When the Leahy–Smith America Invents Act took effect in September 2012, and introduced to the U.S. Patent and Trademark Office post-grant trial proceedings, commentators said it could mean a drastic decline in the use of arbitration to decide patent disputes.
There was good reason for concern. The proceedings were promised to be efficient and expeditious. They provide third parties with an administrative opportunity—a trial process, to be sure, but an alternative to court litigation–to effectively and efficiently challenge validity in the USPTO of any patent claim.
The post-grant proceedings are an adversarial process before the Patent Trial and Appeal Board, with a statutory one-year pendency from the date of initiation.
Post-grant proceedings provide what alternative processes frequently promise: They are faster and less expensive than traditional litigation.
But the proceedings–post-grant review and inter partes review—are limited to validity issues.
The market outcome has been that, instead of supplanting arbitration, the post-grant proceedings have proven to be a complementary process to ADR.
And, notes New York patent neutral Peter L. Michaelson in the cover story in the new March issue of Alternatives, patent arbitration, “where employed in appropriate situations and structured properly, will likely see increasing use.”
In his article, Michaelson notes that the issues in patent disputes, whatever the forum, often range well beyond challenges to the patent’s validity. The USPTO’s post-grant proceedings are fundamentally different from arbitration and are not ADR substitutes, writes Michaelson, “and thus not likely to adversely affect the future use of arbitration to any significant extent.”
But how do post-grant proceedings and arbitration work together in defending a patent portfolio? Obviously, if business considerations beyond validity are part of the claim, arbitration can come into play, rather than traditional litigation.
Using a generation-old conflict resolution tenet, author Michaelson says that patent arbitration requires proper structuring. The invocation of arbitration to resolve a patent dispute involves “fitting the process to the fuss,” he writes.
“Once properly configured, an arbitral process can yield substantial cost and time efficiencies, along with other benefits unavailable through litigation.”
In his March Alternatives article, available later this week for free for CPR members after logging into CPR’s website here, and available by subscription here and at altnewsletter.com, Michaelson details those benefit. He describes the steps needed to provide a patent arbitration forum that maximizes satisfying outcomes faster and at less cost than proceeding to court, and discusses the need for ADR when faced with more than a validity challenge.