Inter Partes Review

Patent Inter Partes Review (IPR)

Challenges to Patent Validity

What Is Inter Partes Review?

An IPR is an administrative trial at the USPTO limited to the issue of the validity of patent in view of two specific types of prior art:  patents, and printed publications. IPR stands for “Inter Partes Review.” The process starts with the filing of a detailed “Petition” with the USPTO to set out how the cited prior art demonstrates that the claims of the patent at issue are invalid based on anticipation or obviousness.  The Petition is usually supported by the declaration of an expert. The Patent Owner then has 3 months to file an optional preliminary response, and then the USPTO will either grant the petition and institute the trial as to at least one claim, or deny the petition. If the petition is granted, then the trial process shown in the diagram below is generally completed in one year from the granting of the petition, culminating in oral argument before a panel of three Administrative Patent Judges within the newly created Patent Trial and Appeal Board (“PTAB”):

The America Invents Act actually created three new post-issuance review proceedings in 2011, which the PTAB practice rules govern: inter partes review (“IPR”); and two additional procedings: post-grant review (“PGR”) which must be filed within 9 months of the issuance of a patent and may challenge the validity of a patent on any available statutory ground; and the transitional post-grant review for covered business method patents (“CBM”) which is directed primarily to “computer implemented” business method patents in the financial industry.   In addition, the former “interference” proceeding to determine priority of inventorship was transitioned to the “First-to-File” patent regime and became a “Derivation Proceeding” to determine whether a patent applicant had derived the invention from another person, and therefore is not entitled to the patent, even if the patent applicant was “first-to-file” an application for the claimed invention at the USPTO.

How Effective Are IPRs?

As of the end of 2014 and into early 2015, statistics were that roughly 75% of Petitions to institute an IPR trial had been granted as to at least one claim of the target patent.  Additional statics recently issued by the USPTO are as follows:

  • As of July 31, 2015, the PTAB has received a total of 3,655 petitions, of which 3,277 are IPRs, 368 are CBMs, and 10 are PGRs.
  • Of all of the AIA petitions filed so far, 63 percent were filed in the electrical/computer technology centers (TCs), 23 percent in the mechanical/business methods TCs, 9 percent in the bio/pharma TC, and 5 percent in the chemical TC.
  • Trials have been instituted on 1,389 of 3,277 IPR petitions, 185 of 368 CBM petitions, and 2 of 10 PGR petitions.
  • Of the first IPRs to reach a conclusion, 12 percent of total claims available to be challenged (4,496 of 38,462), were determined by the PTAB to be unpatentable in a final written decision. Other claims were either not challenged, resolved by settlement, cancelled, or upheld as patentable. Of the first IPRs to reach a conclusion, 25 percent of claims actually challenged (4,496 of 17,675) were found to be unpatentable.

How to Win an IPR

The IPR procedure differs from Federal Court litigation in significant ways.  One of the most important is that, unlike Federal Court litigation, the Petitioner must present its primary evidence and legal arguments at the very beginning of the proceeding in the Petition itself, including the expert declaration.  Two key strategies can lead to success: (1) before the Petition is even filed, make the maximum effort through prior art searches to identify and analyze the very best prior art available; and (2) identify and retain the best possible expert to prepare the expert declaration to increase the persuasive force of the Petition in the eyes of the PTAB Administrative Patent Judges who will generally have technical backgrounds.  The page limit for the Petition is 60 pages, and this is the primary vehicle used to persuade the PTAB judges to initiate the trial on at least one claim. The petition must therefore be carefully prepared with detailed reasoning to demonstrate the invalidity of at least one claim to the required standard of a “reasonable likelihood.” After the trial is initiated, the Petitioner’s efforts should be to refute the arguments raised by the Patent Owner in its response or any proposed claim amendments.

Defense Against an IPR

A key defense strategy is to challenge at the Preliminary Response stage whether the trial should be instituted by showing either that the patents or publications relied on by the Petitioner are either:  (1) do not qualify as prior art; or (2) do not show the claim elements that the Petitioner alleges are disclosed by the cited prior art. An additional strategy involves the Patent Owner seeking to amend the patent claims at issue to avoid the prior art cited by the Petitioner, while also demonstrating the amended claims are patentable over the prior art known to the Patent Owner.  The USPTO has been conducted significant recent rulemaking on the amendment issue.

When Should I Use an IPR?

IPRs can be used offensively and defensively.  If a party is sued for infringement of a patent in Federal Court, a defensive strategy may include filing an IPR in a parallel proceeding at the USPTO.  This forces the patent owner to fight on “two fronts,” and in some circumstances may lead to the Federal Court judge “staying” the litigation in federal court to wait for the USPTO to act on the IPR.