New Proposal May Only Amplify Current Amendment Criticisms

A few weeks back, the USPTO published a Request for Comments (RFC) (here) on a proposed procedure for motions to amend in AIA Trial Proceedings. The proposal provides for a pilot program in which the parties are provided with an initial Board assessment of the proposed amendment. The assessment is provided early in the process. The idea being to provide for a meaningful opportunity for Patent Owner’s to revise proposed amendments where appropriate.

While the agency’s effort to improve the amendment process is to be applauded, its proposal will only increase Patent Owner costs and frustrations.

As I have pointed out a number of times, a significant driver behind the lack of amendment attempts (independent of PTAB hurdles) is the fact that amendment is a non-starter for many litigants. But setting those practicalities aside, Patent Owners that can freely amend, should have a robust opportunity to do so.

The current RFC proposal is show below (revised trial schedule on the bottom, existing on the top):

The first thing you notice from the proposal above is the newly compacted trial schedule. That is, within 1.5 months of institution, a Patent Owner must submit its Motion to Amend (MTA). So, rather than provide the MTA (under current practices) with its Patent Owner Response, the proposal separates the two filings for the purpose of providing a non-binding Preliminary MTA Decision at month 4 of the trial schedule. This would allow for a second amendment at month 5, where appropriate. But compacting an already tight trial schedule is only going to lead to further criticism, and for little additional value.

What the agency needs to appreciate is that existing MTA practices are criticized as follows:

1. Amending before trial concludes conveys weakness (making an MTA “contingent’ doesn’t change the practical reality given the relatively few attempts)

2. Patent Owners are forced to amend before a claim construction is fixed.

3. Patent Owners are forced to amend before the Board takes final positions on the prior art.

4. Contingent amendments increase cost where they may not even be necessary.

5. The PTAB process elevates speed over substance.

The RFC proposal will do little to improve Patent Owner’s current position, or appease critics. The new proposal only amplifies (5) for PTAB critics and resolves none of factors 1-4. Indeed, Patent Owner’s might be forced to amend before they are even able to secure cross-examination of Petitioner’s expert; a far worse position than before.

There is a common sense solution to all of these issues. But, it would require the agency to extend trials involving amendments by 6 months. Strangely, the agency has consistently signaled that it is unwilling to consider such solutions. Presumably, this reluctance is to maintain its history of concluding trials within 12 months. While that history may be a source of pride for the agency, it is a mindset that critics point to in emphasizing their speed over substance mantra. The statute allows for the agency to extend PTAB trials up to 6 months for cause, given the history of PTAB amendments, I can’t think of a better cause.

Adopting a hybrid trial schedule would provide value to Patent Owners, the hybrid schedule would look something like this:

First, there would no amendments before the time of the “Provisional FWD,” allowing the Patent Owner to focus on its case-in-chief. The Provisional FWD is the eventual FWD issued 10-14 days before the 12-month statutory deadline. With the knowledge of the full record, fixed claim construction, and Board’s findings of the art, the Patent Owner would consider whether it desires amendment. Where no amendment is desired (i.e., no Amendment Notice is filed), the Provisional FWD is entered 10-14 days later as the FWD and the trial is concluded.

On the other hand, if amendment is desired, an Amendment Notice is filed by the Patent Owner. This Patent Owner filing would trigger issuance of a second Scheduling Order for a 6 month extension of the trial to account for the Amendment Phase. (This would ensure that the opportunity to amend is offered “during trial” as required by the statute). In the 6-month amendment phase, the Provisional FWD would aid the Patent Owner by providing fixed claim constructions and prior art feedback. Moreover, the Patent Owner would not have to expend resources on the amendment until it has been informed by the Board that its original claims will be cancelled. As to the briefing of the Amendment Phase, this would be the same as that proposed in the RFC above. At the close of that process the Provisional FWD is entered, and a decision on the MTA is appended (i.e., the Provisional FWD does not change) to conclude the trial.

The hybrid trial schedule would allow the PTAB to implement its proposal to allow for a second amendment where appropriate, and address all existing criticisms.

Scott A. McKeown is an author of the Patents Post Grant.