Preissuance Submission Strategies for Patent Prosecution and Litigation

As part of the American Inventor's Protection Act of 1999, a prior procedure, codified in 37 C.F.R. ' 1.99 (“Rule 99″), allowed a third party to submit patents or publications believed to be prior art to a pending patent application. The third party was required to file the submission, along with a fee, within two months from the date of publication of the patent application or prior to the mailing of a Notice of Allowance, whichever came earlier. Rule 99 specifically prohibited any explanation of the relevance of prior art references and provided that any attempted explanation would not be entered into the application file. Consistent with the prohibition on explanation, MPEP ' 1134.01 clarified that even the highlighting of prior art materials was not permitted. Rule 99 limited the number of prior art references a third party could submit in a single patent application to 10. In theory, Rule 99 presented an opportunity to target unworthy patent applications and take action to prevent their allowance.

In practice, however, preissuance submissions under Rule 99 were exceedingly rare. Many rationales have been offered for their unpopularity. According to one, the two-month time window within which to submit prior art references left insufficient time for third parties to uncover dispositive prior art. Another rationale rested on the belief that patent attorneys were hesitant to submit prior art references when they could not provide any discussion about their relevance, especially if an examiner would not necessarily understand or even consider the references. Prospective third parties instead may have preferred post-grant proceedings that allow discussion of prior art relevance. Another theory explaining the lack of submissions under Rule 99 is that, with their identities known to patent applicants, prospective third parties feared retaliation.

Other procedures even less popular than Rule 99 have been available to third parties contemplating prior art submissions. 37 C.F.R. ' 1.291 (“Rule 291″) allows a third party to submit a written protest against a pending patent application. According to Rule 291, a protest may include, inter alia, the submission of prior art references, an explanation of the relevance of the prior art references, and, if applicable, an assertion by the third party that the patent applicant has engaged in inequitable conduct. 37 C.F.R. ' 1.292 (“Rule 292″), which has been abolished, provided a procedure for a third party to oppose a patent application based on an invention that was in public use or on sale for more than a year prior to filing of the patent application. Under Rule 292, a third party was permitted to request a public use proceeding by submitting the petition, accompanied by a declaration or affidavit asserting such prior art activity. It is estimated that the USPTO received only a handful of Rule 291 protests and Rule 292 petitions per year.

To facilitate greater access to information by examiners and encourage more public participation in the examination process, a Peer-to-Patent program was launched in 2007 as a volunteer-driven initiative to bring relevant prior art to the attention of the Patent Office. According to statistics about the Peer-to-Patent program, in 258 office actions issued in applications subject to the program, prior art submitted by third-party reviewers was cited 72 times in claim rejections and identified 122 times as pertinent prior art. It is unclear whether results of the Peer-to-Patent program portend more public participation in the examination process.

New Preissuance Submission

The AIA was enacted, inter alia, to improve operations at the Patent Office, improve patent quality, and provide more certainty in patent litigation. A resounding criticism of the American patent system prior to AIA enactment was that too many low-quality patents were being issued because examiners were ill-equipped to uncover the most pertinent of prior art references. To address the shortcomings of earlier patent practice, a new preissuance submission procedure under the AIA is intended to provide the Patent Office with better information ' by encouraging participation by the public and leveraging its knowledge.

As provided in 35 U.S.C. ' 122(e) and codified in 37 C.F.R. ' 1.290 (“Rule 290″), the new preissuance submission procedure allows a third party to submit patents, published patent applications, and printed publications that the third party believes are relevant to a pending patent application. In contrast with the prohibition of Rule 99 against explanation of the prior art, the new procedure requires concise explanation of the relevance of each prior art reference. An explanation may be submitted in the form of claim charts. However, the Patent Office cautions that the requirement for a description of relevance is not an invitation for the third party to
inject itself in the prosecution of the application. Further, the third party must not include proposed rejections of claims or arguments in response to an Office Action or positions taken by a patent applicant.

Other aspects of the new preissuance submission procedure contrast with perceived shortcomings in prior practice under Rule 99. The new procedure expands the time window within which preissuance submissions must be filed to the earlier of: 1) the date of a Notice of Allowance of the pending patent application, or 2) the later of a) six months after the date of publication of the patent application or b) the date of the first rejection of any claim of the patent application. The new
procedure also allows anonymous preissuance submissions by a patent attorney, without identification of the real party in interest. The new procedure removes the limit on the number of prior art references that a third party may submit. As to cost, the fee for a preissuance submission is $180 for every 10 references, and no fee is required if the submission includes three or fewer references and is the first and only submission by the third party relative to that application.

