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Patent Office Litigation By the NumbersHow effective are the new procedures for resolving litigation? And how dangerous are the new procedures to your own patents?
Post-Grant Proceeding Usage
The IPR process was adopted rapidly and is being used heavily
1,742 IPR petitions filed in 23 months
3
12,874
1,919 1,742
2120
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Ex Parte Reexam (since July1981)
Inter Partes Reexam (sinceNov. 1999)
Inter Partes Review (sinceSept. 2012)
Covered Business Method(since Sept. 2012)
Petitions Filed in Post-Grant Proceedings
On an annualized basis, IPR filings exceed all other types of post-grant proceedings
4
390
150
871
106
0
100
200
300
400
500
600
700
800
900
1000
Ex Parte Reexam (since July1981)
Inter Partes Reexam (since Nov.1999)
Inter Partes Review (since Sept.2012)
Covered Business Method (sinceSept. 2012)
Petitions Filed in Post-Grant Proceedings (Annualized)
During 2013, the Patent Office became the 3rd busiest litigation venue in the country
2013 Patent Case Filings – Top Five VenuesEDTEX 1512DDEL 1337PTAB 562
CDCAL 408NDCAL 247
5
IPR Usage Data
IPR snapshot… as of September 11, 2014
203settlements
37 adverse judgments (stipulated)
114 final written
decisions
7
The majority of petitions (71%) focus on electrical and computer technologies
8
71%
15.10%
8.20%
5.10%
0.60%
IPR Petitions by Technology Area
Electrical/Computer
Mechanical
Chemical
Bio/Pharma
Design
IPR institution rates declined from 87% last year to 76% so far this year
9
87%
76%
70%
75%
80%
85%
90%
95%
100%
Fiscal Year 2013 Fiscal Year 2014
IPR Institution Rate by Year
Two-thirds of IPRs arise out of pre-pending district court litigation
10
892, 64%
509, 36%
IPRs With Pre‐pending Litigation
Pre‐pending Litigation No Pre‐pending Litigation
IPRs are being filed in many cases where multiple patents are asserted
11
197, 22%
149, 17%
218, 24%
328, 37%
# of Patents At Issue
1 2 3 to 5 6+
Filing multiple IPRs is often necessary after a lawsuit is filed – because of the number of patents asserted
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165, 35%
119, 25%
115, 24%
76, 16%
Number of IPRs Filed within 365 Days of District Court Litigation Service
1 2 3 to 5 6+
Filing more than one IPR per patent (by a company or group) is done in one-third of cases
13
282, 59%102, 21%
69, 15%
22, 5%
Max # of IPRs Filed Within 365 days post‐District Court Service Per Patent
1 2 3 to 5 6+
14
Most petitions are filed about 9 months after a petitioner is sued for infringement
All IPRs
Less than half of patent owners file preliminary responses, and the number has been falling
15
10, 1%
602, 43%
788, 56%
Overall Preliminary Responses
Waived Filed Not Filed
Patent owner preliminary responses don’t have much of an impact on institution rates
16
Preliminary IPR Win Rates
At the highest level of abstraction, IPR appears to be about as effective as inter partes reexam
18
41%
92%89%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
District Court (2010-2012 prior art defenses) Inter Partes Reexam (instituted petitions) Inter Partes Review (instituted petitions)
Composite (Partial + Complete) Invalidity Win Rate
But a closer look reveals that IPRs have a much higher complete invalidation rate than inter partes reexamination
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31%
61%
8%
65%
22%
13%
0%
10%
20%
30%
40%
50%
60%
70%
All Claims Canceled orDisclaimed
Some But Not All ClaimsCanceled or Amended
No Claims Canceled orAmended
Inter Partes Reexam vs. Inter Partes Review
(Excludes denials of petitions)
The average claim-based win rate for IPRs is 78% overall and 83% for instituted claims
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78%
83%
65% 67% 69% 71% 73% 75% 77% 79% 81% 83% 85%
Win Rate for Petitioned Claims
Win Rate for Instituted Claims
Average IPR Petitioner Win Rates (Only petitions with at least one claim instituted)
Win rate for litigation-related petitions is higher than petitions outside of litigation
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58%
60%
62%
64%
66%
68%
70%
72%
74%
76%
Litigation‐related No litigation
Invalidation Rates: Lit. v. Non‐litigation(# invalidated / # challenged)
Strategies for Using Post-Grant Proceedings to Resolve Litigation
Techniques for handling three common categories of cases
Case 1 – Simple Case Strong invalidity arguments on all asserted claims
Limited number of asserted patents/claims
Case 2 – Large Case Strong invalidity arguments on all asserted claims
Large number of asserted patents/claims
Case 3 – Complex Litigation Strong invalidity arguments covering only a portion of asserted claims
Large number of asserted patents/claims
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IPR Strategies for Case 1
Simple Case – Limited ClaimsStrong invalidity arguments on all asserted claims
Limited number of asserted patents/claims
If you are going to file, position yourself for success by taking action early
File immediate motion to stay litigation
File petition for inter partes review
Identify likely asserted claims
Immediately search for prior art and retain an expert
25
A stay pending IPR is not guaranteed
26
Contested Stay Motions (2012-2014)
Granted (136)Granted In Part (6)Denied (70)
Overall Win Rate = 65.6%
LegalMetric Nationwide Report Stay Pending Inter Partes Review (Aug 2012-June 2014)
Some top patent jurisdictions appear to disfavor a stay pending IPR
E.D.Tex. – 20.8% grant rate for contested stay motions (12 motions)
M.D.Fla. – 33.3% grant rate for contested stay motions (6 motions)
D.Mass. – 37.5% grant rate for contested stay motions (8 motions)
D.Conn. – 50.0% grant rate for contested stay motions (2 motions)
S.D.Cal. – 58.3% grant rate for contested stay motions (12 motions)
27LegalMetric Nationwide Report Stay Pending Inter Partes Review (Aug 2012-June 2014)
Results from early-filed IPRs are usable at trial in almost all venues—if necessary
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20.8
34.6
21.4
31
30.8
33.1
17.6
37.6
32.4
18
0 5 10 15 20 25 30 35 40
TXED
DED
CACD
CAND
CASD
ILND
FLSD
NJD
NYSD
PTAB
Months
Median Time to Trial Top Ten Patent Venues
IPR filing delay can cost you a stay and render results typically unusable in expert reports or at trial
29
21.4
31
33.1
20.8
32.4
34.6
37.6
17.6
30.8
12 18
0 5 10 15 20 25 30 35 40
CACD
CAND
ILND
TXED
SDNY
DED
NJD
FLSD
CASD
PTAB
Months
Median Time to TrialTop Ten Venues
IPR Strategies for Case 2
Large CaseStrong invalidity arguments on all claims
Large number of asserted patents/claims
Defining the case is critical to determine IPR strategy in large cases
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Immediately search for prior art and retain an expert
Identify likely asserted claims; or push for early infringement contentions
Limit the number of asserted claims
Cannot limit the number of asserted claims
Manage as a Category 1(simple case)
Manage as Category 3(complex case)
IPR Strategies for Case 3
Complex CaseStrong invalidity arguments covering only a portion of asserted claims
IPRs can be successful even when some asserted claims survive
• Invalidate broadest claims• Focus damages on dependent claimMinimize damages
• Invalidate broadest claims• Design product around remaining claims
Protect alternate design
• Estoppel prohibits most invalidity arguments from being used at trial
• But some arguments remain
Set up further invalidity case for trial
33
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