PTAB Litigation 2016 Part 12 – PTAB Popularity and Reasons

Statistics Initial Patent Office Estimates of IPR requests FY2015 – 1743 petitions First chart is from IPR, PGR, CBM Federal Register Rules Publication Second is from Patent Review Processing System (PRPS) – 1743 for the year (3.75 times original estimate)

*Data current as of: 10/31/2015

AIA Technology Breakdown

Why? Results District Court Trial Advantages PTAB trial framework Board procedures

Results

Petition Dispositions   Trials Instituted Joinders Percent Instituted Denials Total Institution Decisions IPR FY13 167 10 87% 26 203 FY14 557 15 75% 193 765 FY15 801 116 68% 426 1343 CBM 14 82% 3 17 91 1 30 122 70% 43 144

IPR Final Written Decisions

CBM Final Written Decisions

Why Do Results Matter? Petitioners pick the PTAB, and Petitioners are doing well at the PTAB Once trial instituted, all claims cancelled over 70% of time, all claims survive less than 15% of time While institution rates are lower (~65%), no estoppel if petitioner loses at institution decision Thus, estoppel is not as scary as it looks on paper

DISTRICT COURT TRIAL ADVANTAGES

Stays 82% of IPRs and nearly all CBMs are directed to patents involved in parallel litigation Stays granted ~70% of the time when requested, 61% of time when motions contested Stay requests especially effective when requested after institution CBM – “whether a stay, or the denial thereof, will reduce the burden of litigation on the parties and on the court.” Judges may rather not deal with validity – confident that estoppel provisions will reduce issues. Non-technically trained judges may prefer. 18 month schedule (compared to 3 yr + avg for reexamination) reduces prejudice to patent holder

Bargaining Leverage - Settlement Process (Rule 42.74) Parties may settle at any time and request termination of the trial May avoid final written decision, but depends mostly on posture of trial Unlikely if Board substantially decided merits already Settlement before oral argument recommended to avoid Board issuing a final written decision See In Kinetic Technologies, Inc. v. Skyworks Solutions, Inc., IPR2014-00690, Paper 43, at 2-3, n.1 (P.T.A.B. Oct. 19, 2015) (final written decision issued after Board denied pre-trial and post-trial motions to terminate proceedings)

Many Defendants Provides a Settlement Opportunity A successful PTAB trial can ruin a patent owner’s trial strategy A patent owner may be willing to dismiss you from a suit in exchange for giving up your PTAB challenge Allows patent owner to continue pursuing other defendants Attractive to patent owners if other defendants are estopped or otherwise PTAB barred Timing is key Settle just before institution decision prevents other defendants from jumping on board via joinder

PTAB Trial Framework

Specialized, Technically-Trained Bench Judges required to have 4-year degree in engineering, chemistry, or biology or the equivalent May be preferable by both parties for complicated technology (vs. jury or bench trial) PTAB APJs focused on patentability analysis

Broadest Reasonable Interpretation District Court – Words given their plain and ordinary meaning as understood by person of ordinary skill in the art in light of the specification and prosecution history PTAB proceedings – A claim in an unexpired patent shall be given its broadest reasonable construction in light of the specification of the patent in which it appears

Broadest Reasonable Interpretation District Court Construction * A Some of the most important fights in an IPR are on claim construction. Need to anticipate potential claim terms to construe. Board sometimes raises claim construction issues sua sponte in final written decisions. * B

Limited Discovery Attractive way for Petitioners to knock out patents without major discovery costs Depositions of experts Sometimes limited discovery regarding secondary factors Board strongly disfavors onerous discovery and will push back on anything not in regulations Delay discover for infringement case and perhaps avoid it entirely

Fast Paced Typically 18 month timeline One year deadline from institution, extension only for good cause

Board procedures

Amendments Board has taken a very hardline approach to amendments Limited number of substitute claims Significant scrutiny for specification support, no broadening, explanation of patentability over art of record in proceeding and art of which the patent owner is aware (e.g., of record in IPR or other prosecution) Show why patentable over claims at issue Adjudicative not examination

Looking forward

Things that could make the PTAB less popular Less findings of unpatentability Fewer institutions Rulings unfriendly to petitioners Procedural defects can be case dispositive Panels have dismissed cases for incorrect naming of real parties in interest Federal Circuit takes a hard line stance on estoppel Board has been hard on