How to Develop an ADR Program for PTAB

Hon. Linda Horner
Administrative Patent Judge, Patent
Trial & Appeal Board
A New Settlement Paradigm at
PTAB:
Using ADR to Settle
Post-Grant Proceedings
David L. Newman
dnewman@gouldratner.com
May 19, 2016

©2016 Gould & Ratner LLP all rights reserved
 The USPTO has announced that it will
encourage participants in post-grant
proceedings at PTAB to use ADR
procedures such as:
• mediation
• arbitration
• hybrid: mediation and arbitration/ early neutral
evaluation (ENE)
ADR at PTAB
1

 Announcement came following input from
the ADR committee of the ABA’s IP
Section.
 Retain attorney especially qualified to
guide parties with respect to PTAB
proceedings and use of mediation,
arbitration and other ADR processes.
ADR at PTAB
©2016 Gould & Ratner LLP all rights reserved 2

 Summer of 2015, multiple meetings with
judges at the PTAB in order to investigate
the use of ADR procedures at the PTAB.
 As a result, the USPTO determined that it
should encourage parties to attempt to
settle PTAB proceedings by use of
mediation, arbitration or other ADR
proceedings.
ADR at PTAB

 The USPTO has identified organizations that may assist
in providing alternative dispute resolution services,
including:
• CPR Institute for Dispute Resolution – roster of neutrals
• American Intellectual Property Law Association
• American Arbitration Association – provides neutrals,
administration
• World Intellectual Property Organization – provides neutrals,
administration
• American Bar Association
ADR at PTAB

ADR at PTAB
 Other organizations that may assist in
providing ADR services, include:
• International Trade Commission (ITC) – roster
of neutrals
• JAMS – provide neutrals
• Court of Appeals for the Federal Circuit –
roster of neutrals

 PTAB disputes that may be settled using
ADR:
• Inter Partes Review (IPR)
• Covered Business Method (CBM) proceedings
• Post-Grant Review (PGR) proceedings
ADR at PTAB

PTAB Arbitration Rulings
 Amkor Tech, Inc. v. Tessera, Inc.,
IPR2013-00242, Paper 98 (Jan. 31, 2014)
 Addressing Patent Owner’s argument that
petition was not filed timely because, in a
prior arbitration proceeding, Patent Owner
served Petitioner with a counterclaim
alleging infringement more than one year
before the petition was filed

 Ford Motor Company v. Paice LLC, IPR2014-
00884, Paper 11 (Dec. 11, 2014) –
 Addressing Patent Owner’s argument that
Petitioner does not have standing to bring
petition to challenge patent because
challenge violates terms of an arbitration
agreement.

 Shinzhen China Star Optoelectronics
Tech Co. v. AU Optronics Corp.,
IPR2016-00548, Paper 9 (May 2, 2016) –
 Order granting parties’ joint motion to
dismiss petitions pre-institution in
according with a partial final arbitration
award and maintaining the partial final
award under seal.

 In many cases, customization of traditional
mediation and arbitration proceedings would
be beneficial
 For example, an ENE or expert determination
by S.M.E. to provide a preliminary opinion
regarding the validity of the patent in a first
phase of the proceeding
ADR at PTAB

 Begin ADR following Institution Decision (IPR)
ADR at PTAB

 Type of ADR to be
selected:
• Arbitration
• Mediation
• ENE/ Expert
Determination
 Include appeal process
ADR Considerations

ADR Considerations - Types of
Cases/ Parties for ADR
 Non-competitors
 Unequal Resources
 Large Monetization Program
at Risk
 District Court Case is Stayed
 Uncertain Claim
Construction Ruling from
Institution Decision

ADR Considerations
 Identify the scope of issues to be addressed by
the new ADR process to include:
• validity
• infringement
• inequitable conduct
• license terms
• ownership
• inventorship
• damages
• FRAND Rates

ADR Timeline
 Set timing of the ADR proceeding so that it does
not disrupt an ongoing AIA trial timeline (e.g. parties
must complete an ADR proceeding within 45 days)

ADR Timeline
1. Parties exchange a list of
topics, ADR neutrals,
potential dates that
attorney and principal can
attend ADR and preferred
location within 17 days of
institution decision.

ADR Timeline
2. ADR coordinator will locate appropriate neutral
within 25 days of institution decision and notify
parties of date and location of ADR to occur
within 45 days of institution decision.
3. Parties will attend teleconference with neutral
to discuss ADR process, urgent issues and
send retainer fee to neutral within 35 days of
institution decision.

ADR Timeline
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4. Parties will submit ADR briefs outlining basic
positions on validity issues, preferred claim
constructions, settlement offer and issues to be
addressed to facilitate settlement within 40
days of institution decision.
5. Parties, including principals, attend ADR to be
held in person within 45 days of institution
decision.
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ADR Considerations - Scope of
confidentiality restrictions for the ADR
 35 U.S.C § 294 (d) - Patentee shall file arbitration
award with USPTO Director. So parties should agree on
terms/issues not to be written in arbitration award (e.g.
non-patentable/ invalidity decision is verbally provided
and no written opinion on that issue).
 35 USC § 317(b) - A [settlement] agreement
shall be filed with PTAB and shall be treated as
business confidential info and be kept separate
from the files of the involved patent, unless good
cause is shown to disclose.

ADR Considerations
 Confirm parties will
split ADR costs.
 Obtain schedule
and budget from
arbitrator/mediator
in advance of ADR
to complete within
45 days.

How to Develop an ADR Program for PTAB

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