STRONGER Bill Part 3: IPR Proceedings

Washington DC Capitol Building

by: Mitch Kline | July 5, 2017

 

Inter Partes Review proceedings have been the greatest detriment to the value of patents in the past decade. The consequences of IPRs and the incomplete rules surrounding them have been felt by patent holders, from individual inventors, to big pharma. Last week, four U.S. Senators introduced the STRONGER Patents Act, which, among other changes, seeks to fill some of the holes in the legislation that created IPRs. For those of you on the edge of your seats, STRONGER stands for Support Technology & Research for Our Nation’s Growth and Economic Resilience—infuriating, I know, but its amendments to Title 35 stem from some rather studious observations. The Act builds on the STRONG Patents Act (don’t even get me started), introduced during the last Congress.

Part 1 Here             Part 2 Here              Part 4 Here

Here are some of the Act’s provisions that will have the most impact towards making IPRs a fast and efficient vehicle for adjudicating the validity of a patent, rather than simply where patents go to die:

Claim Construction

In construing claim terms, Courts look first to intrinsic, and then to extrinsic evidence, to determine how the patentee meant to use the term and how the term would be understood by one having ordinary skill in the relevant art. The PTAB currently gives claim terms their broadest reasonable constructions, which puts the patent owner at a distinct disadvantage. Not only does this policy make it much easier to read a claim onto prior art, but, should the patent survive, the patentee will not realize the potential advantages of such broad constructions for purposes of the infringement analysis.

The Act aligns the PTAB and federal court proceedings by specifying that “each challenged claim of a patent shall be construed as the claim would be construed under section 282(b) in an action to invalidate a patent….”

Standing

The IPR proceeding lends itself to abuse by parties that have no direct interest in a particular patent or the technology it covers. Petitions have been filed, for example, by entities that previously shorted the patent owner’s stock, in the hopes that the challenge to a strategic patent would scare investors. IPRs have also been used to extract nuisance settlements from patent owners. The STRONGER Act would limit the ability to file a petition to only those that have been sued for patent infringement, or that would otherwise have standing to bring a declaratory judgement action.

Limitation or Reviews, Eliminating Repetitive Proceedings, Real Party in Interest

These three sections address what might be the exploitation of IPRs. Extant limits on the timing and contents of a petition are easily flouted by crafty (and deep-pocketed) defendants. To wit: defendants often circumvent the one-year from service time limit to file a petition by funding a third party petition. The new Act would put a stop to this behavior with the standing amendment, described above, as well as by clarifying that any “person that directly or through an affiliate, subsidiary, or proxy, makes a financial contribution to the preparation for, or conduct during, an inter partes review on behalf of the petitioner” is a real party at interest.

The Act prevents the use of IPRs as a vehicle for harassment by limiting the PTAB to one institution per claim. Moreover, the estoppel provision that used to apply in civil actions would be extended to proceedings before the office; a person may not file a petition with respect to a patent on any ground that the petitioner raised or reasonably could have raised in an earlier petition.

Priority of Federal Court Validity Determinations

Finally, the STRONGER Act avoids duplicative proceedings (currently the norm) by barring institution of an IPR if a federal court or the ITC has already ruled on a claim’s validity with respect to sections 102 or 103.

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