Sunny: Hello everyone. My name is Sunny McCall and I am Momentum’s Vice President of Content and Experience and Program Director of our upcoming 2nd IP Exchange on Post-Grant Patent Challenges. It is my great pleasure to be here today with Kevin Greenleaf, Counsel at Dentons. Kevin, welcome.
Kevin: Thank you Sunny. It’s a pleasure to be here.
Sunny: Likewise Kevin. A technically trained computer engineer and a member of Dentons’ Intellectual Property and Technology practice, Kevin has handled more than 100 re-exams, IPRs and other post-grant proceedings, and is recognized as among the most experienced practitioners in this field having achieved consistently excellent results. Kevin serves as the Vice Chair of the Intellectual Property Owners Association’s (IPO) US Patent Office Practice Post-Grant Committee, and he chairs the American Bar Association’s (ABA) Patent System Policy Planning Committee, where he is intimately involved in development of ABA policy and implementation of programs relating to patent office practice and post-grant proceedings. Kevin began his legal career in-house, where he evaluated the value of patent portfolios. He now applies those skills by litigating post-grant proceedings and providing technical analyses. Thank you again for your time today, Kevin.
Kevin: Thank you for reading that long bio, Sunny.
Sunny: So, Kevin why don’t we just go ahead and jump right in. Clearly from the description of your background and expertise here, it sounds like you have been technically trained as an engineer. So, I’m interested to hear how did you find your way into the practice of law and then, more specifically, into IP law?
Kevin: Yes. So I spent about 8 years as an engineer at Intel Corporation – that’s the world’s largest semi-conductor manufacturer – and I loved my job, I loved computer technology and continue to be fascinated and follow the industry really closely because it’s what I’m interested in and it’s where a lot of my clients work in. So, I was also inherently curious and motivated to improve myself, and I had the opportunity to go to school at night while working and I had choices between business school, masters, and engineering, or law school; and law school seemed to be the area that I knew the least about and it was therefore the most interesting to me. And also it allowed me to continue to use my technical training in a different capacity. So I still use my technical training in my job and that gives me a great perspective on how engineers think and also how to analyze claims in the prior art because I do have that significant background in looking at technology and understanding technology.
Sunny: Very interesting. So, Kevin, how would you say you’ve seen the practice of IP law shift over the past year or so – particularly in light of the “new” post-grant patent proceedings at the PTAB?
Kevin: So, I started practicing in post-grant proceedings immediately after law school (and even during law school as an intern at Intel) and then we just had re-examination as far as challenging patents goes; and there was a steady increase in the number of re-examination request filings; from fewer than 1,000 to getting pretty close to 1,000 when the inter-partes re-examination ceased in September of 2012. And we could see that rise after the AIA was enacted, and now we have almost 1,500 petitions filed every year (and that’s not even including ex-parte re-examination requests and other post-grant requests). So that’s not a change so much as a continuation of the growth of post-grant proceedings at the Patent Office as a cheaper alternative, a faster alternative, and people seem to think that they reach a more considered result. And then changes that have occurred because of the AIA are that the PTAB is canceling claims about twice as often, and these statistics came from a recent study done out of the University of Santa Clara, and a friend of mine at Unified Patents and they said that claims are cancelled twice as often relative to re-examination, and we also know that the PTAB proceedings are finishing in half the time. So the inter-partes re-examination took about three years and now we’re getting a final written decision within 18 months of filing. You’re also more likely to get a stay on litigation than you were in re-examination because district courts knew that re-examination would take a long time; but now, because we get the result within 18 months, district courts are much more likely to stay, and we’re actually seeing the federal circuit reverse lower court decisions to not stay. So I think that trend will continue to increase. Another change is the increase in demand because people are understanding that these are very effective – even compared to re-examination – there’s a lot of demand for these post-grant proceedings and because of that increased demand, we get increased participation from counsel who might not be as experienced in prosecuting these; and you saw this in re-examination as well – people did not understand the nuances and particular requirements of re-examination – and we’re seeing the same thing in post-grant proceedings – but even at a greater scale because of the number of new players. So I think you need to be careful with choosing your counsel to make sure they understand the particulars of post-grant proceedings – at least, retain somebody as an advisor to your current counsel so they could provide the insight into what the PTAB is expecting; and that could work together well with your other counsel who might understand the prior art and the history of the case really well.
Sunny: So, Kevin, you just referenced some very interesting statistics, specifically the PTAB having received nearly 1500 post-grant petitions for FY2014 which we know is almost three times the number of estimated yearly filings for the PTAB. Having quickly gained a reputation as being one of top three patent litigation venues in the country, it seems that the PTAB offers efficiency and apparently a reduction in costs that thus far remains unattainable in federal district court. Kevin could you speak to me a bit about why you feel there’s been such a well spring of interest in actions at the PTAB?
Kevin: Sure. So I think it relates a lot to what we just discussed about the higher success rate and that the PTAB’s canceling about twice as many claims as there were under re-examination. The institution rate of AIA petitions relative to re-examination requests being granted are about the same but your end result is much better. Another aspect is that parties want the Patent Office to take a second look at a patent – so, for instance, we saw the first cover business measures petition filed by a party who lost in district court litigation and they went to the Patent Office to get a second bite of the apple – and we’re seeing a few cases like this. And there was the Fresenius case that came out a couple of years ago that was interesting because it vacated a non-final award to a patentee because the Patent Office invalidated the patent in re-examination. So that is another reason that these post-grant proceedings are attractive to accused infringers. Another reason that people are interested in these proceedings is because they feel that the PTAB understands the claims and the prior art and the technology better than a lay juror would. Lay jurors are sometimes perceived (whether correctly or not) to really not reach a result based on the merits so much as on how the case was presented and a gut-feeling of who should win, as opposed to whether the prior art anticipates the claims or whatever other issues they’re deciding in that case.
