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IP Alert: Senators Introduce Bill to Reform USPTO Patent Trials

June 22, 2022

On June 16, Senators Leahy, Cornyn, and Tillis introduced a bipartisan bill, the “Patent Trial and Appeal Board (PTAB) Reform Act of 2022.” A press release from the Senators is here. They tout four goals for the bill:

  1. Prevent Abusive Serial Petitions from Harassing Patent Owners
  2. Prohibit the USPTO from Considering Inaccurate District Court Litigation Timelines
  3. Revise the PTAB Structure to Conform with the Appointments Clause While Preserving PTAB Autonomy
  4. Address PTAB Certainty and Fairness in Other Areas.

Changes associated with these goals are summarized in this document, linked in the press release. The first two goals are likely to be the most controversial.

Related to the first goal, the bill would prevent petitioners from challenging claims in a patent if the same petitioner had already challenged the same claims. This absolute ban on follow-on petitions may be unpopular with petitioners, but the bill includes many petitioner-friendly changes. For example, the bill would allow petitions filed against new or amended claims within one year after the new or amended claims are asserted against the petitioner. Current law prevents institution on petitions asserted more than one year after petitioner is served with the first complaint asserting the patent.

The second goal is achieved by strictly prohibiting the PTAB from considering timing of co-pending district court or International Trade Commission (ITC) proceedings. According to the bill, institution decisions “shall not in any respect consider an ongoing civil action or a proceeding before the International Trade Commission.” The bill would jettison the PTAB’s current policy, which applies a balancing test (the Fintiv factors) at institution of an inter partes review (IPR) to evaluate whether the IPR would duplicate efforts of the district courts or the ITC. Petitioners have complained that district court trial dates often get delayed, making it inaccurate to decide whether an IPR will duplicate the district court’s efforts more than a year before trial. Since late in 2020, however, the PTAB has made it easier for petitioners to avoid this problem by allowing them to stipulate not to assert the same challenges in the district courts. The bill would allow IPRs to proceed in parallel with or even after a district court has considered validity of the challenged patents.

The third goal for the bill attempts to address problems raised by the Supreme Court’s decision in United States v. Arthrex, Inc., as reported here. The bill explicitly provides for review by the Director of PTAB decisions and requires the USPTO to set timelines for rehearing and review of PTAB decisions.

The bill includes many changes to support the fourth goal. Most notable among these changes is a provision that would require the USPTO to cover reasonable attorney and expert witness fees for small and micro entities whose patents are challenged at the PTAB. To qualify for fee reimbursement, the patent owner cannot have asserted the challenged patent in district court litigation.

The bill is likely to undergo changes both in the Senate and in the House of Representatives. Hearings are scheduled in both chambers of Congress this week. Fitch Even attorneys will continue to monitor developments related to this bill.

For more information on this case, please contact Fitch Even partner David A. Gosse, author of this alert.

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