Patent Office Litigation By the Numbers How effective are the new procedures for resolving litigation? And how dangerous are the new procedures to your own patents?
Post-Grant Proceeding Usage
The IPR process was adopted rapidly and is being used heavily 1,742 IPR petitions filed in 23 months 14,000 12,874 Petitions Filed in Post-Grant Proceedings 12,000 10,000 8,000 6,000 4,000 2,000 1,919 1,742 0 Ex Parte Reexam (since July 1981) Inter Partes Reexam (since Nov. 1999) Inter Partes Review (since Sept. 2012) 212 Covered Business Method (since Sept. 2012) 3
On an annualized basis, IPR filings exceed all other types of post-grant proceedings 1000 900 Petitions Filed in Post-Grant Proceedings (Annualized) 871 800 700 600 500 400 390 300 200 100 150 106 0 Ex Parte Reexam (since July 1981) Inter Partes Reexam (since Nov. 1999) Inter Partes Review (since Sept. 2012) Covered Business Method (since Sept. 2012) 4
During 2013, the Patent Office became the 3rd busiest litigation venue in the country 2013 Patent Case Filings Top Five Venues EDTEX 1512 DDEL 1337 PTAB 562 CDCAL 408 NDCAL 247 5
IPR Usage Data
IPR snapshot as of September 11, 2014 114 final written decisions 203 settlements 37 adverse judgments (stipulated) 7
The majority of petitions (71%) focus on electrical and computer technologies IPR Petitions by Technology Area 8.20% 5.10% 0.60% 15.10% Electrical/Computer Mechanical Chemical Bio/Pharma Design 71% 8
IPR institution rates declined from 87% last year to 76% so far this year 100% IPR Institution Rate by Year 95% 90% 87% 85% 80% 76% 75% 70% Fiscal Year 2013 Fiscal Year 2014 9
Two-thirds of IPRs arise out of pre-pending district court litigation IPRs With Pre pending Litigation 509, 36% 892, 64% Pre pending Litigation No Pre pending Litigation 10
IPRs are being filed in many cases where multiple patents are asserted # of Patents At Issue 197, 22% 328, 37% 149, 17% 218, 24% 1 2 3 to 5 6+ 11
Filing multiple IPRs is often necessary after a lawsuit is filed because of the number of patents asserted Number of IPRs Filed within 365 Days of District Court Litigation Service 76, 16% 165, 35% 115, 24% 119, 25% 1 2 3 to 5 6+ 12
Filing more than one IPR per patent (by a company or group) is done in one-third of cases Max # of IPRs Filed Within 365 days post District Court Service Per Patent 22, 5% 69, 15% 102, 21% 282, 59% 1 2 3 to 5 6+ 13
Most petitions are filed about 9 months after a petitioner is sued for infringement All IPRs 14
Less than half of patent owners file preliminary responses, and the number has been falling Overall Preliminary Responses 10, 1% 602, 43% 788, 56% Waived Filed Not Filed 15
Patent owner preliminary responses don t have much of an impact on institution rates 16
Preliminary IPR Win Rates
At the highest level of abstraction, IPR appears to be about as effective as inter partes reexam 100% 90% Composite (Partial + Complete) Invalidity Win Rate 92% 89% 80% 70% 60% 50% 40% 41% 30% 20% 10% 0% District Court (2010-2012 prior art defenses) Inter Partes Reexam (instituted petitions) Inter Partes Review (instituted petitions) 18
But a closer look reveals that IPRs have a much higher complete invalidation rate than inter partes reexamination 70% 60% Inter Partes Reexam vs. Inter Partes Review (Excludes denials of petitions) 65% 61% 50% 40% 30% 31% 20% 22% 13% 10% 8% 0% All Claims Canceled or Disclaimed Some But Not All Claims Canceled or Amended No Claims Canceled or Amended 19
The average claim-based win rate for IPRs is 78% overall and 83% for instituted claims Average IPR Petitioner Win Rates (Only petitions with at least one claim instituted) Win Rate for Instituted Claims 83% Win Rate for Petitioned Claims 78% 65% 67% 69% 71% 73% 75% 77% 79% 81% 83% 85% 20
Win rate for litigation-related petitions is higher than petitions outside of litigation 76% Invalidation Rates: Lit. v. Non litigation (# invalidated / # challenged) 74% 72% 70% 68% 66% 64% 62% 60% 58% Litigation related No litigation 21
Strategies for Using Post-Grant Proceedings to Resolve Litigation
Techniques for handling three common categories of cases Case 1 Simple Case Strong invalidity arguments on all asserted claims Limited number of asserted patents/claims Case 2 Large Case Strong invalidity arguments on all asserted claims Large number of asserted patents/claims Case 3 Complex Litigation Strong invalidity arguments covering only a portion of asserted claims Large number of asserted patents/claims 23
IPR Strategies for Case 1 Simple Case Limited Claims Strong invalidity arguments on all asserted claims Limited number of asserted patents/claims
If you are going to file, position yourself for success by taking action early Immediately search for prior art and retain an expert Identify likely asserted claims File petition for inter partes review File immediate motion to stay litigation 25
A stay pending IPR is not guaranteed Contested Stay Motions (2012-2014) Granted (136) Granted In Part (6) Denied (70) Overall Win Rate = 65.6% LegalMetric Nationwide Report Stay Pending Inter Partes Review (Aug 2012-June 2014) 26
Some top patent jurisdictions appear to disfavor a stay pending IPR E.D.Tex. 20.8% grant rate for contested stay motions (12 motions) M.D.Fla. 33.3% grant rate for contested stay motions (6 motions) D.Mass. 37.5% grant rate for contested stay motions (8 motions) D.Conn. 50.0% grant rate for contested stay motions (2 motions) S.D.Cal. 58.3% grant rate for contested stay motions (12 motions) LegalMetric Nationwide Report Stay Pending Inter Partes Review (Aug 2012-June 2014) 27
Results from early-filed IPRs are usable at trial in almost all venues if necessary Median Time to Trial Top Ten Patent Venues PTAB 18 NYSD 32.4 NJD 37.6 FLSD 17.6 ILND 33.1 CASD CAND 30.8 31 CACD 21.4 DED 34.6 TXED 20.8 0 5 10 15 20 25 30 35 40 Months 28
IPR filing delay can cost you a stay and render results typically unusable in expert reports or at trial Median Time to Trial Top Ten Venues PTAB 12 18 CASD 30.8 FLSD 17.6 NJD 37.6 DED 34.6 SDNY 32.4 TXED 20.8 ILND 33.1 CAND 31 CACD 21.4 0 5 10 15 20 25 30 35 40 Months 29
IPR Strategies for Case 2 Large Case Strong invalidity arguments on all claims Large number of asserted patents/claims
Defining the case is critical to determine IPR strategy in large cases Immediately search for prior art and retain an expert Identify likely asserted claims; or push for early infringement contentions Limit the number of asserted claims Cannot limit the number of asserted claims Manage as a Category 1 (simple case) Manage as Category 3 (complex case) 31
IPR Strategies for Case 3 Complex Case Strong invalidity arguments covering only a portion of asserted claims
IPRs can be successful even when some asserted claims survive Minimize damages Invalidate broadest claims Focus damages on dependent claim Protect alternate design Invalidate broadest claims Design product around remaining claims Set up further invalidity case for trial Estoppel prohibits most invalidity arguments from being used at trial But some arguments remain 33