Strategic Considerations

The new preissuance submission procedure presents uncharted territory for potential third-party submitters and patent applicants alike. The new procedure represents a move toward more open patent examination and more participation from the general public in evaluating patentability. Although the promise of Rule 99 has largely gone unrealized in the many years since its introduction, it remains to be seen if the new procedure will successfully realign third-party incentives to engender broad adoption of preissuance submissions. In any event, participation in preissuance proceedings, whether rare or routine, can implicate critical concerns for both third parties and patent applicants alike.

Third-Party Perspectives

The new preissuance submission procedure offers an option for a third party to prevent issuance of a patent that could later threaten it. To pre-emptively confront risk, a third party can monitor the patent activities of competitors and likely adversaries and, where appropriate, provide preissuance submissions during the examination of its patent applications ' to prevent issuance in the first place. Such preissuance submission could constitute an economical alternative to later attempts to invalidate vested patent rights granted from such patent applications. Given the relative ease of its preparation, the cost of a preissuance submission would be modest compared with the significant expense of challenging patent validity in litigation or post-issuance proceedings before the Patent Office.

For third parties, the forum to challenge patent claims with preissuance submissions may be preferable to alternatives that would subject the third parties to more exacting legal standards. In district court or ITC litigation, an accused infringer must prove patent invalidity by clear and convincing evidence, an elevated standard that litigants often struggle to satisfy. By comparison, during examination before the Patent Office, a patent application does not enjoy a validity presumption and patent claims can be rejected on the lesser showing of a mere preponderance of the evidence. Accordingly, through preissuance submissions, a third party could succeed in preventing allowance of a patent application on the basis of prior art that would fail to invalidate a patent later issued thereon, in litigation.

In addition, unlike other Patent Office proceedings, filing a preissuance submission does not subject a third party to rules of estoppel. For example, if it inadvertently or deliberately excludes a known, material prior art reference in a preissuance submission, the third party is not barred from relying upon the reference, or other invalidity arguments unrelated to prior art, to contest a later issued patent before the Patent Office or in litigation. In contrast, during post-issuance proceedings, if it neglects to advance a material prior art reference that, for example, reasonably could have been raised, the third party will be estopped from arguing patent invalidity based on the reference in certain circumstances.

Apart from its benefits, participation in the new preissuance submission procedure may pose a risk to third parties. By filing a preissuance submission during examination of a patent application, the third party could potentially be found to have formal notice of a later issued patent, depending on evolving case law on notice principles. Notice of the patent may make the third party more vulnerable to allegations of indirect infringement liability, damages, and willful infringement. In this regard, under ' 154(d) of the patent statute, actual notice of a patent application in limited circumstances may even subject an accused infringer to damages liability during the pendency of the application. A preissuance submission also may signal competitive concern about a particular patent application and expose the third party responsible for the submission as a compelling enforcement target. Though anonymous submission may offer the real party in interest some measure of protection in this regard, the submission may nonetheless alert the patent applicant to the possibility of potential infringers and motivate discovery of the identity of the real party.

Many third parties avoid submissions in preissuance proceedings because they fear patent applicants can more easily overcome prior art references there, compared with post-issuance proceedings. In this regard, there is belief that in post-issuance proceedings, such as inter partes review, challengers to patents enjoy repeated opportunities, not merely one chance, to voice their opposition throughout prosecution. Further, some strategists find additional comfort in the intervening rights doctrine, if the claims are successfully altered in post-issuance proceedings. These considerations warrant balancing other options against the potential benefits of the new preissuance submission procedure.

Patent Applicant Perspectives

The new preissuance submission procedure also presents a number of considerations for patent applicants. The possibility of patent applications drawing preissuance submissions from third parties may affect the manner in which patent applicants conduct prosecution. If adoption of the new procedure becomes widespread, the potential consequences for patent applicants may warrant significant proactive and reactive measures.

Because third parties will provide an explanation of relevance for each prior art reference, patent applicants may consider submitting more prior art references under their duty of disclosure than they otherwise might. A patent applicant may not actually believe that a particular reference is material. Mindful of the new preissuance submission procedure, however, the patent applicant nonetheless may decide to disclose the reference to pre-empt the possibility that its submission and characterization by a third party will unduly sway an examiner.

In addition, the degree to which preissuance submissions become prevalent may inform publication practice before the Patent Office. Third parties can file preissuance submissions for only patent applications of which they are aware. Because a patent application intended for publication is published approximately 18 months from its date of filing, a preissuance submission will follow the 18-month period as a practical matter in many instances. Several existing programs allow expedited examination with the possibility of allowance before publication. Patent applicants accordingly may avail themselves of such programs to potentially conclude prosecution before the threat of a preissuance submission arises.

