February 3, 2016

Are USPTO-Promulgated Trial Rules Reliable?

Originally appeared in Intellectual Property Magazine on February 3, 2016. 

—by David Soofian

There is no getting around it—America Invents Act (AIA) proceedings are a work in progress. The United States Congress set a broad framework for inter partes review (IPR), post grant review (PGR) and covered business method (CBM) proceedings in the AIA, but left the US Patent and Trademark Office (USPTO), with much of the responsibility for promulgating the rules to be used in these trial-like proceedings. While the USPTO met its responsibility in promulgating those rules, Congress, the Federal Circuit, the Supreme Court and the USPTO itself have brought into question just how long those rules will continue to apply. Bills are making their way through Congress that, if passed, either supplement or supplant these rules. The Federal Circuit has shown a willingness to evaluate the propriety of these rules on appeal and the USPTO has been routinely conducting listening tours where it solicits feedback regarding AIA proceedings. Based on that feedback, the USPTO has already implemented changes to certain rules and proposed a wide variety of changes to others.

House bills

The Innovation Act of 2015 (HR 9) was introduced by House Judiciary Chairman Bob Goodlatte on February 5, 2015 and was amended and approved by the Subcommittee on Courts, Intellectual Property and the Internet on June 11, 2015. While the bill was originally scheduled for a vote on the House floor in July, the bill has still not been calendared for a vote.

The current version of the bill contains one section relating to improvements and technical corrections to the Leahy-Smith America Invents Act. Among the proposals for IPRs are:

• a proposal to relax the AIA estoppel provision to only prevent a petitioner from subsequently raising in a district court an argument that a claim is invalid on a ground that a petitioner could have actually raised and not could have "reasonably" raised; and

• a proposal to replace the "broadest reasonable interpretation claim" construction standard used in an IPR with the Phillips standard.

This is the standard used in district courts based on the case Phillips v. AWH Corp. decided by the Federal Circuit. Under the Phillips standard, district courts look to both intrinsic evidence, such as the specification and claims of the patent itself as well as the patent’s prosecution history, as well as extrinsic evidence (dictionary definitions and expert testimony). Such a change would make the claim construction standard in an IPR match the standard used in the district courts and would, arguably, make it harder to invalidate a patent in an IPR;

• A proposal to allow the submission of evidence with a patent owner’s preliminary response. Such a change would give patent owners a more robust opportunity to attack a petition for IPR and give patent owners a better chance at convincing the Patent Trial and Appeal Board (PTAB) to decline to institute trial in the first instance; and

• A proposal to add standing requirements and require associated certifications to combat the use of the IPR process for stock manipulation and reverse-trolling.

Senate bills

In the Senate, the Patent Act (S 1137) was introduced by Representative Charles Grassley on April 29, 2015 and was reported by committee on June 4. The bill has not yet been scheduled for a vote.

The current version of the bill contains a section relating to IPRs. Some of the proposals mimic those in the House’s Innovation Act, such as a proposal to relax the AIA’s estoppel provision to exclude arguments that reasonably could have been raised, a proposal to replace the broadest reasonable interpretation claim construction standard with the Phillips standard and a proposal to allow the submission of evidence with a patent owner’s preliminary response. In addition, the bill includes its own unique proposals, such as:

• A proposal to add detailed requirements for claim amendments, such as requiring that any proposed claim amendments be made in the patent owner’s post-institution response and that such amendments narrow the scope of the claim, not add new matter and respond to a ground of unpatentability involved in the IPR trial. By detailing the requirements, this proposal would, arguably, make it easier for a patent owner to amend the claims during an IPR;

• A proposal to apply a presumption of validity to the patent challenged in an IPR. Such a change would align IPRs with district court proceedings and make it harder for petitioners to successfully challenge and invalidate patents using the IPR process;

• A proposal to vary the judges that decide whether to institute and the judges that ultimately decide whether or not challenged claims are invalid so that only one judge from the institution decision may sit on the final panel. Such a proposal would, arguably, make it harder for petitioners to ultimately invalidate a claim because they would have to convince different judges on both the instituting and final panels of the charge of invalidity; and

• A proposal to apply the obligations of rule 11 of the Federal Rules of Civil Procedure to filings with the PTAB during an IPR, such as the obligations that a paper not be filed for an improper purpose, that the legal arguments therein are warranted by existing law or contain a non-frivolous argument to change the law and that the factual contentions have (or will have) evidentiary support.

