Did You Know … The America Invents Act (AIA) May Lead To Stays Of Section 337 Investigations Pending The Completion Of New Post Grant Proceedings?
Historically, stays of Section 337 actions pending the resolution of patent reexaminations at the U.S. Patent and Trademark Office (“PTO”) have rarely been granted. But on September 16, 2012, new post-grant proceedings—Post Grant Review (PGR), Transitional Program for Covered Business Method Patents (TPCBMP), and Inter Partes Review (IPR)—will become available to the public pursuant to the America Invents Act (AIA). Unlike traditional reexamination, these new post-grant proceedings are designed to proceed relatively rapidly to final resolution. Also unlike traditional reexamination, the estoppel provisions of the new proceedings will extend to the ITC. As discussed on the Patents Post-Grant Blog, in view of these significant differences, it is possible that the ITC will eventually start to grant motions to stay Section 337 actions pending resolution of the new post-grant proceedings much more readily than it has in the past with traditional reexaminations.
By way of background, patents asserted in Section 337 actions have often been the subject of concurrent reexamination proceedings at the PTO. When this occurs, Respondents sometimes seek to stay the Section 337 investigation pending the outcome of the reexamination. However, because of the unique nature of the ITC as a forum, stays pending reexamination have rarely been granted at the ITC. See our November 6, 2009 post for more details on the factors used in evaluating motions to stay at the ITC. For example, in Certain Semiconductor Chips with Minimized Chip Package Size and Products Containing Same (Inv. No. 337-TA-605), the Commission reversed an ALJ’s Initial Determination granting a motion to stay the investigation pending the completion of reexamination proceedings. The Commission made note of “Congress’s mandate that section 337 investigations be expeditiously adjudicated … and the Commission policy that, to the extent practicable and consistent with requirements of law, investigations be conducted expeditiously to avoid delay.” Comm’n Op. at 6. The Federal Circuit later denied a request for a writ of mandamus to vacate the Commission’s opinion. In re Freescale Semiconductor, Inc., 2008 U.S. App. LEXIS 15739, at *4 (Fed. Cir. Jun. 25, 2008). More recently, ALJ E. James Gildea denied a motion to stay an investigation pending reexamination in Certain Blu-Ray Disc Players, Components Thereof and Products Containing the Same (Inv. No. 337-TA-824). See our April 18, 2012 post for more details.
A primary reason that stays pending reexamination are rarely granted at the ITC is that the ITC has a statutory mandate to expeditiously process its docket. See Certain Semiconductor Chips (Inv. No. 337-TA-605), Comm’n Op at 6. Since patent reexamination proceedings can often take 4-5 years to come to an ultimate resolution, the ITC has been reluctant to stay its relatively fast investigations while the PTO resolves a drawn-out reexamination.
However, the new post-grant proceedings allowed under the AIA are designed to conclude within 12-18 months of initiation. The speed of these proceedings as compared to traditional reexamination could significantly alter the calculus used to determine whether a stay is appropriate at the ITC. Since a stay pending a post-grant proceeding under the AIA would likely not last nearly as long as a stay pending reexamination, the justification for denying a stay based on the relative slowness of PTO proceedings may be significantly weakened in the future. Moreover, since the estoppel provisions under the AIA will extend to the ITC, the ITC may have more of an incentive to allow the PTO to come to a determination as to an asserted patent’s validity in the first instance.
The ITC will likely take a wait-and-see approach in the short term based on its historical practice of rarely granting motions to stay pending traditional reexamination. However, if it becomes clear that the PTO is actually concluding trials within the mandated 12-18 month time frame, motions to stay ITC actions pending post-grant proceedings at the PTO stand a chance of gaining traction.
We will continue to monitor developments in this area. For more information on the AIA and the new post-grant proceedings, please visit the Patents Post-Grant Blog.