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Rethinking Patent Prosecution: IPR Today

Episode Summary

This episode is audio of the IPR Today panel from the Engelberg Center's Rethinking Patent Prosecution, Review, and Litigation event. It was recorded on March 28, 2024.

Episode Notes

Panel Three: IPR Today

Rochelle Dreyfuss (moderator), NYU School of Law and Engelberg Center on Innovation Law & Policy

Gabrielle Higgins, Desmarais LLP

Scott McKeown, Wolf Greenfield

Naveen Modi, Paul Hastings

Episode Transcription

Michael Weinberg  0:00  

Welcome to engelberg center live a collection of audio from events held by the engelberg center on innovation Law and Policy at NYU Law. This episode is audio of the IPR today panel from the engelberg center is rethinking patent prosecution review and litigation event. It was recorded on March 28 2024.


So, Rochelle, I will hand it over to you to take it away. Well,


Rochelle Dreyfuss  0:29  

thank you. So, morning gave us a lot to chew over, I think. And here we have the people who are actually in the trenches at the PTM to Gabrielle Higgins at the Marisol op Scott mcgeown at Wolf Greenfield and Naveen Modi at Paul Hastings. And I'm going to give them each two minutes to a say what the relevant background is rather than have me do it, or you can google and perhaps taking a page from Judge Chen, what's your pet peeve about the P tab system? So Gabrielle USA,


Gabrielle Higgins  1:03  

okay, first of all, Gabby. And so I am a trial lawyer that's been doing this for a very long time. I'm up here not because I went to NYU, I went to another prestigious law school in town. John talked me into getting up here with these fine colleagues. I work with Scott previously, and I've actually been opposite and even in a nice, fun fight. So I would say, at least in the P tab world, one of my pet peeves is that the default for arguing before the P tab right now is remote. And I'm just gonna, I'm just gonna do this. When I stand up, and I talk to you, I have your full attention. Right? When I'm hiding behind a monitor, it's a different, it's a different world. You know, as I said, I've been opposite Naveen, but the two of us are sitting there behind our monitors. And we're trying on this little small screen to see three judges figure out a what they're saying, and be how we're going to respond to them and still make an impact when they're 1000s of miles away from us. So my pet peeve is the default, especially when we're dealing with property rights. Should be let's do this live. Let's do this in person. You know, it's a Maris. We're all about growing the next generation of trial lawyers. And so our lawyers are, they're just clawing for opportunities to get up on their feet. And the PCP tab should do that. So since I've just kind of knocked the ponytail, I will say that they're actually doing an excellent job. They have a great they call it a LEAP program, where it's all about giving a junior lawyer a chance to be involved in a proceeding and have a speaking role. When we argue in you do that you get an extra 15 minutes to bring your argument and the pizza right now around the country. For the young lawyers in the room has a great mock trial program, where you can actually argue in practice, even the law students before real pizza of judges.


Scott McKeown  3:18  

So Scott McHugh and Wolf Greenfield also been in the pizza field. And prior to that reexamination for a number of years and trained electrical engineer, a lot of pet peeves, I don't think we have time for all of them. But I do want to say at the outset, the Federal Circuit is doing an amazing job. They're completely unified on P tab appeals. So let's just get that out of the way. So we want to keep that affirmance. Right, at least from the petitioner perspective, I do find that a lot of these conferences, you know, there's wildly different views of the P tab. And while I understand it, I think it's not well understood by policymakers in DC in particular. And so you can hear these sort of which may be this is just the way DC operates now, but there's always these extreme viewpoints. On either end of the spectrum, either either claiming that the system is horrific, or the system is is great. And a lot of that has to do, I think, with the the portion of the patent ecosystem that you call home. So whether you're a litigator or a prosecutor, you're gonna have wildly different views of what it is that the patent office is doing. You can talk to a typical litigator that that's litigated for whatever 2030 years and ask them how many times they've lost a patent case on an obviousness you know, basis and, you know, maybe once or twice certainly they could count it on one hand. Whereas if you go to a prosecutor, hey, how many times have you seen claims rejected by two three references? Well, three, four times a day. So you have these sort of different you know, extreme viewpoints coming in and looking at a system that is a Essentially, it's an obviousness court. The overwhelming majority of the decisions that come out of the P tab are based on obviousness. And that's to be expected. It's the expert agency, they have the technical training. And we talked a little bit about the differences in standards. But I think just recognizing that we can all have different viewpoints, whether we're litigator prosecutor, biopharma tech, you know, all of them have different views of the system. And everyone's you know, view is valid, but we have to come together and and address the balance that we want from the P tab as opposed to either Well, let's tear it down, or no, let's let's let's make it even more powerful. And then those tend to be the, you know, the the push and pull that you see in DC on a lot of these policy issues.


