A Review at Five Years of Inter Partes Review

By Robert Stoll
September 12, 2017

It has been five years since the implementation of the America Invents Act’s (AIA’s) most popular post grant procedure, Inter Partes Review (IPR), and we now have sufficient data to begin to evaluate its effectiveness. The procedure was intended to be a less expensive and quicker alternative to litigation as a means to invalidate improvidently granted patents by the United States Patent and Trademark Office (USPTO), and its usage has widely exceeded expectations.

But many patent owners argue that IPRs are unfairly tilted against the patent owner. And some have gone so far as to suggest that the entire procedure should be tossed.

The vast majority of the users of the patent system recognize that the original intent of IPR, namely bolstering the confidence in the patent system and patent quality by establishing a quicker and cheaper method to challenge questionable patents at the USPTO, is a laudable goal and there have been numerous suggestions for improving the system to allow it to serve its purpose fairly, efficiently and effectively.

Instead of being an alternative to litigation, the IPR is a common adjunct to any litigation strategy. Whether conducted in parallel or sequentially, the procedure is frequently providing additional challenges to issued patents, causing patent owners to defend their issued patents in different venues with different standards. In addition there have been instances of “gang tacklings” where numerous IPR challenges against the same patent are filed at the same time or where sequential petitions are quashed but a later one succeeds. These strategies can swamp a shallow-pocketed patent owner.

Certain standards used in IPRs also rankle some patent owners. While a court would presume that the patent is valid, the Patent Trial and Appeals Board (PTAB), which reviews the IPR petitions and ultimately decides the cases, does not rely upon the presumption of the validity of the patent even though it has been reviewed and issued by the very administrative agency that is hearing the case. The PTAB also uses the broadest reasonable interpretation (BRI) when construing the claims instead of the narrower Philip’s standard used in court. That might make sense since the USPTO can permit amendments to overcome a rejection while a court cannot, but the leave for amendment to date has been a truly rare grant. Perhaps it makes sense to permit amendment more liberally when the amendment is narrower than the claims that issued.

Limitation of discovery by the patent owner prior to institution has also been a source of concern to some. It might be reasonable to allow some affidavits early in the process that could dispose of the case before incurring significant costs.

The USPTO had some reasons for limiting discovery and amendments when the IPR process was initially instituted. The office didn’t have sufficient “fire power” in the number of judges to handle the high volume of cases that were filed, and the statute required the completion of the process within one year of institution in most cases. But five years later we have an entire cadre of judges who are fully up to speed with significant experience in handling IPRs, and it is time to reevaluate the rules that might have been more necessary earlier.

Some criticism of panel determinative decisions has surfaced recently. The autonomy of judges is, on one level, important, but consistency among panels and proper implementation of patent office policy is also important for the Office and for stakeholders. Perhaps a representative group of managers at the PTAB can quickly review proposed decisions before they are issued to assure that policies are being properly applied and blunt concerns about inconsistent decisions.

Lastly, there is currently a case pending at the Supreme Court which calls into question the constitutionality of the PTAB procedures as it is alleged that a non-Article III court cannot take away a patent.   While this could cause some significant problems if the Court finds a constitutional impediment, I believe the Justices will find some way to sustain administrative review.

Post grant procedures can be an effective and efficient way of promoting patent quality by invalidating weak, inappropriately granted patents.  What we need now is thoughtful review and assessment, based upon five years of experience about what is working and what needs to be done to improve the system. The above issues need to be watched and analyzed, and, if appropriate, modifications need to be suggested and tried. Many improvements can be made by the USPTO itself through transparent rule-making. Some may need legislative intervention. But there is no need to throw out the entire process. We should learn from what has happened before and be willing to improve the system for the benefit of innovation in our country and the continued growth of our economy.

