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1 1 AIPLA Firm Logo American Intellectual Property Law Association Comparison of Federal Court, ITC, and USPTO Proceedings in IP Disputes TOM ENGELLENNER.

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Presentation on theme: "1 1 AIPLA Firm Logo American Intellectual Property Law Association Comparison of Federal Court, ITC, and USPTO Proceedings in IP Disputes TOM ENGELLENNER."— Presentation transcript:

1 1 1 AIPLA Firm Logo American Intellectual Property Law Association Comparison of Federal Court, ITC, and USPTO Proceedings in IP Disputes TOM ENGELLENNER Pepper Hamilton, LLP IP in Japan Committee Meeting AIPLA MWI Meeting, Phoenix, AZ January, 2014

2 2 2 AIPLA Firm Logo Federal District Court proceedings International Trade Commission (ITC) proceedings New mechanisms for challenging patents under the AIA Key features of Inter Partes Review (IPR) proceedings Some Statistics for the first year of IPR availability Stays of Federal Court and ITC Cases Comparisons and Conclusions Comparing Court, ITC and USPTO Proceedings

3 3 3 AIPLA Firm Logo Patent Infringement And Invalidity Trials In the Federal Courts

4 4 4 AIPLA Firm Logo Patent Litigation in the Federal Courts 35 U.S.C. 271 provides: –whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent. 35 U.S.C. 281: –A patentee shall have remedy by civil action for infringement of his patent. 35 U.S. C. 282: –(a) A patent shall be presumed valid... (b) The following shall be defenses... : (1) noninfringement, (2) invalidity of the patent or any claim in suit

5 5 5 AIPLA Firm Logo Rise of Patent Suits in the Federal Courts Source: PWC 2013 Patent Litigation Survey

6 6 6 AIPLA Firm Logo Top 5 Patent Forums in Federal Courts (2010)

7 7 7 AIPLA Firm Logo Typical Federal Court Patent Suit Budget

8 8 8 AIPLA Firm Logo Disposition of Patent Suits in the Federal Courts Source: PWC 2013 Patent Litigation Survey

9 9 9 AIPLA Firm Logo The US International Trade Commission

10 10 AIPLA Firm Logo Patent Litigation at the ITC 19 U.S.C provides: [T]he following are unlawful, and when found by the Commission to exist shall be dealt with, in addition to any other provision of law, as provided in this section:.. –(B) The importation into the United States, the sale for importation, or the sale within the United States after importation … of articles that (i) infringe a valid and enforceable United States patent or a valid and enforceable United States copyright registered under title 17; or (ii) are made, produced, processed, or mined under, or by means of, a process covered by the claims of a valid and enforceable United States patent.

11 11 AIPLA Firm Logo Rise of Patent Suits at the Intl Trade Comm. Source: David Hill, Report to WIPO on US Patent Litigation (2012)

12 12 AIPLA Firm Logo Comparison of District Court & ITC Proceedings Fed. District Ct.ITC Decision maker Federal District Judge or Jury Administrative Law Judge subject to Commission and Presidential Review TimingAverage time to Initial Determination: 12 months Average time (to trial): 28 months Burden of Proof for Invalidity Patent Presumed Valid Clear and convincing evidence to the contrary is needed Average Cost $1-10M: $2,100,000 $10-25M: $3,554,000 >$25M: $5,911,000 $1-10M: $1,967,000 $10-25M: $3,410,000 >$25M: $6,242,000 Source : AIPLA Economic survey (2013)

13 13 AIPLA Firm Logo Typical ITC Patent Suit Budget

14 14 AIPLA Firm Logo Federal Court and ITC Budget Comparison

15 15 AIPLA Firm Logo New AIA Alternatives to Litigation

16 16 AIPLA Firm Logo The America Invents Act The America Invents Act (AIA) established several new mechanisms for challenging issued U.S. Patents: –Inter partes review –Post grant review –Cover business method review –Derivation proceedings All of these new proceedings are conducted before a new Patent Trial and Appeal Board.