Naveen Modi  5:52  

Thanks, God, Naveen Modi. And as Rochelle said, I'm with Paul Hastings. I'm one of the other co chairs you heard Bruce earlier today. truly a pleasure to be here. I've done a lot. And I also co lead. Peter practice at Paul Hastings. I've been involved in hundreds of these proceedings have been actually opposite both Scott and Gabby, as Gabby mentioned, small world. But it's been you know, from my perspective, I've done a ton of litigation as well, both at the ITC District Court, and certainly have been living in the pizza world for a while. And it's interesting to see how far we've come. And, you know, I was involved in the very first proceeding, where they were still trying to set up the system of filing at the P tab, right the the electronic system. So it's come a long way. And I'm sure we'll agree on a lot of things and disagree on some. And my practice, by the way, also is very balanced. I do a lot of Petitioner work. But I also do a lot of patent on a work. And I do think from a patent owners perspective, it can be difficult to be at the P tab. And it has, I think the pendulum has swung back and forth over the years, primarily still towards the petitioner side. And I think that's to be expected when the P tab was formed, that that's sort of how folks perceive the P tab. And I think that that has sort of come through if you look at it, statistically speaking, and I know we'll get into some of these details later. In terms of pet peeves. The one thing I'll mention is, over the years, I feel like we've gotten away from merits at the P tab, or we fight about a lot of procedural things. And for me, I was always trained with the mindset, you know, don't sort of, you know, get the noise out, right. So don't worry about noise, really worry about the merits. And I would like to see our system get back to the merits. And again, we'll touch on some of these procedural issues that are mentioning, but I feel like a lot of the time that we're spending at p tab as practitioners, we're actually fighting about discretionary denials, and whether the proceedings should even get to the merits phase. And so I feel like a lot of resources are being spent, where they should be really spent on the merits and whether the pattern is invalid or valid. If


Gabrielle Higgins  8:13  

I could just say, Naveen, I agree with that. But I also feel like we are heading right now in the direction where we are more of a merit space system. You know, we'll get into it. But you know, FinTech denials are really down. And, you know, I'm with you. I totally agree with what Judge Chen said this morning, where he said, you know, if you're the petitioner, you gotta bring the goods. And if you do that, you know, I find that you can have success. And I like Naveen. I want it to be a merits fight. And if I'm the patent owner, well, then I'm also going to bring the goods in that I'm going to attack what the what the petitioner had had to say. And I'm going to prevail, as we did in the case, John was talking about this morning as patent owner.


Rochelle Dreyfuss  9:08  

So the big hope was this was going to be an alternative to litigation, or at least it was going to promote settlement. The fear was that this was going to be the place where patents go to die. So have we reached a good point is on this kind of a problem. Are we still in the transition period? What kinds of solutions do you think that we could have to making it work as either an alternative to litigation rather than double the cost or promote settlements? And more? Do you have thoughts about that? Well,


Gabrielle Higgins  9:42  

I'll kick us off. I don't agree that the P tab is a place where patents go to die. I think the statistics that we heard this morning, which are consistent with the the P tabs, you know 2023 stats, you know as you saw this summer Morning, at institution, you have about a 70% institution rate. And by the way, that's overall, if you're on the biopharma side of the world, it's more like 50%. And then though, but then as you proceed, if you're instituted, you proceed to final written decision. Right now we're talking about, you know, the percentage of of final written decisions where all challenged claims are invalidated. It's a lot lower around, you know, 26 28%. And then the other the other statistic that I that I saw that I like, is paying graveyard, if you're talking about overall percentages about how many live patents you have, and what percentage of the patents are actually invalidated at the P tab 90% of which have, you know, litigation, you know, either going on or it had gone on it's point oh, 4%. I saw that stat point of, oh, 4% of live patents. That's, that's the invalidity rate.


Scott McKeown  11:01  

Yeah, I don't think it's a place where patents go to die. I think it's a place where bad claims go to die. And I think that's lost on a lot of people. And I still don't see the adaptation on the prosecution side of recognizing that you need to prosecute differently, you know, we're talking about rethinking prosecution here today. And, you know, back when I was prosecuting, the goal was, well get me the broadest claim that you can. And I remember partners coming into my office and saying, Well, you know, this claim has a, b, c, and d in it, you know, take D out and I'd say, well, a, b, and c are described in the background. And the response was, Well, let me worry about that. You just get the claim. And so you know, when you're in the District Court, and the cases are settling, before you ever get to that, in the ultimate invalidity determination, the first hurdle was summary judgment of non infringement, right. And so that's the way you prosecuted your claim. So you may have invented this, but you claim that and so you would put that claim ABC is, you know, I always call it the claim 11 problem, you read a lot of patents and what was actually invented, as in claim, one, all the details are there, and buried in the middle of the claim set as this broad claim that always gets, you know, that's the one being litigated. And so those claims are not going to get through the P tab. And we still have prosecution practices that are prosecuting for the district court. So you know, I'm always preaching to prosecutors to think differently about what they're doing. And, you know, you're not going to get that holy grail claim anymore, that that captures an entire industry, you know, you may have to have your prosecution structured to get to specific competitors, specific product lines, you know, vary the language in your claims, and all these other things that I won't get into. I just don't see a lot of people doing that. And the point I made earlier this morning was Well, that's because people aren't paying for it. So, you know, if you're just churning out patents, like their sausage, and, you know, they're they're not going to get through the P tab. So, you know, is it an alternative to litigation? It can be if you allow it, it's certainly an alternative to the invalidity component. But again, a lot of the pushback that you see from patent owners as well, how is it an alternative if I have to litigate in both forums? And it's a little bit disingenuous? Because you don't, and this came up earlier this morning, as well, as well, you're deciding as patent owner to litigate in the court and at the P tab. And, you know, that's not the way the system is set up. And it certainly could be set up that way for an automatic stay. But I don't think anybody's lobbying for that as well. So I'll throw it in to be