Federal Circuit

The Federal Circuit has illustrated that it is willing to hear challenges to USPTO-promulgated IPR rules as well. In re Cuozzo,[1] the patent owner challenged the USPTO’s rule that the broadest reasonable interpretation standard should be used for claim construction during an IPR, as opposed to the use of the Phillips standard used in district court proceedings. While a majority of the judges upheld the rule, Judge Newman wrote a long dissent. Judge Newman stated that “[t]he post-grant proceedings established by the America Invents Act were intended as a far-reaching surrogate for district court validity determinations.” Thus, she reasoned that the rule “depart[s] from the legislative plan” because it “precludes achieving PTAB adjudication of patent validity comparable to that of the district courts.” The split in the Federal Circuit intensified when only a narrow majority (six out of 11 judges) agreed with the Cuozzo majority and denied rehearing en banc, leaving five judges on the Federal Circuit who were willing to strike down the USPTO’s broadest reasonable interpretation rule.

More recently, on January 15, 2016, the Supreme Court agreed to hear the Cuozzo case and will likely weigh in on the board’s use of the "broadest reasonable interpretation" standard for IPR proceedings.


The patent office has been responsive to criticism of its own rules and has indicated that it is willing to change those rules when it is convinced that such changes are appropriate. A March 27, 2015 blog post by USPTO director Michelle Lee explained that “[d]espite best efforts, we never envisioned that our rules or guidance would be perfect at the outset, but instead anticipated making refinements along the way.” She added that “our intention is to continue this iterative approach of seeking your input after this round of changes has been in effect for some time” and “regularly monitoring and correcting our course as usage of our AIA trials evolves in time."

In that same blog post, the director outlined a few "quick fixes" that became effective immediately, including increasing the number of pages for a motion to amend and for the petitioner’s reply brief from 15 pages to 25 pages. But in a August 19, 2015 blog post, the director outlined a broader package of proposed rule changes that were published in the Code of Federal Regulations, with a request for comment the next day. Among the proposals are rules that mimic those in both the House’s Innovation Act and the Senate’s Patent Act, such as:

• A proposal to allow the submission of evidence with a patent owner’s preliminary response. However, the proposal details that because of the strict time limits of an IPR, the petitioner will not have an opportunity to cross-examine the patent owner’s declarant before institution of trial and that, consequently, any factual disputes material to institution will be resolved in favour of the petitioner for purposes of determining whether or not to institute trial. As mentioned above, such a change would likely make it easier for a patent owner to avoid trial altogether by mounting a robust attack on the petition; and

• A proposal to apply the obligations of rule 11 of the Federal Rules of Civil Procedure to filings with the PTAB during an IPR and require certifications of compliance of the same from parties when filing papers with the PTAB. The proposal would include a provision that allows the PTAB to sanction a party for a failure to comply with such obligations.

Similarly, in another recent proposed rule change the director suggested a pilot programme that mimics the single instituting judge proposal in the Senate’s Patent Act. On August 25, 2015, the director requested comments on a proposal for a pilot programme where a single PTAB judge would determine whether to institute trial. If the single PTAB judge decides to institute trial, two additional judges would be added to the panel thereafter for purposes of oral argument and rendering a final decision.


The purpose of AIA proceedings is to improve patent quality by providing a quick and inexpensive alternative to district court litigation when challenging the validity of a patent. Thus, as these new types of proceedings play out at the PTAB, many are keeping an eye out for whether these rules, in application, are appropriate to meet that goal. With Congress, the Federal Circuit, the Supreme Court and the USPTO itself open to changing these rules, it would be wise for practitioners and interested parties to keep abreast of rule challenges, potential legislation and proposed rule changes to ensure that they are operating under the most current set of rules.

 » Read the full article in Intellectual Property Magazine (with subscription).


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