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District Court Finding Doesn’t Preclude PTAB Proceeding

by Mike Baldwin | Jun 15, 2023 | America Invents Act, Patents

The Patent Trial & Appeal Board refused to terminate an inter partes review (IPR) proceeding, finding that collateral estoppel and claim preclusion do not apply to previous findings from a district court proceeding. Patent Quality Assurance, LLC v. VLSI Technology LLC, IPR2021-01229, Paper No. 128 (PTAB June 3, 2023) (Melvin, Giannetti, McNamara, APJs).

Patent Quality Assurance filed a petition for IPR on July 7, 2021, against a patent owned by VLSI. The Board granted institution. The Board later instituted on a substantively identical petition filed by Intel and granted Intel’s motion for joinder to add Intel to the Patent Quality Assurance IPR proceeding. Prior to the July 7, 2021, petition, litigation between VLSI and Intel resulted in a jury verdict that Intel infringed certain claims of the challenged patent. Invalidity was not presented to the jury. On May 10, 2022, the district court entered final judgment, including a finding that Intel had not proven invalidity. Based on the district court’s judgment, VLSI asserted that claim preclusion barred Intel from challenging validity of the asserted patent in IPR and sought termination of the IPR as to Intel.

VLSI argued that the elements of claim preclusion were met because both VLSI and Intel were parties to both cases, the district court entered a final judgment for infringement and no finding of invalidity, and the effect of Intel’s IPR was to collaterally attack the final judgment in the first case. Intel responded, arguing that claim preclusion does not apply to IPRs from the district court under the America Invents Act (AIA).

The Board agreed with Intel that estoppel did not apply. Intel argued that if Congress had intended for IPRs to be precluded by claims in a parallel district court, it would have identified that as one of the estoppel circumstances in the AIA. VLSI argued that the Supreme Court’s 1991 decision in Astoria Federal sav. & Loan Ass’n v. Solimino applies only when an agency decision precludes a later court decision and, therefore, common-law claim preclusion would apply to the IPR proceeding barring a plain statement from Congress showing intent to overcome preclusion.

The Board disagreed, noting that the cited case law related to statutes where a later statute superseded the earlier one and required a clear and manifest intent to repeal the earlier statute. The Board found that there was no express intent to repeal the earlier statute regarding estoppel, and the jurisprudence constantly counsels against repeal “by implication.” The Board also crucially noted that there was no statutory conflict between the earlier and later statutes, and the question, therefore, was whether (under Astoria) the AIA showed congressional intent that common-law claim preclusion should apply to IPRs.

Reading 35 U.S.C. § 315(e), the codification of the AIA’s estoppel provision, the Board noted that the statute clearly imposes estoppel on future agency and district proceedings but says nothing about applying adjudications in district court proceedings at the Board. As the Board explained, there would be no reason for § 315(e) to spell [...]

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All’s Well That Edwell: Two Markets Can Be Substantially Different if Defined Narrowly Enough

by Tessa Kroll | Jun 8, 2023 | Trademarks

Despite evidence of actual confusion and seemingly similar services, the US Court of Appeals for the Tenth Circuit upheld a district court’s noninfringement finding concerning two nearly identical education-related marks because the parties targeted different goods and marketing channels. M Welles & Assocs., Inc. v. Edwell, Inc., Case No. 22-1248 (10th Cir. May 31, 2023) (Ebel, Bacharach, JJ.) (Tymkovich, J., dissenting). In his dissent, Judge Tymkovich criticized the lower court for characterizing the scope of the parties’ services too narrowly and observed that “[a]ny court can find some differences between businesses and markets at a particular level of generality.”

M Welles & Associates provides classes, seminars and certification workshops in the project management space under the brand name EDWEL (derived from “education done well”). The classes are designed for professionals in a variety of industries, including information technology, healthcare, education and the military. Welles primarily advertises its services via social media, Google and email, and further owns a variety of domain names incorporating both EDWEL and EDWELL. The defendant, Edwell, is a nonprofit organization that provides mental health coaching services to schoolteachers using the domain name Edwell.org and the brand name EDWELL (derived from “to be an educator and to be well”). Edwell operates by partnering with schools to provide its services and currently has partnerships with 10 K-12 public schools. Edwell does not target institutions of higher learning and does not offer services to corporations.

