On June 30, 2016, lead APJ Jacqueline Wright Bonilla provided an overview of the new PTAB rules during the Biotechnology/Chemical/Pharmaceutical Customer Partnership (BCP) Conference. The final rule on Amendments to the Rules of Practice for Trials Before the Patent Trial and Appeal Board, which we have previously discussed [April 21, 2016 and August 20, 2015] was published on April 1, 2016, and was later revised in a correction to the final rule on April 27, 2016. APJ Bonilla commented on the new rules relating to the standard for claim construction, preliminary responses by the patent owner, including testimonial evidence, word count, Rule 11-type certification, and motions for sanctions.
Claim Construction Standard
The amended rules clarify that either party can request application of the Phillips-type standard rather than the broadest reasonable interpretation standard set out in In re Cuozzo Speed Techs. LLC, if the party can certify that the patent will expire within 18 months from the date of filing the AIA petition. Rule 42.200(b) requires that this request be filed within 30 days from the filing date of the petition. This short deadline allows for claim construction issues to be resolved early in the process, and allows the Board to determine if the parties need to brief the claim construction issues prior to institution.
Patent Owner’s Preliminary Response
Amended Rule 42.107 now allows the patent owner to provide testimonial evidence before institution. In addition, the petitioner can now seek leave to reply to the patent owner’s preliminary response. However, the petitioner must show good cause for seeking leave, such as the patent owner raised a genuine issue of material fact created by their testimonial evidence in the preliminary response. In view of the amendment, Rule 42.108 also has been amended to make clear that if the new testimonial evidence raises an issue of fact, it will be viewed in a light favorable to the petitioner, which will likely give the petitioner an opportunity to cross examine the patent owner’s expert after institution.
Word and Page Limitations
As many parties were using clever page manipulations to comply with the page limitations, amended Rule 42.24 sets out word count limitations to replace the page limitations. The amendment notes that tables of contents, tables of authorities, grounds for standing, mandatory notices, certificates of service or word count, and appendices of exhibits or claim listings do not count toward the limit. The grounds for standing section of the petition is not included as an exception because in CBM petitions the grounds for standing can take up a large portion of the petition.
Rule 11-Type Certification and Sanctions
The new rules also provide a Rule 11-type certification in Rule 42.11, which may provide a basis for a party to file a motion for sanctions for noncompliance or violation of the duty of candor. The PTAB does not expect to impose sanctions frequently, but the rule provides notice to the public on what the Board expects in regards to compliance. The new rules also require that every filed paper be personally signed and that by signing the paper the attorney or other individual signing the paper is certifying compliance with the duty of candor and representations in 37 CFR 11.18(b)(2). The party seeking to file a motion for sanctions must serve the motion at least 21 days before seeking authorization to file the motion, and the motion for sanctions may not be filed or presented to the Board if during that 21-day period the other party withdraws or appropriately corrects the paper that is the subject of the motion. In addition, the Board can also issue an order sua sponte requiring the attorney or party to show why they should not be sanctioned. Any sanction imposed must be consistent with Rule 42.12, and the order imposing the sanction must describe the conduct and explain the basis for the sanction.