Naveen Modi  13:42  

Yeah, no, I think it depends on the court, you're in whether it is an alternative litigation or not. I think, for example, Texas courts we've seen, they don't like to stay cases in light of what's happening at the P tab. If you're in California, and depending on the court, and the judge, you might actually get a stain later what's happening in the P tab? So I do think it does it has created this system where you're actually fighting on both fronts at times, and you know, right, it kind of depends on on what, ultimately that issue, right? You have. I think we saw the stats this morning, although I missed that presentation. But my understanding, which I think is consistent what was what was shown is most of the patents that are being challenged in the P tab are in litigation, right. So there is concurrent litigation. And I would say if you look at the patents even more, a lot of them are tech patents. Right. And versus on the life sciences side. And some of them are really broad patents as as Scott mentioned. So, you know, then that's why you see a lot of those patents being invalidated by the P tab. Right? Because they are, if you will, a patents that are broad that are being challenged that are being asserted against maybe five or six companies at the same time. and you have five or six companies filing pizza proceedings, right to try to invalidate that patent. So there a lot of resources being thrown at the P tab, which again, an examiner doesn't have right to be heard sort of how much time they get to examine a case, an application. So in that sense if the system is likely working, right, is it from a pattern perspective trying to invalidate some of those patterns? Because they're much easier to invalidate before the pizza oven? I know, we'll get to that. And why is that? But But I do think the system is working from that perspective. Of course, when you have litigation, both at the P tab and in district court, again, depending on the court, and depending on which side you're on, you don't you don't necessarily like it. In terms of kind of bringing back to the topic for this conference. What should patent owners do to improve their chances of success at the P tab? What I would say is kind of maybe saying it differently than what Scott said, is build a stronger fence around your property. What I mean by that is, you know, look at and I think this maybe goes back to what John Chen was saying, from even a one on one perspective, put more in the claim that that goes to sort of the novelty goes to sort of the inventiveness. Yes, you know, that could work against you from a infringement perspective. But hopefully, you can walk a fine line. And a lot of times when you're prosecuting, you don't know who the defendant is. So but if you can put more in those claims and have more than one pattern that kind of protects your property right, protects your invention. I do think it makes it harder from a PETA perspective. And we've seen this in practice, right? I'm on both sides. I know Scott, has done a ton of Petitioner work as well. If you look at a lot of the cases that are being filed, these days, they don't just have one patent, it's five or six patents. And all at the end of the day, all you need as a panty is one claim. Right? That's all you need, for that one claim to survive for litigation. So and that's what we've seen. from a strategy perspective, there are a lot more patents thrown in in any given case. And of course, that increases the expense of litigation, right, whether it's at the P tab or the district court. Scott,


Rochelle Dreyfuss  17:17  

Naveen both talked about ways that people might be adapting to this new system. Gabriela, do you want to say anything on that issue?


Gabrielle Higgins  17:26  

I mean, one of the things that I think is difficult is advising our clients, what we're really looking for is predictability and clarity. So that when the client asks you the question, okay, you know, on a scale of one to five, what are your chances of getting this thing instituted? Or? I've got district court litigation going on I now I'm in East Texas, and I have a H trial scheduled, you know, 18 months from now, should we? Or should we not go to go to the P tab? In this situation? And, you know, what you have to realize is that, you know, it was 2012, when we started doing these kinds of proceedings. So we're still in a very new world with what on the order of about 250 judges around the country, and one director, who, you know, has been trying through right now director kind of decisions to try to give us some clarity, but there just as a lot of confusion out there. And, you know, that's what I think, you know, we should be striving towards, and we're still in a world where there is a lot of all over the place.


Rochelle Dreyfuss  18:48  

So let's get back to this question of litigation overlap. We heard about the district courts, but what's going on? In the P tab system, I just want to say one thing. There's Amy Semaj, who is a professor at Buffalo has been looking at this question of the overlaps and trying to get some statistics on that. She had hoped to have a paper for all of you for today. But she had some personal problems, but a draft of the papers outside of people want to look at it. And it is only a draft. There are typos in it. I'm gonna really push her to give her something. So forgive all of her typos, but she does have some interesting statistics. But, so let's talk about you guys now. So FinTech hasn't done anything? What's it done? Is it still the rule? So


