Final Rules for Instituting Contested Proceedings and Eliminating Petitioner’s Presumption

Intellectual Property Law

The U.S. Patent and Trademark Office (Patent Office) has issued final rules revising the procedure for instituting review on all challenged claims to conform with the U.S. Supreme Court decision in SAS Institute Inc. v. Iancu.1 Consistent with that case, the Patent Office also revised the rules of practice when instituting a review on all asserted grounds of unpatentability for all challenged claims.2 Previously, under 37 C.F.R. Secs. 42.108(a) and 42.208(a), the Board had the discretion to institute a contested proceeding (inter partes review, post-grant review or covered business method) on all or some of the challenged claims and on all or some of the grounds of unpatentability being alleged for each claim. For example, the Board exercised the discretion to proceed on only specific claims or grounds to narrow the number of issues requiring review.

The final rule modifies 37 C.F.R. Secs. 42.23, 42.24, 42.120 and 42.220 to describe the current practice to allow (1) replies and patent owner responses to institution decisions, and (2) sur-replies to principal briefs (i.e., to a reply to a patent owner response or to a reply to an opposition to a motion to amend). Under the rules, the petitioner may respond in its reply brief to issues discussed in the institution decision. Similarly, the patent owner is permitted to respond to issues in the institution decision in its response, and is permitted to file a sur-reply to respond to the petitioner’s reply. However, the sur-reply may also include any new evidence other than deposition transcripts of the cross-examination of any reply witness. Sur-replies may only respond to arguments filed in reply briefs, respond to reply declaration testimony reference cross-examination testimony, or address the institution decision if necessary to respond to the petitioner’s reply. This sur-reply practice basically is a substitute for filing observations on cross-examination testimony.

The Patent Office has also modified the rules to eliminate the presumption that a genuine issue of material fact created by the patent owner’s testimonial evidence filed with a preliminary response will be viewed in the light most favorable to the petitioner when determining whether to institute a review. The elimination of the presumption is for the purpose of ensuring that patent owner testimonial evidence is treated similarly to other evidence for purposes of institution. Accordingly, testimonial evidence presented with a patent owner’s preliminary response will be considered as part of the totality of the evidence.

Rule Change Impact

Various procedural changes to the rules continue to seek to level the playing field for the patent owner. The rules provide the patent owner with the right to get in the last word before the Board determines whether to institute the proceeding. The rules provide more flexibility for patent owners to ensure that only meritorious petitions proceed to trial. Thus, petitioners are on notice that the Board will continue to be scrutinizing petitions carefully and not resolve any doubts in their favor. Petitioners should expect the rate of decisions to institute to likely continue to tick down a bit.

The rules were published in the Federal Register on December 9, 2020, and are available online at www.federalregister.gov/d/2020-27048. The rules are effective on January 8, 2021, although as indicated above, some of the rules reflect current practice.


Irah Donner is a partner in Manatt’s intellectual property practice and is the author of Patent Prosecution: Law, Practice, and Procedure, Eleventh Edition, and Constructing and Deconstructing Patents, Second Edition, both published by Bloomberg Law.


1 SAS Institute Inc. v. Iancu, 138 S. Ct. 1348, 126 U.S.P.Q.2d 1307, 2018 WL 1914661 (2018).

2 PTAB Rules of Practice for Instituting on All Challenged Patent Claims and All Grounds and Eliminating the Presumption at Institution Favoring Petitioner as to Testimonial Evidence, 85 Fed. Reg. 79120 (Dec. 9, 2020).

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