By David Linden and Dave Maiorana –
Recently, the Director issued a memorandum identifying inter partes review (“IPR”) and post grant review (“PGR”) institution factors designed to promote American innovation and manufacturing. Director Squires noted that Sections 316(b) and 326(b) of the American Invents Act (“AIA”) require the Director to consider the effects of institution factors on the “economy, the integrity of the patent system, the efficient administration of the Office, and the ability of the Office to timely complete proceedings.”
Director Squires described the decades-long international migration of the United States’s manufacturing base, citing studies by the Departments of Commerce and Homeland Security. This outsourcing continued despite the broad availability of IPRs and PGRs—availability that some stakeholders asserted would protect American manufacturers and small businesses. Additionally, the memorandum notes that many who utilize these post-grant proceedings most frequently are large companies that have little current or prospective manufacturing presence in the United States.
Asserting that this situation “raise[s] a legitimate question about whether the current institution framework appropriately weighs the interests of entities that invest in domestic production,” Director Squires specified additional factors the Director will consider when determining whether to institute IPR and PGR proceedings:
- the extent to which any products accused of infringement in a parallel proceeding are manufactured in the United States or are related to investments in American manufacturing operations;
- the extent to which any products made, sold, or licensed by the patent owner that compete with the accused products are manufactured in the United States; and
- whether the petitioner is a small business that has been sued for infringement of the patent at issue.
The Director encouraged parties to identify relevant facts in their discretionary briefing. The Director noted that the Office will not only consider final product assembly, but will also take into account the extent to which (1) components of a product are made in the United States and (2) products made in the United States are further processed outside the United States. Furthermore, the memorandum clarified that the relevant products for method claims are devices used to carry out the method.
Takeaway
Petitioners that are small businesses and parties investing in American manufacturing should consider highlighting those facts in their discretionary briefing. A showing that an institution or denial promotes American manufacturing or encourages small business investment may influence the Director’s institution decision.
David Maiorana