The Author

Robert Stoll

Robert Stoll is a partner at Faegre Drinker Biddle and Reath and a former Commissioner for Patents. Bob retired from the USPTO as Commissioner for Patents at the end of 2011 after a distinguished 34-year government career. He was instrumental in the passage of landmark patent legislation, the America Invents Act, and lauded for his efforts to reduce patent pendency and improve patent quality. Today he frequently acts as a testifying expert witness in federal district court, and also handles complex and procedurally challenging prosecution matters for select clients and law firms.

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 as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 18 Comments comments.

  1. David September 12, 2017 12:08 pm

    “Lastly, there is currently a case pending at the Supreme Court which calls into question the constitutionality of the PTAB procedures as it is alleged that a non-Article III court cannot take away a patent. While this could cause some significant problems if the Court finds a constitutional impediment, I believe the Justices will find some way to sustain administrative review.”

    Are these guys still on the patent office payroll?

  2. Anon September 12, 2017 12:42 pm

    I take issue with the (rather bald) statement of:

    Post grant procedures can be an effective and efficient way of promoting patent quality by invalidating weak, inappropriately granted patents.

    I have seen zero tie from the post-grant realm into any type of true quality improvement of the initial examination realm.

    Quite in fact, there is a logical move in the opposite direction, as the Office “makes money” when granting patents AND when engaging in post-grant review.

    Couple this with an actual – or even merely perceived – lack of concern for the initial examination (given that mistakes are now so “easily” corrected after the horse has left the barn), I am (again) reminded of my days before law (and heavily involved in actual manufacturing quality initiatives) and the fact that one cannot improve quality of a process (the examination process) with what is effectively a “recall program.”

    Let’s stop using “pet phrases” that are not only inaccurate but that also mask where effort should be being expended.

  3. John Wu September 12, 2017 2:21 pm

    What is the purpose of this debate? As a lawyer, the author can only talk about problems of the PTAB process and how to improve it even if there is no way to improve it. Lawyers are in front of the PTAB panel from time to time…. If the purpose of the debate is to improve the patent system and the nation’s future performance, it is entirely a different question. Some attorneys would give two different answers. Whether the whole PTAB process should be thrown out is really a policy question in a context of improving the patent system and national future performance.

  4. Bemused September 12, 2017 3:52 pm

    Anon – that is fantastic (and oh so accurate)! The PTAB is an institutionalized “recall program”!

    And for those of us old enough to remember what happened to American automakers in the 70’s and 80’s as a result of repeated widespread recalls (Americans stopped buying American cars and started buying foreign cars) – the same thing is pretty much happening now. American innovation is leaving the USPTO whose products (patents) are being “recalled” (IPR-ed) all the time and increasingly turning to foreign jurisdictions for patent protection (and less “recalls”).

    A simply brilliant analogy and one that we should use when discussing the problem of the PTAB with our elected representatives (who – for the most part – don’t have a clue about patents).


  5. Edward Heller September 12, 2017 5:25 pm

    Assume for the sake of argument John that the central problem with IPR is that they are conducted by a branch of the patent office, a political body, and that the APJs are not truly independent and do not provide due process. A potential fix would be to move the PTAB into an independent legislative court staffed by ALJs or magistrates supervised by the district and appellate courts.

    In order that the field be level between the special patent validity court and Article III courts, the same standard of proof and claim construction should be used by both.

    Standing should be required. Also, the patent owner should be allowed to hale into this one proceeding any an all infringers it has actually sued.

    Would this idea represent an improvement to the current system to the extent that it would tend to level the playing field and provide due process to the patent owner?

  6. Invention Rights September 12, 2017 5:36 pm

    Ned – who would decide the factual disputes in this scenario? Or would this plan include consent of the patent owner to waive right to a jury?

  7. Edward Heller September 12, 2017 6:06 pm

    Invention Rights, if the new patent validity court is supervised by the courts and magistrates sit for jury trials, I think there could be several options available to the patent owner:

    1. have three ALJs or magistrates hear the trial and decide the case; or
    2. have one magistrate preside over a jury trial; or
    3. have an Art. III judge preside over a jury trial.