Similarly, patent applicants may file non-publication requests more frequently to avoid discovery of patent applications by third parties. For particular types of inventions that may be ineligible or otherwise not desirable for patent protection in foreign jurisdictions, foregoing foreign filing of a patent application poses little, if any, downside. As a result, patent applicants in these circumstances may have incentives to file non-publication requests to avoid third-party preissuance submissions with no commensurate sacrifice to their global procurement efforts.

As noted above, a patent application that has triggered third-party attention may be particularly valuable. While the question of patent value is no doubt complex, patent applicants may assess “worth” in pending patent applications and issued patents, based at least in part on the extent of preissuance submissions each has drawn. This extent, in some circumstances, may reflect objective industry concern about the coverage of a patent application and thus the value of a patent issued thereon. Patent applications and patents identified as having a high value in this manner may be earmarked to receive elevated prosecution investment, and may lead targeted enforcement efforts.

Conclusion

The new preissuance submission procedure has the potential to impact the formulation of patent prosecution and litigation strategies for third parties and patent applicants. For third parties, the new procedure warrants consideration of challenges to patent claims of their competitors and other adversaries, prior to grant. While not risk free, preissuance submissions can pose unique tactical, evidentiary, and cost advantages in defeating nascent patent threats before they mature. In considering preissuance submissions, third parties should remain mindful of alternative post-issuance proceedings and their contrasting benefits. On the other hand, patent applicants need not passively acquiesce to the disruptive impact of preissuance submissions. When confronted with anticipated interference from third parties during patent prosecution, patent applicants can take action to minimize or avoid the effect of preissuance submissions and leverage the submissions to inform their own enforcement strategies.

James W. Soong is a shareholder of Greenberg Traurig, LLP. Sabir Ibrahim is an attorney with Greenberg Traurig, LLP. The opinions expressed are the current views of the authors and should not be attributed to others. Copyright ' 2012 James W. Soong and Sabir Ibrahim.

Under the Leahy-Smith America Invents Act (“AIA”), several new mechanisms allow third parties to challenge patent applications and patents. Among these is a new preissuance submission procedure by which members of the general public may submit prior art believed to be relevant to a pending patent application. The new procedure replaces and supplements procedures that have been seldom used to challenge patent applications. The new procedure, which became effective on Sept. 16, 2012, poses significant implications for both patent prosecution and litigation strategies.

Legal Landscape

Background

As part of the American Inventor's Protection Act of 1999, a prior procedure, codified in 37 C.F.R. ' 1.99 (“Rule 99″), allowed a third party to submit patents or publications believed to be prior art to a pending patent application. The third party was required to file the submission, along with a fee, within two months from the date of publication of the patent application or prior to the mailing of a Notice of Allowance, whichever came earlier. Rule 99 specifically prohibited any explanation of the relevance of prior art references and provided that any attempted explanation would not be entered into the application file. Consistent with the prohibition on explanation, MPEP ' 1134.01 clarified that even the highlighting of prior art materials was not permitted. Rule 99 limited the number of prior art references a third party could submit in a single patent application to 10. In theory, Rule 99 presented an opportunity to target unworthy patent applications and take action to prevent their allowance.

In practice, however, preissuance submissions under Rule 99 were exceedingly rare. Many rationales have been offered for their unpopularity. According to one, the two-month time window within which to submit prior art references left insufficient time for third parties to uncover dispositive prior art. Another rationale rested on the belief that patent attorneys were hesitant to submit prior art references when they could not provide any discussion about their relevance, especially if an examiner would not necessarily understand or even consider the references. Prospective third parties instead may have preferred post-grant proceedings that allow discussion of prior art relevance. Another theory explaining the lack of submissions under Rule 99 is that, with their identities known to patent applicants, prospective third parties feared retaliation.

Other procedures even less popular than Rule 99 have been available to third parties contemplating prior art submissions. 37 C.F.R. ' 1.291 (“Rule 291″) allows a third party to submit a written protest against a pending patent application. According to Rule 291, a protest may include, inter alia, the submission of prior art references, an explanation of the relevance of the prior art references, and, if applicable, an assertion by the third party that the patent applicant has engaged in inequitable conduct. 37 C.F.R. ' 1.292 (“Rule 292″), which has been abolished, provided a procedure for a third party to oppose a patent application based on an invention that was in public use or on sale for more than a year prior to filing of the patent application. Under Rule 292, a third party was permitted to request a public use proceeding by submitting the petition, accompanied by a declaration or affidavit asserting such prior art activity. It is estimated that the USPTO received only a handful of Rule 291 protests and Rule 292 petitions per year.

