[co-author: Melissa Marrero]
The America Invents Act, adopted in September 2011, introduced the new inter partes review (IPR) procedure, providing an opportunity to challenge the validity of issued patents at the US Patent and Trademark Office. Thus far, these IPR procedures are proving to be quite popular. Since IPRs became available in September 2012, more than 800 have been requested. What can we learn from looking at use of the new procedures?
Among those who can seek IPRs are defendants accused of infringing particular patents asserted in litigation. Frequently, defendants seeking IPRs will attempt to stay concurrent litigation pending resolution of the IPR. Given the streamlined nature of the new IPR procedures, this can bring significant cost savings. For example, the IPR procedures are typically faster (12-month deadline) than district court litigation and involve only limited discovery and motion practice. If the IPR results in a determination of invalidity, district court action can be avoided entirely.
Although a stay of litigation pending IPR is not mandatory, early numbers suggest district courts are quite willing to exercise their discretion in staying litigation pending IPR. Since the adoption of the AIA up to December 31, 2013, a total of 70 contested motions to stay district court cases pending IPR have been decided throughout the US. Of those 70, 45 were granted and 25 were denied – a success rate of 64 percent. The chart to the right provides a district-by-district breakdown. During that same period, another 40 cases were stayed pending IPR by agreement of the parties. Adding the cases stayed by stipulation to the total, the rate at which cases are being stayed pending IPR (when requested) jumps to about 80 percent. In the first two months of 2014 (through February 25), it appears that decisions are becoming more evenly split, with 10 of 20 contested motions to stay pending IPR granted.
While it may be too early to identify general trends – especially given the differences among districts – a few observations are worth noting.
A common theme among courts granting stays was the predictability in the length of time for IPR resolution. The 12-month deadline was a significant factor in many decisions.
Another prominent issue in decisions granting stays was the estoppel effect that attaches to prior art used in the IPR, precluding that art from being used again in district court. The “estoppel effect” caused many courts to conclude that the IPR process would simplify issues to be decided in litigation, even if it did not eliminate the need for trial altogether.
Decisions often focused on the overlap among claims subject to IPR and asserted in the litigation: the more complete the overlap, the more likely a stay would be granted.
The timing of the request was central to the stay analysis. Generally, the earlier the stay request was made, the more likely a stay would be granted, with stays requested close to trial the most likely to be denied. Several courts declined to grant stays early in cases when the IPR had not yet been initiated. In some of those cases, the decisions were without prejudice to raising again if the IPR was instituted.
New IPR procedures are having a significant impact on patent litigation. The simple fact that more than 800 have already been requested tells the tale: IPR has quickly become a popular mechanism to challenge the validity of patents, including those asserted in litigation. In many cases, courts have been willing to stay patent cases pending IPRs. These early statistics suggest that the AIA’s new IPR process will continue to shape the patent litigation landscape.
*Melissa Marrero is a law clerk in DLA Piper’s Austin office.