The Reexamination Center Executive Interview: Dr. Nancy J. Linck
January 11th, 2012
The Reexamination Center interviews Nancy J. Linck, Ph.D., partner at intellectual property law firm Rothwell, Figg, Ernst &Manbeck, P.C. on a variety of post-grant challenge options at the PTO, including inter partes and ex partes reexamination and the new options introduced within the America Invents Act signed into law in September 2011. From August 1994 until November 1998, Dr. Linck was the Solicitor of Patents and Trademarks at the U.S. Patent and Trademark Office. Between May 2006 and February 2008, she served as an Administrative Patent Judge on the U.S. Patent and Trademark Office’s Board of Patent Appeals & Interferences in the Board’s biotechnology practice group.Dr. Linck’s experience in inter partes matters before the Office began with her role as one of the drafters of the inter partes reexamination legislation that was ultimately enacted in November 1999. In 2002, she testified before the Subcommittee on Courts, the Internet and Intellectual Property of the House Judiciary Committee regarding needed improvements in inter partes reexamination to make the process more meaningful, including a third party right to appeal to the Federal Circuit. Such a right is now available and has made reexamination an attractive, less expensive alternative to litigation.
The views expressed by Dr. Linck during the interview are her own and not necessarily those of her firm.
THE REEXAMINATION CENTER: You have worn many hats in the intellectual property world –let’s start the interview by going back to a time before your tenure as the Solicitor. Why was inter parte reexamination enacted even though ex parte reexamination was continued? Could you describe your role in the creation and implementation of inter partes reexamination?
NANCY LINCK: Around 1989 or 1990, I spear-headed an AIPLA committee along with Rene Tegtmeyer and Bill West to work on inter partes reexamination. The general feeling was that ex parte reexamination, while a useful tool, was too one-sided for the patentee to be used effectively as an alternative to litigation. When ex parte reexamination legislation was proposed, the drafters were very concerned about harassment of patentees. But that did not happen after its enactment. Quite the opposite – it wasn’t being used very much by third parties. So the goal was to put a system in place that would give third parties a greater opportunity to participate in the process. Our AIPLA committee actually drafted both legislation and regulations for the inter partes reexam system, gave them to the Patent and Trademark Office and the PTO introduced the legislation in the early ’90’s as a stand-alone package.
Initially, the inter partes reexamination legislation didn’t have any resistance in Congress. But when it was put together with other provisions – 18 months publication and patent term adjustment and some other provisions – there was resistance. So it took until the end of 1999 to get the legislation enacted as part of the American Inventors Protection Act (AIPA). When inter partes reexam was enacted, it didn’t have all of the provisions that our committee had envisioned being a part of the legislation. For example, a third party requestor did not have the right to appeal to the Federal Circuit. That was changed in 2002. Now there is such an appeal right. Today, many consider inter partes reexamination a success, and many third parties are using it to challenge patents.
Personally, I now have some second thoughts about inter partes reexamination. I believe the court system is probably the best place to address inter partes issues. However, our litigation system is so expensive and discovery is so extensive that folks turn to inter partes reexam as an alternative. They will also turn to the new legislation, I believe, when it becomes effective. Inter partes reexamination was my “baby,” and I fought for its expansion by testifying before the Judiciary in favor of adding third-party appeal rights. But I’m not sure inter partes reexamination has been made a positive contribution to our patent system.
THE REEXAMINATION CENTER: Could you tell us a little more about the strengths and weaknesses of the current inter partes reexamination system now that you are a practitioner and you are not in the Office? And now that you are a practitioner and are very involved on both sides, do you think it has met its goals and objectives as it was intended to achieve?
