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.
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.
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