BPI and Coalition of Trades Comment on U.S. Patent and Trademark Office Proposal

Dear Director Vidal:

The Quality Patents Coalition respectfully submits these comments in response to the United States Patent and Trademark Office’s (the “USPTO” or “Office”) Request for Comments on the Advanced Notice of Proposed Rulemaking published on April 21, 2023 and titled Changes Under Consideration to Discretionary Institution Practices, Petition Word-Count Limits, and Settlement Practices for America Invents Act Trial Proceedings Before the Patent Trial and Appeal Board, 88 Fed. Reg. 24,503 (the “ANPR”).

Quality Patents Coalition

The Quality Patents Coalition (QPC) is comprised of companies and trade associations representing the financial services, fintech, retail and restaurant industries. QPC is dedicated to ensuring the patent system fosters innovation through issuance of quality patents, provides fair and efficient post-grant and inter partes review procedures as set forth in the America Invents Act, and adheres to the letter of the law and judicial precedent.

We have a strong interest in the proper implementation of America Invents Act (“AIA”) post- grant proceedings, such as inter partes review. Today, our members and many other companies are heavily investing in developing technologies that touch all aspects of society, including healthcare, climate change, data security and privacy, and access to education, to name a few. We have increasingly sought to protect such innovation through the patent system. Thus, we have a strong interest in ensuring that AIA post-grant proceedings are fair to patent owners.

At the same time, our industries and many others have been plagued for years by patent litigation based on patents that claim longstanding and well-known concepts or are otherwise of low quality and that should not have issued. The issuance of such patents leads directly to costly and wasteful litigation that is detrimental to economic progress and actual innovation. We therefore have an equally strong interest in ensuring that AIA post-grant proceedings, which were designed to provide a lower-cost alternative to district court litigation for determining patent validity, are effective at accomplishing that goal.

Discussion of the Proposals

Sections 316(a) and 326(a) of the AIA grant the Director the authority to promulgate regulations governing certain aspects of AIA proceedings.[1] We appreciate the Director using rulemaking procedures to exercise this limited authority because it fosters transparency and public involvement in the rulemaking process. However, we are greatly concerned that most of the proposals in the ANPR exceed the Director’s authority and depart from the text of the AIA and the congressional intent behind it by imposing new limits on post-grant proceedings that would reduce the efficiency and effectiveness of those proceedings.

Congress intended that an IPR or PGR proceeding should generally be instituted if a petitioner establishes “that there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition.”[2] Congress recognized that there should be limited exceptions to this institution standard, and provided these specific exceptions in the text of the AIA.[3] These exceptions make clear that the denial of a petition that otherwise meets the institution standard is limited to specific and unique circumstances.

The ANPR sharply departs from this intent. The proposals add numerous requirements for petitioners that were plainly not adopted by Congress and create a framework that would make discretionary denial routine and ubiquitous. As detailed below, while the AIA grants the Director authority to promulgate regulations governing AIA proceedings, it does not grant the Director authority to depart from the text of the AIA and implement rules that make discretionary denials the norm.

To read the full congressional letter, click here or the download button below.

[1] 35 U.S.C. §§ 316(a), 326(a).

[2] 35 U.S.C. § 314(a); see also id. § 324(a).

[3] Congress’s limited exceptions include that: (a) an IPR petition cannot be filed until 9-months after a patent is issued or the conclusion of a PGR proceeding (35 U.S.C. § 311(c)); (b) an IPR proceeding cannot be instituted if the petitioner or real party in interest filed a civil action challenging the validity of the patent prior to filing the IPR petition (id. §315(a)(1)); (c) an IPR proceeding cannot be instituted if the petition was filed more than one year after the petitioner, real party in interest, or privy of the petitioner is served with a complaint for patent infringement (id. § 315(b); and (d) an IPR petition can be denied if it presents “the same or substantially the same prior art or arguments [that were] previously … presented to the Office” (id. § 325(d)).