Is More Patent Reform Really Necessary? Patent Litigation Declines, PTO Administrative Trials Increase

By Gene Quinn on March 14, 2014

The United States Patent and Trademark Office has recently released the latest information about the number of post grant trial proceedings that have been initiated. The clear, resounding verdict is that post grant administrative trials are extraordinarily popular. In fact, they are far more popular than Congress anticipated they would be at the time the America Invents Act (AIA) was passed.

Scott McKeown, a partner with Oblon Spivak who co-chairs the firm’s Post Grant practice group and is the primary author of the Patents Post Grant Blog, recently posted his analysis of the latest post grant trial statistics announced by the Patent Trial and Appeals Board (PTAB). See March 2014 Update to PTAB Trial Statistics. Here is what the chart looks like:

According to McKeown these numbers are significant because they are significantly higher than the numbers originally anticipated by Congress, showing that the industry finds these administrative trials to be extremely useful, even more so than predicted. His article explains: “These numbers are well beyond the 281 filing limit per year Congress envisioned…”

Section 319 of the AIA gives the PTO the ability to limit the number of proceedings for the first 5 years based upon the number of inter partes reexams in the last fiscal year before enactment, which was 2010. In 2010 the number of inter partes reexamination proceedings was 281. Therefore, Congress granted the USPTO the authority to limit the number of proceedings initiated to 281 per year. During FY 2013 there were double that number of administrative trials. Five months into FY 2014 we are already at 468 administrative trials, which suggest that the PTAB is on pace for more than 1,100 administrative trials in FY 2014, which would be 4 times the number of inter partes reexams, and 4 times the expectation of Congress before limitations could kick in. The USPTO has announced they would not exercise the option to limit the number of proceedings, but the fact remains that there is much more interest in administrative trials than anticipated at the time the AIA was enacted.

This latest updating of the PTAB statistics comes on the heals of data from Lex Machina that suggests that the number of patent lawsuits filed during the first two months of 2014 has decreased by 25% compared with the same time frame in 2013.  See Sharp Decline in Patent Litigation in 2014.

All of this has to make you wonder whether any new patent legislation is necessary at this time. The House of Representatives has already passed new patent legislation that focuses on patent litigation and the perceived abuses. Reasonable minds can perhaps differ about whether the measures being discussed are good, bad or would do anything to address the manipulation of the judicial process by nefarious actors. The facts suggest, however, that patent litigation is declining and the administrative trials are increasing beyond expectations. This is significant because the administrative trials were created in order to offer defendants a better, cheaper avenue to challenge patents outside of litigation.  So why not allow the reforms of the AIA time to work before once again tinkering with the patent laws and potentially upsetting the incentive to innovate?

The America Invents Act passed in September 2011, and the administrative trials created did not become an option to pursue until September 2012. Yet, less than 18 months later Congress is considering additional changes to the patent laws without ever giving the changes ushered in by the AIA a chance to play out and succeed.

New patent legislation seems unnecessary, particularly when it appears that the tide of patent litigation has been significantly curtailed by the procedures put in place by Congress that became effective on September 16, 2012. Add that the Government Accountability Office (GAO) says that 80% of patent litigation is brought by manufacturing companies. See GAO Unmasks Mythical Patent Troll Problem and GAO Report Finds No NPE Patent Litigation Crisis. It seems far too early to be considering additional changes to the patent laws. Congress should allow the procedures they established to continue to play the role they envisioned and not simply make additional changes for the sake of change.

For more on pending patent legislation please see:

The Author

Gene Quinn

Gene Quinn is a patent attorney and the founder of IPWatchdog.com. He is also a principal lecturer in the PLI Patent Bar Review Course and an attorney with Widerman & Malek.

Gene’s particular specialty as a patent attorney is in the area of strategic patent consulting, patent application drafting and patent prosecution. He has worked with independent inventors and start-up businesses in a variety of different technology fields, but specializes in software, systems and electronics.

is admitted to practice law in New Hampshire, is a Registered Patent Attorney licensed to practice before the United States Patent Office and is also admitted to practice before the United States Court of Appeals for the Federal Circuit.

Gene is a graduate of Franklin Pierce Law Center and holds both a J.D. and an LL.M. Prior to law school he graduated from Rutgers University with a B.S. in Electrical Engineering.

You can contact Gene via e-mail.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 4 Comments comments.

  1. ben ford March 17, 2014 3:11 pm

    in further reply to the article…’the number of patent lawsuits filed during the first two months of 2014 has decreased by 25% compared with the same time frame in 2013′

    The problem is far worse, Prior to AIA patent holders would sue multiple defendants in 1 case -routinely up to 20 defendants in each case and some times as high as 50, or more. Because of AIA patent holders may only name one defendant in each case. That the number of suits filed is actually down means far fewer parties are sued. So if the number of parties sued is tracked as it more sensibly should instead of the number of suits filed, it will show a far greater impact. Few patents today can be enforced. All AIA did was legalize theft -exactly what the huge multinational invention thieves paid for.

  2. Anon March 17, 2014 3:59 pm

    ben,

    The effective date of the joinder provision of the AIA was September 2011.

    Thus there is no year over year effect of this provision when comparing 2013 and 2014.

  3. angry dude March 17, 2014 10:27 pm

    Ben is right

    They reported slight increase in patent litigation in 2013 compared to 2012 due to joinder provision of AIA
    but this yeas filings are sharply down.
    And this is not surprising in view of all media hysteria about evil “patent trolls” and criminal penalties pushed by some state legislatures on patent holders for simply writing letters to patent infringers… what a horrible crime against humanity !:)
    Screw patents!

  4. Anon March 18, 2014 7:47 am

    angry dude,

    Your mantra of “Screw patents!” no matter the topic is a bit distasteful. Can you please lose that?