Sunny: Hello everyone. My name is Sunny McCall and I am Momentum’s Vice President of Content and Experience and Program Director of Momentum’s upcoming IP Counsel Exchange on Post-Grant Patent Challenges at the PTAB. It is my great pleasure today to be here with Jon Beaupre. Jon welcome. 

Jon: Thanks for having me Sunny.

Sunny: Thank you so much Jon. By way of background, Mr. Beaupre is a shareholder in the Ann Arbor, Michigan office of Brinks Gilson & Lione and currently serves as a co-chair of the firm’s Post-Grant Patent Practice Group. Jon’s practice includes all areas of intellectual property, litigation, including patent litigation, trademark and false advertising disputes as well as trade secret and unfair competition litigation.

Jon also counsels clients on intellectual asset management and prepares agreements and licenses. Jon also practices in a wide array of forums, including federal courts, the Patent Trial and Appeal Board, the International Trade Commission, as well as the United States Court of Appeals for the Federal Circuit. Jon, jumping right in here, as a practitioner who has directly overseen post grant patent trials since their inception, I am curious to hear your hindsight thoughts on how this niche practice of law has blossomed over the past three plus years and then, more importantly, why you believe we’ve seen such a growth spurt in companies running to the Patent Trial and Appeal Board.

Jon: Sure. Thanks Sunny. There are a lot of advantages to being in the PTAB but picking on two reasons that jump out at me, the drafters of the AIA and also the PTAB judges themselves have done a great job of limiting distractions and making the whole proceeding a very streamlined process. In a District Court litigation or an ITC litigation, clients and counsel often have to tolerate and sometimes create distractions relating to discovery motion practice and sometimes delays the court’s schedule on rulings and uncertainty regarding the same.

But AIA trials give parties the opportunity to really fully litigate the issue of validity in a focused manner without these distractions and extra cost. It’s a bit like the old Dragnet line, “just the facts ma’am”. And then also another main reason, the board is filled with highly trained and technically competent judges that are really well-matched with the background of the technology, and I think that’s attractive to a lot of parties and counsel alike.

Sunny: Thank you Jon. I understand that you possess experience in the field of medical devices, wireless and software technology, as well as industrial mechanical devices. Have you noticed any filing or assertion trends by way of the PTAB proceedings, specifically by industry? 

Jon: Sure. A lot of these have been well-reported, so for example the wireless technology and software patents, most people have seen that those tend to dominate the AIA trials, especially earlier on. Another trend that’s emerging is more pharmaceutical patents are being challenged in medical devices as well. For pharmaceutical patents, this trend has be attributed at least in large part to the number of filings by hedge fund managers recently, which gets a lot of press and a lot of controversy.

But then also with medical devices that’s not nearly as controversial, but I think it’s very interesting how there’s an interplay between the PTAB and the ITC possibly. So for example medical device cases at the ITC historically have been quite rare; only about 4% of filings in the last two decades. However, over the last few years, that number of medical device cases in the ITC has doubled, more than doubled, and now it’s up to 10%, and perhaps this is related to AIA trials. Because filing and the ITC is one of the few good ways to try and prevent getting outpaced by an IPR action.

So for example if you file in District Court, and it is a patent owner, and then the petitioner files an IPR pattern 888 with the PTAB, the IPR proceeding is going to be completed before the District Court case is completed, but that’s not necessarily true with an ITC action. An ITC action is a good way of possibly heading off an IPR.

Sunny: Very interesting. Thank you for that Jon. Speaking of trends, I would love to hear your take on what impact the new PTAB rules, effective on May 2, will have on practice before the board.

Jon: Sure, yes. It is another great question Sunny, thank you. So I think the main trends that we will see, patent owners will file preliminary responses at a higher rate, (and at an even higher rate because it’s already at a higher rate), and also I think those responses will be much more substantive and takes full advantage of the page limits that people are allowed.