NANCY LINCK: The goal of inter partes reexamination was to have a fast and effective and fair alternative to litigation. Unfortunately, I don’t believe that goal has been met. In fact, I’m not sure it can be met. I’m not sure you can have a system that’s both fast – as fast as it needs to be to be an alternative – and have it be fair. Maybe when the Board handles the new provisions, it will be a different story. I certainly hope so. Examiners are ill-trained to handle litigation, and that is really what inter partes reexamination is – mini-litigation without the procedural safeguards of the Federal Rules. In inter partes reexamination, while evidence may be introduced through declarations or affidavits, unfortunately there is no cross-examination of that evidence. That will change with the new review procedures. Further, because the examiners are under tremendous pressure to complete the process with “special dispatch,” frequently the merits don’t get the consideration that they need to have.
It is also unfair that inter partes reexamination at each juncture gives the challenger or the third-party requestor the last word before the CRU acts. First, the challenger files the request, typically a very extensive document with many proposed rejections. At that point, the CRU orders reexam and issues a first Office action (without ever hearing from the patent owner). Only then does the patent owner have an opportunity to submit a paper. But the challenger gets to file comments before the CRU acts again. Given the required speed of prosecution, the easier course for the CRU is to maintain the position it adopted in the Order and first Office action. The only time the patent owner has the last word in the PTO is on appeal to the Board when a reply brief is filed. And that’s the case only when the challenger does not file its own appeal. This system is very tough on patent owners and has resulted in very few patents surviving without at least amendments to the claims – amendments that create intervening rights. A particular concern I have is that some patent owners have built businesses around their patent rights and yet the patents can be challenged throughout their enforceable life without any recognition of a presumption of validity to which issued patent are normally entitled. One significant advantage of the new post-grant review procedure is that it is only for a nine-month period after a patent issues, not for the life of the patent. Maintaining the preponderance of the evidence standard for an additional nine months seems fair. After that the presumption should be applied.
THE REEXAMINATION CENTER: So turning now to the America Invents Act, which went into effect on September 16, 2011, what is your view on the current ex parte reexamination process? Should it have been continued under the new law?
NANCY LINCK: If it were up to me, I would continue ex parte reexam as a tool for patent owners only to fix their patents. Patent challengers no longer need ex parte reexam after Septermber 16, 2012 because the new inter partes review will permit them to challenge any enforceable patent. Under the present system, only patents that issued from applications that were filed after November 29, 1999 can be challenged through inter partes reexam and older patents must be challenged through ex parte reexam. But with the advent of inter partes review that changes. Thus, ex parte reexam is no longer needed to challenge older patents. It makes sense, then, to turn ex parte reexam into a truly ex parte system — a tool for the patent owner only, similar to the situation with reissue today.
THE REEXAMINATION CENTER: Let’s talk about the new post-grant review process first which becomes available on September 16, 2012. In particular, what are your views about post-grant review and the PTO’s ability to implement and administer this new review?
NANCY LINCK: If you don’t mind I’d like to discuss post-grant review along with inter partes review.
THE REEXAMINATION CENTER: Go right ahead.
NANCY LINCK: The two new review procedures are very, very similar. When you read through the legislation, there’s only a few differences. In fact, even those differences can be minimized through the PTO’s rulemaking. They are, of course, different in scope and timing. And they have different effective dates. With respect to timing, post-grant review is available only for the nine-month period after a patent issues. Inter partes review picks up where post-grant review leaves off. So either after that nine-month period or after a post-grant review procedure is completed, inter partes review becomes available. With respect to scope, inter partes review, like inter partes reexamination, is limited to patents and printed publications (and presumably double patenting). Post-grant review is essentially for all defenses that are available in litigation – except for best mode, of course, which isn’t available as a defense anymore. Both procedures are conducted by APJs. Both must be completed in one year or one year and six months for good cause. Both have a four-year phase-inperiod, which is going to be very important to the PTO’s ability to handle them. With respect to effective dates, inter partes review actually kicks in earlier than post-grant review. Inter partes review kicks in September 16, 2012. Post-grant review won’t kick in, except for a transitional provision for “covered business method patents” (yet to be defined), until March 16, 2013. Even then, it is only applicable to claims that have a priority date after that date. So we may not see much post-grant review for many years to come, which will give the Board time to hire and train APJs to handle post-grant review and will give the Board some experience with inter partes review.
