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22 March 2021Alex Baldwin

Reviewing the inter partes review

The establishment of the US Patent Trial and Appeal Board (PTAB) in 2012 changed the game for patent owners. And while life science patents have not always been under the spotlight, recent trends suggest more such patents are being reviewed than ever before.

What this means for life science lawyers and IP holders is not entirely clear yet. But to get a better picture of the situation, LSIPR invited a panel of PTAB experts from Milbank to discuss recent developments, trends and impacts of the PTAB on IP holders and lawyers in life sciences.

To set the scene, the panel opened with LSIPR editor Tom Phillips asking whether PTAB still strikes fear into patent lawyers. Chris Gaspar, partner at Milbank answered: “I really think it does, It is the way the PTAB is viewed now and back when it began back in 2012.”

Trending towards life sciences

Until recently, life science patents have taken something of a backseat to the more prevalent electrical, computer, mechanical and business method disputes. But in 2021, this changed drastically.

Gaspar explained: “The number of institution rates for inter partes review of life bio/pharma patents was 58% between its inception and late 2020. This is lower than other major tech areas such as chemical and electrical sectors. However, in Q1 2021, this figure has jumped to 79%, out ahead of all of the other sectors.

“Will this trend continue? We will have to wait and see. But I think this at least should prompt the life science community to look closely at what is going on with IPR in the US.”

Discretionary denials

Discretionary denials have been around since the beginning but have recently become one of the hottest points of debate surrounding the board.

In short, discretionary denials are when the PTAB decides not to institute an IPR for what may be called a “non merit-based” reason, at the director’s discretion.

Since 2016, the number of discretionary denials has skyrocketed from 5.5% to 19% of total institution decisions.

Nathaniel Browand, partner at Milbank, explained why the denials are such a hot-button topic for litigators.

“The vast majority of IPRs take place with a parallel district court proceeding involving the same parties. The basis for a lot of the denials is put down to the scheduling, with the PTAB using district trial dates as grounds for denying the IPR trial phase,” said Browand.

“It is hard to accept for attorneys practicing in the field that decisions made by the PTAB are unreviewable by the higher court, but the statute says exactly that when it comes to discretionary denials.”

Changing the rules

Related to the discretionary denials is a rulemaking decision announced by USPTO in October 2020. It issued a note of proposed rulemaking seeking codification of current policies and precedential opinions that are currently followed in the discretionary analysis, less than two months after a complaint was filed at the United States District Court of the Northern District of California against the PTAB by Apple, Google, Cisco, Intel and Edwards Life Sciences.

The companies are challenging the imminent trial grounds for discretionary denial as a violation of the administrative procedures act, claiming the director of the PTAB has exceeded his authority. The case has proceeded to a motion hearing since the filing.

“This connection does not seem like coincidence and suggests that the rulemaking exercise was a direct response to the lawsuit, potentially to try and lessen its blow,” said Sean Hyberg, partner at Milbank.

A new face for the PTO?

The future is not clear for PTAB, nor its handling of life science litigation, but a new USPTO director with a stronger connection to the sector could spark change.

Gaspar said: “I think the point is being made to the selection committee that none of the prior directors of the USPTO have had a connection to the life sciences community. But one of the few runners for the position is Christal Shepard, who has a IP law and molecular biology background.

“We will wait and see but there is some chance that the pro-patentee trends may change with a new director.”

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