US Post-Grant Review v. EPO Opposition Proceedings
The America Invents Act further aligns the US patent systerm with other patent processes.
Until recently, patent challengers have had relatively few options for post-grant review (PGR) in the United States. The situation has dramatically changed with the passage of the America Invents Act (AIA), which now provides challengers with several new routes for PGR. These changes further align the US patent system with other patent systems, as seen for instance, in the similarities to the opposition process of the European Patent Office (EPO). With a reduced cost (as compared to US litigation) and the promise of a one year resolution period, PGR offers a viable alternative to EPO oppositions.
Timing and institution of a PGR
With the exception of the patent owner, anyone can initiate a PGR. However, PGR is not available if a petitioner has or is currently challenging the validity of the same patent in a US civil action (patent litigation), e.g., by seeking a declaration of invalidity. To be eligible for PGR, a patent must have issued from an application subject to the first-inventor-to-file provisions of the AIA (i.e., the effective filing date must be March 16, 2013 or later).
The PGR petition must be filed within nine (9) months of the patent grant. In order to initiate the PGR process, a petitioner is required to allege grounds for unpatentability, in a similar manner to alleging grounds for invalidity in civil action: (i) lack of patent-eligible subject matter, (ii) lack of novelty, (iii) obviousness, (iv) lack of enablement, and/or (v) non-compliance with the written description requirement. A PGR petitioner is not, however, permitted to allege a “best mode” violation, which is no longer permitted in US civil actions after enactment of the AIA.
To initiate a PGR, the petitioner must submit a minimum filing fee of US $30,000 (for patents with up to 20 claims, with additional fees being charged for each claim over 20). The Patent Trial and Advisory Board (PTAB) of the US Patent Office (USPTO) will review the petition and determine if it is “more likely than not” that at least one of the claims challenged in the petition is unpatentable. This evaluation is made with the “preponderance of the evidence” standard, which is notably lower than the “clear and convincing evidence” standard used for US civil litigation. The PTAB may also grant a PGR for all or some of the patent claims based on all or some of the alleged grounds of unpatentability. Thus, the PTAB has wide discretion in granting a PGR, and its decision is final and not appealable by either party.
An EPO opposition takes more time
Unlike PGRs, an EPO opposition may be requested even if the requester has previously challenged the validity in a prior action. In fact, it is not uncommon for there to be parallel validity proceedings ongoing in the EPO and national courts of EPO member states. A requester may also appeal a decision by the Opposition Division if the initial request is declined. Thus, oppositions are easier to initiate and more widely available than PGR proceedings.
In contrast to PGRs, an EPO opposition proceeding may take more than five (5) years until final resolution, including any appeal. This is a clear distinction from PGRs, which are statutorily required to be completed within one (1) year of institution with a possible extension of six (6) months for good cause. The longer time until a final resolution for an EPO opposition is primarily due to oppositions being procedurally more similar to litigation For example, both the patentee and the requester may appeal an adverse decision of the EPO Opposition Division (citing either factual or legal grounds), leading to further proceedings before the EPO Board of Appeal and a possible remand to the EPO Opposition Division.
PGR decisions may be appealed to the U.S. Court of Appeals for the Federal Circuit (CAFC), which takes on average about ten (10) months to render a decision when reviewing USPTO decisions. As a result, a PGR proceeding even with an appeal to the CAFC, is likely to require less than half the time of an EPO opposition. Thus, PGR provides a much faster route to a final resolution than an EPO opposition.
EPO oppositions also differ from PGR proceedings in that the anonymity of the real petitioner is permitted. In an EPO opposition, a representative or proxy can serve as a requester without identifying the real party in interest. In contrast, PGR practice prohibits anonymity because of the estoppel considerations that attach to the parties upon final resolution of the PGR.