Welles first learned of Edwell’s services when it received a call from a potential customer asking about classes at Denver North High School—classes that were in fact offered by Edwell, not Welles. Welles sent a cease-and-desist notice to Edwell, which rebranded to “Educator Wellness Project” for a short time before reverting back to EDWELL. Welles then sued Edwell for trademark infringement, and the district court found that there was no likelihood of confusion. Welles appealed.

Welles raised three arguments on appeal:

The magistrate judge used the wrong legal standard in assessing likelihood of confusion.
The Tenth Circuit should adopt a presumption of confusion.
The magistrate judge clearly erred in the analysis of Edwell’s intent, the similarity of the parties’ services and marketing, the degree of purchaser care and actual confusion.

Welles also moved to supplement the appellate record with new evidence of actual confusion that occurred after the trial.

Supplementation

The Tenth Circuit first addressed Welles’s motion, finding that there was no legitimate basis for supplementing the record. Fed. R. of Civ. P. 10(e) permits a court to modify the appellate record “only to the extent necessary to ‘truly disclose what occurred in the district court.’” Because the new evidence of actual confusion was not before the district court, the Tenth Circuit concluded that Rule 10(e) would not permit it to be added to the record. The Court further reasoned that the rare exception to Rule 10, which permits the court to supplement the record to correct misrepresentations, demonstrate mootness, or raise an issue for the first time on appeal, did not [...]

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Electra Powers Second Circuit’s False Endorsement Analysis

by Nitya Anand | Jun 8, 2023 | Trademarks

Following on the heels of its 2021 decision in Electra v. 59 Murray, the US Court of Appeals for the Second Circuit affirmed the summary judgment denial of a Lanham Act claim related to false endorsement premised upon the unauthorized use of photographs in connection with promotional materials. Souza et. al. v. Exotic Island Enterprs., Inc., Case No. 21-2149 (2d Cir. May 19, 2023) (Lynch, Nardini, Menashi, JJ.) The Second Circuit also affirmed the district court’s summary judgment denial of Lanham Act false advertising and New York state right of publicity claims.

The operator of a gentlemen’s club used photographs of current and former professional models in social media posts promoting the club. The photographs were obtained without the models’ permission through a third-party vendor. The models sued the club operator asserting false endorsement, false advertising and right of publicity violations. The parties filed dueling summary judgment motions in February 2021. During the pendency of those motions, the Second Circuit decided Electra, a case involving overlapping plaintiffs suing on several of the same causes of action based on highly similar fact patterns. The district court subsequently granted the club operator’s motion for summary judgment and denied the models’ motion. The models appealed.

The Second Circuit relied heavily on its Electra decision to affirm the district court’s denial of the models’ false endorsement claim. To prevail on a false endorsement claim under Section 43 of the Lanham Act, the models were required to prove that there was a likelihood of confusion between their goods or services and those of the club operator. Likelihood of consumer confusion is evaluated using the eight Polaroid factors:

Strength of the trademark
Similarity of the marks
Proximity of the products and their competitiveness with one another
Evidence that the senior user may bridge the gap by developing a product for sale in the market of the alleged infringer’s product
Evidence of actual consumer confusion
Evidence that the imitative mark was adopted in bad faith
Respective quality of the products
Sophistication of consumers in the relevant market.

First, the models argued that the district court oversimplified the “strength of the mark” analysis (factor 1) to focus only on the recognizability of the mark. The Second Circuit disagreed, explaining that not only was Electra’s focus on recognizability binding precedent but also, that factor was required to be evaluated in the context of the mark’s strength in the false endorsement context (i.e., as a function of the extent to which the endorser’s identity could be linked with the product being sold). In other words, without an adequate showing that the models were recognized in the social media posts promoting the club, there could be no case of endorsement, let alone false endorsement.