To facilitate greater access to information by examiners and encourage more public participation in the examination process, a Peer-to-Patent program was launched in 2007 as a volunteer-driven initiative to bring relevant prior art to the attention of the Patent Office. According to statistics about the Peer-to-Patent program, in 258 office actions issued in applications subject to the program, prior art submitted by third-party reviewers was cited 72 times in claim rejections and identified 122 times as pertinent prior art. It is unclear whether results of the Peer-to-Patent program portend more public participation in the examination process.

New Preissuance Submission

The AIA was enacted, inter alia, to improve operations at the Patent Office, improve patent quality, and provide more certainty in patent litigation. A resounding criticism of the American patent system prior to AIA enactment was that too many low-quality patents were being issued because examiners were ill-equipped to uncover the most pertinent of prior art references. To address the shortcomings of earlier patent practice, a new preissuance submission procedure under the AIA is intended to provide the Patent Office with better information ' by encouraging participation by the public and leveraging its knowledge.

As provided in 35 U.S.C. ' 122(e) and codified in 37 C.F.R. ' 1.290 (“Rule 290″), the new preissuance submission procedure allows a third party to submit patents, published patent applications, and printed publications that the third party believes are relevant to a pending patent application. In contrast with the prohibition of Rule 99 against explanation of the prior art, the new procedure requires concise explanation of the relevance of each prior art reference. An explanation may be submitted in the form of claim charts. However, the Patent Office cautions that the requirement for a description of relevance is not an invitation for the third party to
inject itself in the prosecution of the application. Further, the third party must not include proposed rejections of claims or arguments in response to an Office Action or positions taken by a patent applicant.

Other aspects of the new preissuance submission procedure contrast with perceived shortcomings in prior practice under Rule 99. The new procedure expands the time window within which preissuance submissions must be filed to the earlier of: 1) the date of a Notice of Allowance of the pending patent application, or 2) the later of a) six months after the date of publication of the patent application or b) the date of the first rejection of any claim of the patent application. The new
procedure also allows anonymous preissuance submissions by a patent attorney, without identification of the real party in interest. The new procedure removes the limit on the number of prior art references that a third party may submit. As to cost, the fee for a preissuance submission is $180 for every 10 references, and no fee is required if the submission includes three or fewer references and is the first and only submission by the third party relative to that application.

Strategic Considerations

The new preissuance submission procedure presents uncharted territory for potential third-party submitters and patent applicants alike. The new procedure represents a move toward more open patent examination and more participation from the general public in evaluating patentability. Although the promise of Rule 99 has largely gone unrealized in the many years since its introduction, it remains to be seen if the new procedure will successfully realign third-party incentives to engender broad adoption of preissuance submissions. In any event, participation in preissuance proceedings, whether rare or routine, can implicate critical concerns for both third parties and patent applicants alike.

Third-Party Perspectives

The new preissuance submission procedure offers an option for a third party to prevent issuance of a patent that could later threaten it. To pre-emptively confront risk, a third party can monitor the patent activities of competitors and likely adversaries and, where appropriate, provide preissuance submissions during the examination of its patent applications ' to prevent issuance in the first place. Such preissuance submission could constitute an economical alternative to later attempts to invalidate vested patent rights granted from such patent applications. Given the relative ease of its preparation, the cost of a preissuance submission would be modest compared with the significant expense of challenging patent validity in litigation or post-issuance proceedings before the Patent Office.

For third parties, the forum to challenge patent claims with preissuance submissions may be preferable to alternatives that would subject the third parties to more exacting legal standards. In district court or ITC litigation, an accused infringer must prove patent invalidity by clear and convincing evidence, an elevated standard that litigants often struggle to satisfy. By comparison, during examination before the Patent Office, a patent application does not enjoy a validity presumption and patent claims can be rejected on the lesser showing of a mere preponderance of the evidence. Accordingly, through preissuance submissions, a third party could succeed in preventing allowance of a patent application on the basis of prior art that would fail to invalidate a patent later issued thereon, in litigation.

In addition, unlike other Patent Office proceedings, filing a preissuance submission does not subject a third party to rules of estoppel. For example, if it inadvertently or deliberately excludes a known, material prior art reference in a preissuance submission, the third party is not barred from relying upon the reference, or other invalidity arguments unrelated to prior art, to contest a later issued patent before the Patent Office or in litigation. In contrast, during post-issuance proceedings, if it neglects to advance a material prior art reference that, for example, reasonably could have been raised, the third party will be estopped from arguing patent invalidity based on the reference in certain circumstances.

