Friday, December 1, 2023

PREVAIL Act & Molly Metz - Clear and Convincing: Will changing the standard save America’s greatest patents?

Molly Metz's article Clear and Convincing: Will changing the standard save America’s greatest patents? discusses whether or not the PREVAIL Act goes far enough in proposing to raise the "burden of proof" for instituting a validity challenge in an inter partes review (IPR) in the USPTO. 

Note the article talks about "burden of proof" when it must mean "standard of proof." (Burden of proof assigns which party must prove something in a proceeding, while standard of proof establishes the amount of evidence required to support a claim or defense). 

First, the PREVAIL Act proposes to change more than the standard of proof. See PREVAIL Act fact sheet for a summary, but let's focus on what was raised in the article.

Ms. Metz's article argues that a heightened standard of proof will not suffice, due to the subjective nature of an obviousness under KSR and certain procedural issues (e.g., lack of a  jury, cross examination of experts, and discovery) during an IPR. I  understand her position and do not doubt her experience. But the key factor for a patent owner to win in an IPR is for it to not be instituted in the first place. And whether an IPR will be instituted may well depend on the standard of proof. 

In 2012, the AIA set a low standard of proof for instituting an IPR, i.e., prove a reasonable likelihood at least one claim is unpatentable. IPR's were assumed to be much like patent prosecution where patent owners could if required amend claims. 

However, nearly all patent owners have not been able to amend claims. Facing this problem, USPTO launched a series of studies, but nothing has changed. See IP Watchdog's recent article: USPTO Motion to Amend Study Update Shows 83% of MTAs Denied

Congress understand at this stage the low standard for institution is based on a faulty assumption. The low standard of proof allows infringers to institute an expensive IPR, out resource the patent owner, and invalidate valid patents. A heightened standard should reduce the problem. At least let's admit we don't know because the standard has not changed. 

It also seems that invalidity challenges in an IPR should be proven by clear and convincing evidence like district court. Shouldn't the patent that was obtained by the same examination be afforded the same presumption of validity in both forums? 

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