Sunny:  Hello.  My name is Sunny McCall and I am Momentum’s Vice President of Content and Experience and program director of Momentum’s upcoming 2nd IP Counsel Exchange on Post Grant Patent Challenges.  It is my great pleasure to be here today with Linda Thayer and Aaron Capron.  Aaron and Linda – thank you both for speaking with us today. Welcome.

Linda:  Thank you.

Aaron:  Thank you.

Sunny:  Linda is a partner at Finnegan Henderson Farabow Garrett & Dunner and focuses her practice on patent litigation and administrative trial procedures before the Patent Trial and Appeal Board.  Aaron is also a partner at Finnegan Henderson Farabow Garrett & Dunner and has a wide range of experience involving post-grant proceedings, patent litigation, as well as patent portfolio management.  So, Linda and Aaron, it seems you both clearly have a great deal of experience in the post-grant proceedings and related litigation.  Aaron – first question for you:  I understand that you were co-lead counsel for one of the first cases instituted under the America Invents Act (AIA as we refer to it). Can you tell us what it was like as one of the practitioners involved in one of the very first cases at the PTAB?

Aaron:  Sure.  It was just an awesome experience actually working on that case, which was the CRS v. Frontline covered business method proceeding.  We filed the petition on September 16, 2012, which was the very day that the AIA went into effect.  I recall that we were the fifth petition filed that day, with our colleagues from the SAP case filing the first one earlier in the day.  For our case, though, I recall that there were just so many questions going in: for example: Is the Board going to consider the patent at issue to be a covered business method patent?  How is the Board going to treat an expert declaration?  What about claim construction?  Another question was how was the CBM proceeding going to affect the corresponding district court litigation, which was in the final stages before trial?  And was the court going to stay the proceeding (which the AIA seemed to support) or were we going to have to go to trial with the CBM proceeding still in the works?  In our district court litigation, though, the judge did stay the case pending the outcome of the CBM proceeding.  Once the CBM proceeding was instituted, we had the opportunity to work with the Board.  For conference calls. we learned early on to be prepared to discuss anything regarding claim construction issues, procedures, deadlines.  It was hands-on very early on.  We also learned early on that we would have to get permission from the Board essentially before filing any documents.  Regardless, I have to admit that the Board was very helpful during the proceedings, as they understood that these new proceedings could get tricky.  In fact, during each of the conference calls, PTAB judges that were not on the case would often listen in to the judges assigned on our case as a learning exercise.  We also worked with the Board to get ready for trial.  Our case was the second ever trial under these new proceedings, with our colleagues from the SAP case handling the first one.  As everyone now appreciates, the trial was more like an oral argument and not a district court trial, but as I said earlier, it was a great experience, which was enhanced by the fact that we won before the Board and all claims were held invalid.

Sunny:  Linda, I see that you have experience handling litigations that began in district court, but which have related IPR proceedings before the PTAB.  What do you think of the PTAB as a venue for efficiently resolving high stakes patent claims?

Linda:  Well, I think it’s an ideal forum for resolving validity.  I mean – where else can you find technology-savvy judges who know patent law – many of whom were in law firms like us – many of whom were prior patent agents or at the Patent Office as examiners beforehand.  The proceedings are also fast and very efficient.  The procedure is streamlined so that you don’t run into discovery on very minor issues; you have discovery only relating to a few very specific issues.  And there are fewer ways to sort of “game” the system and fewer games to play than go on in litigation, and so it tends to be that the costs of a PTAB proceeding are more affordable for the client, and you’re not spending money on all these peripheral matters.  The one thing I’d like to add to what Aaron said is that it is very true that the procedures for these PTAB proceedings are still going on (or being developed, I should say) and that the conference calls are very important.  This is one of the reasons why you need to have counsel that is experienced with PTAB proceedings, because the lead and back-up counsel need to be very familiar with the procedures that are going on and be able to make decisions “on the fly” for the way that the case is going to go.  I had a similar experience to Aaron in a case that my team was handling that had a corresponding related litigation in Delaware, and we were also able to get a stay in that case for the length of time that it took the PTAB proceedings to go on; and it ended up being very economical for the client to have the validity determined before the district court.

Sunny:  Thank you Linda.  Aaron, switching back to you now; I have a question for you:  Thinking exclusively about your practice at the PTAB, what is the one procedural or other nuance you’ve noticed that is uniquely different from how patent claims are handled in federal district court proceedings?

Aaron: As Linda alluded to earlier, one area that is uniquely different is the more focused discovery.  It seems like there are less games being played in that regard.  Another area, though, that is uniquely different is claim construction.  There are a number of nuances regarding the claim constructions before the PTAB.  One nuance is how the claim construction standards change – for example, for unexpired patents, the standard is the “broadest reasonable interpretation” standard which the Federal Circuit recently affirmed by a 2:1 split in the Cuozzo case; but the standard can change to the Phillips standard if you are dealing with an expired patent.  Where it really gets interesting is if you have a patent that will expire during the IPR proceedings; this opens up a whole new set of considerations.  I mean, as a petitioner, does a construction under one of the standards hurt you?  Do you apply one standard or do you apply both?  These types of questions must be addressed and, if not, parties run the risk of having their petitions denied or their petitions ignored by the Board.  Another interesting nuance is the construction of “means plus function” terms.  According to the rules, the contents of the petition must identify the specific portions of the specification that describe the structure, material, or acts corresponding to the claimed function.  This is, that the burden is on the petitioner from the start as they will need to take positions regarding whether there is the necessary support in the specification.  If not, if there is no support in the specification, they run the risk of having their petition denied based on grounds of indefiniteness.  This is exactly what happened in the Blackberry v. Mobilemedia case, where the IPR was terminated because indefiniteness issues in the claims precluded an anticipation analysis.  If the petitioner does indicate that the spec does provide the necessary support, the petitioner could in fact  strengthen a patent owner’s infringement position if the case ever goes to district court litigation; and if the petitioner argues solely that the term at issue is not a “means plus function” term, the Board may disagree and deny the petition.  This is exactly what happened in the Pride Solutions v. Not Dead Yet Manufacturing IPR proceedings.  I mean, there are other nuances as well, but these two are the ones that I thought to be the most fascinating.

