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
`
`Firm Logo
`
`AIPLA
`11
`
`
`
`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
`
`Firm Logo
`
`AIPLA
`11
`
`
`
`Comparing Court , ITC and USPTO Proceedings
`
`• 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
`
`Firm Logo
`
`AIPLA
`22
`
`
`
`Patent Infringement
`And Invalidity Trials
`In the Federal Courts
`
`Firm Logo
`
`AIPLA
`33
`
`
`
`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,
`Firm Logo
`• (2) invalidity of the patent or any claim in suit
`
`AIPLA
`44
`
`
`
`Rise of Patent Suits in the Federal Courts
`
`Firm Logo
`
`Source: PWC 2013 Patent Litigation Survey
`
`AIPLA
`55
`
`
`
`Top 5 Patent Forums in Federal Courts (2010)
`
`Firm Logo
`
`AIPLA
`66
`
`
`
`Typical Federal Court Patent Suit Budget
`
`$800,000
`
`$700,000
`
`$600,000
`
`$500,000
`
`$400,000
`
`$300,000
`
`$200,000
`
`$100,000
`
`$0
`
`Firm Logo
`
`AIPLA
`77
`
`
`
`Disposition of Patent Suits in the Federal Courts
`
`Firm Logo
`
`Source: PWC 2013 Patent Litigation Survey
`
`AIPLA
`88
`
`
`
`The US International
`Trade Commission
`
`Firm Logo
`
`AIPLA
`99
`
`
`
`Patent Litigation at the ITC
`
`•
`
`• 19 U.S.C. 1337 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
`Firm Logo
`enforceable United States patent.
`
`AIPLA
`1010
`
`
`
`Rise of Patent Suits at the Int’l Trade Comm.
`
`60
`
`50
`
`40
`
`30
`
`20
`
`10
`
`0
`
`99
`
`0
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`2010
`
`Firm Logo
`
`Source: David Hill, Report to WIPO on US Patent Litigation (2012)
`
`AIPLA
`1111
`
`
`
`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
`
`Timing
`
`Average 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
`
`Patent Presumed Valid Clear
`and convincing evidence to
`the contrary is needed
`
`Average Cost
`
`Firm Logo
`
`$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)
`
`AIPLA
`1212
`
`
`
`$700,000
`
`$600,000
`
`$500,000
`
`$400,000
`
`$300,000
`
`$200,000
`
`$100,000
`
`$0
`
`Firm Logo
`
`Typical ITC Patent Suit Budget
`
`AIPLA
`1313
`
`
`
`Federal Court and ITC Budget Comparison
`
`$800,000
`
`$700,000
`
`$600,000
`
`$500,000
`
`$400,000
`
`$300,000
`
`$200,000
`
`$100,000
`
`$0
`
`Q1
`Q2
`Firm Logo
`
`Q3
`
`Q4
`
`Q5
`
`Q6
`
`Q7
`
`Q8
`
`Q9
`
`Q10
`
`AIPLA
`1414
`
`
`
`New AIA
`Alternatives
`to Litigation
`
`Firm Logo
`
`AIPLA
`1515
`
`
`
`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.”
`Firm Logo
`
`AIPLA
`1616
`
`
`
`Comparison of AIA Proceedings
`
`Grounds
`
`Timing
`
`IPR
`
`CBM
`
`PGR
`
`102 & 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
`
`Pre-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
`
`Standard Receivable
`Firm Logo
`likelihood success
`
`More likely than not
`that a claim is invalid
`
`More likely than not
`that a claim is invalid
`
`AIPLA
`1717
`
`
`
`Key Features of
`IPR proceedings
`
`Firm Logo
`
`AIPLA
`1818
`
`
`
`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?
`Firm Logo
`Why a feature in inherent in the prior art?
`
`AIPLA
`1919
`
`
`
`Key Features of IPR Proceedings
`
`• Patent Owner (PO) Initial Response (optional):
`• Decision to Initiate Proceedings
`• PO takes discovery of Petitioner’s Expert(s)
`• Patent Owner Response (with PO’s Expert Declarations)
`and Motion to Amend Claims (only one opportunity)
`• Petitioner takes discovery of PO’s expert(s).
