Ch7. Patent Trials & Disputes — From PTAB to Federal Court

USPTO Post-Grant Proceedings

Ex Parte Reexamination (37 CFR § 1.510):
Patent owner or any third party submits prior art
USPTO reexamines the patent in view of the prior art
Conducted by the examiner who issued the patent
Third-party requester has limited participation after initiation

Inter Partes Review (IPR, 35 USC § 311):
Any person who is not the patent owner may petition PTAB
Grounds limited to: § 102 (novelty) or § 103 (non-obviousness) prior art
Must be filed within 1 year of being served an infringement complaint
"Reasonably likely to prevail" standard for institution

Post-Grant Review (PGR, 35 USC § 321):
Petition must be filed within 9 months of patent grant (or reissue)
Any invalidity ground allowed (including § 101 and § 112)
Petitioner must show "more likely than not" at least one claim is unpatentable

IPR / PGR Petitioner Estoppel:
After final written decision, petitioner is estopped from raising in district court
any ground that was or reasonably could have been raised in the proceeding

Invalidity Proceedings at PTAB

Filing the Petition:
Filed with the PTAB (Patent Trial and Appeal Board), an administrative tribunal
within the USPTO
Petitioner identifies claims challenged and prior art relied upon

Proceeding:
Patent owner files a Preliminary Response; then PTAB decides institution
If instituted: Discovery, depositions, oral hearing
Trial concluded within one year of institution (PTAB's statutory goal)

Decision:
Written decision: claims confirmed, amended, or canceled
Canceled claims are void ab initio

Appeal from PTAB:
To the United States Court of Appeals for the Federal Circuit (CAFC)
Discretionary further appeal to the Supreme Court

Patent Litigation in Federal Court

Civil Litigation:
Complaint for patent infringement in US District Court
Proper venue: TC Heartland LLC v. Kraft Foods (2017) — defendant's place
of incorporation or regular place of business
Common venues: D. Delaware, N.D. California, W.D. Texas

District Court Infringement Suit:
Claim construction (Markman hearing) → Infringement analysis
Counterclaim of invalidity (§§ 101-103, 112)

Damages (35 USC § 284):
Reasonable royalty (floor — Georgia-Pacific factors)
Lost profits (Panduit test: demand, no acceptable non-infringing substitutes,
manufacturing capacity, and lost profits amount)
Treble damages: willful infringement (Halo Electronics v. Pulse, 2016)

Criminal:
Counterfeiting only (18 USC § 2320); not mere infringement

Dispute Strategy

Patentee Strategy:
Gather infringement evidence (product teardown, source code, sales data)
Confirm claim scope (claim construction analysis)
Send cease-and-desist letter
Negotiate license or settlement
File suit if negotiation fails

Accused Infringer Defense:
Prior art invalidity search (PTAB petition / invalidity counterclaim)
Design-around: modify product to avoid claim elements
IPR petition: challenge patent at PTAB (often before or during litigation)
Declaratory judgment of non-infringement (DJ action)

Non-Practicing Entity (NPE) / Patent Assertion Entity (PAE) Response:
File IPR petition promptly (within 1-year window)
Seek inter partes review on § 102/§ 103 grounds
Build defensive patent portfolio (cross-license, defensive publications)
Consider joining a patent defense consortium (e.g., Open Invention Network)

Key Concept Cards

IPR = PTAB Invalidity Proceeding (§ 102/§ 103 Only) ★★★★★ : Most-used post-grant challenge; must petition within 1 year of infringement suit. Memory hook: IPR = patent killer at PTAB

CAFC = Exclusive Jurisdiction over Patent Appeals ★★★★★ : All patent cases from district courts and PTAB appeals go to the Federal Circuit. Memory hook: CAFC = patent court

Reasonable Royalty = Minimum Damages Floor ★★★★☆ : 35 USC § 284 guarantees at least a reasonable royalty even without proven lost profits. Memory hook: damages ≥ reasonable royalty

Practice Questions

Q. What defenses does an accused infringer typically raise in patent litigation?

(1) Non-infringement: at least one claim element is absent from the accused product (literal) and doctrine of equivalents does not apply. (2) Invalidity: § 102 anticipation, § 103 obviousness, § 101 ineligible subject matter, or § 112 written description/enablement. Invalidity can be raised as an affirmative defense or counterclaim in district court, or via an IPR petition at PTAB. (3) Equitable defenses: inequitable conduct (fraud on the USPTO), patent misuse, laches, equitable estoppel. (4) License defense: the accused infringer has a license (express or implied). Most powerful defense: compelling prior art that anticipates or renders obvious the asserted claims.

Q. What is the difference between an IPR and a declaratory judgment action for non-infringement?

IPR (PTAB): challenges the validity of the patent on prior art grounds; if successful, the patent claims are canceled and void ab initio — binding on everyone, not just the parties. Filed at the USPTO. Declaratory judgment (DJ) action (district court): seeks a court ruling that the plaintiff does not infringe — but does NOT necessarily invalidate the patent, only determines non-infringement for the specific accused product. A DJ action is useful when the claim scope is narrow and clear non-infringement is demonstrable; an IPR is preferred when there is strong prior art. Accused infringers often pursue both in parallel.