By way of background, patent owners up until now, well, including now, but up until May 2, patent owners didn’t have the right to file new testimonial evidence with preliminary responses. They could file declarations or affidavits from other cases such as other related proceedings but no new declarations were permitted, at least in the preliminary response. But now, patent owners will be able to file a new expert declaration with their preliminary response.

This will be a great opportunity for patent owners to do several things: One is kind of get the most “bang for their buck”, so to speak, with page limits because as you know these are trials by paper. Everything you argue has to be set forth in your papers. Secondly to maybe test out some technical arguments and engage the board’s receptiveness to the same. And then finally to try and head off an IPR before it’s instituted. That opportunity has been more limited up until now so I think we will see how that affects the board’s institution rate.

Sunny: Very interesting. Thank you for that Jon. It will be certainly something I know everyone in this field will be sort of keeping an eye on it to see how it plays out. I understand that one of your great many attributes often cited by clients is your willingness to literally immerse yourself into their business, making yourself a part of internal strategy discussion so that you can direct creative solutions that quickly resolve problems. Could you share with us a time when you had to create such a solution? And how that solution was able to benefit your client?

Jon: Sure, thank you. I think, at least in my experience, most in-house counsel are looking for outside counsel who can almost act as a co-in-house counsel and step in and take things from start to finish, or midstream, whatever helps the in-house counsel the most. To do this you really have to know the client’s business inside and out. You have to know their internal operating procedures, how they like things done. Otherwise your in-house contact will have to spend a lot of time, getting you up to speed or changing things or modifying things as you present them.

I’ve been lucky and honored to work very closely with some very talented, dedicated and thorough in-house counsel, and because of that, I’ve had the benefit of learning how some really great companies operate both their internal operation and then external operation interactions with the customers and other competitors. And it’s allowed me and others to bring skill to really get some great results in the PTAB District Courts and in the ITC. That’s been a key. 

Sunny: Fantastic, thank you for that Jon. Finally, speaking about upcoming PTAB event, you will be moderating a panel on the topic, building your IP litigation dream team, tips for selecting, screening and managing outside counsels oversee PTAB proceedings. Could you give us a little sneak peek into some of the key points you plan on driving home during that session?

Jon: Sure, thanks. We will have a great panel of in-house counsel who will provide some great insight. Hopefully I will be able to provide them with some challenging questions that kind of pick their brains and we can learn a lot from their expertise and experience. Some of the topics that I love to hear about and hopefully they will be happy talk about are selecting counsel, for example, and how to select counsel for the PTAB, for District Court proceedings or prosecution. Do you use the same counsel for all three or do you mix it up? What are the advantages of both? How important is experience in the PTAB versus experience with that particular technology? Just really finding out what these in-house attorneys have as far as their preferences and their priorities.

Another thing that I am very interested in talking to them about is expert witnesses. For these PTAB proceedings, it’s a bit different than finding an expert witness for a District Court case, where you ultimately would testify live if it goes to trial. In PTAB proceeding, the only time an expert testifies live is when he or she is being deposed, so really playing defense more than testifying for a judge or jury.

And so, I am interested in seeing how the in-house attorneys feel about those differences and what they are really looking for in an expert. And then finally, more of a kind of nuts-and-bolts question, is how are these cases or how do the in-house attorneys want these cases to be billed. What do they expect for creative budgets or flat fees or success bonuses? Things like that that are really a key part of managing any proceeding nowadays, but particularly in IPR where I think there’s a little bit more predictability as far as trying to predict what the budget will be. Because, as I mentioned earlier, there’s often or almost always fewer distractions in the case. 

Sunny: Thank you so much for that, I’m really looking forward to seeing you at our upcoming conference. It’s been a pleasure speaking here with you today. And we will look forward to hearing more from you in a few short weeks. 

Jon: Well, thank you very much Sunny both for the opportunity to speak at the upcoming event in San Jose. I am very excited about that and for the call today, thank you.