My main concern is whether the PTO can handle all of the review proceedings that are expected to be filed and do so fairly and in a timely way. The Board plans to hire at least 100 new APJs. If they can find 100 competent candidates, hire, train, and keep them when the market for lawyers turns up, that will certainly go a long way toward meeting the challenge they’re facing. Also, because of a four-year phase-in program provided by the AIA, the Board will be able to limit the number of inter partes review procedures to a number tied to the number of inter partes reexaminations during the year prior to the effective date for inter partes review. With respect to post-grant review during the four-year phase in period, I believe the Director has significant discretion and thus can phase it in as slowly as is necessary. So I am quite hopeful the Board can meet the challenge, if it can be met. Whenever possible, the PTO should limit the procedures by rulemaking to assist the Board in meeting the challenge. As one example, the PTO has the ability to limit third parties participation to the filing of one paper, providing an opportunity to keep the proceedings under control.
There are some excellent, excellent people on the Board. Some of them – the ones that have handled interferences – have had the type of trial experience that will be needed for these review procedures. Hopefully, they’ll be able to train new APJs. The ones that have trial experience are few in number – I would say 10, maybe 15. They undoubtedly will have a heavy workload going forward. One thing I’m hoping they do by rulemaking is to make the two review procedures as much alike as possible. Doing so would avoid confusion for those that are using the system and also should be helpful to the Board.
THE REEXAMINATION CENTER: Since the Patent Trial and Appeal Board is essentially going to act both as an initial decider and as a reviewer, in effect they have convolved the CRU into the BPAI. Do you think that the patent owner and the third-party petitioner will have adequate opportunity to get due process in their case with just a 20 minute hearing like they do with interference? Shouldn’t they get a full day hearing, for example, in the same fashion that you would in an opposition at the EPO?
NANCY LINCK: I hadn’t really thought about the length of the hearing before today. I would say a longer hearing certainly makes sense, at least in some cases. Perhaps the length of the hearing should be at the discretion of the APJs. If a case warrants a day-long hearing, then such a hearing should be granted. In my experience, that’s the way it works in the EPO. The hearings are not always for a full day. However, given the short time period to complete these procedures, hearing length is likely going to depend on whether the APJs have the time and the resources to hold such hearings. It ultimately will depend on how many petitions are filed and granted. I’ve been following the Board decisions in inter partes reexaminations and there are a huge number of them. In fact, I have not been able to stay on top of all of them because of their number. Again, I’m concerned that giving each post-grant review a full day hearing may negatively impact the Board’s ability to meet the challenge of handling all its work – not just post-grant cases — in a fair and timely manner.
THE REEXAMINATION CENTER: But the post-grant review allows you to raise practically every defense available in the Federal Court or the ITC in terms of validity.
NANCY LINCK: That is correct.
THE REEXAMINATION CENTER: Including statutory subject matter, 112 issues, as well as all kinds of prior art issues – including offer for sales and public use. And the discovery under post-grant review is quite a bit broader because you have all these defenses that can be raised and pleaded. Whereas, in the inter partes review you are limited to patents and printed publications and double patenting. The question that has arisen is how is the three Judge APJ Board dealing with the post-grant review going to be able to adequately provide opportunity for the patent owner and the third-party petitioner to deal with all of these alleged defects in the patent in a way that’s full and complete?
NANCY LINCK: If they’re permitted to do so in the PTO, patent challengers are likely to raise every possible defense, and there is no mechanism for summary judgment to limit the issues as there is in district court. That’s a problem. But I question whether having a lengthy hearing is the way to address this potential problem. Perhaps the PTO, through rulemaking, can place fair limits on the documents to be filed and the scope of discovery to be permitted. How broad should discovery be? Certainly not the scope permitted in district court litigation! The PTO is going to have to experiment until it finds a good and fair balance, just as it did in interference practice. In interference practice, if declarations and affidavits are submitted, then cross-examination of the declarants and affiants is permitted. In both review proceedings, such discovery likely will be available. How much will be permitted beyond that will be up to the PTO. By statute, additional discovery must be limited to “evidence directly related to factual assertions” in the case.
