In the two and a half years since the America Invents Act (AIA) expanded the ways in which a granted patent may be challenged, new statistics from the USPTO reveal just how vital patent application quality has become to maintaining patent protection.
When the first-to-file provisions of the AIA came into force in March 2013, conventional wisdom held that among its outcomes would be a steep increase in the number of applications that would be vulnerable to inter partes review (IPR) and post-grant review (PGR), the AIA’s two most significant avenues to challenge granted patents.
Insufficient due diligence during the search for prior art is the reason. Before the first-to-file rule went into effect, the main pressures on the schedule for any prior art search were inside an organization. Now, if there are multiple competing companies that are working on comparable inventions, there is additional pressure on each to submit a completed application to the USPTO before the others. This can compromise the prior art search, which is already underperformed by many patent applicants.
New data released by the patent office indicate that new patents are being subjected to a much greater number of attacks than the agency itself anticipated. On Feb. 5, 2015, the USPTO published comprehensive statistics detailing the growth in post-grant challenges in the wake of the AIA. Since 2012, nearly 2,800 AIA petitions have been filed by third parties challenging the validity of issued patents.
Unsurprisingly, more than half of those petitions were filed in 2014, the first full calendar year following the implementation of the new AIA proceedings in September 2013. The overwhelming majority of the petitions have been for IPR, with requests for reviews of covered business method (CBM) a distant second. Only four of the petitions have requested PGR.
It is worth noting, however, that all four post-grant review petitions have been filed since August 2014, and one already had been filed in January 2015 when the USPTO released its statistics report. It remains to be seen whether this signals a continued acceleration in the rate of PGR petitions for the remainder of 2015, but the statistics bear monitoring.
Gene Quinn of IP Watchdog noted in August 2014 that the use of inter partes review was dramatically exceeding the USPTO’s early projections. Thirteen months before the new proceedings were put into use, the USPTO projected that it would field 420 IPR petitions in 2013 and 450 in 2014, a year-over-year increase of less than ten percent.
Instead, petitioners filed 514 IPR challenges in 2013, then more than doubled that figure to 1,310 in 2014 – a nearly 300 percent increase over the agency’s early estimates. The reasons for the popularity of IPR are clear.
First, petitioners need only convince the Patent Trials and Appeals Board (PTAB) of a “reasonable likelihood” that their petition will succeed in order to move forward. This “preponderance of the evidence” standard is lower than the “more likely than not” bar established for PGR proceedings, which may carry the additional overhead of legal discovery.
Second, the data indicate that the majority of IPR proceedings are successfully forcing patent holders to abandon at least one of their claims—which, it must be remembered, no longer can be amended at that stage. Since these patents have, by definition, already been issued, its claims and description are frozen. Patent owners can retract claims—which reduce the patent’s value—but no longer can reword or edit them.
The ramifications are clear. Securing a patent is not the finish line that it once was. An issued patent is vulnerable to and must survive expanded post-grant challenges by competitors in order to remain a valuable IP asset. A deep and comprehensive prior art search that informs and shapes an application’s claims and description from the outset is absolutely crucial to safeguarding any eventual patents, irrespective of any competitive pressures.
Cutting corners on prior art due diligence may come at the price of potentially costly inflexibility during post-grant appeals.