Gabrielle Higgins  19:39  

just to make sure that people even understand what we're talking about when when we talk about FinTech have been to visit case. Which, you know, back before 2021 was one of those nitpicky, you know, procedural things that we as practitioners that we're dealing with, were Um, if you're the patent owner, and the petitioner brings a petition before the P tab, you, you argue, Well, wait a second, I've got this district court action, and the district court case is going to get to trial long before I can even finish this thing with a final written decision at the P tab. And because of that, you the P tab audit, just discretionarily not even instituted. And prior to about 2021. You know, there were quite a few cases that were not getting instituted, just based on procedural grounds alone. And this is one of the areas where there has been, and they're, you know, that came under a lot of, you know, political, you know, attack. And so we have kind of swung the pendulum on that issue where now it's very rare that you're going to see a font of denial of institution. And that's because the judges now, if they have a situation where they run through these FinTech factors, and yes, the district court litigation is going to happen in advance of the final written decision. That judges now under the direct under the director, they have to consider the merits. And so now, it's not just, you know, I run through these FinTech factors, but they have to consider the merits. And not only that, in the current world we're living in, there has to be, quote, compelling merits, whatever that means, for them to institute. And, but there still are situations, I'll just give you an example of sort of bolts both sides of the world. I was in DC, and I know Navion was there where Samsung was on a panel. And you know, Samsung kind of got caught in the crosshairs, where they want it to be before the P tab. They find themselves in East Texas all the time, they had a case, going to trial before they could ever get to final written decision, because somebody said it earlier today. But when you are faced with multiple patents, and you do what we do, and then you know, the client says, Hey, can you draft five petitions in three months, you have to search for the art, you have to do all of that. It's it's not a doable thing. And by the way, the statute gives you a year to do that. But just getting back to the Samsung, this was Samsung, Cal Tech was the case. And Samsung didn't want to do one of these what's called a sotera stipulation, where they would have to give up their rights to argue their best art in the district court if they thought they had, you know, good, a good printed patent or printed publication. And so they didn't want to agree to that that larger standard of you know, anything that reasonably you know, could have been raised. Right. So they filed something less than that stipulation. They didn't get instituted before the before the P tab. On the other hand, you know, we're seeing there was just this month on the the other side of the world on the biocide. You know, there was a situation in the vaccine space, Pfizer moderna, where Pfizer brought the petition and patent on a raised fint IV, and the judges went through and it was a case in the district of Massachusetts, it's pretty far along. They were already past claim construction, it pre 2020 21, there would there would have been no institution. But in this situation, the judges ran through the factors. They picked what they thought was the strongest ground of invalidity. And they said we see compelling merits and with an 80 Page decision, we're gonna go forward here. So when I said, you know, that's the world we're living in right now.


Rochelle Dreyfuss  24:03  

So it was a bust.


Scott McKeown  24:06  

I mean, as defend to I've probably benefited, you know, more than just about any practitioner, I've had a number of these things go my way. But that said, I think it's wrongheaded policy. The statutes provide for one year for petitioner to come in and file a petition. And without notice and comment rulemaking, the agency came along and said, Well, no, you know, we're going to sit down and see, you know, what's the best for overall patent policy in this country? You know, there's there may be a trial coming up in Texas that could beat us to the punch, and therefore, you know, we're gonna decide that it's best for the system. If we sort of take a step back, ignore the merits and just deny on discretion. I just don't see how you get there, how you get judges and then I have a very close colleague will say that that is on the board but say just to calm And, you know, I don't see how you get there not Senate appointed we we've been through all of that in Arthrex. And they're making decisions that could cost companies billions of dollars. And that was the VLSI, Intel case, right? Those petitions were filed, they had viable grounds in them, they were turned away as a matter of discretion, Intel gets tagged, and I don't work for Intel, until it gets tagged with a multibillion dollar verdict. And, you know, later as a consequence of some other things that happen, ultimately, those grounds were repurposed by another file, or they get to the board, and they're instituted, you know, do we want people that aren't appointed by the Senate, you know, making decisions that could cost American businesses, you know, billions of dollars, you know, my two cents is we don't want that. And again, if we do want that, that should have been notice and comment rulemaking so that we can get everybody, you know, on paper as to those positions as in that's the way that administrative law is supposed to work. Unfortunately, we're in a position where, you know, the the patent office is not the sexiest posts from a political perspective, the directors getting in the chair later and later, it seems every administration. And so what happens is, you have no time to issue the rules. And so you start seeing memos being issued, and, and the director review process is now a way to drive policy by the by the political appointee. And it needs to be done the right way with rulemaking. And, you know, ffensive is a good example of that we had directory on coup that wanted to, you know, basically add some pro patent donor controls to the P tab process, and did that by by implementing a lot of this fence of practice. And then we had director of a doll come in, who, you know, was backed by Senator Leahy that frankly hated all of the offensive practices. And, you know, we get a memo as she comes in the door that essentially waters a lot of that down. And so we're gonna keep flip flopping this way, unless and until we get some rules. And there's, to my knowledge, there's still litigation pending, challenging ffensive as being outside the administrative law practices. So who knows, maybe it all goes away, before we even get the next director.


