Inter Partes Review (“IPR”) was first made available via the America Invents Act (AIA) on September 16, 2012 as a counterpart to Post Grant Review. Accordingly, IPR is a procedure in which a third party may challenge the validity of patent claims based on existing prior art. Since its enactment, early statistics demonstrate that a staggering 87% success rate for the Petitioners to institute a trial with the Patent & Trial Appeal Board (“PTAB”) against the Patent Owners in the first year and equally favorable 76% success rate in the second year.
From a legislative perspective, IPR was predominantly introduced to eliminate invalid patents that were erroneously issued by the United States Patent & Trademark Office (“USPTO”). However, since its introduction two (2) years ago, IPR has instantly altered the Patent Litigation vista. Quite frankly, to some, it may be rather unsurprising that the statistics at this point have favored the Petitioners. A cursory review of the legal standard illuminates on the initial success rate for Petitoners. In particular, for a successful IPR to be granted against the Patent Owner, the Petitioner has to only establish that there is a reasonable likelihood of success that at least one (1) claim will be invalidated. In other words, the Petitioner only has to show that the existing prior art can successfully invalidate a minimum of only one (1) claim of the granted patent.
Given the standard of review, an overwheliming volume of IPR petitions are being filed with PTAB. First, filing an IPR petition with PTAB allows the Petitioners to stay their patent litigation case filed in a federal district court. Second, the procedure for IPR is much quicker and less expensive than litigating a case in the District Court. For instance, the fee for filing an IPR petition with the PTAB is $23,000. Although by no means an inexpensive sum, a lengthy, drawn out litigation proceeding in a federal district Court can incorporate litigation costs, including but not limited to attorney’s fees, discovery costs and other court costs can acccrue to be far more expensive and time consuming in comparison.
Moreover, having a patent matter initiated in front of the PTAB via an IPR can yield quicker results. More particularly, an IPR petition can be resolved within a year from when the Petition is initially filed to when a final decision is written by the PTAB. The Petitioners are also afforded with the opportunity to present their case in front of an expert panel of the PTAB rather than a jury, who may not be as well-versed in patent invalidity subject matter.
On the contrary, however, it is no surprise that patent owners and their attorneys prefer to litigate in a federal district court rather than via an IPR with PTAB. First, as highlighted, the statistics are not in favor of patent owners when it comes to IPR grants. To demonstrate, between September 16, 2013 and March 31, 2014, only 27% of patent claims survived IPR for the patent owners. Not an impressive statistic if you are a patent owner. Additionally, in IPR proceedings, claims are given their broadest possible interpretation. This is significant because this claim interpretation is generally broader than what the District Court typically allows for claim review. A broader interpretation of claims rather than a narrower one can be fatal to a patent owner when it comes to patent invalidity matter. Given this, patent owners and their litgation attorneys alike, seem to be finding it more appealing to litigate their patent invalidity cases in the District Court in front of a jury.
While overall statistics indicate that IPR proceedings have been enormously favored to petitioners during the first two (2) years, the PTAB appears to be closely analyzing the petitions. More specifically, as highlighted by the drop in statistics from 87% to 76% in success rates, if petitioners are unable to precisely indicate the prior art questioning patent validity and/or adequately explain the grounds for invalidity, the PTAB is denying IPR petitions in favor of patent owners. Accordingly, moving forward, practioners are cautioned that despite the favorable statistics in IPR petitions, filing weak IPR’s may not yield favorable grants moving forward.