Brilliant New Book on Ethics in Prosecution 2015 Edition Out Now!

By David Hricik

Proud to announce that the 3rd edition of Patent Ethics: Prosecution that I co-authored with Mercedes Meyer is now available here!  This edition adds a massive amount of new material to deal with the new PTO ethics rules and the fast-moving, roller coaster world of ethical issues in patent practice!

From the description:

Patent Ethics: Prosecution (2015 Edition), by David Hricik and Mercedes Meyer, is an essential guide to the ethical issues arising in the course of the patent prosecution process. By providing relevant rules and case law, it allows practitioners to identify ethical problems before they arise and to address them most effectively when they do. Patent Ethics: Prosecution is one of two volumes on patent ethics — the second focuses on litigation — and is the first of its kind to combine the United State Patent and Trademark Office (PTO) rules with commentary by the authors, which distills the authors’ own experience and expertise in patent prosecution into effective practice strategies.

The 2015 Edition is particularly relevant considering the significant ramifications with the United States Patent & Trademark Office (USPTO) repealing its existing rules, the USPTO Code of Professional Responsibility, and replacing them with the new USPTO Rules of Professional Conduct. Furthermore, the 2015 Edition also comprehensively discusses ethical issues of major concern for patent law practitioners such as:
•   The increase in malpractice claims based upon patent prosecution as well as recent significant verdicts of $30 million and $70 million.

•   The USPTO’s Office of Enrollment and Discipline’s vigorous enforcement efforts, continued persistence in asserting a broad view of its jurisdiction, and resulting increase in the volume of case law and other authorities.

•   The troublesome issue of best mode and the America Invents Act.

•   The various ethical issues surrounding patent agents.

The 2015 Edition features new analysis of current client conflicts in patent practice, including when prosecution and opinion work become “adverse” to a client, the conflicts of interest created by the AIA’s approach to the best mode, and duty of candor post-Therasense. It also includes an updated PTO Code completely annotated with OED decisions on each provision.

Makes a perfect Christmas present, too!  Buy one for every lawyer in your firm!  Heck, buy two so they have one at home!

Guest Post: PTAB Partial Institution of IPR and CBM Review Violates the AIA– But There Is a Simple Fix

Guest Post by Timothy K. Wilson, Senior IP Counsel, and John S. Sieman, Patent Counsel, SAS Institute Inc.

In the provisions of the America Invents Act (AIA) governing inter partes review (IPR), post-grant reviews (PGR), and transitional covered business method review (CBM), Congress provided the Patent Trial and Appeal Board (PTAB) with a binary choice: to either institute or not institute a review of the challenged claims, i.e., the claims identified by the petition.  Rather than pursue one of these two options, however, the PTO took a different path in its implementation of the AIA, permitting the PTAB to select only some challenged claims for review.  The excluded claims receive no further review and the final written decision does not address the patentability of those claims.  Worse, because a decision whether to institute a review is not subject to appeal, this practice (which we refer to as “partial institution”) strips petitioners of their statutory appeal right as to the excluded claims.  The PTAB has already followed the partial institution practice for dozens of IPR and CBM trials.  There is, however, a simple fix for future reviews.

The binary nature of the decision whether to institute review arises from the plain language of the statute, which includes section 314 entitled “Institution of inter partes review”:

(a) Threshold.— The Director may not authorize an inter partes review to be instituted unless the Director determines that the information presented in the petition filed under section 311 and any response filed under section 313 shows that there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition.

(b) Timing.— The Director shall determine whether to institute an inter partes review under this chapter pursuant to a petition filed under section 311 within 3 months after—

(1) receiving a preliminary response to the petition under section 313; or

(2) if no such preliminary response is filed, the last date on which such response may be filed.

(c) Notice.— The Director shall notify the petitioner and patent owner, in writing, of the Director’s determination under subsection (a), and shall make such notice available to the public as soon as is practicable. Such notice shall include the date on which the review shall commence.

(d) No Appeal.— The determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.

35 U.S.C. § 314 (emphasis added).

Under the AIA, petitioners choose which claims of a patent to include in a petition.  The statute refers to these as the “challenged” claims.  35 U.S.C. § 312(a)(3) (requiring an IPR  petition to “identif[y], in writing and with particularity, each claim challenged”); 35 U.S.C. § 314(a) [fn1] (referring to “claims challenged in the petition”).