Second, the models challenged the district court’s exclusion of their expert testimony on certain Polaroid factors. The district court excluded surveys conducted by the models’ expert as unreliable because they suffered from various methodological flaws and, therefore, did not provide a reliable [...]

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Common Sense: Nonparties Not Precluded by Ex Parte Reexamination Termination

by Brennen Baylor | Jun 8, 2023 | Trademarks

In a precedential decision, the US Patent & Trademark Office (PTO) Trademark Trial & Appeal Board denied a motion for judgment based on either claim or issue preclusion, and in the alternative for a show cause order, in a challenger’s petition. Common Sense Press Inc. d/b/a Pocket Jacks Comics v. Ethan Van Sciver and Antonio J. Malpica, Cancellation No. 92075375, 2023 BL 171365 (TTAB May 19, 2023) (Wellington, Pologeorgis, English, ATJs).

Common Sense Press filed a petition to cancel the registration for the mark “Comics Gate” for comics. In its petition, Common Sense asserted claims of nonuse, abandonment and fraud. The Respondents denied the allegations in the petition and also raised unclean hands by petitioner as a defense.

Common Sense also requested reexamination of the “Comics Gate” mark, which the PTO Director instituted on May 9, 2022. The cancellation proceeding was suspended pending the outcome of the reexamination. The Respondents were instructed to submit evidence to establish use of their mark for comics as of the August 13, 2020, deadline for filing a statement of use, as required under Section 1(d) of the Lanham Act.

The Respondents’ Section 1(d) statement showed that the “Comics Gate” mark was used in connection with comics sales in interest commerce and that such comics were provided via interest trade channels during the relevant period. In view of the Respondents’ evidence, the PTO Director determined that use had been demonstrated for comics and terminated the reexamination.

With the Notice of Termination in hand, the Respondents requested that the Board enter judgment in their favor in the cancelation proceeding as to nonuse and abandonment based on issue preclusion or, in the alternative, issue a show cause order to Common Sense as to why judgment should not be entered against them.

The Board denied the Respondents’ request, reasoning that termination of a reexamination proceeding does not preclude future nonuse challenges. Nor does such a reexamination termination decision have preclusive effect on a petitioner seeking cancellation, even if the petitioner requested the terminated reexamination. Citing due process concerns, the Board explained that the termination of an ex parte reexamination proceeding in which the petitioner necessarily does not participate may not serve as a basis for preventing the petitioner from raising even identical challenges in another action. The Board further noted that while the applicable statute “contains explicit estoppel provisions that bar the filing of future expungement or reexamination proceedings as to the identical goods or services once a proceeding of the same kind has been instituted . . . neither the statute nor regulations set forth a limitation on any party’s ability to petition to cancel a registration just because it is or has been the subject of a reexamination or expungement proceeding.” Thus, the Board concluded there is no basis to issue a show-cause order to a litigant who never appeared in a prior action.

Practice Note: This case serves as a reminder of the metes and bounds of an ex parte reexamination or expungement proceeding. Although [...]

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Neither Narrow Proposed Claim Construction nor Work Product Claim Justify Withholding Material Factual Information

by Cecilia Choy, PhD and Hannah Hurley | Jun 1, 2023 | Patents

The Patent Trial & Appeal Board of the US Patent & Trademark Office (PTO) canceled all challenged claims across five patents because the patent owner failed to meet its duty of candor by selectively and improperly withholding material information that was inconsistent with its patentability arguments. Spectrum Solutions, LLC v. Longhorn Vaccines & Diagnostics, LLC, IPR2021-00847; -00850; -00854; -00857; -00860 (PTAB May 3, 2023) (Braden, Yang, Derrick, Pollock, APJs) (per curiam) (Braden, APJ concurring).