Naveen Modi  27:12  

I think this discussion kind of proves the point. I was saying earlier that we're looking at how much time we're spending discussing procedural issues and not merits right. In the decisions that Gaby mentioned, the biotech Pfizer, I'm very familiar with those decisions, because I worked on those cases. And they were instituted and Bruce worked on those cases. And I would just commend someone to go look at those decisions. As Gary mentioned, they're over 80 pages long. The finish of analysis is like 25 pages out of those 80 pages, you know, look at cover instead of sort of talking about patentability and and ultimately the board did get that and as Gabby mentioned, they've they found that the merits were compelling. So they did Institute. But I feel like we shouldn't have been even discussing FinTech in a case like that, or in some of these other cases, because the statute does give you one year to file a petition, right. And so the vintage stuff has been a sideshow. And like I said, I do work on both sides. And even for me, I feel like, you know, phantip has went too far. I think Director of a doll is trying to sort of scale it back, I don't think it has come back as much as it probably should. The P tab is still denying many cases in light of printf. And maybe sometimes it's the easy way out, they just feel like maybe the cases are tough, so they're not going to get into the merits. So they're going to just look at the festive factors. And if they feel like if entire argument has been made, they're gonna deny the petition. And I actually had another case where we saw FinTech work, and kind of it shows you the the resources being wasted where we actually filed, our client was sued in Texas, and this was on a in the on the life sciences side. They were sued in October of I'm just gonna make up the years, let's say 2019. We filed a PGR petition bobbin in two months of our client getting sued, and the P tab actually denied and this was a Texas case, the P tab actually denied our petitions in light of fintech. In that case, we saw rehearing, we saw a pop review in that case, and then after a few months now we're like a year into it, the P tab actually flipped and instituted those cases. Then there comes a jury verdict in the in the Texas case, and the patent owner seeks rehearing guess what the P tab D Institute's the proceedings. And then to finish the story. Then we again saw it rehearing by the director in light of the memo by director of a doll and then they reinstituted those proceedings. So here we are now, right? This was fall, I'm pretty sure this is in October of 2019. We are now in 2024. Right where those cases should have been decided by the P tab, we did invalidate the patent at issue, we finally got a final written decision in I think it was January of this year or February of this year. And now we are in a race to finish before the Federal Circuit where the district court case has gone up. And you won't be surprised the district court found that the jury found the patents not to be invalid, right and a finding of infringement. So our client appealed in that case, and then the P tab has now found the patents to be invalid. I know I'm jumping ahead a little bit, I will get to this point as well. But now we're in a race to finish. But that shows you I think that's a prime example of how it was such wasteful litigation in my mind of sort of instituting the instituting, re instituting. And then the P tab did finally get to the final written decision, which it should have come to in early 20. Right 2021 If you kind of do the math, but that is sort of the you know, the consequence of fintech. So which is why, for me, I think a lot of these procedural fights like FinTech, if we should just not have them. I


Gabrielle Higgins  31:17  

just want to though, for FinTech, now, you do have to the board will have to address the merits. And so as Petitioner you, that's still really went when I'm doing it, I want to think about the merits and actually, the merits can can really work in your favor. We had a situation where, as Petitioner we filed, you know, we put forward our best case, there was a there was a fictive issue. But yet the board then found compelling merits. And it's settled that case. And just you know, from a settlement perspective, people asked about settlement, about 30% of these P tab proceedings settle about half before institution and about half after me,


Rochelle Dreyfuss  32:06  

I created sistex on that. And it's actually interesting, it goes up and down and up and down. According to her, so are there District Court practices that work better than other district court practices? Are there some courts that are handling this overlap problem better than other courts? And are there best practices that we might think of trying to adopt for all courts


Gabrielle Higgins  32:31  

and wants to tackle that, I


Scott McKeown  32:32  

mean, if you're a plaintiff, or if you're a patent owner, then then you're you're very happy the way that the Texas courts have been treating it, which is to, you know, not to be too flippant, but, you know, they essentially ignore what the P tab is doing outside of, you know, you know, Judge Gilstrap may interest day if every single claim of you know, a four or five patent campaign is instituted. But for the most part, you know, if you're playing if you're a patent owner, and you're concerned about the P tab, you're going to Texas and a couple years ago, when you also had ffensive, you know, that was a very effective one, two punch of going to a faster jurisdiction. And even if someone filed at the P tab, there was a pretty good shot that that wasn't going forward. And even if it did, you know, that district court proceeding is going to keep, you know, marching toward a trial date, and in a lot of at least the tech space where I am. And you've you're talking about non practicing entities and asymmetric discovery obligations. That's how you get paid. So you were going to Texas, you're going to the ITC or, you know, some other fast docket, you know, to really move what the P tab could bring to the equation in terms of either a stay or, you know, that institution decision providing some kind of milestone for a potential settlement. You know, it's it's been in a lot of these litigation campaigns going someplace where you can keep the meter running, so to speak on on the cost of litigation. You know, other district courts, other individual judges, obviously can view it differently. You know, nd cow, for example, is sort of the preferred escape route from Texas. But every court is different. And there's an appear to be any kind of unified view.


Rochelle Dreyfuss  34:18  

So let's talk about inconsistencies. So first of all, there's abandoning has abandoning the VRI helped to make things more consistent. What happens in cases where the jury verdict as people have described is different from what happened in the P tab? How are people thinking about that and how should that be handled?


Gabrielle Higgins  34:39  

I'll just kick it off by saying, you know, having done this for a while that I didn't really see much of a difference when at the patent office when we changed from VRI to Philips, because we were already in a situation where in the in the best of worlds you want to be consistent, you know, you want to be taking one consistent position. Should I claim construction across, you know, your litigation and your P tab proceeding? Are you going to get into trouble? So you want to figure out how to do that?


Scott McKeown  35:10  

Yeah, corozo oil states Arthrex. You know, they were all proxy arguments to essentially pull down the, you know, the whole, the whole system. And, you know, the argument and close Oh, at least the way I viewed it was never about, well, you know, we need to use Phillips at the P tab, because then it'll be consistent. Because if, you know, if you look at the two rubrics, they don't really differ, right, you know, broadest reasonable interpretation had been used prior to Phillips, you know, becoming a case, if you look at how to apply PRI in the MPP. It references Phillips, right. So it was never that there was anything drastically different between the legal analysis to my I was always the decision makers, right. The claim construction that's done by someone that has the scientific or engineering training is just going to be different than what happens in the District Court. And so the fight over VRI versus Phillips was really about, well, I got a Phillips construction and the District Court. And that's what happened in the Kozo case, that avoids the prior art and maintains my infringement, it would be great if I could keep that and I could go, and I could argue to the agency that they're bound by that. So that's really what that was about, it wasn't so much of once you reconcile these two frameworks that somehow, you know, the results will be the same. And that, that I think that holds true with a lot of the proposals to change the P tabs, what's lost on a lot of these proposals is, it's just different decision makers, you know, applying a clear and convincing standard at the agency, you know, will it change the outcomes? Sure. Is it going to make them like the District Court? No, because what's clear and convincing to someone that understands the technology is going to be quite different than than a generalist. So, you know, the short answer is, is it hasn't done anything, you know, in terms of making any real movement of the needle for patent owners. And that's that's just where we are.


