Patent Reform Act of 2011 – Validity Challenges

On February 3, the Senate Judiciary Committee unanimously voted to report the Patent Reform Act of 2011 (S.23), adopting two amendments (from Sens. Leahy, Hatch, and Grassley and from Sens. Feinstein and Kyl) to the bill. We previously wrote about the provisions that would establish a first-to-file system. The bill would also significantly alter the procedures for questioning patent validity before the USPTO.

The bill briefly sets forth procedures for third-party preissuance submissions of patents, published patent applications, or other printed publications that may be relevant in examination. A third party would have to submit these materials before a notice of allowance. The submission would also have to come before the first rejection or within six months after publication of the application, whichever is later.

For challenges to the validity of a granted patent, the Patent Reform Act establishes new post-grant review proceedings. A person other than the patent owner could file a petition for such a review within nine months of patent grant or reissue. Additionally, if the patent owner serves a complaint alleging that the petitioner infringed the patent, any petition for post-grant review would have to be filed within six months of the complaint’s service. The petitioner could file for post-grant review based on any grounds for invalidity that would constitute a defense to infringement.[1] The information the petitioner brings would have to “more likely than not” render at least one issued claim unpatentable. Unlike current reexamination statutes, the bill includes provisions for settlement of post-grant review if both the petitioner and patent owner request termination.

Along with post-grant review, the bill would further establish inter partes review procedures that would supersede the current inter partes reexamination procedures. A person other than the patent owner could file a petition for such a review starting nine months after patent grant or reissue (i.e. when post-grant review is no longer available), provided any previously-initiated post-grant reviews have been terminated. In the proposed inter partes reviews, the petitioner would have to raise a novelty or nonobviousness issue, based on patent or printed publication prior art, to the level of “a reasonable likelihood [of prevailing] with respect to at least 1 of the claims challenged in the petition.”

Notably, the proposed statutory language for both post-grant review and inter partes review omits the current reexamination requirement of “a substantial new question of patentability.”

Ex parte reexamination would emerge from the bill largely intact. The bill broadens the types of prior art that the USPTO would accept under 35 U.S.C. § 301, including patent owner’s statements in federal court or before the USPTO in addition to the patents and printed publications it previously accepted.

Most of the Patent Reform Act’s proposed changes to third-party validity challenges before the USPTO would increase opportunity to question patent validity. Post-grant review would allow third party challenges in the USPTO based on such grounds as patentable subject matter and failure to meet the written description requirement, without requiring the published reference basis needed in reexamination. Furthermore, in not requiring “a substantial new question of patentability,” the new post-grant and inter partes review system may allow third parties to unearth and readdress old issues of patentability from prosecution or from other parties’ previous validity challenges. However, where the USPTO previously determined a patent to be valid over a potential validity challenge, subsequent challengers questioning the patent’s validity on the same grounds would probably not be able to overcome the “more likely than not” and “reasonable likelihood of prevailing” standards of the new provisions.

For continuing coverage of proposed patent reform measures from a post grant perspective, and for other post grant news, please see the Patents Post Grant Blog.

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[1] The bill also includes a provision removing the best mode requirement of 35 U.S.C. § 112 from among the grounds for which a patent claim may be cancelled, held invalid, or held unenforceable .