The Board instituted inter partes reviews (IPRs) against five Longhorn patents based on petitions filed by Spectrum. During the proceedings, Longhorn filed motions to amend, after which the Board issued preliminary guidance suggesting that Spectrum established a reasonable likelihood that the proposed substitute claims were unpatentable. Longhorn engaged Assured Bio Labs (ABL) to conduct biological testing that would support its arguments distinguishing a prior art reference, but Longhorn made attorney work product objections in Spectrum’s ABL depositions and withheld testing data inconsistent with its arguments on the patentability of the original and proposed substitute claims. The Board subsequently allowed additional questioning on certain ABL testing, after which Spectrum filed a motion for sanctions, requesting judgment against Longhorn, a finding that the prior art reference taught the claim limitations and precluding Longhorn from contesting the finding, and an award to Spectrum of compensatory expenses, including attorneys’ fees.

The Board determined that sanctions of adverse judgment as to all challenged claims was appropriate because Longhorn failed to meet its duty of candor and good faith. The Board explained that parties have a duty of candor and good faith before the Board that requires any factual contentions to be well supported by evidence. Parties have “a duty to disclose to the [PTO] all information known . . . to be material to patentability.” (37 C.F.R. §1.56(a).) Information is material to patentability when it is “not cumulative to information already of record or being made of record in the application and . . . it refutes, or is inconsistent with, a position the applicant takes in . . . asserting an argument of patentability.” Taking a position contrary to any known fact while shielding factual information from the Board violates the duty of candor and good faith to the PTO, even if the party may otherwise withhold the information as being immaterial to patentability or privileged.

The Board criticized Longhorn’s proposed claim constructions as too narrow and contrary to the express language in both the original and proposed substitute claims. The Board explained that although Longhorn was free to maintain arguments grounded on Longhorn’s claim constructions, that did not excuse Longhorn’s duty of candor and good faith dealing, including disclosing material information relating to the Board’s preliminary claim constructions. Longhorn could not “simply withhold information” that the PTO would find material to patentability and should instead contest the Board’s constructions at trial.

The Board also explained that Longhorn took an overly strict view of what was material to claim patentability and a lax view as to the duty of candor [...]

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Weeded Out: Mark for Drug Paraphernalia Described as “Essential Oil Dispenser” Refused Registration

by Tessa Kroll | May 18, 2023 | Trademarks

Addressing the registrability of marks for cannabis-related products, the Trademark Trial & Appeal Board upheld an Examiner’s refusal to register marks for an “essential oil dispenser” based on extrinsic evidence that the dispenser was primarily used with cannabis extract. In re National Concessions Group, Inc., Ser. Nos. 87168058 and 87183434 (TTAB May 3, 2023) (Thurmon, Greenbaum, English, ATJs) (precedential).

National Concessions sought registration of the word mark BAKKED and a stylized drop logo for an “essential oil dispenser, sold empty, for domestic use” on the Principal Register. The specimen provided by National Concessions illustrated the two marks on an oil dispensing pen identified as “THE DABARATUS.” After reviewing National Concessions’ website—where THE DABARATUS was touted as “THE ALL-IN-ONE TOOL FOR DABBING” that delivers “THE PERFECT DOSE OF CANNABIS EXTRACT”—the Examiner concluded that THE DABARATUS was unlawful drug paraphernalia under the Controlled Substances Act (CSA) and refused registration of the marks. National Concessions appealed on the following three grounds:

The goods are not drug paraphernalia because they are used to dispense essential oil.
The exemption in Section 863(f)(1) of the CSA applies because National Concessions was permitted to sell the goods under Colorado state law.
The exemption in Section 863(f)(2) of the CSA applies because the goods are traditionally intended for tobacco products.

After briefing, the Board suspended the appeal and remanded the applications to the Examiner to request information from National Concessions concerning the legislative histories of Sections 863(f)(1) and (2) of the CSA and the relevant provisions of Colorado state law. The Examiner then issued a Supplemental Final Office Action maintaining the refusal of both marks, and the Board continued proceedings.