Limited discovery in PGR proceedings
Under the current USPTO rules, PGR proceedings allow for limited discovery as compared to the vast discovery available in US civil litigation. The rules governing discovery in a PGR are codified in 37 CFR 42.51-42.65, which provides for three general categories of discovery: (a) mandatory initial disclosures, (b) routine discovery, and (c) additional discovery. The first two categories are fairly narrow in scope and include information similar to that found in the initial disclosures served during US litigation, information that is inconsistent with a position advanced by a party, and cross-examination of declarants. Unlike US civil litigation, all testimony in a PGR proceeding is initially submitted in written form using signed declarations.
The third category is much broader than the first two, potentially allowing discovery of any other type of information. However, “additional discovery” is much harder to obtain because it is not available as a matter of right. “Additional discovery” can only be provided if agreed to by all of the parties or by grant of a motion to the PTAB. Inter Partes Review (IPR) proceedings, which are now before the PTAB, also allow for “additional discovery” and should serve as a useful guide for PGR proceedings.
However, few parties in IPR proceedings are willing to agree to “additional discovery.” Likewise, a party seeking “additional discovery” from the PTAB has a difficult burden to meet using IPR proceedings as a guide.[i] The PTAB requires a party seeking “additional discovery” to show that the grant of “additional discovery” is in the “interest of justice.” “Additional discovery” is also limited to evidence directly related to factual assertions advanced by either party in the proceeding (see Rule 42.51(b)(2)(i)).
This is a sharp contrast to discovery in US civil litigation, where the parties have much more freedom to request information from adversaries. Thus, “additional discovery” is available in PGR proceedings but few parties will agree to it and the PTAB will rarely grant it if IPR proceedings are used as a guide.
In contrast to the foregoing, EPO oppositions do not have adversarial discovery. Oppositions are generally focused on prior art references, with limited consideration of expert and witness testimony only when such evidence is highly relevant. This serves to dramatically reduce the legal costs of an EPO opposition, but also strategically constrains the requester.
Estoppel and settlement considerations
While PGR proceedings provide an attractive alternative to US civil litigation, a PGR petitioner must be aware of estoppel considerations of an adverse decision. If a PGR results in a final written decision (regarding one or more claims)adverse to the petitioner, the petitioner may not request or maintain a proceeding before the USPTO, International Trade Commission (ITC) or a federal district court, with respect to that claim on any ground that the petitioner raised or reasonably could have raised during the PGR.
The importance of this estoppel cannot be overstated. If a petitioner fails to prove unpatentability of a claim, the petitioner is barred from asserting unpatentability to the USPTO and from asserting invalidity to the ITC or a federal district court in US civil litigation. The estoppel applies equally to both the petitioner (the real party in interest) and those in privy with the petitioner.
However, estoppel does not occur until the PTAB issues a “written opinion” adverse to the petitioner. As a result, a petitioner may consider initiating and/or settling a PGR for strategic considerations while negotiating a license. The threat of a PGR may be a means for the petitioner to obtain favorable licensing terms from the patent owner.
In contrast, in an EPO opposition, the requester is not estopped from raising the same issues of law or fact in subsequent litigation that were first argued in the opposition. Thus, the consequence of a decision adverse to the opposer in an EPO opposition is significantly reduced as compare to a PGR. In addition, withdrawal of an EPO opposition following settlement may not terminate the proceeding, as the EPO Opposition Division has discretion to continue the proceeding in the interests of justice. Taken together, settlement has far less strategic value in an EPO opposition.
What strategy to choose?
In many scenarios, a petitioner will seek to challenge both a US patent and an EPO counterpart with similar scope. This necessitates strategic concerns regarding whether to file an EPO opposition, a PGR, or both. Given the fact that novelty and inventive step arguments may be equally applicable to both of the patents, there are significant benefits in initiating one or both proceedings. However, a petitioner must balance the cost savings of an EPO opposition with the relatively short time period for a decision in a PGR proceeding, among other considerations, when deciding which course of action to pursue.
Robert P. Michal
Partner
Lindsay A. Adams
Counsel
Michael Scarpati
Associate
Lucas & Mercanti, LLP
New York, NY
