Intellectual Property Litigation Alert: Post-Grant Review And Inter-Partes Review Are New Alternatives To Federal Litigation

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In September 2011, the America Invents Act (AIA) reformed the United States patent statutes. One of the most significant reforms is the change from a "first-to-invent" system to a "first-inventor-to-file" system for new patent applications, which is effective on March 16, 2013. Along with that change, the AIA creates two new mechanisms to challenge or affirm the validity of issued patents: (1) post-grant review (PGR), which is available for the first nine months after a patent is issued, and (2) inter-partes review (IPR), which is available after PGR.

Both PGR and IPR are contested case proceedings conducted before the newly instituted Patent Trial and Appeal Board (PTAB) at the United States Patent and Trademark Office (PTO), rather than patent infringement lawsuits brought in federal district court. These new administrative trials are intended to be a quick and cost-effective alternative to federal court litigation. Because these administrative trials involve fact and expert discovery and motion practice, skilled trial attorneys are critical to a party's success.

In general, PGR will be available for patents sought on or after March 16, 2013—i.e., for first-inventor-to-file patents. But with respect to "covered business-method patents" (CBM) (patents directed to performing data processing or operations used in a financial product or service), PGR is already available and can be sought at any time after a patent is issued. IPR, which became an option on September 16, 2012, replaced the former inter-partes reexamination proceeding and is available for all patents. Since IPR became available, more than 150 requests for IPR have been filed and more than 10 requests for PGR of CBM patents have been filed.

Although PGR and IPR are alternatives to federal court litigation, they can also be used in parallel with such litigation in certain circumstances. Because the preclusive effects of PGR and IPR are significant and the burdens of proof differ from district court litigation, strategic considerations are essential in evaluating the best way for a party to utilize these new proceedings.