The Board began its analysis by outlining the relevant provisions of the CSA, explaining that for a mark to be eligible for registration, the goods must be legal under federal law. Under Section 863(a) of the CSA, it is unlawful to sell “drug paraphernalia,” which is defined as “any equipment, product, or material of any kind which is primarily intended or designed for use in … introducing into the human body a controlled substance, possession of which is unlawful under [the CSA],” including marijuana and marijuana-based preparations. The CSA includes exemptions for any person authorized by local, state or federal law to distribute such items (Section 863(f)(1)) or any item that is traditionally intended for use with tobacco products (Section 863(f)(2)).

The Board first found that National Concessions’ “essential oil dispenser” was prohibited drug paraphernalia under the CSA, even though the product was not unlawful as described in the application. The Board noted that extrinsic evidence, such as an applicant’s marketing materials or product instructions, can be used to show a violation of the CSA even if the application does not reveal a per se violation. After considering National Concessions’ website as well as third-party websites and articles, the Board agreed with the Examiner that National Concessions’ “essential oil dispenser” was primarily intended to dispense cannabis oil for “dabbing”—a method of inhaling superheated cannabis concentrates. The [...]

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PTO Proposes Patent Fee Increases

by Amol Parikh | May 4, 2023 | Patents

The US Patent & Trademark Office (PTO) announced proposed patent fee increases. Patent fees would increase by about 5% across the board because of inflation.

Certain fees would be increased by substantially more than the 5% inflationary increase to reduce subsidization from other fee sources. For example, the overall design patent fees would increase by 48%, based on a 27% increase in filing, search and examination fees and a 76% issue fee increase. The PTO also proposes a 100% increase in the excess claim fee for each claim over 20, and a 25% increase in the fee for each independent claim over three. Because the costs of reviewing patent term extensions is complex, the PTO proposes fee increases of 196% to 468%. The PTO also proposes a fee of $500 for filing an After Final Consideration Pilot (AFCP) 2.0 request, and new fees for filing an information disclosure statement (IDS) that causes the number of applicant-provided citations to exceed 50, 100 or 200 citations, respectively.

To offset the loss of future maintenance fee payments, the PTO proposes fees of $1,500 for continuing applications filed more than three years from the earliest benefit date and $3,000 for continuing applications filed more than seven years from the earliest benefit date.

Other proposed fee increases are intended to expedite the patent examination process. For example, the PTO proposes a 25% increase in the fee for a second request for continued examination (RCE) and an 80% increase for a third or subsequent RCE. The fee for a terminal disclaimer filed after the first action on the merits and before a final rejection would increase by 194%. After a final rejection or notice of allowance, the fee would increase by 371%. On or after a notice of appeal, the increase would be 547%, and the proposed increase for filing a terminal disclaimer in an issued patent would be 724%.

The PTO further proposes increasing Patent Trial & Appeal Board America Invents Act (AIA) trial fees by 25%. The PTO also proposes new fees for inter partes review (IPR) and post grant review (PGR) petitions that exceed the word count limits. For example, the PTO proposes a 50% higher fee for petitions that exceed the word count limit by up to 50%, and a 100% higher fee for those that exceed the limit by up to 100%.

A public hearing is scheduled for May 18, 2023. Those wishing to present oral testimony at the hearing must submit a written request by May 11, 2023. Written comments on the proposed fees will be accepted until May 25, 2023.

The PTO anticipates that the fee changes will be implemented around January 2025.

More details, including a complete list of the proposed fee increases, can be found on the PTO website.

Strike 1: Priority. Strike 2 :Likelihood of Confusion. Strike 3: You’re Out under Section 2(d).

by Jake B. Vallen | Apr 27, 2023 | Trademarks

The Trademark Trial & Appeal Board affirmed the rejection of three trademark applications, finding that the applied-for marks would cause confusion with a record-setting major league baseball player. Major League Baseball Players Ass’n v. Chisena, Opp. Nos. 91240180; 91242556; 91243244 (TTAB Apr. 12, 2023) (Cataldo, Heasley, Larkin, ATJ.) (precedential).

