In 2011, Congress passed the America Invents Act, which established, among other things, a process by which a party could petition the Patent Trial and Appeal Board (PTAB) to review the validity of a challenged patent based on prior art publications. In the process, known as inter partes review, or IPR, a three-judge panel of the PTAB first determines whether “there is a reasonable likelihood that the petitioner would prevail.” If so, it institutes a review and conducts a minitrial between the patent challenger and the patent owner to determine the validity of the challenged patent claims. See 35 U.S.C. §§ 311–319. The idea was to give patent challengers, most often those who had been sued for patent infringement, a quicker and less expensive vehicle for challenging the validity of the asserted patents. In many cases, a district court litigation is stayed pending the outcome of the IPR, thus allowing the parties to avoid those litigation costs while the IPR plays out.
Since the first IPR was filed in 2012, nearly 15,000 petitions have been filed, with the PTAB instituting review on more than half of those (52%). USPTO data shows that in 2022, about 80% of instituted PTAB proceedings, which included IPRs and the lesser-used post-grant review (PGR) proceedings, that reached a final written decision resulted in the invalidation of at least one challenged patent claim, with 65% of those proceedings resulting in the invalidation of all challenged patent claims.
Patent owners have complained that the IPR process favors patent challengers and thereby discourages innovation. In response, companion bills have been recently introduced in the House and the Senate that would change the IPR process in a number of significant ways intended to promote the fair treatment of inventors and patent owners.
The proposed legislation, which is referred to as the Promoting and Respecting Economically Vital American Innovation Leadership Act, or the PREVAIL Act, will make a number of significant changes to the law, including:
Giving challenged patents the same presumption of validity they enjoy in civil litigation and raising the patent challenger’s burden of proof from a mere preponderance of the evidence to the much more demanding clear and convincing evidence.
- Why it matters: Harmonizes the burden of proof with civil litigation and makes invalidating claims in an IPR more difficult.
Prohibiting any judge who participated in the IPR institution decision from serving on the panel that conducts the actual review.
- Why it matters: Prevents the potential bias existing in current practice when a panel that has already determined that “there is a reasonable likelihood that the petitioner would prevail” decides whether the petitioner should ultimately prevail.
Limiting who can file an IPR petition to those who have been sued for patent infringement or have a reasonable apprehension of being sued.
- Why it matters: Prevents third parties unlikely to be accused of infringement from challenging patents for some other purpose.
Prohibiting a petitioner from maintaining a claim, counterclaim or affirmative defense of invalidity in any civil action on any ground permitted in the IPR if the IPR is instituted.
- Why it matters: Attaches estoppel earlier in the process by not requiring a final written decision, which would help avoid redundant challenges.
Changing how the PTAB makes institution decisions when prior art was previously considered by the Patent Office from simply “tak[ing] into account” that the prior art was previously considered to requiring the PTAB to, absent exceptional circumstances, reject any petition that presents the same or substantially the same prior art or argument previously presented to the Patent Office.
- Why it matters: Will help avoid redundant challenges.
Precluding institution of an IPR if a district court or the International Trade Commission (ITC) has entered a final judgment on validity on any ground that could be raised in an IPR.
- Why it matters: Will help avoid redundant challenges and conflicting decisions.
Expanding the patent owner’s ability to amend patent claims during IPR and allowing responses to PTAB feedback on proposed amendments.
- Why it matters: Improves opportunity for patent owners to secure claims that will survive IPR.
(See also Senate Fact Sheet.)
Practitioners will be keeping an eye on this legislation as it makes its way through the committee process. If you have any questions, please contact Bruce Zisser.