April 7, 2015Share this:
Patent owners are scoring more wins at the Patent Trial and Appeal Board (PTAB), and that’s good news for not only patent owners but also inventors, investors, and anyone interested in seeing America remain the most innovative country on the planet.
The PTAB (an administrative court, part of the US Patent and Trademark Office) came into being in September 2012 as part of the America Invents Act (AIA). The AIA was the biggest overhaul to US patent law in a generation and created several new ways to challenge the validity of a patent -- most importantly the Inter Partes Review (IPR) and the Covered Business Methods Patent (CBM) Review.
When results first started coming out from the PTAB they were pretty dismal. The PTAB accepted 80% of the petitions asking the Board to review a patent, and in the first 19 proceedings, not a single patent emerged completely unscathed. Randall Rader, former chief judge of the Federal Circuit, dubbed the PTAB as a “death squad for patents.”
The trend has changed, however.
Cumulative data from the USPTO shows that as of January 15, 2015 the PTAB had granted review for 68% of the claims where a petition had been filed. 36% of those claims were found un-patentable; an additional 15% were either cancelled or disclaimed (by the owners -- not by the PTAB).
Patents Post-Grant reports recent trends that are even better for patent owners: in recent weeks the PTAB has found in favor of patents owners over two dozen times.
There are likely several reasons for the shift in favor of patent owners:
- It could be that the weakest patents – the low-hanging fruit -- have already been challenged. Companies accused of infringement are now challenging stronger patents at the PTAB, and those stronger patents are less likely to be invalidated.
- The PTAB seems to be tightening its standards and using a narrower definition for which patents are eligible for a CBM review.
- As firms rush to jump on the IPR bandwagon, some may be sloppy or lack the expertise to craft a strong case.
Regardless of the reasons, these trends are encouraging. Prior to the AIA, patent owners could assume that an issued patent was valid. The early results from the PTAB put that assumption in doubt. The more recent results help restore the assumption of validity.
As the invalidity rate of claims challenged drops from 80% to 25% or less, companies charged with infringement are likelier to take a license or settle.
There is still room for improvement in the process for challenging patent validity. Most importantly, the standard of evidence used at the patent office should be aligned with the standard of evidence used in court.
As we mentioned in a recent blog, there should be an assumption, not only in court but also at the patent office, that once a patent has been issued, it’s valid.
But in the meanwhile, we find these trends encouraging.