Naveen Modi  37:09  

And all that. I agree with that. I don't think it has moved the needle that much. In some cases, I think it has made it harder for petitioners to file petitions. But I think in most cases, it doesn't matter, because petitioners will find art and say, Look, claim construction really doesn't matter. But then, I think going to the other issue that Rochelle raised was, what happens when there are inconsistencies in claim construction, I actually have a case right now where the patent owner is taking making certain statements about claim construction in district court, but to the P tab, they're saying something different. And so we're trying to get those statements in for the P tab and the District Court. Right. So both forms know that that you know, party is taking positions that are inconsistent. And certainly before the P tab, you're required to do that. And certainly, I would say, as an officer of the court, you're supposed to do this in court as well. And so that's how inconsistencies are handled. I don't think there are that many cases where this happens. But there are cases where this occurs. And in terms of when you do have cases, like I said, you get into this race, let's say you have a jury verdict of infringement, and the Pats not invalid. There's a big judgment, that's that's been awarded, and then in the meantime, and that's on appeal to the Federal Circuit, and then you have the P tab finding the pattern invalid, right. In the meantime, and in that case, really the best thing you can do. If you're on the on the petitioner side, you just need to try to line up the appeals, the Federal Circuit has been very good about trying to line up the appeals. If they're not too far apart, and you move to court, and sometimes the court does it sua sponte. That's really kind of your only avenue, you could certainly try to stay the case in district court, or try to accelerate in the P tab. But more likely than not your best option is the Federal Circuit hopefully, is able to align the appeals rather on motion or so spawning.


Gabrielle Higgins  39:15  

Yeah, I think it was mentioned earlier that, you know, just the large number of cases, it's like over two thirds of the the appeals to the Federal Circuit or from the P tab. And, you know, as the Navy points out, you gotta you gotta really focus on the standard of review there. Right. So claim construction is one of those issues that is can be looked at de novo. Right?


Rochelle Dreyfuss  39:37  

So I was on the National Academy of Sciences committee that recommended setting this stuff up. And we thought PGR is we're going to be where the action was, that these cases will be headed off in the first time months or year through these PGRs and they seem to be going nowhere. Does anybody have a theory for that?


Scott McKeown  39:59  

I think the main reason especially when you look at the vast majority of litigation in the country, it's it's non practicing entities and those patents are moved around they're purchased. They have claims that you read the specification, you think it means one thing. And the argument is the other way. And so those patents, especially since they're not coming from traditional competitors, you're not aware of those as a defendant that you can train that you can get them into the agency within that nine month window. So that's sort of the first sort of practical problem is is the limited window there. And then secondarily, even when you're in a dispute, and there's some continuations rolling out where you might have the option of filing a PGR? You know, you're typically looking at it as well, I could file a PGR. And if I lose, right, that estoppel footprint covers everything, 112, one to one, where if I wait nine months, and I file the IPR, you know, I'm just going in on the patents and printed publications and made maybe I feel a little, you know, maybe there's a little more comfort there that the you know, the technical folks are going to do, you know, a better job there. So I'm going to hold off on that, that PGR Yeah, I


Gabrielle Higgins  41:08  

think keeping some, you know, some powder dry is a big part of it. Yeah.


Rochelle Dreyfuss  41:12  

I mean, you know, I think what the National Academies was trying to do was mirror what happens in the EU, but in the EU, you bring these opposition's and you get the thing knocked out in every EPC country, whereas here, you know, we've we've got blonder tongue, so we don't need that. But I don't know any of the theories invented you have


Naveen Modi  41:32  

Yeah, no, I agree with what has been said so far. I do think it's the estoppel provisions. And in cases where we've actually employed it. It has been where the the development of the product is far enough in advance that we can actually let's say the patent survives a challenge, the company can actually go in a different direction. And so I think that's where we have seen it being used


Gabrielle Higgins  41:58  

was that on the life sciences side, yeah, it was.


Naveen Modi  42:01  

And so, so I think that's that's really why we're we see it use being used. And I think also, in at least in Europe, I feel like when there are opposition proceedings, it's easier to amend claims there versus here in a PGR. I mean, that doesn't explain why it's not being used from a petitioner perspective, but but at least it's easier to amend claims during an opposition proceeding. Whereas in a PGRN, IPR, even with sort of the new, I guess not so new provisions that were put in place under our former director, it's supposed it's supposed to be easier to amend claims, but I really don't think it is. So I think that's the other reason at least, we don't see a lot of the use of PGR.


Scott McKeown  42:49  

But we are starting at least I'm starting to see an uptick in the filings. You know, keep in mind that the beginning of the P tab, there wasn't a big population of patents that were eligible for PGR, because they were AIA patents. But post Amgen I'm seeing, you know, more companies interested in going in on one trial and PGR. And I filed a couple of those. So I do see, and it does tend to be in the unpredictable arts 112 arguments where you see PGR being used


Naveen Modi  43:16  

the most. And in fact, I think it's in those cases, it's purely one to have and not necessarily prior art. So it's kind of interesting to see how, you know, the PGR is being employed.


