putting the current grant rate under the RLP standard at about 90%. Thus, while the sample set is still limited, the Office appears to be granting reexamination requests at about the same rate under the RLP standard as it had been under the SNQ standard. This runs contrary to the general belief among practitioners that the RLP standard would be stricter than the SNQ standard.

 Wright Guest Post

Second, in finding an RLP, the Office appears to be focusing on the persuasiveness of the requester’s evidence on the merits. The Office is also correctly placing the burden of establishing the reasonable likelihood prevail on the requester. In cases where RLPs are denied, the Office frequently uses language like, “Requester has failed to show the claim step is taught by the reference.” (See, e.g., 95/001,809, p. 6.) At the same time, the Office is not shying away from addressing the underlying legal issues presented in the request, such as claim construction. For example, in several cases, the Office explicitly construed claim terms, and then made a finding that the cited references do not teach claims under that construction. (See, e.g., 95/001,785, 95/001,792.) Thus, in establishing whether there is an RLP, the Office is considering the merits of the cited prior art against the claims on both factual and legal bases.

Third, while the importance of the art’s strength against the claims may have increased with the RLP standard, the importance of the art’s “newness” may have decreased. Under the SNQ standard, the Office would almost always take into account the prosecution history and discuss whether the cited prior art was presented a new light. In contrast, of the forty-two (42) orders issued under the RLP standard, only three (3) make any discussion of the prosecution history or cumulativeness of the art. And in no case did this appear to be dispositive. This is consistent with the AIA, which made the newness requirement effectively discretionary on the Office. See AIA codified at 35 U.S.C. § 325 (“In determining whether to … order a proceeding under [the inter partes reexamination/review chapter], the Director may take into account whether, and reject the … request because, the same or substantially the same prior art or arguments were previously were presented to the Office.”) (emphasis added). In sum, the weight given to the art’s newness appears to be waning.

Practice Tips

Given the above observations, drafting a strong, persuasive request supported by quality prior art references remains paramount under the new RLP standard, just as it was under the old SNQ standard. But in view of the Office’s tendency to now focus more intently on the merits of the individual rejections under the new standard, requesters may want to provide and justify claim constructions in their initial requests. Also, requesters may want to consider including expert declarations with their request, especially if the art upon which the reexamination is based is complicated and would benefit from expert clarification or explanation. Keep in mind, though, that reexaminations must still be based on patents and prior-art publications, not expert declarations.

At the same time, requesters may need less discussion in their requests of how their art is noncumulative or new with respect to what the Office has already considered. This could result in structural change to reexamination requests. For example, prior inter partes reexamination requests usually included two separate questions, one developing and showing the SNQ and a second section with the proposed rejections—i.e., the manner and pertinency of applying the prior-art references. Now, with the increased focus on the substantive merits of the proposed rejections and the decreased focus on newness or cumulativeness of the art, the second section becomes the most important section. Indeed, a fully developed set of proposed rejections would seem to be sufficient in proving up the RLP standard.

In sum, the authors believe it was a good idea for Congress to immediately implement the RPL standard for inter partes reexaminations. It gives patent practitioners a taste of what is to come for inter partes review under the AIA, and the ability to prepare for that change. It also appears as if the Office is adopting evaluation standards similar to those used the context of preliminary injunctions. We hope this post provide some new insight into the RLP standard—a standard with which we will have to live for the foreseeable future.

1Jon Wright is a Director and Joe Mutschelknaus is an Associate at Sterne Kessler Goldstein & Fox, PLLC www.skgf.com. The views expressed herein are the authors’ alone and should not be attributed to the firm or its clients.

Edited on 2/2/2012 to reflect that it was Congress's decision to immediately implement the RPL standard.

49 thoughts on “Guest Post on New Inter Partes Reexamination Standard

  1. Here is a Clearinghouse hypothetical
    We have here a Paint Roller. Something you put onto a cylinder that has a handle and when you put paint on it you then roll the cylinder that has the Paint Roller on it onto the wall to paint. Now do you think adding fluff,stuff or rough should afford you another Patent on that same Invention?

  2. it was appealed, of course, because it read on the prior art and WAS insconsistent with the specification.

    It was appealed because it read on the prior art, because reading a claim on the prior art tends to lose the applicant his case.

