Supreme Court’s Cuozzo Case Reveals a Need for More Efficient IPR Preparation

9/12/2016

The U.S. Supreme Court’s decision in Cuozzo Speed Technologies, LLC v. Lee may not have been revolutionary but it certainly signified that the high-stakes Inter Partes Review (IPR) proceedings are not vanishing any time soon. Unanimously, the Court upheld the U.S. Patent and Trademark Office’s rule to apply the “broadest reasonable interpretation” of challenged claims, and also maintained that the Patent Trial and Appeal Board’s (PTAB) decision to institute an IPR is not judicially reviewable under the statute.

While many see this decision as merely maintaining the status quo with IPRs, other patent professionals have spoken of the opinion as administratively strengthening the USPTO and the PTAB. An official statement from Michelle Lee, director of the USPTO, states: “The USPTO appreciates the Supreme Court’s decision which will allow the [PTAB] to maintain its vital mission of effectively and efficiently resolving patentability disputes while providing faster, less expensive alternatives to district court litigation.” IPRs have become a recognized weapon to fight overly aggressive “patent trolls” and nuisance lawsuits.

While filing an IPR may be less pricey than litigation, it’s not cheap. RPX Corp. data indicates an average IPR campaign costs about $278,000 prior to institution, despite most petitioners hoping to budget much less. Cuozzo reminds the tech industry that the PTAB is still a courtroom where, apparently, the Administrative Patent Judges have substantial deference over the decision to institute an IPR. With prior art analysis, petition drafting, expert declarations, and filing fees, preparing for an IPR is far from a low-cost endeavor. Failure to persuade the PTAB to institute would likely prove more costly.

Cuozzo did not make it easier to have the Board institute an IPR—in fact, it may have a chilling effect on institutions if the USPTO is worried that statistics may again invoke the patent “death squad” moniker of 2013-14. With a host of procedural and estoppel issues used to reject imperfect petitions, the petitioning party needs to plan their sole bite at the apple carefully and properly. As researching and preparing to file an IPR must be both thorough and quick, it is clear that in-house counsel and outside attorneys could use a hand in streamlining the process and reducing costs.

The patent experts at TechPats recommend a focus on 4 key phases of preparation for an IPR petition to help ensure the PTAB recognizes and adopts your arguments: (1) Prior Art Investigation, (2) Invalidity Claim Charts, (3) Analysis by a POSITA, and (4) Expert Declaration and Support.

Prior Art Investigation

More than just a Prior Art Search, an Invalidation Investigation Report needs to quickly depict whether challenging the validity as anticipated or obvious can be fruitful, as well as illuminate claim limitations and terms that may need additional focus. An attorney should be able to look at an invalidation report and make a decision to proceed with certain references or request a deeper dig for additional prior art. The reports are especially valuable to help companies and counsel evaluate and prioritize potential challenges for a list of multiple patents with litigation pending.

Invalidity Claim Charts

A detailed Invalidity Claim Chart should be the roadmap to constructing a solid petition for IPR and should provide organization and clarity. A thorough claim chart is a crucial step in building an IPR case for a number of reasons, including procedural compliance, efficiently outlining strategy, and facilitating collaboration with colleagues and experts. Identifying issues or holes in the prior art references—prior to drafting the petition—is perhaps the most valuable aspect of invalidity claim charts. An invalidity chart should be the backbone of the petition’s grounds for invalidity and should eliminate swapping references or combinations at the 11th hour before filing.

Analysis by a Person Having Ordinary Skill in the Art (“POSITA”)

Relying on consultants with expertise in the art at the time of invention can produce analysis as good as—if not better and more efficient than—many in-house IP teams and patent attorneys. Whether it is describing the technological landscape at the time of invention, recalling a particular company or product from 18 years ago, or unearthing that decisive prior art reference, TechPats can act as an extension of your office and fill in any potential gaps in technical experience.

Expert Declaration and Support

The days are over for when the Expert Declaration could just echo the IPR petition. More than ever, the IPR declaration is now used for the critical functions of vividly depicting the state of the art and explaining how a POSITA would interpret each reference’s teachings. An expert has the single opportunity to frame exactly how a POSITA would interpret claim terms and elements. Perhaps just as importantly, when proposing alleged obvious combinations of known elements, the expert can offer a solid rationale or motivation as to why a POSITA would think to combine the references. Conclusory statements and unsupported petitions won’t work anymore, regardless of the experts’ many years of experience or multiple graduate degrees.

For those reasons, it is crucial to have the Expert working early in the project for an efficient and effective Expert Declaration.

Putting the Plan in Action

Our experts and patent analysts have adapted these proven steps from nearly 20 years of helping our clients in litigation and validity challenges. TechPats continues to work with top law firms and in-house counsels of major companies on IPR preparation. We have in-house analysts and expert declarants experienced in IPRs to support your team and contribute key pieces of a petition and declaration.

TechPats is ready to help with any step of the IPR preparation process. However, as technical consultants and patent agents, TechPats cannot file a petition or provide legal advice. Nevertheless, working in conjunction with legal teams, we’ve found that we can optimize IPR preparation and reduce costs.