Inter Partes Review (“IPR”) proceedings are a powerful tool for challenging the validity of patents before the Patent Trial and Appeal Board (“PTAB”).1 In addition to their firepower to invalidate patents under §§ 102 and 103, the potency of IPRs against patents is also helpful in obtaining a stay in corresponding district court litigation. In particular, the latest statistics show that IPR proceedings will greatly simplify issues before a judge in corresponding litigation. This article considers the latest statistics (as of May 29, 2014) and ways in which these statistics show why a judge should grant a litigation stay in view of an IPR challenge of the patents-in-suit.
Both institution and invalidation rates for IPR proceedings have been relatively high. The IPR institution or joinder rate is about 82% (526 IPR trials instituted out of 643 IPR petitions).2 While still high, this is less than the 93% grant rate of Inter Partes Reexaminations (“IPX”).3 The change from 93% to 82% likely reflects the difference between the lower “substantial new question of patentability” standard4 for IPX and the higher “reasonable likelihood that the petitioner would prevail” standard currently used for IPR proceedings.5 This higher standard and lower likelihood of institution should give an IPR institution greater weight than was given IPX institution under the previous standard.
Of the 526 IPRs in which a trial has been instituted, the PTAB has issued a final decision in 66 IPRs.6 In these 66 final decisions, 932 claims were reviewed for invalidity and 720 claims were found to be unpatentable (although 18 claims in one IPR were found to be patentable pursuant to a granted motion to amend the claims). Of the 720 analyzed claims, 206 claims were voluntarily invalidated. Thus, there has been a 77% invalidation rate and a 71% involuntary invalidation rate. These are powerful figures that show there is a substantial likelihood that the claims involved in an IPR trial will be invalidated.
Potentially even more helpful when seeking a stay is the incidence with which all claims of an IPR proceeding have been invalidated. This has been significantly higher than was observed for the previous IPX proceedings. Of the 696 IPX certificates issued between 1999 and 2013, 53 (8%) confirmed all claims, 219 (31%) cancelled or disclaimed all claims, and 424 (61%) included some combination of confirmed, cancelled, and amended claims.7 Calculated in the same manner for IPRs, of the 66 final IPR decisions, 9 (13%) confirmed all claims, 46 (70%) cancelled all claims, and 11 (17%) included some combination of cancelled, confirmed, and amended claims. Thus, IPR petitioners have been more than twice as likely to invalidate all claims in the proceeding. This is likely due to the change “from an examinational to an adjudicative proceeding”8 “conducted before a panel of three . . . technically trained administrative judges comprising the [PTAB].”9
The higher rate of complete invalidation for IPR as opposed to IPX proceedings may be particularly useful for courts considering a stay or continuance in a litigation based on an IPR petition or institution. For example, when considering a stay or continuance, the judge may consider the likelihood that all the claims of multiple patents are found invalid or not invalid by the PTAB. In fact, some judges have opined that the potential simplification of the trial is of reduced benefit if there is not a likelihood that all the related patents are invalidated. See, e.g., Davol, Inc. v. Atrium Med. Corp., No. 12-958-GMS, 2013 WL 3013343, at *5-*6 (D. Del. June 17, 2013). With IPR proceedings, the likelihood that all claims are invalidated is significantly higher (71%) than it was with IPX proceedings (31%).
The small sample size of final written decisions is one factor that should be considered when analyzing these statistics. While the number of decisions is approaching a size to allow for some generalizations, the size is still somewhat limited and could be skewed by certain factors. For example, there may be a selection bias associated with the earlier-filed petitions that skews the initial IPR results towards invalidity. Because of the estoppel provisions involved, parties may have been initially leery of the new system such that only particularly persuasive cases were filed in the first several months after IPRs became available. As another example, one particular petitioner can affect the numbers in a considerable way. For example, Corning filed 10 IPR petitions involving 215 claims. Of that group, 152 claims were found not unpatentable, 63 claims were invalidated, and 10 claims were not subjected to an IPR trial. This amounted to a 71% “validity” rate and a 29% invalidity rate, nearly the inverse of the statistics for IPRs as a whole. Indeed, almost 74% of all claims found not unpatentable so far in IPRs were from the Corning IPRs alone. If these Corning IPR claims were removed from the statistical analysis above, the invalidation rate becomes much higher (92%).
In conclusion, despite a small sample size, the trends indicate that an IPR proceeding is likely to simplify litigation issues for a court by invalidating the vast majority of claims for which IPRs are instituted. And while this is not the entire analysis for granting a stay or continuance, it should be an important factor when considering such a motion.
1See 35 U.S.C. §§ 311-319.
2See United States Patent and Trademark Office, Patent Trial and Appeal Board AIA Progress - Statistics (as of 5/29/14), available here (last visited June 4, 2014).
3See United States Patent and Trademark Office, Inter Partes Reexamination Filing Data - 2012, 2013. available here (last visited May 21, 2014).
435 U.S.C. §§ 303(a), 312(a).
535 U.S.C. § 314(a).
6While the USPTO’s statistics refer to 64 final written decisions, separate research suggests there are 66 final written decisions, and the discrepancy is due to a mis-labeling in the USPTO’s docketing system. See, e.g., IPR2013-00173 (labeled as a Final Written Decision but in actuality is a joint settlement resolution).
7See supra, FN 2, Inter Partes Reexamination Filing Data - 2012, 2013.
8Abbott Labs. v. Cordis Corp., 710 F.3d 1318, 1326 (Fed. Cir. 2013) (quoting H.R. Rep. No. 112–98, pt. 1, at 46–47 (2011)).
9Rensselaer Polytechnic Inst. v. Apple Inc., 2014 WL 201965, at *2 (N.D.N.Y. Jan. 15, 2014).