The onslaught of non-practicing entities, or “patent trolls,” that aggressively leverage the high price of defending a patent infringement action in order to extract licensing fees, cost defendants and licensees $29 billion in 2011. The number of such lawsuits rose to 62% of all patent infringement cases filed in 2012. The economic drain on the targets of these troll lawsuits, U.S. companies that are actually marketing products and services, has focused attention on the inability of the U.S. Patent and Trademark Office (USPTO) to weed out overly broad patents, and it has bolstered criticism of the patent system for stifling innovation by granting improper exclusivity for less-than-inventive concepts.
In part to combat the scourge of patent trolls, the recently enacted America Invents Act (AIA) increases the number of avenues available for parties to direct the USPTO’s attention to more relevant references and to challenge the validity of a U.S. patent at the USPTO without incurring the high cost of litigation.
In the new AIA post-grant proceedings (i.e., post-grant review, inter partes review, and covered business method review), the USPTO reevaluates the validity of an issued patent. The challenger (e.g., the patent troll’s intended prey) presents new references, arguments, or both for the USPTO to consider in revisiting the validity of the previouslyissued patent. The challenger participates throughout the post-grant proceeding by countering the patent owner’s arguments of validity. Based on past experience with the previously available post-grant procedures (i.e., ex parte and inter partes reexamination), many practitioners expect these new proceedings to be generally favorable to the challenger’s goal of either invalidating the patent or at least narrowing the patent’s scope, thus improving the challenger’s odds to avoid liability. However, while these proceedings are significantly less expensive than litigation, they are not cheap, owing to the large filing fees (upwards of $23,000) and to their adversarial nature...
Originally published in the Orange County Business Journal on August 26, 2013.
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