Michael P. Chisena sought registration of the standard character marks ALL RISE and HERE COMES THE JUDGE, along with the following design mark for use in commerce on “clothing, namely, t-shirts, shirts, shorts, pants, sweatshirts, sweatpants, jackets, jerseys, athletic uniforms, and caps.”

New York Yankees outfielder Aaron Judge and the Major League Baseball Players Association (MLBPA) filed Notices of Opposition challenging Chisena’s registration for likelihood of confusion under Section 2(d) of the Trademark Act, 15 U.S.C. § 1052(d), among other things.

At the outset, the Board addressed the issue of whether Judge and MLBPA were entitled to a statutory cause of action challenging the registration of Chisena’s marks. The Board found standing, concluding that both Judge and MLBPA had “legitimate interest[s] in the outcome of this opposition” because granting Chisena’s registration “would provide a prima facie right to exclusive use of [the] marks on [the] identified apparel, in competition with the apparel marketed by Opposers’ licensees.” The Board reasoned that this stake in the outcome of the opposition created a sufficiently high level of potential harm to Judge and MLBPA to support standing.

Turning to the merits of the Section 2(d) claim, the Board explained that Judge and MLBPA must “prove both priority of use of their pleaded marks and a likelihood of confusion between those marks and those Applicant ha[d] applied to register.”

First, the Board addressed priority of use of ALL RISE and HERE COMES THE JUDGE, as well as judicial designs, such as a gavel, courthouse image or the scales of justice, as trademarks on t-shirts, baseball caps and other athletic apparel. Judge and MLBPA established that Judge had been an MLBPA member since 2016 and that since then, “numerous licensees have obtained approval to produce and market products bearing his personal indicia.”

Chisena responded with multiple arguments in favor of priority but the Board found none to be persuasive. The Board reasoned as follows:

“[T]he relevant purchasing public [would] clearly perceive[] ‘JUDGE’ in the context of ‘HERE COMES THE JUDGE’ as a play on words, embracing both its judicial and surname meanings.”
“[B]aseball fans and commentators began using ‘ALL RISE’ as a play on Aaron Judge’s last name early in his career,” and whether it is a nickname or not, there is “a protectable property right in any term the public has come to associate with . . . goods or services.”
The slogans and symbols function as trademarks because “consumers who encounter [them] on t-shirts and other athletic apparel would recognize, associate, and perceive them as pointing to a single source: Aaron Judge.”
“[T]he judicial phrases and symbols . . . serve to perform the [...]

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No Spark Here: TTAB Refuses to Register Similar Mark for Real Estate Services

by Kathleen Lynch | Apr 27, 2023 | Trademarks

The US Court of Appeals for the Federal Circuit upheld the Trademark Trial & Appeal Board’s refusal to register a mark due to the “close similarity” between the applied-for mark and a previously registered mark. In Re: Charger Ventures LLC, Case No. 22-1094 (Fed. Cir. Apr. 13, 2023) (Prost, Reyna, Stark, JJ.)

Charger Ventures applied to register SPARK LIVING, identifying its services as rental property management and real estate leasing and listing. Based on an existing mark, SPARK, which identified other real estate services such as rental brokerage, commercial property leasing and management, the Examining Attorney ultimately refused to register Charger’s mark, despite Charger twice amending its application and disclaiming the word LIVING. Charger appealed to the Board, which used the 13 DuPont factors to analyze likelihood of confusion. The Board focused on five of the DuPont factors:

Similarity of the marks: SPARK LIVING fully incorporates SPARK, and LIVING is both descriptive and disclaimed, making it “subordinate to SPARK.”
Similarity of the nature of goods/services: While not identical, commercial and residential real estate services may “emanate from a single source under a single mark.”
Similarity of trade channels: There exists “some overlap” between commercial and residential real estate trade channels.
Class of purchasers: Although real estate purchasers exercise a high level of care, “even . . . sophisticated purchasers are not immune from source confusion.”
Strength of the mark: Although SPARK is somewhat commercially weak, “even weak marks are entitled to protection.”

