The USPTO issued an advance notice of proposed rules (“ANPRM”) on April 21, 2023 and is requesting comments and feedback from practitioners on proposed, proposed changes at the PTAB. The full ANPRM document is available on the Federal Register website. The ANPRM is being used by the PTAB to gather more information or data about whether certain rules are needed.  The PTAB recently hosted a webinar discussing the ANPRM.  During the webinar, the PTAB emphasized numerous times that the ANPRM are merely proposals for future proposed rules, and that they are requesting feedback in order to refine proposed rules further before issuing a notice of proposed rulemaking (“NPRM”).  The proposals for proposed rules cover a variety of topics, largely centering around institution denial criteria.

1. Establishing Clear, Predictable Definitions

According to the PTAB, these proposed, proposals focus on clarifying existing definitions to better match how PTAB uses certain words or phrases in practice. And to further provide the public with clear, predictable definitions.  Some of the relevant terms the PTAB is seeking to clarify include:

• “Substantial relationship” between entities. This definition would be broad and encompass both real parties in interest and privies of a party.  The USPTO is proposing to propose that such test would evaluate “whether certain entities are sufficiently related to a party in an AIA proceeding such that discretionary denial is warranted under the criteria set forth in the changes under consideration.”
• “For-profit entities.” The USPTO is proposing to propose defining this as “[e]ntities that do not qualify for tax-exempt status with the Internal Revenue Service including any entity that is a real party in interest with, or in privy with, a for-profit entity.”  The USPTO is also seeking input on whether that definition should include entities with a substantial relationship with a for-profit entity.
• “Compelling merits.” The USPTO is seeking input on defining this term as “[e]vidence of record before the Board at the institution stage is highly likely to lead to a conclusion that one or more claims are unpatentable by a preponderance of the evidence.”
• “Parallel petitions.” The USPTO is proposing to propose to define this as “[t]wo or more petitions that: (1) challenge the same patent by the petitioner or by a petitioner who has a substantial relationship with another petitioner challenging the same patent; and (2) are filed on or before –(a) the filing date of a preliminary response to the first of two or more petitions, or –(b) the due date set forth in 42.107(b) for filing a preliminary response to the first petition, if no preliminary response to the first petition is filed.”

The USPTO is also considering a “substantial overlap” test where claim sets are deemed to “substantially overlap” the challenged claims when at least one challenged claim is “substantially the same” as a claim in a set to which the claim is being compared.  Under this comparative test, claims will be deemed to be “substantially the same” when any differences between the claims are not material to patentability.

2. Discretionary Denials

The USPTO is considering proposing several new rules that would modify the discretionary denial process. Under the first proposal, the PTAB would deny any petition filed by a non-practicing, for-profit entity that has not been sued or threatened with litigation.

The second proposal would allow the PTAB to consider Patent Owners’ micro- or small-entity status when compelling merits are absent leading to a denial of institution. Specifically, if during the calendar year preceding the filing of the Petition, the Patent Owner and the real party in interest did not exceed eight times the micro entity gross income level under 37 CFR 1.29(a)(3) and was commercializing the subject matter of a challenged claim. The USPTO is also considering expanding disclosure of ownership interests and funding as a pre-conditions for considering a discretionary denial.

Several rule proposals focused on limiting multiple challenges to the same patent. First, the USPTO is considering discretionarily denying institution of proceedings when prior final adjudications by a district court or by the PTAB in AIA post-grant proceedings upholding the validity of claims that substantially overlap the challenged claims, unless the Petitioner meets certain exceptions. Other proposed rules would place limits on serial petitions and parallel proceedings. The process for denying serial IPR or PGR petitions would simplify the General Plastic factors. The USPTO still needs to define exceptions to the new rule.

Another proposed rule would limit 35 U.S.C. 325(d) to situations when the PTAB has previously addressed the prior art or arguments, based on the PTAB holding in Advanced Bionics, LLC v. MED-EL Elektromedizinische Geräte GmbH, IPR2019-01469, Paper 6 (Feb. 13, 2020). Previously addressed arguments and prior art would be those that the Examiner has done more than merely cite.

Another proposed, proposed rule would change PTAB practice when there is parallel district court litigation (Fintiv). According to the PTAB, its current practice is not to deny institution of an IPR under Fintiv “(1) when a petition presents compelling merits of unpatentability; –(2) when a request for denial under Fintiv is based on a parallel International Trade Commission (ITC) proceeding; or –(3) when a petitioner stipulates not to pursue in a parallel district court proceeding the same grounds as those in the petition or any grounds that could have reasonably been raised in the petition.” Since ITC proceedings do not have a binding preclusive effect on the PTAB or district courts, claims that the ITC determined were unpatentable can still be asserted in district court, and petitions will not be denied because of an ITC proceeding. The ANPRM proposes a new safe harbor rule under which the PTAB would apply a clear, predictable rule. Unless a safe harbor exception is met, the PTAB proposes it will deny institution of an IPR in view of pending parallel district court litigation if the trial in the district court action is likely to occur before PTAB issues a decision.

3. Restrictions on Future District Court and AIA Proceedings

The USPTO is considering a rule that would require Patent Owners and Petitioners to make required stipulations before the PTAB would institute AIA proceedings, including a Sotera stipulation as well as stipulations indicating that parties have not filed prior post-grant petitions and will not file future post-grant petitions.

4. Briefing and Word/Page Limits

The PTAB emphasized that they wish to maintain a streamlined approach to briefing and proceedings, but that they had heard public feedback that some proceedings with numerous claims or complicated technology may need more briefing. The PTAB proposed several new rules to address practitioner concerns while maintaining an efficient process. Among these are: (1) good cause factors for additional briefing, (2) increased word-count for additional fees, (3) separate briefing on discretionary denials, and (4) separate briefing on whether more than one petition is necessary.

5. Settlement Agreements

The final topic the PTAB addressed in the webinar was settlement agreements. The ANPRM contains a proposed rule that would clarify the rules about filing settlement agreements and pre-institution settlement agreements.

Takeaways:

Public comments on the ANPRM can be submitted through the eRulemaking Portal, Docket No. PTO-P-2020-0022. The last day for submissions is June 20, 2023. More information can be found in the PTAB slides from the May 9 webinar or in the ANPRM.