THE REEXAMINATION CENTER: But you have very strict estoppels in the law – which means that the Federal Courts and the ITC will be prevented from rehearing the issues that were raised or could have been raised in the post-grant review. So the question that’s been raised by some is if you have prior art now that can be an offer for sale or a public use anywhere in the world under the new first inventor to file provision, how is the Patent Trial and Appeal Board going to be able to effectively allow that defense to be fully aired vis-à-vis the patent in question in the post-grant review process?
NANCY LINCK: It is going to be a challenge. However, the third-party petitioner has a choice — it can go to the PTO and petition for review or fight its battle in federal court where full discovery is available. If there are extensive, multiple real issues based on other than prior art patents and publications, the latter avenue may be a better choice.
THE REEXAMINATION CENTER: Another question that I would like to ask is, do you have any thoughts on how the PTAB is going to deal with the whole discovery process itself? In effect, are they going to have a magistrate judge? How does that all work with these very tight timelines that will exist for this whole proceeding?
NANCY LINCK: One APJ in the trial section at the Board oversees limited discovery in interference cases. And presumably, that’s worked fairly well. Obviously, the scope is somewhat narrower. The PTO may – and should — limit the scope of discovery to the extent reasonably possible and perhaps find a mechanism such it uses in interference practice to eliminate issues via motion practice rather than maintain them all. One problem in reexamination is that the CRU examiners do not limit the issues. Rather, they frequently just adopt all the issues the third-party requestor has proposed. That really makes for a very burdensome examination – burdensome for all parties. Hopefully, based on the experience the interference judges have had (and the training they’ll provide to the new APJs), they will find equitable ways to limit discovery and to limit the number of issues. I am sympathetic with respect to the estoppel issues. However, parties may have to decide what are their best arguments. Courts make them do so. The PTO must also make them do so. One tool for making this happen is through limiting the length of documents to be submitted. Of course, such limitations must be fair, given any particular case.
THE REEXAMINATION CENTER: How do you think the Patent Trial and Appeal Board is going to deal with the issues of veracity and credibility in terms of the defenses that can be raised in post-grant review and also the discovery rights you have in inter partes review with regard to declarations and affidavits?
NANCY LINCK: Parties can take the testimony of declarants and affiants and cross-examine the other party’s declarants and affiants. The APJs then will have to make credibility determinations. APJs in the trial section have experience in doing that during interferences. In addition, many of the interference APJs were in the Solicitor’s Office and actually handled litigation. Hopefully many of the new APJs also will have outside litigation experience. It’s undoubtedly going to be a challenge for the Board, given the short time period available to complete the review proceedings. As I mentioned earlier, given the phase-in period and the fact that the post-grant review really won’t kick in after 2013, the APJs will have some litigation training and some experience with inter partes review before they must tackle post-grant review.
THE REEXAMINATION CENTER: Going now to the new supplemental examination process – which will become available on September 16, 2012 – what are your views about this new process for patent owners and do you think it will be widely used?
NANCY LINCK: No, I don’t believe it will be widely used. First, it was part of the legislation before the Therasense case came down and was included to address pre-Therasense concerns about inequitable conduct charges in litigation. Supplemental examination is a tool by which patent owners can bring before the PTO information that they knew about and failed to identify earlier. If they do so, then an inequitable conduct charge cannot be based on that information. Therasense, I think, has put a real damper on inequitable conduct as a defense. Maybe it’s too early to draw that conclusion, but I often serve as an expert on inequitable conduct, and I’m seeing a real change. Today summary judgment of no inequitable conduct is being granted fairly frequently. Thus, there may no longer be much need for supplemental examination. Further, when you read the entire supplemental examination provision (section 12 of the AIA), there is a subsection that may have a chilling effect on its use. It provides that, if the Director thinks that fraud has been practiced on the Office, the Director can cancel all the claims and can refer the matter to the Attorney General. The legislation mentions it could be considered a criminal offense. Patent owners may not want to tell the PTO about their possible bad acts if it can come back to bite them – particularly, now with Therasense dictating controlling law in this area. Interestingly, if supplemental examination is used, it will present a unique form of reexamination, i.e., an ex parte reexamination with the potential scope of the new post-grant review. It won’t be limited to patents and printed publications. If the Director decides to order a supplemental examination, it will be based on issues presented in the patent owner’s submission, including possibly on sale and public use issues.
