How the America Invents Act (AIA) gives you opportunities to challenge other’s patents before or after granting Featured

3:47pm EDT January 10, 2013
How the America Invents Act (AIA) gives you opportunities to challenge other’s patents before or after granting

Challenging a patent is a strategic decision made by a individual or business and can be done for a number of reasons and at various stages of the patent process — such as during the patent “pending” phase or after the patent has been granted and issued. However, challenging a patent before or after granting is expensive and could have some pitfalls, such as potentially making the challenged patent more resilient to validity assertions if a challenge fails.

Smart Business spoke with James Scarbrough, a partner with Fay Sharpe, LLP, as well as law clerks Matt Burkett and Erik Keister, about strategies for challenging patents and when it’s appropriate to do so.

Why would someone challenge a patent?

There are several reasons to challenge a patent. For example, someone can challenge a patent if they think that the person(s) that obtained the patent stole or copied the invention from them. Another reason to challenge a patent is if there is a concern that a product or process may infringe one or more claims of the patent. Also, if a person has been accused of infringing a patent, and the person wishes to prevent or end a lawsuit or encourage a patent license agreement, the person may then challenge the patent. A patent or pending patent application can be challenged through the U.S. Patent and Trademark Office (PTO) as an alternative to court litigation.

How does a patent challenge work?

One type of challenge can be made after a patent application is filed but before a patent is granted or issued. This particular challenge is called a pre-issuance submission. Documents that can be considered prior art, such as another patent, a published patent application, or any other printed publication of potential relevance can be submitted to the Patent Office. The person submitting the prior art must also provide a concise description of relevance of each document. The submission must occur before a notice of allowance is mailed or the later of two events: (a) six months after the application is published, and (b) a mailing of a first Patent Office Action in which one or more claims are rejected.

The entity whose patent application is being challenged can submit a response to the challenge, but is not required to unless requested by the Patent Office.

Another type of challenge proceeding is called a derivation proceeding. In a derivation proceeding a person may challenge a patent or pending patent application if they think that an inventor in an earlier filed patent application derived the claimed invention from an inventor of their patent application. Any such petition may be filed only within the one-year period beginning on the date of the first publication of a claim to an invention that is the same or substantially the same as the earlier application's claim to the invention.

A third type of challenge is called a Patent Post-Grant Review. A Post-Grant Review is performed once a patent is issued and must be done within the first nine months of the grant date of the patent.  A patent owner is given three months to respond after the review request before the Patent Office decides to proceed forward with the review. The patent owner has one opportunity to file a response or amend claims. The challenge can be based on several factors within patent law, such as patentability, anticipation, obviousness, or indefiniteness.

What happens if you win a challenge? And, if you lose?

Winning a challenge could result in the patent being invalidated and any products or processes thought to infringe the patent claims can then be freely produced without threat of a lawsuit or legal action with regard to the challenged patent. A successful outcome might also result in the patent claim scope being limited such that a competitive product can be manufactured or sold without concern of infringement. Winning the challenge could also stop a lawsuit from being filed or a pending lawsuit that has been filed against the challenger. If a challenge is lost, i.e., the patent or patent application survives the challenge, the challenger could potentially be found liable for infringement in a pending or subsequently filed lawsuit. Additionally, a patent that survives a challenge may become stronger in that it has survived a review against additional prior art.

What’s the difference between challenging a patent before or after it has been granted?

When challenging a patent application before a patent is issued via pre-issuance submission, the challenger submits prior art and then is not involved in the process after that point. A pre-issuance submission can be made by anyone before a patent is granted.

When challenging a patent after grant, it depends on the timing whether it is before or after nine months since the patent had been granted. A Post-Grant Review can be performed if it is less than nine months after grant of a patent. A Post-Grant Review is advantageous in that the patent can be invalidated on more grounds and there is a lower burden of proof. Which challenge is appropriate depends on the timing of the challenge, the basis for the challenge and the person or entities making the challenge.

What costs might a company incur by challenging a patent?

Fees for the different types of challenges vary, and can range from $180 for every 10 documents submitted in a pre-issue prior art submission, to $60,000, which is the estimated cost of preparing a petition for derivation. And those figures may not take into all costs incurred, such as attorney fees. Ultimately, a company has to do a cost/benefit analysis to determine whether it’s worth spending the money to file a challenge, weighing the risks of not filing and possibly being exposed to liability.

James E. Scarbrough is a partner with Fay Sharpe, LLP. Reach him at (216) 363-9141 or jscarbrough@faysharpe.com.

Insights Legal Affairs is brought to you by Fay Sharpe, LLP.