We’ve previously written with updates about inter partes reviews (“IPRs”), where an accused infringer files a petition with the US Patent and Trademark Office arguing that the asserted patent should’ve never been granted in the first place.
A law passed by Congress in 2011 created, for use starting in 2012, this IPR procedure to allow for the challenge of issued patents. IPRs were designed as a low cost alternative to long, expensive lawsuits with patent owners who hold bad patents. Anyone bothered with a patent can bring an IPR challenge if they meet the standards of the law and regulations, by having a reasonable likelihood of cancelling the patent, acting within deadlines, and paying necessary (and not small!) fees.
The patent owner gets to respond, but the IPR will be decided by highly patent-and-technology-experienced Patent Trial and Appeal Board (“PTAB,” said “Pea-Tab”) administrative patent judges (“APJs”) in 3-judge panels. Once the IPR “petition” is accepted, which usually happens within 6 months, the IPR almost always ends within a year. Some features of IPR favor patent owners, but challengers get first and last briefs in IPR, have the right to use technology experts, get PTAB APJs who decide cases “by the book,” not like juries, and win IPRs at a rate of about 65%, cancelling patents. The procedure is so valued by challengers that they have filed thousands of IPRs, including 1,434 in USPTO fiscal year 2017 alone.
A quick search on Docket Navigator reveals that IPRs have been a popular option for game companies when faced with patent assertions. Since 2013, the top 50 game companies have filed over 250 IPR petitions. Some recognizable names using IPRs as part of their litigation strategy include Sony, Microsoft, Nintendo, Electronic Arts, Activision Blizzard, Valve, Bungie, Ubisoft, and Naughty Dog. Of the IPRs we found that reached a final decision, around 68% had claims of the challenged patent found unpatentable and cancelled. Not a bad success rate for accused infringers!
An interesting statistic close to home at our law firm, Banner & Witcoff, is that its lawyers, paralegals, and staff filed more IPR petitions than any law firm filed in the first half of 2017. We filed 45 IPR petitions for one client in those six months, as well as appearing in about double that number of proceedings when other petitions and appearances on behalf of patent owners as well as patent challengers are counted.
The constitutionality of the IPR process has recently been challenged at the Supreme Court. It remains to be seen whether this popular alternative to litigation will remain a useful option for defendants in patent matters. But what is clear is that IPRs have truly changed the current patent landscape and the dynamics of patent litigation.
We will continue to post updates about interesting IPRs that catch our attention.
Special thanks to Charles Shifley for his help in preparing this post.