THE REEXAMINATION CENTER: Under the AIA, there is a new pre-issuance submissions practice. What do you think of this and do you think it will be in effect a pre-grant opposition proceeding?
NANCY LINCK: I fear it offers a form of pre-grant opposition. Under this new pre-issuance submission provision, the PTO is considering having a third party, who may remain anonymous, submit claim charts explaining how the art is applicable to the claims. Obviously, it is more like an ex parte reexam than an inter partes reexam because third-party participation is limited. However, query whether the third party can submit additional comments through multiple filings. The patent bar hasn’t paid much attention to pre-issuance submissions, but I see it as possibly having a huge impact on certain patent applications by delaying their issuance. Notably, we have never permitted pre-grant oppositions and have criticized other countries that do permit such challenges.
THE REEXAMINATION CENTER: Under the AIA, there will be derivation procedures that will exist under the new first inventor to file rules that will become effective on March 16, 2013. What are your views about this new process and the PTO’s ability to implement and administer it, as well as how it compares to the prior interference practice?
NANCY LINCK: We have derivation proceedings as part of interference practice today, but I don’t believe it’s used much. The APJs who have been handling interferences have handled the derivation issues as well, so they do have some experience with them. Whether derivation proceedings will be used more frequently, once interferences are phased out is an open question. I don’t see them as a major challenge for the Board, but certainly the extent of their use is another unknown created by the AIA.
THE REEXAMINATION CENTER: You are focused professionally in the pharmaceutical and life sciences area. Do you have any thoughts under the new AIA whether certain provisions will be embraced more by those industries versus other industries or do you think that the AIA is going to be accepted or rebuked across all industry areas?
NANCY LINCK: My background is certainly is in the pharma-biotech area. However, my work in reexamination is 75-80% high tech, i.e., cases involving software and computer technology. That’s because it is primarily the high tech companies that are using the inter partes reexamination proceeding. Whether this legislation will encourage pharma and biotech companies to use it as well is another open question. Pharmaceutical litigation presents a different situation than that in the high tech area. For example, in a paragraph four case, the generic drug company wants to defeat the asserted patents in district court litigation, so it can obtain a very valuable period of exclusivity for the generic drug. That’s not available to it in reexamination. Some pharmaceutical companies are using reexamination, but the number is relatively small. I predict that number will remain relatively small under the new legislation, at least for the foreseeable future.
THE REEXAMINATION CENTER: Do you think that the high tech world, particularly in the United States, will embrace post-grant review or do you think they will essentially wait to be charged with infringement or have a significant infringement threat and then consider utilizing inter partes review since the nine-month window will be gone?
NANCY LINCK: It is probably going to depend on the company. I believe big companies that can afford to monitor their competitors’ patents will use the post-grant procedure. Although, there may be a sit back and watch period, such as there was with inter partes reexam. It was not used for awhile for a number of reasons but then third parties realized patent challenges in the PTO were succeeding. With that realization, more third parties challenged patents successfully, resulting in the system being widely used. That could happen with post-grant review as well. I don’t think small companies have the resources to monitor patents and challenge those offering a potential threat. A small company more likely will wait until a patent has been asserted against it and then, perhaps, use inter partes review to challenge it in the PTO, if it has a strong defense based on patents and printed publications.