17 17 AIPLA Firm Logo Comparison of AIA Proceedings IPRCBMPGR Grounds102 & 103 but only patents and printed publications 101 (ineligible subject matter) 112 (enablement or written description) & all102/103 prior art 101 (ineligible subject matter) 112 (enablement or written description) & all102/103 prior art TimingPre-AIA patents: Anytime Post-AIA patents: 9 months after issue and after termination of PGR challenges Pre-AIA patents: Anytime if sued or threatened by PO. Post-AIA patents: 9 months after issue and after all PGR challenges are terminated Available only for Post AIA patents: Must be filed within 9 months of grant StandardReceivable likelihood success More likely than not that a claim is invalid More likely than not that a claim is invalid

18 18 AIPLA Firm Logo Key Features of IPR proceedings

19 19 AIPLA Firm Logo Key Features of IPR Proceedings Initiated by a Petition (and fee payment): –Formal recitations –Must identify all challenged claims and recite all grounds for review –60 pages or less, 14pt. font, double spaced Must be accompanied by all supporting evidence –PTAB expects in most cases the evidence will include one or more expert declarations. –What does a reference disclose? What does the reference mean to a person skilled on the art? Why a feature in inherent in the prior art?

20 20 AIPLA Firm Logo Key Features of IPR Proceedings Patent Owner (PO) Initial Response (optional): Decision to Initiate Proceedings PO takes discovery of Petitioners Expert(s) Patent Owner Response (with POs Expert Declarations) and Motion to Amend Claims (only one opportunity) Petitioner takes discovery of POs expert(s). Petitioners Reply (w/ rebuttal declarations) and Opposition to Amendments PO discovery of rebuttal experts POs Reply Trial (Oral Hearing) ~~~~~> Final Written Decision

21 21 AIPLA Firm Logo Typical Inter Partes Review Budget

22 22 AIPLA Firm Logo Comparison of Federal Court, ITC & IPR Costs

23 23 AIPLA Firm Logo IPR S TATISTICS 9/16/2012 to 9/15/2013 Special thanks to Yasser El-Gamal, Ehab Samuel and Peter Siddoway who compiled some of the following data for the AIPLA

24 24 AIPLA Firm Logo Statistics 483 petitions filed in the first year

25 25 AIPLA Firm Logo Statistics Most IPR petitions have been against NPEs

26 26 AIPLA Firm Logo Statistics About 6% of IPRs involve Japanese companies

27 27 AIPLA Firm Logo Statistics During the first year, about 8% (37) of the IPR petitions resulted in settlements (20 before, and 17 after, institution)

28 28 AIPLA Firm Logo Statistics 403 of the 483 petitions (83%) were related to pending patent litigation between the same parties

29 29 AIPLA Firm Logo Statistics The 403 Petitioners involved in related Federal Court litigation has filed for stays 159 times But Petitioners are very unlikely to get a stay at the ITC

30 30 AIPLA Firm Logo Forum Comparison USPTO (IPR)ITCDISTRICT CT Grounds102 & 103 but only patents and printed publications 101 (ineligible subject matter) 112 (enablement or written description)& all102/103 prior art 101 (ineligible subject matter) 112 (enablement or written description) & all102/103 prior art Presumption of validity? No. Petitioner need only show that it is more likely than not that a claim is invalidity Yes. Respondent must prove invalidity by clear and convincing evidence Yes. Defendant must prove invalidity by clear and convincing evidence Collateral effect of invalidity? Conclusive on all other proceedings Not conclusive unless affirmed by the CAFC Not conclusive on other proceedings unless affirmed

31 31 AIPLA Firm Logo Forum Comparison (Continued) USPTO (IPR)ITCDISTRICT CT Jury Trial?No Yes Timing 12 months from Initiation to Decision 12 Months from Initiation to Initial Determination Average time to trial: 28 months Damages?No Yes Injunction?NoYesMaybe Resolve Infringement NoYes Costs~$300K – 500K~$2M - $6M

32 32 AIPLA Firm Logo Thanks for your attention! Questions? T OM E NGELLENNER Pepper Hamilton, LLP High Street Tower, 19 th Floor 125 High Street Boston, MA Name


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