Sunny:  Thank you, Aaron.  So, Linda, when one of your clients comes to you and is considering filing an action at the PTAB, what advice do you have for them?  What is the thought process behind that advice?  And then, does your advice and what you recommend differ from what you might tell a client interested in filing a district court proceeding?

Linda: Well yes.  There are several considerations that you need to consider.  First, we represent clients in PTAB proceedings who are both petitioners and patent owners, and the considerations differ depending on whether you’re the patent owner or the one that intends to challenge the patent.  I would say that a lot of our clients that come to us that are interested in filing petitions (and we refer to them as petitioners) they come to us because they have either been contacted by a patent owner that’s threatening to assert a patent, or they’ve been sued by a patent owner in district court.  The patent owners could be operating companies that invented the technology and have patented the idea; or they could be non-practicing entities that just acquired the patent solely to assert the patent.  But when a client comes to us with this quandary, when this patent is being asserted against them, we need to first determine which post-grant procedure the client may be eligible to use, because each of them has different criteria.  We also need to consider whether there are invalidity arguments that are suitable for a post-grant proceeding.  So, for example: if the patent is recently issued, the patent maybe eligible for post-grant review which has a nine-month “window” after issuance.  If the patent relates to financial services or business methods, maybe it would be eligible for what’s called the CBM PGR.  If not eligible for either of those, and the client hasn’t been sued yet, then IPR or inter-partes review might be the only (or most appropriate) choice.  But, if the client has already been sued, we must be careful to file or take action within one year because inter-partes reviews must be filed within one year of the litigation.  The other thing that we do is assess what invalidity argument may exist by looking at the claims and looking at the art, and discussing the state of the art around the time of filing the application with experts in the field, and generally getting a sense for what the arguments are.  We do this because you can’t make certain arguments in some of the procedures – meaning, for example, §102 or §103 arguments (anticipation or obviousness arguments over publications and printed prior art) must be brought using an IPR – they can also be brought using a PGR – but in IPRs you can only bring these §102 and §103 arguments.  However, if you have, for example, possibly an argument that the claims are not directed to statutory subject matter under §101, or they have a problem with written description, as Aaron mentioned earlier, you can bring those arguments in a PGR but you can’t bring those in an IPR.  But, generally speaking, if it appears that those reasonably strong invalidity arguments exist, and the client and the patent fit into one of these eligibility categories, then we’ll recommend pursuing a post-grant proceeding because there are just so many advantages.  We also do work, though, with clients who are patent owners who come to us interested in filing a district court action, and in those cases we will tell them that they need to expect the possibility that the defendants will use the PTAB and that they will find their patent challenged by one of these post-grant reviews.  I think now we would review the patent and tell the client to sort of “kick the tires” to see if the patent has any obvious issues before initiating litigation, because we do need to expect that there will be this post-grant proceeding. If we do find those possible bugs in the patent, then we would counsel the clients on how to fix those before filing the district court action.

Sunny:  Thank you so much for that, Linda.  And now, for the both of you, as participants at our upcoming PTAB IP Counsel Exchange and seasoned patent counsel who are tasked with representing clients across diverse forums, I am curious to hear what sessions at the conference you think will be most valuable for someone attending holding a similar role as yourself?

Aaron:  Well, I’ll start first.  Although this is the third year of the AIA proceedings, and approximately 3,000 of these proceedings have been filed to date, the procedures and law surrounding these new post-grant proceedings are still being formed; and we are happy to be involved any time there is a group of practitioners, judges, and counsel gathering who specialize in these proceedings and have a great interest.  I think we are curious with respect to all the sessions.

Linda: Yes, I would second that.  I think that three years seems like a long time but the law is evolving (Aaron pointed to a couple of the nuances that are still being developed and that have come out) and I think that there are still some issues that we talk about on a regular basis, both in-house here at Finnegan and with our colleagues.  So, a lot can be gained from being in the same room and around the same table as the judges that are deciding the cases, and the in-house counsel that are maybe involved in these proceedings.  We see that a lot of the panels have participation by one or more APJs and we’re excited to go to those panels.  And, while Finnegan is one of the firms with the largest PTAB practices and probably the largest number of lawyers experienced in this field, we know that this practice is still rapidly evolving and we like to be part of the dialog with our colleagues and the court.  We basically expect there will be some takeaways in almost every one of the panels that we’ll find interesting.

Sunny:  Well, Aaron and Linda, thank you so much for your time here today.  It’s truly been a pleasure speaking with you and I very much look forward to seeing you at our conference in a few short weeks.

Aaron:  Thank you very much, Sunny

Linda:   Thank you.