    The trade-off between 2 and 3 would be the relative experience in patent matters by the magistrate specialist vs. the legal expertise and independence of the judge. The trade-off between 1 and 2 would be the relative speed and cost of the proceedings.

  8. Pro Se September 12, 2017 6:42 pm

    10 references = Likelihood of Success for me…

    Next, 10 words found in the dictionary will invalidate the copyright of any literary work.

    The PTAB and their supporters would own slaves if it was legal.. morals aside, the law is the law.

  9. Curious September 12, 2017 7:25 pm

    Does this article really add anything to the debate? I feel like I’m reading a Wikipedia article or a 10 minute slide show to a bunch of investment bankers.

  10. Edward Heller September 12, 2017 7:38 pm

    Curious, when Stoll says things like — “Certain standards used in IPRs also rankle some patent owners” — we know that he is not even attempting to provide fair commentary regarding IPRs and how patent owners as a group view the situation. That is the problem when we allow people fundamentally in the opposing camp to argue our side of the case.

    I still “rankle” at having the likes of IBM argue for this or that based on the bests interests of the small firm or inventor. As if. IBM only has its own bests interests at heart, and when you hear any argument from the likes IBM or Stoll, you have to remember that.

    And then there are all those Oil State amicus briefs arguing on our side but citing Lemley of all people, bolstering his credentials, when we all know that he is going to file a brief truly hammering us.

  11. Night Writer September 13, 2017 6:52 am

    @10: Edward. That is a good post, and I agree.

  12. Night Writer September 13, 2017 6:54 am

    How does the IPR and Constitutionality question fit in with the ITC?

  13. Night Writer September 13, 2017 6:58 am

    This is just a terrible blog post. It does read like slides to investment bankers. And, I don’t think the majority of patent holders would agree with that IPRs are good as the article suggests.

    Wow. I think this blog post brings up the whole problem with the USA in that we cannot have a fair debate anymore. That there are no ethical standards and people just don’t respond to your criticisms.

  14. Night Writer September 13, 2017 6:59 am

    The reality too is that Stoll’s positions are probably about clients and money. He is a partner at Drinker Biddle and probably cannot take positions that would turn off clients and the clients are probably those that want to burn the system down.

    So, this blog post is just part of the propaganda machine that is burning down our system.

  15. James September 13, 2017 8:07 am

    Time for positive change. The Trump Administration should, sooner rather than later, be willing to improve the system for the benefit of innovation in our country and the continued growth of our economy.

  16. Eric Berend September 13, 2017 1:48 pm

    When your article cannot read as a position advocate like Prof. Lemley, and you know that complete omission would undermine the superficial credibility of the equivalent of an IT “white paper”, then the ‘other side’ is typically misrepresented by generic, minimal statements such as “Certain standards used in IPRs also rankle some patent owners” and “…this could cause some significant problems if the Court finds a constitutional impediment…”.

    No regard for an 800-pound gorilla in the room: diversion of patent examination fees to fund costs of the PTAB, of which the USPTO’s own policies and practices encourage absurd imbalances of resources; e.g., 125 IPR petitions instituted against just one patent. Is this not, yet more ‘incentive’ towards allowances of so-called “weak” patents?

    “Follow the money”
    – All the President’s Men

  17. Edward Heller September 13, 2017 1:49 pm

    Night, re: ITC.

    One has a constitutional right to a trial in a court of law before his or her patent is invalidated. The ITC does not invalidate a patent. There is no collateral estoppel effect.

  18. LLDC September 15, 2017 12:21 pm

    Rubbish. Stoll helped create the AIA. Remember in 2014, The directorship of the United States Patent and Trademark Office has sat vacant for more than 16 months, at once a reflection the fact that the world of patents has long been what one veteran observer calls a “backwater.” “It can seem like Google vs. the pharmaceutical industry.”

    How did Stoll help?