The Board did not announce the weight it afforded to each factor but found that Charger failed to overcome the high similarity between its mark and SPARK. The Board therefore affirmed the Examining Attorney and refused to register SPARK LIVING. Charger appealed to the Federal Circuit.

As to factor 1, Charger argued that the Board erred in finding similarity of the marks. The Federal Circuit disagreed, noting that Charger disclaimed LIVING from its mark. The Court explained that disclaimer has no legal effect on likelihood of confusion because consumers do not know which words have been disclaimed. The Court found that the Board properly considered the full mark and that the marks were clearly similar.

As to factors 2 and 3, Charger argued that the previous SPARK registration could not be newly extended to include residential real estate services. The Federal Circuit rejected Charger’s argument, finding that many marks bridge the commercial and residential gap and that a registration’s listed services do not limit the trade channels in which the mark actually operates.

Regarding factor 4, Charger argued that SPARK and SPARK LIVING appealed to different classes of purchasers. The Federal Circuit disagreed, finding that Charger had failed to show that residential property owners were distinct from commercial owners.

Charger asserted that the Board improperly analyzed factor 5, since a mark’s weakness is “paramount” to likelihood of confusion. However, the Federal Circuit agreed with the Board that Charger failed to overcome the registered mark’s presumption of validity, despite other “spark” marks in the field. The Court [...]

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PTO Requests Comments on Revisions to AIA Trial Proceedings

by Amol Parikh | Apr 27, 2023 | America Invents Act, Patents

On April 21, 2023, the US Patent & Trademark Office (PTO) announced that it is seeking public input on proposed modifications to the rules of practice for inter partes reviews (IPRs) and post grant reviews (PGRs) before the Patent Trial & Appeal Board to better align the practices with the PTO’s mission to promote and protect innovation and investment in the same and to provide a less expensive alternative to district court litigation to resolve certain patentability issues while also protecting against patentee harassment.

The PTO is considering promulgating rules that the Director—and, by delegation, the Board—will use to do the following:

Exercise the Director’s discretion to institute IPRs and PGRs
Provide a procedure for separate briefing on discretionary denial that will allow parties to address relevant issues for discretionary denial without encroaching on the page limit to address the merits of a case
Give petitioners the ability to pay additional fees for a higher word-count limit
Clarify that all settlement agreements, including pre-institution settlement agreements, are required to be filed with the Board.

To create clear, predictable rules where possible, as opposed to balancing tests that decrease certainty, the PTO is considering changes that would provide for discretionary denials of petitions in the following categories, subject to certain conditions and circumstances as discussed further in the Official Notice:

Petitions filed by certain for-profit entities
Petitions challenging under-resourced patent owner patents where the patentee has brought or is attempting to bring products to market
Petitions challenging patent claims previously subject to a final adjudication upholding the patent claims against patentability challenges in district court or in post-grant proceedings before the PTO
Serial petitions
Petitions raising previously addressed prior art or arguments
Parallel petitions
Petitions challenging patents subject to ongoing parallel litigation in district court.

The PTO also seeks comments on proposed threshold definitions that apply to one or more of these categories of petitions subject to discretionary denials. Those definitions set forth the criteria used to determine the following:

What constitutes a “substantial relationship” between entities sufficient to trigger or avoid discretionary denial
When claim sets are deemed to have “substantial overlap” with challenged claims
What constitutes “compelling merits” sufficient to trigger an exception to discretionary denial.

For example, one proposal with respect to the “substantial relationship” is a requirement that a patent owner and petitioner disclose anyone with an ownership interest in the patent owner or petitioner, any government funding related to the patent, any third-party litigation funding support, and any stake any party has in the outcome of the America Invents Act (AIA) proceeding or any parallel proceedings on the challenged claims.

Additional changes being considered by the PTO include the following:

Absent exceptional circumstances, requiring petitioners to file a stipulation that neither they nor their privy or real parties in interest have filed prior post-grant proceedings (PGRs, IPRs, covered business methods or ex parte reexaminations) on the challenged claims
If petitioners’ post-grant proceeding is instituted, requiring that [...]

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