USPTO Issues a Notice of Proposed Rulemaking on PTAB Changes

On April 19, 2024, the United States Patent and Trademark Office (USPTO or Office) issued proposed modifications to the rules of practice for inter partes review (IPR) and postgrant review (PGR) proceedings before the Patent Trial and Appeal Board (PTAB or Board).

According to the USPTO, the proposals are to enhance and build upon existing precedent and guidance regarding the exercise of the Director’s discretion pursuant to the America Invents Act (AIA) to determine whether to institute an IPR or PGR proceeding with regard to serial petitions, parallel petitions, and petitions implicating the same or substantially the same art or arguments previously presented to the Office. The proposed rules also provide a separate briefing process for discretionary institution arguments and align the procedures for termination of proceedings pre- and post-institution.

First, the proposed modifications would incorporate into the rules the factors the Board will consider in determining whether to institute an IPR or PGR for parallel petitions and serial petitions as well as set forth the framework the Board will use to conduct an analysis under 35 U.S.C. 325(d) when determining whether to institute an IPR or PGR.
The proposed modifications would define a serial petition as: “[A] petition that (1) challenges overlapping claims of the same patent that have already been challenged by the petitioner, the petitioner’s real party in interest, or a privy of the petitioner; and (2) is filed after (a) the filing of a patent owner preliminary response to the first petition; or (b) the expiration of the period for filing such a response under § 42.107(a)(2) or § 42.207(a)(2), or as otherwise ordered, if no preliminary response to the first petition is filed.”

A parallel petition would be defined as: “[T]wo or more petitions that (1) challenge the same patent and (2) are filed by the same petitioner on or before: (a) the filing of a patent owner preliminary response to any of the petitions, or (b) the due date set forth in § 42.107(a)(2) or § 42.207(a)(2) for filing a patent owner preliminary response to the first petition (if no patent owner preliminary response to the petitions is filed).”

The USPTO said it was doing this to provide more clarity regarding the difference in timing between petitions the USPTO deems to be filed in parallel and those it deems to be filed serially. To provide better clarity on this issue, the USPTO proposes to define a parallel petition in the rule as one filed during the time period for filing a patent owner’s preliminary response in the first proceeding.

Second, another proposed change would provide a procedure in which a patent owner may, in a separate paper filed prior to a preliminary response, request discretionary denial of institution. In this case each of the parties would have the opportunity, in a separate responsive briefing, to address relevant factors for discretionary denial. This separate briefing avoids encroaching on the parties’ word-count limits for briefing on the merits.

The USPTO also noted that nothing in the rules prevents the Board, when the circumstances warrant, from exercising discretion and authorizing the patent owner to include discretionary denial issues in the patent owner’s preliminary response. Further, to the extent the merits are relevant to discretionary denial, the parties may direct the Board’s attention to the petition and the patent owner’s preliminary response for discussion of the merits as contained in those documents. And, there may be instances in which it is appropriate for the Board to address discretionary denial even if the patent owner does not file a request. Thus, the proposed amendments also provide that the Board may raise discretionary denial sua sponte, in which case the Board will provide the parties with the opportunity for briefing.

Third, an additional proposed rule change would amend the rules of practice for the termination of proceedings in view of settlement to align the requirements for terminating proceedings pre- and post-institution, requiring that pre-institution settlement agreements be filed timely with the Board to support termination of a proceeding pre-institution. Specifically, the USPTO explained that the statute requires the filing of settlement agreements made in connection with, or in contemplation of, the termination of a proceeding that has been instituted, and is silent on AIA pre-institution settlement. The USPTO explained the proposed rule is promulgated within the Director’s authority to prescribe regulations establishing and governing an IPR under the AIA provisions.

Fourth, the last major proposed rule changes would add factors to be addressed in consideration of discretionary denial on the basis of parallel petitions and serial petitions. For parallel petitions, the various factors relevant to the good cause determination that may be considered by the Board, include: (1) a petitioner’s ranking of their parallel petitions in the order in which petitioner wishes the Board to consider the merits, (2) an explanation of the differences between parallel petitions, (3) the number of claims challenged by the petitioner and asserted by the patent owner, (4) whether the parties dispute the priority date of the challenged patent, (5) whether there are alternative claim constructions requiring different prior art, (6) whether the petitioner lacked information at the time of filing the petition; and (7) the complexity of the technology in the case, as well as any other information believed to be pertinent to the good cause determination.

For serial petitions, the factors the Board considers in determining whether to deny institution of a serial petition include: (1) whether, at the time of filing of the first petition, the petitioner knew of the prior art asserted in the second petition or should have known of it; (2) whether, at the time of filing of the second petition, the petitioner had already received the patent owner preliminary response to the first petition or had received the Board’s institution decision for the earlier petition; (3) the length of time that elapsed between the time the petitioner learned of the prior art asserted in the second petition and the filing of the second petition; and (4) whether the petitioner provided an adequate explanation for the time elapsed between the filings of multiple petitions directed to the same claims of the same patent.

Public comments on the USPTO’s proposed rule changes are due within 60 days from April 19, 2024.