Patent and Trademark Office: AIA Patent Challenges at PTO Get Slow Start After Reexamination Filing ‘Bubble'

Bloomberg BNA’s Patent Trademark & Copyright Law Daily™is the IP industry’s premier news service, offering objective, timely,and reliable daily news coverage and commentary from leading IP law...

 By Tony Dutra

Summary: Only six business method and 17 inter partes review petitions were filed in the first two weeks of the America Invents Act's new patent challenge option, but a “bubble” of pre-AIA patent reexamination petitions were filed just before the new procedure's Sept. 16 implementation date.

There was a “bubble” of patent reexamination filings at the Patent and Trademark Office just before the Sept. 16 changeover, under the America Invents Act, to a new system of inter partes review and covered business method challenges.

The PTO reported on background that about 95 percent of the filings of inter partes reexamination petitions in fiscal year 2012 occurred in the last three weeks before Sept. 16. While that may be explained by challengers' comfort with or better expectations in those proceedings compared to its replacement, the new inter partes review (IPR) option, the higher fees to be charged for the new patent review proceedings are more likely the reason for the bubble.

An inter partes reexamination prior to Sept. 16 cost $8,800; the base fee for an IPR petition is $27,200. Fees for ex parte reexamination requesters jumped to $17,750 from $2,520.

AIA-Based Challenges Underwhelming.

As of Oct. 1, only 17 IPR petitions had been filed. For the other new AIA-based post-grant challenge that became available Sept. 16, a challenge to a covered business method patent, only eight petitions have been filed.

The differences between the old inter partes reexamination and the new inter partes review were detailed in an Aug. 3 BNA Insight, “Inter Partes Reexamination and Inter Partes Review: Weighing Strategic Choices Before the Clock Runs Out,” written by J. Steven Baughman of Ropes & Gray, Washington, D.C. (84 PTCJ 581, 8/3/12).

For his part, Baughman has filed no IPRs as yet, but he did submit five of the eight CBM challenges on behalf of his client, Liberty Mutual Insurance Co., against patents owned by Progressive Casualty Insurance Co. The companies are litigating Progressive's patents in the U.S. District Court for the Northern District of Ohio. Progressive Casualty Insurance Co. v. Safeco Insurance Company of Illinois, No. 1:10-cv-01370 (N.D. Ohio, complaint filed June 16, 2010).

Also making multiple filings was a surprise challenger, Intellectual Ventures Management LLC, which filed four patent challenges against Xilinix Inc. Although the company is a well known patent assertion entity, its challenges of the Xilinx patents are probably a response to that company's filing of a declaratory action against IVM in the U.S. District Court for the Northern District of California. Xilinx Inc. v. Intellectual Ventures Management LLC, No. 5:11-cv-04407 (N.D. Cal., complaint filed Sept. 2, 2011).

Each of the 23 petitions, in fact, appears to be have a link to ongoing district court proceedings (84 PTCJ 849, 9/21/12).

PTO Pressing Ahead with APJ Hiring.

The PTO began an aggressive push to hire new administrative patent judges to meet the anticipated use of the AIA-enabled post-grant proceedings. The agency had earlier announced that it would double the APJs to 200 in the newly named Patent Trial and Appeal Board by the end of 2012 (82 PTCJ 681, 9/23/11).

Despite the low use of AIA proceedings to date, at a Sept. 27 meeting of the Public Patent Advisory Committee, Chief Administrative Patent Judge James D. Smith said that the PTAB could end up with as many as 250 APJs as hiring continues into fiscal year 2013.

Smith said that the bubble of reexaminations—which are handled by the PTO's central reexamination unit initially—would percolate up to the PTAB as appeals roughly one year from now, and that he expected to “be seeing more AIA proceedings at that time.”

Since many of the new APJs will have a learning curve and may not be ready to take a full case load for some time, Smith said, “We think the timing will work out well.”