Is the Pendulum Shifting Back to Inventors/Patent Owners?
If you practice law long enough, you see the pendulum shift between the respective rights of patent owners and accused infringers. The pendulum seems to be shifting, at least somewhat, back toward the inventors. In October of last year, John Squires, Director of the USPTO, issued a memorandum stating that he would be personally deciding whether to institute or deny petitions for inter partes review (“IPR”) or post-grant review (“PGR”), two processes adopted in the America Invents Act to allow patents to be challenged without having to go to court. A PGR may only be filed within nine months of patent’s issuance but may be based on any of the grounds for patentability under the Patent Statute, including things like the on-sale and public use bars, lack of enablement, and insufficient written description. An IPR can be filed at any time, but may only be based on patent and printed publication prior art invalidity.
Since these processes were adopted, patent owners have complained that the validity of their patents is never settled and that challengers can file never ending strings of IPRs, which is not only expensive, but also keeps a cloud over the validity of their patents. These processes have made it difficult for patent owners to enforce their patents because after being sued, accused infringers often try to initiate an IPR or PGR quickly and then seek a stay of the infringement case in court.
Since Director Squires issued the October memorandum, the percentage of instituted IPRs has plummeted. In addition, no reasons for denial are provided. Rather, summary notices are issued identifying those IPRs/PGRs that have been instituted and those that have been denied institution. To make matters worse, if you are paying the large entity fee, you lose your $23,000 filing fee.
In general, this seems like a pro-patent holder development. IPRs and PGRs were enacted at a time when there was a perception that the USPTO was issuing many “junk” patents. It was felt to be unfair to force accused infringers of going through the expense of district court litigation to neutralize a patent threat. Since the mid-1990s there have been many procedural shifts which, whatever you may think of their merits, have generally favored accused infringers. These shifts include the Markman opinion that made claim construction a matter of law to be decided by the court rather than the jury, the elimination of automatic permanent injunctions for prevailing patent owners, the advent of patent local rules, significantly heightening of pleading standards for bringing a patent infringement case, and the increased rigor and scrutiny applied to damages evidence and expert witness testimony. So, the diminished availability of IPRs may be a relief to the holders of US patents.