What Increased Success Rates for Amending Claims During Post-Grant Proceedings Means for Patent Litigation

As reported by the Patent Trial and Appeal Board (PTAB) here and by others, the motion to amend pilot program (see 84 Fed. Reg. 9497), which took effect in March 2019, has increased patent owners’ success in obtaining claim amendments during post-grant proceedings, including inter partes reviews (IPRs). Specifically, the success rate for motions to amend has more than doubled under the pilot program to nearly 30% as compared to roughly 14% before the program. In fact, when patent owners use one of the options the Board added to motion to amend practice by way of the pilot program—seeking preliminary guidance and/or filing a revised motion to amend—the grant rate jumps to 36%. The graph below, taken from slide 24 of a Board presentation, reflects these data.

This begs the question: what does the increased motion to amend success rate mean for patent litigation in 2021 and beyond? As described below, the higher success rate could affect Board practice in several ways, and may even influence district court litigation. 

Expect more motions to amend, but the increase may be modest. As described in slide 30 of this presentation, since the motion to amend pilot program took effect, patent owners have filed motions to amend in instituted post-grant proceedings at about the same frequency as they did before the program. But common sense suggests that with the recent release of data from the Board and others showing the dramatic rise in grant rates, patent owners may be emboldened to file motions to amend more often. After all, patent owners now have an incentive to do so knowing that the Board is, on average, much more apt to grant those motions.

Despite the probable increase in motions to amend, it is unlikely that the filing rate will rise dramatically. That is because, even with the recent increase in grant rate, patent owners succeed in amending claims only about one-third of the time. In other words, the absolute success rate for motions to amend remains relatively low. Many patent owners may be unwilling to roll the dice with a motion to amend given that the Board grants less than half of those motions. Patent owners are likely to file more motions to amend, but because such motions have dim prospects, we can expect more of an uptick than an explosion.   

The higher frequency of motions to amend will increase costs in post-grant proceedings. The expected rise in motion to amend filings, even if small, will inflate the expense of post-grant proceedings. More motions to amend will lead to more briefing, more attorney hours, and more financial outlays.

For example, the higher motion to amend grant rate may mean patent owners elect to file more contingent motions to amend, which do not require canceling original claims. Contingent motions provide a fallback that allows a patent owner to seek to amend the claims, and therefore potentially save those claims in the event the Board decides the original, unamended versions are unpatentable. Any cost increase resulting from a rise in contingent motions would apply to both parties in a post-grant proceeding, as motions to amend require additional work by the patent owner and the petitioner.

As another example of how costs may expand with an increase in motions to amend, recall that the pilot program allows a patent owner the choice to file a revised motion to amend. It follows that any one motion to amend under the pilot program has the potential to turn into two—the original motion and a second revised motion. This feature of the pilot program will lead to more briefing and an increase in costs for both parties in post-grant proceedings. Those higher costs could also be widespread, given that to date patent owners have filed revised motions to amend almost 80% of the time, as noted in slide 29 of this presentation. That means over three-quarters of trials involving pilot program motions to amend have seen two separate motions. If those numbers hold going forward, the average cost of post-grant proceedings is likely to rise.

Patent challengers may elect to take their chances in district court and forego filing a post-grant challenge. The recent increase in success rate for motions to amend may cause fewer would-be petitioners to decide to file petitions requesting post-grant review. Several other recent trends, such as the marked increase in discretionary denials and the downward slide in institution rates, have recently been pushing parties in that direction. In combination with those factors, patent owners’ increased success in amending claims may cause prospective petitioners to think twice before filing a petition. For several years in a row, as reflected in slide 6 of this presentation summarizing statistics tracked by the Board, the raw number of post-grant proceedings has steadily declined. The increase in motion to amend grant rate may reinforce, and could even accelerate, that downturn.

As a result, federal district courts may see an increase in the number of cases without a parallel post-grant proceeding. That could lead to fewer district court stays based on such proceedings and require the courts to address patent invalidity issues instead of deferring to the Board, as has become common in recent years. All of this may increase strain on a district court system that is already suffering under a heavy load due to the COVID-19 pandemic, which could lengthen the time-to-trial for patent cases.

Of course, the increased success rate for motions to amend might have other effects. Only time will tell.