New PTAB Rules Result in Decline of Institution of IPRs

A final rule issued by the U.S. Patent and Trademark Office (USPTO) and published in the April 1st edition of the Federal Register amended rules of practice for trials held before the Patent Trial and Appeal Board (PTAB). The rule changes are designed to “make the trial proceedings more fair and effective” for inter partes reviews (IPRs) and other PTAB proceedings which were created by the America Invents Act of 2011 (AIA).

One of the rule changes affecting PTAB proceedings allows patent owners an opportunity to supply new evidence with their preliminary response to the petition before the PTAB decides to institute patent review proceedings. Public comments received by the USPTO argued that the new rule would help level the playing field in PTAB proceedings, allowing evidence from both sides prior to the decision to institute an IPR or other proceedings. The preliminary response is a voluntary action for a patent owner and the USPTO maintains that “no negative inference will be drawn” if a patent owner decides not to file a preliminary response.

Since these rules went into effect on May 2nd, patent owners have had this new option for responding to patent challenges at the PTAB. Now, Docket Navigator has made search tools available for those who want to find out whether a preliminary response containing new testimony provides any benefit to a patent owner.

Of the 16 institution decisions filed since May 2nd in IPRs in which a patent owner filed a preliminary response with a declaration, seven IPRs were granted institution while six others were denied; the remaining three were granted partial institution. This is admittedly a small sample size, so caution should be used when extrapolating statistics from it. As Rick Neifeld, of Neifeld IP Law in Alexandria, VA, commented, “We should have a statistically significant number of cases by the end of September.” When compared to the overall success rate of IPR institution decisions filed during that same time period, the results so far seem to indicate that IPRs are denied more often when a patent owner files a preliminary response. Of the 380 institution decisions in IPRs filed between May 2nd and August 26th of this year, 122 have been denied institution while 172 have been instituted.

*IPRs w/ institution decisions filed between May 2-August 26.

Taking out the IPR petitions in which a preliminary response has been filed without a declaration, it’s easy to see that the filing of a declaration with the preliminary response at least correlates with higher rates of denial of institution for IPRs. Of 364 IPRs in which the patent owner did not file a declaration with the preliminary response, just under 32% were denied institution while more than 45% were granted institution. When preliminary responses with declarations are filed by a patent owner (see the first chart), IPRs are denied institutions at a rate of 37.5%. Partial institutions also rise slightly when declarations are filed with preliminary responses to about 19% percent compared to around 23% when declarations aren’t filed with the preliminary responses.

The American intellectual property landscape continues to shift and it is helpful for patent owners to stay on top of how recent legal developments can affect their ability to retain their patent rights. With Docket Navigator, a patent owner has sophisticated tools which can provide insights into the best methods for defending against a PTAB challenge.

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Charts made using Docket Navigator's data.
This guest post was written by Steve Brachmann.