    There is no indication anywhere in the decision that the claims as construed would not read on the embodiments in the specification, nor that the point was even specifically argued by the applicant.

    The applicant said the claims read on only the disclosed embodiments. The Board said they read on the disclosed embodiments and also the prior art. The Board was absolutely right and completely reasonable. Broad claim language makes for broad claims, and broad claims tend to get invalidated by prior art.

  3. Ned a luminary in the patent bar, another of those rare Harvard Law graduates who practiced patent law

    Credentials don’t change the fact that the passage from the spec you cited is not a “definition”.

  4. Ned: here are legions of cases that say that a claim construction that fails to read on any of the embodiments is “rarely” or “seldom” correct.

    Jexus xxxxxxxx cripes, Ned, put the goalpost back. We were talking about “preferred embodiments,” not “any embodiments.”

  5. No sane person?
     
    Really? 
     
    I remember sitting in a bar discussing this case at the time with a luminary in the patent bar, another of those rare Harvard Law graduates who practiced patent law.
     
    He agreed at the time that the Federal Circuit blew it.

  6. The specification actually defines the term in so many words.

    That’s not a definition, it’s a description.

    No sane person would consider “the acoustic isolator is formed by selectively reducing the thickness of the structure member” as a definition of “integrally formed”. That doesn’t even make sense. It’s clearly describing a completely different aspect of the formation of the isolator.

    What’s more, it’s nothing to do with the applicant’s argument before the Board and the Federal Circuit that “integrally formed” means “made as a single piece”.

  7. But the construction adopted by the PTO would not read on the specification.

    The Federal Circuit seemed to think it would.

    “The examiner [...] clearly meant that he interpreted the phrase “integrally formed” to encompass devices that had a compliance area fixedly attached to a support member, as in Brown.”

    “The Board also adopted this interpretation citing numerous cases in which the word “integral” had been interpreted broadly to encompass multi-piece structures.”

    No indication at all that “integral” would not also encompass one-piece structures, according to the Board’s construction. In fact, there’s no sign that anybody even raised the argument that the examiner’s construction would not read on the preferred embodiments. It’s certainly not “why the PTO claim construction was appealed”.

  8. No, IANAE, read the specification.  I have given the patent number of the issued patent a number of times before.  The specification actually defines the term in so many words.  It just does not say that it is a definition.

  9. the specification which had all but defined the term

    Defining the term is a very particular thing, which is either done or not. “All but defining” is something most people call “giving examples”, and anybody who has ever seen a patent will tell you that the claims are intended to be broader than the examples in the spec. No matter how many times you consult the spec or how many mutually consistent examples there are in the spec.

  10. A claim that would read on the one would not read on the other.

    I think you’ll find that it depends on just how broad the claim is. A broad enough claim will read on pretty much anything, as anybody who has ever done any patent prosecution should know.

  11. Seems to me eminently reasonable for a USPTO Examiner in the FAOM to apply an out of context BRI standard to claim terms.

    Because appying a known out of context meaning is…

    Hm, no, I cannot figure out one reason at all why purposely applying an out of context meaning has any valid purpose.

  12. Ned thanks again,for contrasting the reasonable “seldom” standard with Rader’s “never” standard. For me “never say never” is wise counsel.

    I’m intrigued by what Rader means when he uses the word “consistent”. Which case should I read, please?

    A majority of applications at the EPO suffer claim narrowing amendment during prosecution, and would go to issue with a specification that is “inconsistent” with the allowed claims, but for the fact that the EPO insists on applicant “conforming” what the specification describes as the invention with what the allowed claims define as the invention. This “conforming” process restores consistency and does away with any need to consult the file wrapper when construing the claim.

    Seems to me eminently reasonable for a USPTO Examiner in the FAOM to apply an out of context BRI standard to claim terms. That should prompt a Phillips-inspired exchange of views about contextual meaning, whereby the claims that issue are reasonably clear, unambiguous and consistent with the specification, the dictionaries and with the way the intended reader uses the termiinology in the real world.

    It would still be nice though, to have a specification consistent with the narrowed allowed claims. Then I would not have to read the entire voluminous file history, and all the conflicting jurisprudence, just in order to hazard a guess at what the claim means.

