Potential Changes to IPR & PGR Proceedings: USPTO Announces Advance Notice of Proposed Rulemaking

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With the aim of encouraging and safeguarding innovation and investments, the USPTO has announced an Advance Notice of Proposed Rulemaking (ANPRM) to gather input from the public regarding potential modifications to the Patent Trial and Appeal Board (PTAB). The proposed reforms encompass discretionary practices for initiating proceedings, limitations on the length of petitions, and settlement practices for America Invents Act (AIA) proceedings before the Patent Trial and Appeal Board (PTAB). 

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The Fintiv decision, made in March 2020, led to a significant decrease in the number of times inter partes review (IPR) cases were rejected, falling from 40-50% to 11-16%. In June 2022, Director Vidal issued a memo saying that the PTAB would not use the Fintiv criteria to reject a case if there was an ongoing court action and the petition had strong evidence that the patent was not valid. However, in February 2023, Director Vidal clarified that PTAB panels must first analyze the Fintiv criteria before looking at the case’s merits. This led to a lot of confusion among the public. In under two months, with concerns rising about a potential rise in Fintiv denial rates, the USPTO announced the ANPRM. 

The USPTO wants to ensure that their rules match the goals of encouraging innovation and investment, as well as the intentions of the AIA law, which is to provide a cost-effective alternative to district court litigation to address some patentability concerns while also safeguarding against patentee harassment. Before the USPTO forms possible regulations in a Notice of Proposed Rulemaking (NPRM), the ANPRM allows the public to submit initial feedback on suggestions from both the USPTO and the public.  

The USPTO evaluated the effect of any such rule on the economy, the integrity of the patent system, the efficient administration of the USPTO, and the capacity of the USPTO to conclude proceedings commenced under 35 U.S.C. 316(b) in a timely manner in the ideas contained in the ANPRM. 

The USPTO is seeking feedback on a variety of proposals concerning the rules that the Director, and by delegation, the PTAB, will utilize in exercising discretion to institute inter partes reviews and post-grant reviews under 35 U.S.C. 314(a), 324(a), and 325(d). The USPTO is also asking for feedback on ideas that would allow petitioners to pay extra fees for petition word count limits, establish a separate briefing process for discretionary institution arguments, and ensure that parties who settle prior to institution must file copies of any settlement agreements with the PTAB. 

This ANPRM provides a chance for inventors, investors, and stakeholders to submit comments on the intended changes that the USPTO will make, as well as any changes that the USPTO will not move forward with. 

Key Areas of the Specific Proposals 

Better alignment with the goal of the USPTO and the congressional intent behind the AIA 

The USPTO wants to make sure its practices are in line with its goal of encouraging and protecting innovation and investment, as well as the intentions of the AIA law. This means offering a cheaper alternative to going to court to address patent-related concerns and protecting inventors from harassment. 

Enhancing existing precedent and guidance  

To decide whether to launch an AIA proceeding, the USPTO will rely on existing precedence and guidelines governing the exercise of the Director’s discretion. This will give stakeholders more clarity and predictability about USPTO’s choices. 

Threshold definitions for discretionary denials  

The USPTO suggests setting clear standards that apply to different types of cases that can be rejected based on discretionary decisions. These standards will include factors like “substantial relationship,” “substantial overlap,” and “compelling merits.” They will provide guidance to stakeholders on when a case is likely to be rejected for these reasons. 

Procedural enhancements  

To make AIA proceedings more effective and predictable, the USPTO will make procedural improvements. There will be a separate briefing procedure for presenting arguments related to discretionary decisions, and petitioners will have the option to pay an extra fee if they want to submit longer petitions. 

Clarification of filing requirements for settlement agreements  

The USPTO will make it clearer how to file settlement agreements. If two parties settle before a case begins, they need to share a copy of the settlement agreement with PTAB. 

Conclusion 

The USPTO’s announcement of the Advance Notice of Proposed Rulemaking (ANPRM) demonstrates its dedication to promoting innovation and protecting investments. This ANPRM presents an opportunity for inventors, investors, and stakeholders to actively participate by sharing their opinions and influencing upcoming changes. The extent to which these changes will enhance proceedings and ensure patent quality is yet to be determined. However, the USPTO’s commitment to seeking input suggests a positive step towards fostering clarity in the process. 

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