Out of 2,600 Challenges, Patent Trial and Appeal Board Has Invalidated 571 Patents

Since the Patent Trial and Appeal Board (PTAB) replaced the Board of Patent Appeals and Interferences (BPAI), a total of 2,600 petitions for Inter Partes Review were filed with the Board. Of these, 571 patents (22%) were invalidated as a result of all claims being ruled unpatentable. There were 114 patents that survived with only some claims ruled unpatentable. And 107 patents survived with all claims intact. We take a look this month at some Patent Trial and Appeal Board statistics, but first a little background.

The America Invents Act (AIA) was enacted in September 2011, and the law replaced the Board of Patent Appeals and Interferences with the Patent Trial and Appeal Board effective September 2012. The AIA also introduced three new proceedings before the U.S. Patent and Trademark Office (USPTO) regarding challenges of patent validity.

Inter Partes Review: This proceeding replaced the Inter Partes Reexamination. The law stipulates that there be a limit of 281 proceedings per year through 2016 to avoid overwhelming the PTAB. This proceeding applies to patents issued as of September 2012 or later. An Inter Partes Review differs from a Post Grant Review in two important aspects.

An Inter Partes Review can only be requested nine months or later from the issue date of the patent since the Post Grant Review (described in next paragraph) covers recently issued patents. Second, an Inter Partes Review can only be based on patents and printed publications. While this limits the scope of an Inter Partes Review, it also limits the estoppel affect. While an accused infringer who had previously requested an Inter Partes Review may not raise an invalidity defense based on patents and printed publications during litigation, the accused infringer can challenge at trial the novelty and non-obviousness of the invention based on evidence of public use or sale, insufficient disclosure or patentability ineligibility.

Post Grant Review: This new proceeding, also created by the America Invents Act, replaced the Ex Parte Reexamination. It enables a third party to request a review of an issued patent during the nine months following the issue date of the patent and before any declaratory judgment of invalidity has been filed by the requester. Post Grant Reviews apply to patents filed as of March 2013 or later.

Unlike an Ex-Parte Reexamination, the third party in the filing of a Post Grant Review must be identified. The request can be based on any ground of invalidity except failure to disclose the best mode. That means that a patent can be challenged in a Post Grant Review on the basis of novelty, non-obviousness, sufficiency of the description, and patentability eligibility. Novelty and non-obviousness can be challenged based on patents, publications, evidence of public use, products offered for sale, and other forms of public disclosure. A request for a Post Grant Review is not granted automatically. The request must establish that it is “more likely than not that at least one of the claims challenged is unpatentable,” or that there is a novel or unsettled legal question that is important to other patents or patent applications.

Transitional Program for Business Method Patents: The AIA established this proceeding for businesses that were sued for patent infringement of a business method patent that is not for “a technological invention.” The law authorizes this proceeding through 2020.

The Numbers: The USPTO, as a federal agency, operates on an October 1-through-September 30 Fiscal Year, so the numbers are presented for those periods.

Total Filings: For Fiscal 2014 (October 1, 2013 through September 30, 2014), 1,310 Inter Partes Reviews were filed with the PTAB. There were 177 Covered Business Method Reviews, and just two Post Grant Reviews filed. For Fiscal 2015 (October 1, 2014 through September 30, 2015), Inter Partes Review filings increased by 33% to 1,737, while Covered Business Method Reviews dropped to 149, and there were just 11 Post Grant Reviews.

Technology: Of the total requests before the Patent Trial and Appeal Board in Fiscal 2014 and 2015, the largest share was – not surprisingly – in Electrical/Computer technologies: 962 (65%) in 2014 and 1,193 (63%) in 2015. Mechanical/Business Method reviews were second both years, with 318 (21%) in 2014 and 443 (23%) in 2015. In 2014, there were 114 filings (8%) in Chemical and 92 filings (6%) in Bio/Pharma. The numbers shifted in Fiscal 2015, with 167 filings (9%) in Bio/Pharm and 90 filings (5%) in Chemical.

Acceptances and Denials: Of the 1,310 requests for Inter Partes Review filed Fiscal 2014, 557 were instituted and 193 were denied. Of the 1,737 Inter Partes Review requests filed in Fiscal 2015, 801 were instituted and 426 were denied.

Settlements: In 2014, 106 Inter Partes Review filings were settled before institution and 104 were settled after institution of the review. In 2015, 275 Inter Partes Review filings were settled pre-institution and 189 were settled post-institution.

Trials: Since the inception of the Inter Partes Review under the America Invents Act, 2,600 total petitions were filed. Of those, 1,313 were denied and there was no trial, and 1,287 were accepted and went to trial. Of the filings that went to trial, 495 were settled during the trial, and 792 trials were completed. Of the 792 Inter Partes Reviews that went to the PTAB, 571patents had all claims ruled as unpatentable, 114resulted in some claims being ruled unpatentable, and 107 patents survived with all claims intact.

Analysis: The bottom line is that of the 2,600 patents that were challenged by Inter Partes Review, 571 or 22% were invalidated by the Patent Trial and Appeal Board. Is the glass half full because over three-quarters of the issued patents that were challenged survived the process in some form? Or is the glass half-empty because almost one-fourth of all challenged patents were invalidated?

Here is a recap of the numbers.

AIA Review Filings Fiscal Year: 2014 2015
Inter Partes Review Filings 1,310 1,737
Covered Business Method Review Filings 177 149
Post Grant Review Filings 2 11
Filings in Electrical/Computer 962 1,193
Filings in Mechanical/Business Methods 318 443
Filings in Chemical 114 90
Filings in Bio/Pharm 92 167
Inter Partes Review Filings Denied 193 426
Inter Partes Review Filings Instituted 557 801
Inter Partes Review Filings Settled Pre-Institution 106 275
Inter Partes Review Filings Settled Post-Institution 104 189
Disposition of Inter Partes Review Petitions
Total Filings: 2,600 (100%)
Trials Not Instituted 1,313 (50%)
Trials Instituted 1,287 (50%)
Petitions Denied 786 (30%)
Terminated Before Institution 527 (20%)
Terminated After Institution 495 (19%)
Patents Went to Trial 792 (30%)
Patents Invalidated 571 (22%)
Patents with Some Claims Unpatentable 114 (4%)
Patents with No Claims Unpatentable 107 (4%)