Apart from its benefits, participation in the new preissuance submission procedure may pose a risk to third parties. By filing a preissuance submission during examination of a patent application, the third party could potentially be found to have formal notice of a later issued patent, depending on evolving case law on notice principles. Notice of the patent may make the third party more vulnerable to allegations of indirect infringement liability, damages, and willful infringement. In this regard, under ' 154(d) of the patent statute, actual notice of a patent application in limited circumstances may even subject an accused infringer to damages liability during the pendency of the application. A preissuance submission also may signal competitive concern about a particular patent application and expose the third party responsible for the submission as a compelling enforcement target. Though anonymous submission may offer the real party in interest some measure of protection in this regard, the submission may nonetheless alert the patent applicant to the possibility of potential infringers and motivate discovery of the identity of the real party.

Many third parties avoid submissions in preissuance proceedings because they fear patent applicants can more easily overcome prior art references there, compared with post-issuance proceedings. In this regard, there is belief that in post-issuance proceedings, such as inter partes review, challengers to patents enjoy repeated opportunities, not merely one chance, to voice their opposition throughout prosecution. Further, some strategists find additional comfort in the intervening rights doctrine, if the claims are successfully altered in post-issuance proceedings. These considerations warrant balancing other options against the potential benefits of the new preissuance submission procedure.

Patent Applicant Perspectives

The new preissuance submission procedure also presents a number of considerations for patent applicants. The possibility of patent applications drawing preissuance submissions from third parties may affect the manner in which patent applicants conduct prosecution. If adoption of the new procedure becomes widespread, the potential consequences for patent applicants may warrant significant proactive and reactive measures.

Because third parties will provide an explanation of relevance for each prior art reference, patent applicants may consider submitting more prior art references under their duty of disclosure than they otherwise might. A patent applicant may not actually believe that a particular reference is material. Mindful of the new preissuance submission procedure, however, the patent applicant nonetheless may decide to disclose the reference to pre-empt the possibility that its submission and characterization by a third party will unduly sway an examiner.

In addition, the degree to which preissuance submissions become prevalent may inform publication practice before the Patent Office. Third parties can file preissuance submissions for only patent applications of which they are aware. Because a patent application intended for publication is published approximately 18 months from its date of filing, a preissuance submission will follow the 18-month period as a practical matter in many instances. Several existing programs allow expedited examination with the possibility of allowance before publication. Patent applicants accordingly may avail themselves of such programs to potentially conclude prosecution before the threat of a preissuance submission arises.

Similarly, patent applicants may file non-publication requests more frequently to avoid discovery of patent applications by third parties. For particular types of inventions that may be ineligible or otherwise not desirable for patent protection in foreign jurisdictions, foregoing foreign filing of a patent application poses little, if any, downside. As a result, patent applicants in these circumstances may have incentives to file non-publication requests to avoid third-party preissuance submissions with no commensurate sacrifice to their global procurement efforts.

As noted above, a patent application that has triggered third-party attention may be particularly valuable. While the question of patent value is no doubt complex, patent applicants may assess “worth” in pending patent applications and issued patents, based at least in part on the extent of preissuance submissions each has drawn. This extent, in some circumstances, may reflect objective industry concern about the coverage of a patent application and thus the value of a patent issued thereon. Patent applications and patents identified as having a high value in this manner may be earmarked to receive elevated prosecution investment, and may lead targeted enforcement efforts.

Conclusion

The new preissuance submission procedure has the potential to impact the formulation of patent prosecution and litigation strategies for third parties and patent applicants. For third parties, the new procedure warrants consideration of challenges to patent claims of their competitors and other adversaries, prior to grant. While not risk free, preissuance submissions can pose unique tactical, evidentiary, and cost advantages in defeating nascent patent threats before they mature. In considering preissuance submissions, third parties should remain mindful of alternative post-issuance proceedings and their contrasting benefits. On the other hand, patent applicants need not passively acquiesce to the disruptive impact of preissuance submissions. When confronted with anticipated interference from third parties during patent prosecution, patent applicants can take action to minimize or avoid the effect of preissuance submissions and leverage the submissions to inform their own enforcement strategies.

James W. Soong is a shareholder of Greenberg Traurig, LLP. Sabir Ibrahim is an attorney with Greenberg Traurig, LLP. The opinions expressed are the current views of the authors and should not be attributed to others. Copyright ' 2012 James W. Soong and Sabir Ibrahim.