Rochelle Dreyfuss  43:26  

That's interesting. So is touched on this morning, but let's go into what's coming. What's coming down the pike, a word of the policy headwinds here. So are we gonna see new PTO regulations? And what are you hoping to see?


Gabrielle Higgins  43:41  

We'll see some, but they won't matter. That it's basically just, you know, codifying some stuff that we're already doing in practice. And anything that was controversial has pretty much been taken out of it.


Scott McKeown  43:54  

Yeah, the these are the advanced notice of proposed rulemaking one out over a year ago. And that was a collection of really all of the ideas that had come into the agency, which I think was unfortunate, because it created a lot of problems on the administrative side and 10s about I think there was 15,000 comments that came in. But yeah, the the rules that they're thinking of coming out with have been parked over at the Office of Information and Regulatory Affairs, there's still meetings ongoing. It's possible that time could run out. You know, we're coming to the end of director of Adele's administration here, the couple of rules that they do have lined up to, to possibly go to rules. As Gabby points out, it's, you know, putting your discretionary arguments in a separate, you know, 10 Page filing with your petition or making clear that just because of reference was cited in an IDS during prosecution, it doesn't mean it was considered for 325 D purposes. So, you know, pretty much nibbling around the edges as compared to some of the more ambitious Just proposals that were originally released during season nine,


Rochelle Dreyfuss  45:07  

so how about more authority for the directors, the director of PTO posts Arthrex. So we're seeing anything better happening there? You've already started complaining about that.


Scott McKeown  45:21  

I mean, it's it's been a, I think it's been an effective tool for the director, like I said, in the absence of notice, Director review, yeah, you know, the director to step in and drive some policy with with the director reviews,


Rochelle Dreyfuss  45:35  

but you don't like the loss of notice and comment rulemaking? No,


Scott McKeown  45:38  

I mean, it's Yeah, I mean, you know, it's one thing to provide notice of different interpretations and things that you would normally expect, and in those kinds of decisions, but it's become more of a Monette mechanism of well, you know, we don't have a lot of time here. And we need to provide some notice to the bar. So let's do it this way, when it


Gabrielle Higgins  45:55  

when it helps with clarity, that, you know, I'm in favor. You know, just to give you an example, there's a thing called real party and interests, you know, if I'm bringing if I'm bringing the petition, I'm supposed to name in the petition, you know, any of the other real parties. And one of the things when you're a defendant in the litigation, where lots of people have been sued, and you're trying to figure out, you know, what are we going to do here? There has been uncertainty about at what level of coordination is that going to make me a real party in interest over in the P tab, and, you know, a recent thing that the director, she just issued an order car manufacturers, you know, they all got sued together, and you got Volkswagen and Ford and Honda. And you know, one of them stepped up, they filed the first petition, and then another one who, you know, manufactures a different product, and they've got a different view of the world, they filed another petition. Well, of course, the the, the P tab said, No, we're not going to institute on that. Later, petition. And director Vidal turned around and said, Nope, I'm going to I'm going to vacate that denial of institution, and I'm going to try to make whatever the heck substantial relationship means I'm going to I'm going to try to make that clear by pointing out that just because I've been ordered as a defendant to cooperate and litigation, doesn't mean that that makes me have, you know, have a substantial relationship for purposes of the keytab. So, you know, it does provide some clarity. But you know, the proper way to do it, as Scott pointed out is through, you know, rulemaking, and


Naveen Modi  47:32  

I'll just add, I don't know how much more time we have. So I'll just make it quick. I do think directive a dol is using her discretion power, whatever you want to call it much more than I think other directors that we've seen, for example, she's willing to sanction folks, right, that we really haven't seen other directors do in the past. So I do think she's trying to use that authority, and of course, a director of views. She's trying to use those as well, you know, her authority on director view. And, and I know she has sort of an entire panel under her that looks at those cases. So I do think she's, she's using it. And you know, whether it's sort of in the right way as it's right. It depends on what side you're on. But But I do think she's trying.


Rochelle Dreyfuss  48:15  

Yeah, so the real question Congress, so anything good in the probate law, that you would hope that eventually gets enacted? I'm concerned about changing the burden of proof. You know, I think that the p tag was partly invented because of AI for AI. And I like the idea of having preponderance of the evidence, but I don't know how you guys feel about that. Then the other thing I'm interested in is Article Three standing and whether Article Three standing should be required of the people who litigate in the P tab, which is not true right now, or should the people who litigate in the P tab and lose have Article Three standing to bring an appeal comments on that? Before Michael comes up to us and saying it's all over? I guess


Gabrielle Higgins  48:57  

I'll just raise two points of stuff in the prevail act that I don't agree with. You know, one of the things is that estoppel should apply it institution, and it should not be so it should be after you've had the full opportunity to litigate before the P tab at final written decision. And then I don't think you should make the parties choose between District Court and the P tab. You know, there were already certain things in place estoppel and SubTerra stipulations and things like that. I think people should be able to choose their forum.