  13. If Ned is right and applicant has no right to amend during the inter partes reexam, then bri should not apply. The federal circuit, in american academy, said that bri applies during prosecution because the applicant has a right to amend the claims to put his intended meaning into the claim, so bri during prosecution is not unfair to applicant. But if applicant can’t amend during inter partes reexam, then bri is unfair to applicant.

  14. Sure there is. There are legions of cases that say that a claim construction that fails to read on any of the embodiments is “rarely” or “seldom” correct. There is even a recent case penned by Rader that held that a BRI that was inconsistent with the specification was unreasonable for this reason. (I think Rader’s opinion and Morris are hard to reconcile.)

  15. Nice. But to be clear, the prior art clamped a rubber pad between two plates, one being the casing. The invention was to thin a casing about the point of contact of the motor to the casing. Both reduced coupling of vibrations from a motor to the casing, but did so with entirely different structures and in different ways.

    A claim that would read on the one would not read on the other. That is why the PTO claim construction was appealed. Yet it was sustained because in other patents the term being used covered sandwich structures.

  16. Ned: At least a “proper” construction consults the specification first and will not tolerate a construction that would not read on the preferred embodiments

    What the hexx are you talking about? No canon of claim construction and no case law requires every “properly” construed claim to read on embodiments described in the specification as “preferred.” I’m pretty sure the relevant case law warns against falling into traps like that.

  17. A thinned casing and a sandwich structure are two different animals entirely. They are not even close to the same concept.

    What if you remove the crust from the bread and pinch the edges of the slices together?

  18. Max, Phillips did not overturn cases such a Morris.  That case remains predominate in any assessment of BRI, as it lays it all out and discusses it in detail.  It is cited in the MPEP.  It is the law.

    Which means the examiner can construe claim terms as one of ordinary skill in the art would construe them and the only practical restraint is whether the claim terms are defined in the specification.  The Federal Circuit justified the claim construction in Morris relying on prior case interpretations of other patents, for Gods sake, of the disputed term "integral," and gave no weight at all to the specification which had all but defined the term as being limited to a thinned casing.  

    At least a "proper" construction consults the specification first and will not tolerate a construction that would not read on the preferred embodiments.

  19. Malcolm, so, assuming what you say is true, you seem to suggest that it would make sense to simply use Phillips in the new inter partes review.  Is that what I am hearing?

  20. Well thank you Ned but, from your two paragraphs on just one isolated case, I still do not understand why Phillips and BRI cannot generally be reconciled.

    But that’s probably because of my 40 years experience in Europe, where BRI co-exists with Article 69 of the EPC, which requires the scope of protection to be defined by the claim, interpreted in the light of the specification.

    Fixing what a claim means is not rocket science. It is quite simple really. In just one case, lawyers (and, even more so, judges)can make things more complicated than they are, or that they need be.

  21. it is entirely possible that a claim term can be construed independently from the specification and not cover any embodiments. That was, in fact, what happened in Morris

    Did I say that BRI is ALWAYS consonant with Phillips? Nope. Assuming what you say about Morris is true, it doesn’t disprove my statement. The fact is that most of the time BRI and Phillips give similar results. Why is that? Because most prosecutors use terms the way that ordinary artisans would use the terms. The obvious exception, of course, is the softie woftie arts where practitioners like to load up their claims with made-up b.s. terms that have no clear purpose except to interfere with prior art searches.

  22. Phillips was primarily about whether the specification was to be consulted first or whether it was to be used as a confirmation. Its holding was that it was to be consulted first, indicating that a construction that was inconsistent with the specification would not be correct.

    BRI, in contrast, uses the discarded Vitronics approach where the ordinary meaning of a term prevails unless the specification contains definitions to the contrary. See, Morris on this point as well. As a result, it is entirely possible that a claim term can be construed independently from the specification and not cover any embodiments. That was, in fact, what happened in Morris and was the very point on appeal.

  23. IANAE, I know we have discussed this before.  But if the claim were construed to MEAN the sandwich structure of the prior art as the Federal Circuit affirmed, it would not cover the thinned casing disclosed.  

    A thinned casing and a sandwich structure are two different animals entirely.  They are not even close to the same concept.

