So called “patent trolls” have been all over the news, and with good reason— these entities pose significant risks to the hi-tech industry. But a new tribunal has been shown to be effective at thwarting patent trolls and other overly aggressive patent owners.
Patent trolls are companies that attempt to monetize patents through litigation, with no interest in commercializing a product or advancing the state-of-the-art. Litigation initiated by patent trolls is expensive; just the threat can force a settlement.
With the passage of the America Invents Act (“AIA”), a new tribunal called the Patent Trial and Appeal Board, or “PTAB”, was created as an efficient and cost effective means of invalidating patents. The implications for patent trolls looms— the PTAB presents a new and inexpensive proceeding to render their patents invalid, disrupting their business model.
The most common procedure for invalidating a patent at the PTAB is inter partes review (“IPR”). A petition for IPR is filed by a third party, called the “petitioner”, against the owner. Often, the petitioner is concurrently involved in a patent infringement lawsuit with the same patent owner. An IPR petition requests that the PTAB invalidate some or all of a patent’s claims because the patent is not new (§ 102) or was obvious at the time the patent was filed (§ 103).
A three-judge PTAB panel first decides whether to institute the IPR. Later in the proceeding, the PTAB decides whether to invalidate some or all of the patent’s claims in a “final written decision”.
The Effect of the PTAB on Patent Owners
Docket Alarm is a legal analytics platform that tracks statistics on IPRs, including how often IPRs get instituted, the number of claims involved, and the outcomes of all final written decisions issued. These statistics can target certain PTAB judges or technology centers, allowing litigants to better estimate their likelihood of success.
PTAB judges have been granting requests to institute IPR petitions more often than not, with petitions being instituted in whole or in part 72% of the time. Interestingly however, the average has decreased over time, in the last three months the average has decreased to 62%. The average number of claims instituted in an IPR petition is 13.8 claims.