Sunny: So, Kevin, building off of that, what clear advantages do you see the PTAB offering to clients as opposed to pursuing a claim more traditionally in federal district court? And I guess the second part of my question would be: Are there certain circumstances under which you feel federal district court may still be the better option?
Kevin: So, I think that the reasons why this is better, again, is that PTAB strives to provide a just, speedy and inexpensive resolution to proceedings. And that’s quoting them – they love to state that that is their goal. And, because they’re finished in less than 18 months, and they’re relatively cheap compared to district court litigation, you can decrease the amount of risk that businesses have because they reach a quicker result, and that’s what businesses are most interested in – decreasing their risk – so they can get more certainty more quickly. However, there are instances in which you might want to go to district court instead of going to the PTAB. For instance, if the patent that you want to challenge is only eligible for inter-partes review which only allows you to challenge a patent based on prior art and printed publications; then, if you don’t have good prior art or printed publications, then you probably don’t want to use IPR unless you want to get the Patent Office to take a second look at the patent. But that would occur more often in a CBM case (a cover business method case) because the CBM doesn’t have a one-year estoppel from being served with a complaint; you can file a CBM whenever – and that goes back to the first CBM case that we talked about earlier where the petitioner filed the CBM petition several years after having been served with a complaint – and that’s not an option for IPR. Another reason why you wouldn’t want to file in a price review petition is because your best prior art might be other than a printed publication – for instance you might have great public use art or an on-sale bar; in that case, you’re going to want to go to the district court (assuming that the patent again is not CBM eligible or post-grant review eligible) because in those cases you can use public use and on-sale. And PGR has another nuance where they’ll address interesting questions or novel legal questions (and it remains to be seen what that means but that’s an interesting side note). And another reason not to file an IPR petition is that you don’t have enough time: I’ve seen petitioners hurriedly put together petitions and then they don’t turn out so well. These are very complicated, and you might think: “yeah, yeah – I have the prior art; I have claimed the right to litigation and I’ll just put some boilerplate in there and file and IPR petition”. It’s much more difficult than that – you need at least a couple of months to draft the petition, review it and vet it. One month is really pushing it. And I have counseled clients to say that we shouldn’t be filing a petition in one month; we need to make a decision quickly about whether to file a petition especially as you approach that one year deadline for IPR.
Sunny: Thank you, Kevin. Taking your comments there a step further, at our upcoming 2nd IP Counsel Exchange on Post-Grant Patent Challenges, you will be leading a deep-dive session that will explore, How to Select the Best Challenge for Your Unique IP Litigation Goals and Business Objectives. Talk to me a little bit about any trends you’ve seen by way of industry among your clients who are seeking to initiate an action at the PTAB?
Kevin: So, trends again are the increase in demand for these post-grant proceedings; and that’s a function of the success rate, the saving money, and the quickness of the proceedings. Another trend that we’re seeing is that people still don’t fully understand what these proceedings are: a lot of people equate them with re-examination, but it’s not really the same. Clients are having to resolve questions such as: “who should I choose for my counsel?” “Is my case appropriate for post-grant review, or cover business method review or inter-partes review?” “What are the things to consider before I file my petition?” “What are things to consider when I receive a complaint or a letter – an offer to license?” Clients need to understand, even before being served with a complaint, what post-grant proceedings require. For instance, you should not file a declaratory judgment challenging the validity of a patent because, once you do that, then you can’t file an inter-partes review petition – unless, of course, that was your intent. But some clients still don’t understand that. So I think that there are a lot of questions out there that clients need to understand the answers to. And therefore we’ve designed a unique round table experience led by me and several in-house counsel to answer these questions and go over some of the nuts and bolts of post-grant proceedings, and also encourage audience participation so that people can ask more complicated questions – or even more basic questions – there’s no such thing as a dumb question – and we want to encourage active participation to make it a fun panel, a fun round table, and make sure everybody comes out knowing what they need to know, and what they wanted to know coming in.
Sunny: Well, thank you for that Kevin and that’s most certainly our goal and objective for the conference as well. And just wrapping things up, I know we’ve touched on a few points today, the speed and efficiency of PTAB actions, we talked about trends by industry, circumstances under which a PTAB action may/may not be the best fit for a client, all of which will be discussed in more detail at our live event, the upcoming 2nd IP Counsel Exchange on Post-Grant Patent Challenges, which excitingly enough, will be taking place at San Jose City Hall, the future home of the USPTO’s Silicon Valley office. Any closing thoughts that you’d like to leave with our audience today of in-house and corporate listeners?
Kevin: Yes, Sunny. I think, as you mentioned, the timing of this presentation could not be better because we’re going to get one of the first looks at the new Patent Office, which I’m really excited about. And then also the timing could not be better from the perspective of post-grant proceedings because the Office came out with a request for a comment in June, which we responded to by October, and will be coming out with new rules sometime in the spring – hopefully in time for our conference, so that we can discuss the new rules and how they will affect the proceedings. I’ll be in the throws of responding to the proposed rules, to hopefully ask the Office to make some adjustments and it will be a great time to answer questions about the evolving proceedings and any other questions people have about post-grant proceedings. So thank you, Sunny, it was a pleasure speaking with you today.
Sunny: Thank you so much Kevin- likewise. And we’ll look forward to seeing you all at our upcoming live event in March in San Jose. Thank you so much everyone.