Asked and Answered

 Sangeeta Shah on America Invents Act

By Steve Thorpe

The Leahy-Smith America Invents Act (AIA) was passed by Congress and signed into law by President Barack Obama in 2011. It’s been called the most significant change to the U.S. patent system since the 1950s. It introduced expedited post-grant challenges that allow specific issues related to unpatentability to be addressed by the Patent Trial and Appeal Board (PTAB) of the Patent and Trademark Office. Sangeeta G. Shah is the co-chair of Brooks Kushman’s Post Grant practice group in its Detroit office. Her practice includes all aspects of intellectual property litigation, prosecution and counseling, with a special focus on post-grant challenges and patent opinions. 

Thorpe: What are the most significant changes brought to your field by the AIA?

Shah: The Leahy-Smith America Invents Act (AIA) is the most comprehensive patent reform in the United States in more than 60 years. There are three primary changes that are noteworthy. First, effective March 16, 2013, the AIA changed the U.S. patent system from a first-to-invent system to a first-inventor-to-file system. This in effect harmonizes U.S. patent law with the majority of foreign jurisdictions and streamlines the procedural and evidentiary burdens of establishing priority of invention. Second, new post-grant challenges — inter partes review and post-grant review — were created to allow third parties to challenge patentability before the Patent Trial and Appeal Board (PTAB) of the Patent and Trademark Office (PTO). Inter partes review (IPR) has been a “game changer,” with over 900 petitions filed since its introduction eighteen months ago. IPRs typically conclude within twelve months from granting of a petition. To date, while only a small number of these proceedings have reached final decision; most of these decisions resulted in cancellation of challenged claims and/or settlement. Finally, the AIA created a mechanism for third party pre-issuance submissions during prosecution.

Thorpe: In an article you co-authored you refer to post-grant challenges as “a complex chess game in which a myriad of new and at times competing strategies are at play.” Describe that chessboard.

Shah: Depending on whether you are a petitioner or a patent owner, the post-grant chessboard includes several key pieces: 1) strategies to successfully challenge and/or defend claims at the PTAB; 2) strategies to amend claims either as part of the post-grant challenge or through other available mechanisms; 3) consideration of the potential implications of a post-grant challenge on claim construction and damages for any concurrent litigation; and 4) consideration of the estoppel implications both for the PTAB proceeding and any concurrent litigation. To add to the current complexity, for the next few years, each of these aspects will remain in flux until the Federal Circuit and PTO have an opportunity to analyze and weigh in on the impact of these proceedings.

Thorpe: You have written on the recent precedent-setting decision of the Patent Trial and Appeal Board defining the proofs required for a patent owner to amend patent claims in an inter partes review. Tell us about that decision.

Shah: On Jan. 7, 2014, in its second institution decision on the merits, the PTAB created precedent in defining the proofs required for a patent owner to amend patent claims in an inter partes review. Idle Free Systems Inc. v. Bergstrom Inc. (IPR 2012-00027, paper 66).Distinguishing inter partes review from patent examination and ex parte re-examination proceedings, the board explained that the patent owner “bears the burden of proof in demonstrating validity of the proposed substitute claims over the prior art in general, and thus entitlement to add these proposed substitute claims to its patent.” Id. This burden includes showing a patentable distinction over all “prior art known to the patent owner.” See Idle Free Systems Inc. v. Bergstrom Inc. (IPR 2012-00027, paper 26, pages 7-8). A blanket statement from the patent owner stating that the prior art fails to teach or suggest the newly added feature(s) is not enough. Id. Ultimately, the patent owner must establish in the context of the known prior art and trial issues that the added features are sufficiently different that one of ordinary skill in the art would not be expected to have arrived at the claimed invention. Id. Given the detailed showing that must be met and the limited number of pages, the PTAB has set a high burden for motions to amend-which will generally only be met in cases where an amendment is limited in scope.

Thorpe: You’ve represented Fortune 500 clients in both challenges and defenses of patents before the PTAB. Are recent new laws making it easier or harder for the two sides?

Shah: In view of the claim construction standard, expedited twelve month proceeding and limited ability to amend, to date most patent owners have had difficulty defending their patent claims in IPR proceedings.

Thorpe: You have an increasing role in international transactions, especially with India. Has the AIA affected those cases?

Shah: With our international and domestic clients, we have been encouraging inventors to submit invention disclosures early and shortly after the conceptual stage. In view of the expanded role of foreign prior art post-AIA, an early filing strategy is valuable for all clients. Additionally, we have been counseling international clients on the implications of the AIA on patent prosecution strategies and ways to help insulate a patent portfolio from PTAB challenges.

Thorpe: Intellectual property law is evolving to try and keep up with a global landscape where ideas move at the speed of light. What do you see coming over the horizon in your practice?

Shah: Based on the PTO’s recent statements, efforts are underway to streamline and improve the patent examination process-which should help reduce the current backlog and improve the quality of issued patents. Further, in view of the increase of post-grant challenges, patent practitioners will be working closely with clients to help develop IP portfolios that can withstand the scrutiny of a post-grant challenge, including utilizing trade secret protection, where appropriate.