The U.S. Patent and Trademark Office is opening a Texas regional satellite office in downtown Dallas, serving the regional patent community in connection with patent procurement and proceedings before the newly formed Patent Trial and Appeal Board (PTAB). While a regional patent office will benefit Texas-based inventors, it also will handle contested trial proceedings such as inter partes review and post-grant review proceedings.
These contested review proceedings typically will occur parallel to district court litigation. Many district court cases likely will be stayed during at least part of the PTAB review. For this and other reasons, the PTAB review proceedings will impact patent litigation in Texas and elsewhere.
The potential for parallel litigation at the district court and PTAB gives rise to a number of strategic considerations for patent holders and alleged infringers. Some of the strategic considerations for the now-discontinued inter partes re-examination carry over and apply equally to inter partes review. Other considerations will change or be entirely new. Here are some questions general counsel will need to consider.
Estoppel: This can be a risk or an opportunity. For most district court patent litigators, the most significant strategic consideration for review proceedings is whether an adverse result at the PTAB will hamstring the invalidity defense at trial. This is probably the wrong question for in-house legal departments to ask, however.
The right question is whether a PTAB review improves the company's chances of prevailing at trial or reaching a favorable settlement. The estoppel risk impacts both sides, so counsel should weigh the downside risk against the potential for avoiding expensive litigation by invalidating the patent at the PTAB.
The main consideration when evaluating whether to request PTAB review is the strength of the patent compared to the prior art. A patent that is subject to a strong prior-art challenge is a good candidate for review by the PTAB. That's particularly true if the patent's subject matter is technical and difficult for a jury to understand and evaluate.
Next, counsel for companies who face allegations of infringement must consider whether they have other defenses for trial. What would the trial look like if invalidity based on written references were not a triable issue? How would review impact claim construction? Would the court permit the patent owner to brag to the jury about winning at the PTAB review stage?
Once the trial issues become clear, in-house lawyers evaluating inter partes review should consider settlement dynamics. Most cases settle based on the parties' expectations of what will happen at trial. Unlike inter partes re-examination, PTAB proceedings are designed to stop once the parties reach settlement. In many cases, PTAB review may provide a checkpoint where the parties can reach a reasonable settlement.
The most important thing for in-house counsel to remember is that each case presents a different set of issues to consider when evaluating whether to institute PTAB review. Considering these issues requires a fairly detailed and sober upfront evaluation of the case.
Timing: PTAB review proceedings are subject to strict timing limitations. For example, unlike inter partes re-examination, which could be brought at any time, a defendant must bring inter partes review within 12 months of the plaintiff filing suit.