Claim drafting has always been a critical stage of the patent application process, but trends and developments in the patent realm indicate that quality claims have taken on an even greater significance. A simple strategy is gaining new importance with regards to strengthening claims submitted for examiner review as U.S. patent holders and attorneys begin to feel the full flexing of the America Invents Act’s (AIA) muscles.
One of the major changes instituted by the AIA was the creation of new post-issuance review proceedings; namely Post-Grant Review (PGR), Covered Business Method (CBM), and Inter Partes Review (IPR). Since September 2012 through January 2015, over 2,500 petitions for IPR and CBM have been filed with 1,120 proceeding to trial and 328 being denied (an approximate 77 percent acceptance rate). Once trial proceedings were initiated, approximately 82 percent of the claims at issue have been subsequently cancelled. For example, in its first final written CBM decision in SAP America, Inc. v Versata Development Group, Inc., the Patent Trial and Appeal Board (PTAB) held all of the challenged claims unpatentable under §101. In SAP, the patentee had been successful in its infringement suit against the defendant, but the defendant filed the CBM petition the day the program went into force.
Such high rates of cancellation can have a devastating financial effect on a business built around a suddenly invalidated patent. A recent article has shown that the average price for a U.S. patent sold has dropped from about $422k in 2012 to $164k in 2014. This is in large part due to the threat of litigating IPRs and the like, estimated at costing $200-500k for each patent. The best defense to the post-issuance barrage lies in drafting robust claim sets that can withstand the assault.
Perhaps the strongest method bolstering a claim set’s defense is to clearly and unambiguously define the claim terms in the specification. In the PTAB’s determination of fundamental validity, the focus is on claim interpretation and whether the asserted prior art falls within those claims. The PTAB has further emphasized that a claim’s language is “on its face” and in light of the evidence provided in the specification, even if the patentee asserts a lexicographic basis for an alternative meaning. The company ContentGuard has clearly taken this lesson to heart as they have successfully defended several IPR proceedings. For example in ZTE Corporation v. ContentGuard Holdings, ContentGuard was able to successfully counter the petitioner’s challenge with solid interpretations of its claims with concrete and definite links to the specification.
As the trend in post-issuance proceedings and other challenges continue to grow in the wake of the AIA, only the strongest patents and claim sets will survive. To lay the strongest foundation to weather the oncoming storm of challenges, it is crucial for patentees to utilize tools that will enable high-quality claim sets grounded firmly in the specification beginning with the drafting process.