Scott McKeown  49:31  

Yeah, I don't consider the prevail EC serious legislation. I know Senator Tillison coons would disagree with me. But I think it's very one sided. And for that reason, it's been pending or, you know, proposed. This is the last seven or so years. You know, when you talk about changing the standard of evidence, I just I don't see how it makes sense. On the one hand, you have clear and convincing what you're applying outside of the agency and an artist Well three court before a generalist yours judge, that don't have any insight into the technology that are presuming the government did its job appropriately. And to reverse that decision, it needs to be clear and convincing, that makes perfect sense. So that's validity. patentability is is a different issue in both standards. And temporarily, you're going back to the agency, and you're saying, had you known about this prior art, applying the standards that you applied? Would you have determined those claims patentable, you know, ultimately patentable, invalid, the claims get cancelled, you arrive at the same spot, but the patentability question is different. So how do you change that to? Well, here's some prior art that you didn't know about. And we know that the examiner only spent 20 hours on this. But you know, let's presume that no mistakes were made, even though clearly there might have been and apply this higher standard. It just doesn't make any sense to me logically, number two, I just don't think lobby wise it has a shot at ever getting through. And then finally, if it did, it's never going to align with what happens in the District Court. Because, again, you've got people that understand the technology. And what's clear and convincing to the expert agency is going to be different than what's clear and convincing to generalists.


Naveen Modi  51:17  

And I'll just make a comment on the Article Three standing issue that you mentioned. I think, really the problem, why that that's become a issue is you have what I would call reverse trolls, that started using the P tap system to basically right extort money. You know, one of them was the coalition of affordable drugs, you know, many years ago, and they started filing challenges to patents on by drug companies, right, and in exchange for basically money, right, that that will drop those challenges. So I really think it's those types of entities that have created this issue. So you know, whether it's, I'm not sure it's sort of fixing it through Article Three standing is the issue, because if you look at a lot of the cases that are being filed, they are being filed by competitors, or someone who's been sued. And generally, I think that that's been working fine. I think it's sort of these other companies who have interests that are maybe purely financial and not necessarily going to


Rochelle Dreyfuss  52:20  

raise coming in, I


Gabrielle Higgins  52:22  

actually challenged these guys to see if they could get you to speak during our panel. Good thing if


Judge Raymond Chen  52:30  

this is a friendly question. And the friendly question, is this. Just curious, this is a question for all three, Gabby, Scott and Naveen. When a client wants you to, you know, file up IPR petition against some patent? Just generally speaking, how often? Are you able to find what you consider to be really good prior art? And then, when you do find that really good prior art, how expensive was that? And how much time did it take? As a general matter? Does it maybe just take a week? And then you just paid some prior art search firm? Five or 6k? And that was it? Or as, as a general matter? It's actually a much more intricate searching inquiry, that tends to be very expensive. So I'll


Gabrielle Higgins  53:22  

lead up I'm not going to answer the how often because I don't know that I could put a number on it. But 75 Five, I will answer the question about how hard it is. And, you know, people don't realize that it's, you know, living in the trenches, you're paying outside vendors to do those searches, you're getting on, you know, Google Advanced patents, and you're searching there, you're you're speaking with experts. Oftentimes, you're in a situation where, you know, mucho defendants have all been sued at the same time, and you've got 10 Different companies that are that are paying 10 different search firms to do. So a lot, a lot of art is being quite frankly, sometimes the challenge is to dig through that art and find the that that key reference or in most cases, references, right, that you want to go forward with. But I think it's always a calculus, you want to look at the whole picture, you know, things are best done, when everything's looked at as a whole, you know, what's happening in the litigation, what do you want to take into account? Like, what are the infringement non infringement positions, you know, is the pizza of the plate? So, I will say that the answer is sometimes No, this is not a case where we want to go forward in the P tab. We, you know, we there was a good non infringement position.


Scott McKeown  54:46  

I mean, I think if you look, it's gonna depend on the technology, of course, but I think if you look at the general case, that's driving the numbers in a district court, your general nonpracticing entity case, most of the time it I would say, and you know how fast how much in terms of resources, it's disappointing the number of times where I find the best priority is already in an IDS, or is already in front of the examiner that didn't appreciate really what they were looking at, I would say that happens 40 50% of the time. So, you know, from a, you know, patent examination quality perspective, there could be a lot, there's a lot of meat left on the bone in the examination process that, you know, maybe could have made a difference had there, you know, we talked about this this morning. It's a question of money and resources, but a lot of the times I'm using art that's in and IDs, or, you know, a slightly different combination of what the examiner considered because they they miss the sort of important and what's


Gabrielle Higgins  55:49  

at risk, you know, is this a billion dollar case? Is this a half a billion dollar case? Or, you know, we talking about like some nuisance suit, and that that, you know, that drives the budgets that we get to do the work?


Naveen Modi  56:03  

And I agree, I mean, I think it really depends on the pattern. I think there's some patterns. And I would say even I don't know if Scott and Gabby, you've seen this, I would say in the early years of the PTR practice, we were able to find art much easier than now. And I think maybe this goes back to the point I was making is that you actually have multiple patents being asserted. So I don't think it's uncommon for us to do multiple prior art searches to find that art. So but I do think over the years, I feel like the time and resources spent on finding the right art has gone up, at least from my perspective.


Rochelle Dreyfuss  56:42  

Well, please join me in thanking the panel.


Michael Weinberg  56:51  

The engelberg center live podcast is a production of the engelberg center on innovation Law and Policy at NYU Law is released under a Creative Commons Attribution 4.0 International license. Our theme music is by Jessica Batke and is licensed under a Creative Commons Attribution 4.0 International license


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