Patent Owners PTAB Success Rates Up, More Petitions Denied

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By Tony Dutra

July 15— A steady increase in the rate at which challenges under the America Invents Act of 2011 are being denied suggests that patent owners are walking away with enforceable rights at least half the time.

Though owners still have a better shot at defending invalidity challenges in court, the difference between court and Patent Trial and Appeal Board results is narrowing.

Data from Bloomberg BNA's PTAB Challenge Navigator through May 31, 2016, show the board denied inter partes review (IPR) petitions—refusing to institute trials to review the patentability of claims on grounds of being not novel or obvious—at a rate of about 34 percent in the most recent year, and 29 percent in the preceding year. That compares to about 18 percent in the PTAB's early days.

For trials that proceed to the end, resulting in final written decisions (FWD), there has been a slight change in favor of patent owners. In the most recent full year of challenges that have gone to the end, 14.2 percent of final written decisions were complete victories for patent owners, with no claims cancelled. That compares to 11.9 percent for the AIA period—13 months—preceding that year.

Walking Back From Final Decisions

Studies tend to focus on FWD results, ignoring decisions at earlier stages that aren't clear wins for petitioners.

For example, Federal Circuit Judge Pauline Newman, in a recent dissenting opinion, used data provided in an amicus brief by nine patent owners, led by 3M Co., to note that the PTAB rarely changes its mind after instituting trial. Newman added post-trial-start settlements and dismissals as losses to bring the 14.2 percent FWD full patent owner success rate down to 9 percent. For settlements, at least, common wisdom is that the patent owner is disadvantaged after trial institution; the settlement allows the patent owner to keep the patent but it is of little value going forward. See below for more on the topic.

But Newman's concern was that the same PTAB judges are instituting trial and writing FWDs. That concern of bias—that a judge's finding of a likelihood of unpatentability in order to institute trial makes a finding of unpatentability in the last decision not surprising—may either be addressed by the Supreme Court—Newman's colleagues on the Federal Circuit bench have rejected it—or by Congress. But it is a different question than whether patent owners are surviving IPR challenges with enforceable patents.

Beyond the FWD results, three years of AIA data offer results that can be interpreted as wins for patent owners:

  •  The board instituted trial in 1,471 distinct cases (ruling out consolidated petitions) that are now closed, but only 903 went to a final disposition. Patent owners requested adverse judgment in 118 cases, which are clear losses, and petitioners dismissed cases in three, which are clear wins. But the parties settled in 447 cases. Patent owners walk away, in those cases, with valid patents although the PTAB— in instituting trial—has effectively blessed petitioners' invalidity arguments to some extent.
  •  The board did not cancel all challenged claims in 138 of 903 decided cases—that is, it issued split decisions. That means a clear winner can't be assigned, because the surviving claims may be all that's needed by a patent owner to enforce its patents.
  •  The board rejected challenges in 909 cases—a clear win for patent owners. Considering trial-institution decisions only, patent owners have won 38 percent of those challenges.
  •  Of the cases concluded before a decision to institute trial, 14 adverse judgments favored petitioners, 16 dismissals favored patent owners, and 560 were settled. Settlements before a trial decision leave a patent owner substantially better off than settlements after trial is started. In pre-trial cases, the PTAB hasn't commented on whether a challenger has a good case, and if the settlement includes a license, a patent owner is left with a chance to negotiate with other potential infringers or take them to court.

Assumptions in Assigning Success Rate

As of May 31, there were 751 trials in progress and 666 petitions without trial institution decisions—fully one-third of the three-year total of challenges filed. It's unknown whether the board will follow recent trends in disposing of them.

It's also virtually impossible to calculate patent owner success rates for the rest of the cases—the completed two-thirds—because other factors are not known, including settlement values, how settlements affect future enforcement potential, and the value and potential of claims that survived split decisions.

However, even assuming that every settlement and split decision is a petitioner win, the success rate for patent owners would be 43 percent. If just one-fourth of the cases involve a patent owner win, with surviving claims having value and potential, the success rate climbs to 50 percent.

Regardless of whether that's a better or worse outcome than what a patent owner would get from a district court judge or jury, it certainly doesn't match the narrative of patent owner devastation at the PTAB.

To contact the reporter on this story: Tony Dutra in Washington at

To contact the editor responsible for this story: Mike Wilczek in Washington at

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