Serving the Creative and Legal Communities

TOM ENGELLENNERPepper Hamilton, LLP

IP in Japan Committee MeetingAIPLA Annual Meeting, Washington D.C.

October, 2015

USPTO Rule Changesand IPR Procedures

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Types of Post Grant ProceedingsRecap of IPR ProceduresOutcomes to DateRequest for comments – June 2014The Director’s Blog – Quick Fixes – March

2015PTO’s Proposed Rule Changes August 19,

2015PTO Responses to CommentsPTO Proposals for Statutory Changes

Presentation Overview

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Types of Post Grant Proceedings

Type Who Can Initiate?

What Patents Qualify?

When to File?

Grounds for Filing

Standard for Institution

IPR 3rd PartyAny

unexpired Patent

9 months after patent

grant, or termination

of PGR proceeding

§102 and §103 invalidity grounds; but only patents

or printed publications

Reasonable likelihood

petitioner would prevail on at least

1 of the challenged claims

PGR 3rd Party

Patents with a priority date of

3/16/2013 or later

During 9 month window

after grant

Any grounds for invalidity

More likely than not at least one

claim is unpatentable; or novel/unsettled legal question is

presented

CBM

3rd Party sued or charged

with infringeme

nt

Covered Business Method Patent

Only when PGR is not available

Any grounds for invalidity

More likely than not at least one

claim is unpatentable

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Filings as ofJuly 31, 2015

Over 3600 AIA proceedings have been filed to date-- (3277 IPRs, 368 CBMs, 10 PGRs)

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Recap of IPR procedures

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IPR Outcomes To Date

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Unintended Consequences?

“We are going to challenge and invalidate patents through the IPR process ... [and] we are not going to settle.”

“The companies that are expanding patents by simply changing the dosage or the way they are packaging something are going to get knee-capped.”

“The beautiful thing is this will lower drug prices for everyone.”

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Hedge Fund Challenges to Pharma

CAD Fund IPRs Filed

Target Drug Disease

I 5 Acorda Thera Ampyra Multiple Sclerosis

II 3 Shire PLC Lialda & Gattex

Short bowel syndrome

III 1 Jazz Pharma Xyrem narcolepsy

IV 1 Pharmacyclic Imbruvica lymphoma

V 3 Biogen Tecfidere Multiple Sclerosis

VI 5 Cellgene Revlimid Multiple Myeloma

VII 4 Pozen, Inc. Vimovo Pain & inflammation

VIII 1 Aegerion Juxtapid hypercholesterolemia

IX 1 Bristol Myer Eliquis Stroke / blood clots

X 3 Anacor Kerydin antifungal

XI 3 Insys Subsys Cancer pain

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The Director’s Blog

March 27, 2015:“We never envisioned that our rules or guidance would be perfect at the outset. . . . In June 2014 we asked for your input on how these proceedings were working. I am pleased to tell you about the feedback we collected and how that feedback is shaping the direction of our AIA trials going forward.”

PTO DirectorMichelle Lee

“This spring we plan to issue a first rule package containing what we call "quick fixes”. . .  Later this summer, we will issue a second proposed-rule package.”

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Quick Fixes – May 19, 2015 Final Rules

Petition UNCHANGED 60 pages for IPRs80 pages for CBMs and PGRs

PO Prelim. Response UNCHANGED

60 pages for IPRs80 pages for CBMs and PGRs

PO Response UNCHANGED 60 pages for IPRs80 pages for CBMs and PGRs

Petitioner Reply UNCHANGED 15 pages

PO Motion to Amend Pages increased from 15 to 25 pages exclusive of any claim appendix

Petitioners Opposition to Motion to Amend

Pages increased from 15 to 25 pages

PO Reply to Opposition to Motion to Amend

Pages increased from 5 to 12 pages

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More Quick Fixes May 2015

Required Font 14-point, Times New Roman proportional font with normal spacing

Counsel Clarifies that more than one back-up counsel may be named.

Statements of Material Facts

Supplying a statement of a material fact is optional.  However, when responding to a statement of material fact, "a listing of facts that are admitted, denied, or cannot be admitted or denied" must be included.

Discovery Clarification that routine discovery is limited to cross-examination and that either party is permitted to file testimony as an exhibit.

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August 19, 2015 Proposed New Rules

Testimonial Evidence (Expert Declarations) will be permitted in Patent Owner’s Preliminary Response (but the testimony will be considered in the light most

favorable to the petitioner when determining whether to institute an inter partes review proceeding)

Phillip-style claim construction standards for patents that “will expire” before final judgment (instead of broadest-reasonable-interpretation)

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August 2015 Proposed New Rules cont’d

New Rule-11 Requirement associated with all papers filed with the PTAB – giving the USPTO “a more robust means with which to police misconduct.”

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August 2015 Proposed New Rules cont’d

Word Count instead of page limits IPR Petitions: 14,000 words

CBM & PRG Petitions: 18,700 words

Exchange of demonstrative exhibits before Oral Hearing (7 days instead of 5 days)

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Lee’s Response to Public Comments

The Broadest Interpretation is not Appropriate for Issued Patent Claims “The Office appreciates the suggestions [but] will

continue to apply the broadest … interpretation standard”

Motions to Amend Should Be Liberally Allowed “These suggestions are not adopted.”

If a Motion to Amend is Denied, it should be converted to into A Request for Reexamination “This suggestion is not adopted.”

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Lee’s Report to Congress – Sept. 2015

Correction of Real Party in Interest “The USPTO recommends that the statute be amended

to allow for timely correction of real party in interest identification where the error identification arose without deceptive intent.”

Make Joinder Easier for Petitioners “The USPTO recommends clarifying the joinder

provisions to state that same party joinder is permitted.”

Ostensible to allow petitioners to challenge newly asserted claims from related district court litigation.

Pre AIA Patent Invalidity Challenges in District Courts:

Defendant Prevails on Invalidity 42% U.S. Personal Injury Litigation Generally

Plaintiff Prevails 52 %U.S. Contract Litigation Generally

Plaintiff Prevails 64 %Toxic Tort Litigation

Plaintiff Prevails 72%US Criminal Prosecutions

Government Prevails 84%IPR Challenges to Patent under Current PTO Rules:

Petitioner Prevails 96%

Comparative Success Rates Various Cases

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www.postgrant-counsel.com

THANK YOU

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TOM ENGELLENNERPepper Hamilton, LLP

High Street Tower, 19th Floor125 High Street

Boston, MA 02110+1-617-204-5189

engellennert@pepperlaw.com