Patent Trial and Appeal Board
(PTAB) proceedings celebrated their second birthday on
September 16. Two years in, with the popularity of
inter partes review (IPR) and covered business method (CBM)
reviews taking most by surprise – including the Board
itself – it is clear there is increasing pressure to
meet the 12-month deadline for a final written petition from
when a petition is granted.
new report from Goodwin Procter – called "The
Patent Trial and Appeal Board Second Anniversary: Reflections
and strategies for the years ahead" – assesses the
state of play two years in and finds that there has been a big
adjustment process over that period.
In the first year of proceedings, one IPR petition was filed
a day on average. But after the first written decision on an
IPR in November 2013, an average of two petitions were filed a
day, or about 60 a month. Now, more than four petitions are
filed a day on average.
This has led to "trimming" of trial schedules, according to
Goodwin Procter. When the proceedings began, the PTAB gave
patent owners a full nine to 10 months to prepare the papers
exchanged during the trial and present an oral hearing. This
has lately been cut down as a result of the Board putting
pressure on participants to complete proceedings in five to
seven months to give more time to prepare the final written
decision before the 12-month statutory deadline to complete
proceedings set out in the America Invents Act (AIA).
The institution rate has also shifted over the two years.
Early on, more than 80% of IPR and CBM trials were instituted.
This high "success" rate encouraged others to file petitions.
In the past six months, however, the institution rate has
dropped 10 percentage points. For example, from June to August
2013 the institution rate was 80%. For the same period this
year, it was down to 71%.
Goodwin Procter notes that more than 70% of all petitions
filed as of September 11 this year were for electrical or
computer patent claims, with 15% for mechanical patents, 13%
for chemical/bio/pharma and the remainder accounted for by
"But this distribution will undoubtedly change in the months
and years to come, as PGR proceedings kick-off in earnest and
the number of chemical/bio/pharma related petitions are
expected to substantially increase," says the report.
"A PGR challenge is available for a wide variety of grounds
(including indefiniteness). Pharmaceutical companies, and
generic producers in particular, who may wish to invalidate a
patent more quickly than is possible in most district courts,
are likely to ramp up their filings. Second-filer generics that
enjoy no Hatch-Waxman exclusivity may have nothing to lose by
filing a PTAB proceeding."
Settlements are rising, and are now close to 200 a month.
About 12% of all claims under review were disclaimed by the
patent owners by filing a terminal disclaimer or request for
One of the biggest concerns
among those looking to use the PTAB is whether district courts
will stay cases until the AIA trial is completed. More than 80%
of patents challenged in PTAB trials are involved in co-pending
district court litigation.
According to Goodwin Procter, 72% of IPR or CBM motions to
stay are granted, excluding orders denying motions without
prejudice. While it was expected stays would be almost a
foregone conclusion, judges have not agreed.
The Northern District of California is the most "stay-friendly"
court, according to Goodwin Procter, while the Eastern District
of Texas is the least. Courts such as the District of Delaware
and the Central District of California are somewhere in the
A look at a selection of judges reveals that you better hope
John Love is your judge if you are looking to get a stay in the
Eastern District of Texas. His 60% grant percentage compares
with 20% for Judge Roy Payne’s and 0% for Nicole
Mitchell, Rodney GIlstrap, Leonard Davis, Michael Schneider and
Another popular patent court, the District of Delaware,
shows an interesting split between judges, with Judge Gregory
Sleet granting 89% of motions to stay, Judge Richard Andrews
granting 60%, Judge Christopher Burke granting 50%, Judge Sue
Robinson granting 50%, and Judge Leonard Stark granting
For IPRs, district court
weigh three factors: whether discovery is complete and whether
a trial date is set; whether a stay will simplify the issues
and trail of the case; and whether a stay would unduly
prejudice or present a clear tactical disadvantage to the
For CBM reviews, district courts consider the same three
factors as for IPRs but must also consider a fourth: whether it
would reduce the burden of litigation on the parties and the
court. When the AIA was being discussed Senator Charles Schumer
claimed this fourth factor should place a "a very heavy thumb
on the scale in favour of a stay", making it "nearly impossible
to imagine a scenario in which a district court would not issue
The report identifies a ray of hope for those nervous about
getting a stay – even in courts deemed as unfriendly
to stays. The Federal Circuit issued a strong smack down to the
Eastern District of Texas earlier in July. It said the district
court was wrong not to stay infringement proceedings in
VirtualAgility v Salesforce pending the conclusion of
a CBM review.
The Federal Circuit said: "Under the statutory scheme,
district courts have no role in reviewing the
PTAB’s determinations regarding the patentability
of claims that are subject to CBM proceedings. Indeed, a
challenge to the PTAB’s 'more likely than
not’ determination at his stage amounts to an
improper collateral attack on the PTAB"s decision to institute
CBM review, allowing it would create serious practical
The Federal Circuit decision was expected to make stays
easier to obtain. It did not initially pan out like that,
"The Federal Circuit’s decision did not
immediately cause an increase in grants of stays pending AIA
trials," says the report. "In fact, certain courts even refused
to stay CBM proceedings following the VirtualAgility decision
– despite the Federal Circuit’s clear
instruction to 'weigh heavily’ the special
CBM-specific fourth factor. It is possible, though, that stays
may be easier to come by in the year ahead as more litigants
rely heavily on the Federal Circuit’s language in
their motion papers."
Petitioners will hope that predicted developments such as it
becoming easier to get a stay mean PTAB proceedings will be
able to avoid the "terrible twos" as they go through their