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IP Alert: PTAB Issues Final Rules Removing Presumption at Institution Favoring Petitioners

December 14, 2020

On December 9, the USPTO published Final Rules related to America Invents Act (AIA) trial proceedings. The updated rules address three aspects of trial proceedings. First, the Final Rule aligns the USPTO rules with the Supreme Court’s holding in SAS Institute v. Iancu by providing that instituted reviews will proceed on all challenged claims and on all asserted grounds of unpatentability. Second, the rules provide for sur-replies as a matter of right—but only to address new evidence or arguments raised in a reply. Third, and perhaps most notably, the rules eliminate the presumption that disputed facts are viewed in the light most favorable to the petitioner for purposes of deciding whether to institute a review.

In inter partes review (IPR) and post-grant review (PGR) proceedings, the party challenging a patent submits a petition that is typically supported by an expert declaration. The patent owner is entitled to file arguments against instituting trial in a preliminary response, which may also be supported by an expert declaration. Under the current rules, if the experts disagree on a material fact, the petitioner’s view of that fact is assumed to be correct for purposes of the Patent Trial and Appeal Board’s (PTAB’s) institution decision. Under the new rules, however, the PTAB will view the competing testimony and weigh the relative credibility of each party’s expert when deciding whether to institute. In certain cases, this rule change could change the decision on institution in favor of the patent owner.

Removing the presumption favoring petitioners on institution decisions is the latest in a series of rule changes related to pre-institution pleadings in IPR and PGR proceedings. In August 2012, after Congress passed the AIA, the USPTO published initial rules that defined trial procedures. Those initial rules prevented patent owners from filing any testimonial evidence with their preliminary response. In April 2016, the USPTO amended the rules to permit patent owners to file testimonial evidence with their preliminary response. This change was designed to give patent owners the opportunity to present expert evidence and provide the PTAB with more information when deciding whether to institute a trial. To balance this change, the amended rules established that such testimonial evidence would be subject to a presumption favoring evidence submitted by the petitioner, to the extent disputed material facts exist after the patent owner submits its testimonial evidence.

In comments on the new rules, some stakeholders had argued that the presumption favoring petitioners dissuaded patent owners from filing testimonial evidence to support their preliminary response. The USPTO seemingly agrees, noting in response that the “rule change removes any bias or appearance of bias in favor of petitioner, and provides a balanced approach to ensure that all testimonial evidence submitted by the parties is fairly considered.” With the latest rules, the USPTO notes that “the PTAB will consider the totality of the evidence to determine whether the petitioner has met the standard for institution of the procedure.” Getting more evidence before the PTAB is intended to improve the efficiency of these proceedings and therefore benefit both the parties and the public. Nevertheless, the rules will not apply retroactively, meaning that the presumption favoring a petitioner’s testimonial evidence will be eliminated only for petitions filed after January 8, 2021.

For more information on this ruling, please contact Fitch Even partner David A. Gosse, author of this alert.

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