The PTAB may institute an IPR if “there is a reasonable likelihood that the petitioner would prevail with respect to at least one of the claims challenged in the petition.”  35 U.S.C. § 314(a).  Because the determination “whether to institute” the IPR is a preliminary decision, the statute makes it “final and nonappealable.”  35 U.S.C. § 314(d).  Congress chose to make appeals available only at the conclusion of the IPR proceeding, after the PTAB issues a final written decision.  35 U.S.C. § 319 (permitting “[a] party dissatisfied with the final written decision [to] appeal the decision pursuant to sections 141 through 144”); 35 U.S.C. § 141 (permitting “[a] party to an inter partes review … who is dissatisfied with the final written decision … [t]o] appeal the Board’s decision only to the United States Court of Appeals for the Federal Circuit”).

The statute further requires the PTAB to issue a final written decision “with respect to the patentability of any patent claim challenged by the petitioner.”  35 U.S.C. § 318(a) (emphasis added).  The set of “claim[s] challenged by the petitioner” depends on which claims the petitioner includes in the petition, not on a later decision by the PTAB.  The statutory language leaves little doubt the final written decision—the appealable one—must address the patentability of every claim challenged in the petition.

This is not how the PTAB has implemented IPR and CBM.  For example, in the very first IPR, the PTAB reviewed a petition that challenged claims 1-20 of a patent, instituted review only on three claims, and did not address the patentability of the other 17 challenged claims in the final written decision.  Garmin Int’l Inc. v. Cuozzo Speed Techs. LLC, Case IPR2012-00001, paper 59, pp. 2, 49  (Final Written Decision of Nov. 13, 2013).   Even the PTO’s regulations that govern IPR trials contradict the statute. These regulations permit the PTAB to “authorize [inter partes] review to proceed on all or some of the challenged claims” 37 C.F.R. § 42.108(a).  Because the regulations violate the statute, the PTO exceeded its authority in promulgating them, opening up the PTO to a potential challenge under the Administrative Procedures Act.

While the PTAB’s practice of partial institution may help complete trials within the required one-year period, the practice violates the statute and strips petitioners of a statutory appeal right as to excluded claims.  In addition, the problems arising from partial institution of IPR and CBM review will spill over into litigation, as excluded claims return to district courts, presumably without estoppel.  35 U.S.C. § 318(e)(2) (limiting estoppel in civil actions to “an inter partes review of a claim in a patent under this chapter that results in a final written decision”).  Partial institution also complicates decisions on whether to stay a litigation pending the PTO proceeding.  And even if a court does stay a an infringement suit to let the PTAB resolve the petitioner’s arguments, the court may later need to review the same arguments as to the non-instituted claims, and may reach a different or even inconsistent result.

Fortunately, the PTAB can address this problem without impairing its ability to quickly resolve cases.  Even under current partial institution practice, decisions whether to institute review already address all challenged claims, identifying some claims that are likely invalid and other claims for which the petitioner has not met its burden.  If the PTAB instituted on all challenged claims as it should, that would allow the parties to decide how much of the existing page and time limits to use on each challenged claim.  These limits would still prevent trials from ballooning out of control.  PTAB judges can continue to focus their efforts on the claims identified as likely unpatentable.  And by the end of the trial, if the PTAB judges have not changed their opinions that some claims should survive, they would only need to carry the analysis about those claims forward from the institution decision into the final written decision.  By instituting review of all challenged claims and including patentability analysis of all challenged claims in the final written decision, the PTAB would restore the right to appeal the final written decision as to all challenged claims.

[fn 1] Citations provided here are for IPR proceedings; the parallel sections governing CBMs and PGRs contain similar language.

Ex Parte Patent Appeal Results

The chart above shows the results of ex parte appeals grouped by the fiscal year of the appeal decision. In the data, I eliminated administrative dismissals and other non-merits actions from consideration. At this point, I don't have a good explanation for the gradual shift in outcomes.  It may be driven by the underlying patentability of the claims; the selection of cases for appeal; shifts in the law; and also changes in Board decisionmaking.  2012 figures presented here are only through July 2012.