  24. Refreshing statement. Plausible and sensible.

    Is there an intelligent and rational rebuttal of it? Until then, I will assume it also to be correct.

    Nice circlejerk there pal. Your agreeing with a crazyman statment means only that you are acrazyman yourself.

    T O O L

  25. In nearly all cases, BRI is consonant with the correct application of Phillips, desperate whining from the softie-woftie crowd notwithstanding.

    LOLOLOLOL

    Now we really know that MM is not playing with a full deck, works for the Office and has no clients, or both.

    Note that the complaints against BRI have NEVER been constrained to any single art unit (softy wofty or not).

    T O O L

  26. I would urge you to read In re Morris where “integrally formed” was distorted by the examiner in a way that would not read on any disclosed embodiments but instead read on the prior art.

    I think you’ll find that the disclosed embodiments of Morris would infringe the claim as construed. We’ve had this conversation before.

  27. “BRI is consonant with the correct application of Phillips”.

    Refreshing statement. Plausible and sensible.

    Is there an intelligent and rational rebuttal of it? Until then, I will assume it also to be correct.

  28. With all due respect, Malcolm, this simply is not true as anyone with substantial  experience with reexaminations will attest.  At a minimum, I would urge you to read In re Morris where "integrally formed" was distorted by the examiner in a way that would not read on any disclosed embodiments but instead read on the prior art.  Yet that claim construction was AFFIRMED.

  29. At a minimum therefor, the whole rational for BRI to be used in reexamination is absent. I would expect, at minimum, therefor, that BRI not be used. The standards for claim construction as defined by Phillips v. AWH for the courts should prevail.

    In nearly all cases, BRI is consonant with the correct application of Phillips, desperate whining from the softie-woftie crowd notwithstanding.

  30. Correct me if I am wrong, but he new inter partes review is not so much a re-examination of a patent, as it is a trial on validity. The petititioner files, the PO responds (optionally), the PTO orders reexamination. Next the PO may respond and may take testimony. The petitioner may file comments. The PO has one opportunity to file a motion to add new claims. Both sides have a right to an oral argument. The Board decides.

    Notice here, that there is no examiner. There is no office action. The trial is completely adversarial. There is no absolute right to amend any claim.

    This is a validity trial, not an examination by the PTO.

    At a minimum therefor, the whole rational for BRI to be used in reexamination is absent. I would expect, at minimum, therefor, that BRI not be used. The standards for claim construction as defined by Phillips v. AWH for the courts should prevail.

    Next the constitutionality of the procedure must be questioned. The right to have a de novo review by a court has been removed. This effectively prevents the PO from having a trial by jury in an article III court on disputed factual issues involved in validity. To the extent that the PO has a constitutional right to a trial by jury on such disputed factual issues, the new procedure may be unconstitutional.

  31. The PTO doesn’t, and never did, reject nearly enough claims for 90% of issued patents to survive an invalidity counterclaim completely intact

    Make up things much?

  32. changing one rubber stamp for another rubber stamp

    If the courts threw out enough “weak” cases on summary judgment that 90% of the remaining plaintiffs ultimately prevailed on the merits at least in part, you’d be screaming about the rest of the plaintiffs being denied access to justice. And you’d probably be right.

    The PTO doesn’t, and never did, reject nearly enough claims for 90% of issued patents to survive an invalidity counterclaim completely intact. How would you feel if they did?

    This is apparently a forum where the overwhelmingly vast majority of requesters have a winning case. If that means there’s a rubber stamp at the front door, I can’t think of a better place to have a rubber stamp.

  33. the general belief among practitioners that the RLP standard would be stricter than the SNQ standard.

    Maybe it is a stricter standard, but the requests are meeting the standard anyway. Considering that only 11% of patents emerge unscathed from inter partes re-exam, a substantial new question seems to correlate strongly with a reasonable likelihood to prevail.

    It’s entirely possible that the PTO is simply getting the answer right, and pretty much every requester legitimately deserves to be there.

  34. Thus, while the sample set is still limited, the Office appears to be granting reexamination requests at about the same rate under the RLP standard as it had been under the SNQ standard. This runs contrary to the general belief among practitioners that the RLP standard would be stricter than the SNQ standard.

    Was there a poll taken about the “general belief”? If so, I missed it.

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