PTAB Chief Judge Discusses Post-grant Review Statistics at IPO Meeting

by McDonnell Boehnen Hulbert & Berghoff LLP

The value of the post-grant review programs (post-grant review, inter partes review, and covered business methods review) has been debated since these provisions were enacted as part of the Leahy-Smith America Invents Act in 2012.  Indeed, the legal status of these review programs under the U.S. Constitution has been challenged in a certiorari petition granted for this term in Oil States Energy Services LLC v. Greene Energy Group, LLC.  Nevertheless, these forms of review remain in the statute and have been used as Congress apparently intended to them to be, invalidating numerous patents duly granted by the U.S. Patent and Trademark Office purportedly in error.  Yesterday, USPTO Patent Trial and Appeal Board Chief Judge David Ruschke presented cumulative statistics for these proceedings, at the annual meeting of the Intellectual Property Owners group in San Francisco.

The overall statistics illustrate that inter partes review, the flavor having the broadest scope (being applicable to all unexpired U.S. patents whether granted under the AIA or prior to its enactment), have been used most frequently:  on 7,429 filed petitions, 6,831 (92%) were IPRs.  Of the total petitions, 3,774 (a little more than 50%) were instituted.  And of those petitions that were instituted, 1,733 have reached Final Written Decision.

The breakdown of those Decisions illustrates the experience of patent holders that have raised allegations that these review proceedings (and IPRs in particular) are "death panels" for patents.  According to USPTO statistics, 65% of these decisions resulted in all instituted claims to be unpatentable under Section 102 (novelty) or Section 103 (obviousness) of the Patent Act, while only 19% of the Decisions resulted in all claims being held patentable (the remaining 16% had mixed results).

The technology breakdown for these resolved reviews is as follows:

• Electrical/computer 1,053 (59%)
• Mechanical/business methods 383 (22%)
• Biotech/pharma 205 (11%)
• Chemical 118 (7%)
• Design 14 (1%)

The Chief Judge also presented graphical representations of trends in these review filings:

Figure 1 Figure 2 Figure 3
Institution rates are dropping, according to Office Statistics, from a high of 87% in FY2013 to 63% in FY2017 (ending August 31st).  Electrical/computer (69%) and business methods (70%) continue to have the highest rates of institution, with chemical (67%) and biotech/pharma (63%) being instituted at slightly lower (but still significant) rates.  Pre-institution settlements have increased over the time these forms of review have been available to challengers (from 9-14%) while post-settlement rates have dropped from 90% to 22% (presumably on the basis that patentees believe their chances of at least some claims surviving have increased over the period).

The slide deck also contains a comprehensive slide graphically representing the fate of all 7,429 review petitions filed:

Figure 4
The USPTO in public comments consistently maintains that the post-grant review system in all its forms has had a positive impact on U.S. patent quality and that only those patents improvidently granted are at risk.  This attitude is reminiscent of the sentiment that one "has nothing to fear if they have nothing to hide," but it is certainly the case that, just as the USPTO must have erred in granting at least some of these claims, the PTAB must certainly have erred in invalidating them.  Neither reality can be reassuring to the patent community or the public that relies on the Office to shepherd patent protection for innovation in the U.S.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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