`• Petitioner’s Reply (w/ rebuttal declarations) and
`Opposition to Amendments
`• PO discovery of rebuttal experts
`• PO’s Reply
`Firm Logo
`• Trial (Oral Hearing) ~~~~~> Final Written Decision
`
`AIPLA
`2020
`
`
`
`Typical Inter Partes Review Budget
`
`$80,000
`
`$70,000
`
`$60,000
`
`$50,000
`
`$40,000
`
`$30,000
`
`$20,000
`
`$10,000
`
`$0
`
`Q1- Petition
`
`Q2 - P.O. Discovery
`& Response
`
`Q3 - Petitioner
`Discovery and Reply
`
`Q4 - Motions
`
`Q5 - Hearing
`
`Firm Logo
`
`AIPLA
`2121
`
`
`
`Comparison of Federal Court, ITC & IPR Costs
`
`$800,000
`
`$700,000
`
`$600,000
`
`$500,000
`
`$400,000
`
`$300,000
`
`$200,000
`
`$100,000
`
`$0
`Q1
`Q2
`Firm Logo
`
`Q3
`
`Q4
`
`Q5
`
`Q6
`
`Q7
`
`Q8
`
`Q9
`
`Q10
`
`AIPLA
`2222
`
`
`
`IPR STATISTICS
`9/16/2012 to 9/15/2013
`
`Firm Logo
`Special thanks to Yasser El-Gamal, Ehab Samuel and Peter Siddoway
`who compiled some of the following data for the AIPLA
`http://www.aipla.org/learningcenter/live_webinars/Pages/Wednesday,-October-9,-2013-Webinar.aspx
`
`AIPLA
`2323
`
`
`
`• 483 petitions filed in the first year
`
`Statistics
`
`Firm Logo
`
`AIPLA
`2424
`
`
`
`• Most IPR petitions have been against NPEs
`
`Statistics
`
`Firm Logo
`
`AIPLA
`2525
`
`
`
`• About 6% of IPRs involve Japanese companies
`
`Statistics
`
`Firm Logo
`
`AIPLA
`2626
`
`
`
`Statistics
`
`• During the first year, about 8% (37) of the IPR
`petitions resulted in settlements (20 before, and
`17 after, institution)
`
`Firm Logo
`
`AIPLA
`2727
`
`
`
`• 403 of the 483 petitions (83%) were related to
`pending patent litigation between the same parties
`
`Statistics
`
`Firm Logo
`
`AIPLA
`2828
`
`
`
`• The 403 Petitioners involved in related Federal
`Court litigation has filed for stays 159 times
`
`Statistics
`
`Firm Logo
`But Petitioners are very unlikely to get a stay at the ITC
`
`AIPLA
`2929
`
`
`
`Forum Comparison
`
`USPTO (IPR)
`
`ITC
`
`DISTRICT CT
`
`Grounds
`
`Presumption
`of validity?
`
`102 & 103 but
`only patents
`and printed
`publications
`
`No. Petitioner
`need only show
`that it is more
`likely than not
`that a claim is
`invalidity
`
`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
`
`Yes. Respondent
`must prove invalidity
`by clear and
`convincing evidence
`
`Yes. Defendant must
`prove invalidity by
`clear and convincing
`evidence
`
`Collateral
`Conclusive on
`effect of
`all other
`Firm Logo
`invalidity?
`proceedings
`
`Not conclusive
`unless affirmed by
`the CAFC
`
`Not conclusive on
`other proceedings
`unless affirmed
`
`AIPLA
`3030
`
`
`
`Forum Comparison (Continued)
`
`USPTO (IPR)
`
`Jury Trial?
`
`No
`
`ITC
`
`No
`
`DISTRICT CT
`
`Yes
`
`Timing
`
`12 months from
`Initiation to
`Decision
`
`12 Months from
`Initiation to Initial
`Determination
`
`Average time to trial:
`28 months
`
`Damages?
`
`Injunction?
`
`Resolve
`Infringement
`
`No
`
`No
`
`No
`
`No
`
`Yes
`
`Yes
`
`Yes
`
`Maybe
`
`Yes
`
`Firm Logo
`Costs
`~$300K – 500K
`
`~$2M - $6M
`
`~$2M - $6M
`
`AIPLA
`3131
`
`
`
`Thanks for your attention! Questions?
`
`TOM ENGELLENNER
`Pepper Hamilton, LLP
`High Street Tower, 19th Floor
`125 High Street
`Boston, MA 02110
`+1-617-204-5189
`engellennert@pepperlaw.com
`www.postgrant-counsel.com
`
`Name
`Firm Logo
`
`AIPLA
`3232
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