Recent data released by the USPTO in 2015 indicates that the Patent Trial and Appeal Board (PTAB) has become more conservative in instituting inter partes review (IPR) and Covered Business Method (CBM) proceedings.  However, once post-grant proceedings have been instituted, the statistics suggest that the PTAB’s decisions are still trending in favor of petitioners challenging the validity of patent claims.

IPR Proceedings

In the eight-month period from May to December 2015, the PTAB instituted IPR proceedings for 571 petitions and denied institution for 322 petitions, yielding an institution rate of 64%.1  This is a notable decrease from the institution rate as of April 2015, at which point the PTAB had granted institution of IPR proceedings for 1,204 petitions and denied institution of IPR proceedings for 434 petitions, yielding an institution rate of 74%.2  The decrease in the institution rate coincides with a general increase in the number of IPR petitions filed at the PTAB,3 which may have resulted in weaker petitions being filed.  This trend suggests that the PTAB has become more conservative in instituting IPR proceedings, a trend less favorable to petitioners seeking to challenge the validity of patent claims.

Once an IPR proceeding has been instituted, however, the recent trends at the PTAB appear to swing in favor of the petitioners.  In the eight-month period from May to December 2015, the PTAB had completed IPR proceedings for 7,101 instituted claims.4  Of these, only 30% survived the proceeding and remained patentable.  The PTAB found 62% of these instituted claims to be unpatentable in a final written decision, and patent owners cancelled or disclaimed 8%.  Id.

In contrast, of the 8,886 instituted claims for which the PTAB had completed IPR proceedings as of April 2015, 48% survived the proceeding and remained patentable.  The PTAB found 38% of claims to be unpatentable, and 14% were cancelled or disclaimed by the patent owner.5  These findings suggest that once an IPR petition had been instituted, a petitioner stood a better chance of invalidating claims at the PTAB at the end of 2015 when compared to eight months prior.

When comparing the USPTO’s statistics on a per petition basis, rather than on a per claim basis, there appears to be an even greater likelihood for the PTAB to reach a finding of invalidity.  Between May and December 2015, the PTAB had completed 392 IPR trials.6  Of these trials, 78% of the final written decisions found all instituted claims unpatentable, and only 11% found no instituted claims unpatentable (with the remainder finding a mix of unpatentable and patentable claims).  Id.  As of April 2015, there had been a total of 340 IPR trials completed at the PTAB, in which 66% of the final written decisions found all instituted claims unpatentable, and 15% found no instituted claims unpatentable.7  Again, the USPTO data show that the rate of invalidations increased in the final eight months of 2015.

CBM Proceedings

The trends in IPR proceedings are consistent with the trends observed in CBM proceedings.  In the eight-month period from May to December 2015, the PTAB instituted CBM proceedings for 40 petitions and denied institution of IPR proceedings for 43 petitions, yielding an institution rate of 48%.8  At the end of April 2015, the PTAB had granted institution of CBM proceedings for 156 petitions and denied institution for 56 petitions, yielding an institution rate of 74%.  Again the institution rate dropped significantly over the course of 2015.

The IPR invalidation trends were also similar for CBM proceedings.  From May to December 2015, the PTAB found 67% of the 881 instituted claims to be unpatentable in the final written decision.9  Again, the rate of unpatentability increased in the last eight months of 2015.  As of April 2015, the PTAB found 53% of the 1,666 instituted claims to be unpatentable in the final written decision.10

On a per petition basis, the USPTO statistics again show a much greater likelihood for the PTAB to reach a finding of invalidity.  Of the 39 CBM trials completed between May to December 2015, 82% of the final written decisions found all instituted claims unpatentable.11  Of the 46 CBM trials completed by April 2015, 80% of the final written decisions found all instituted claims unpatentable.12  On a per petition basis, the invalidation rate increased only slightly from an already high rate.

Conclusion

These recent trends in PTAB trials suggest that for both the petitioner and patent owner, the pre-institution filings are critically important.  The petitioner should aim to submit the best petition possible in order to persuade the PTAB to institute a post-grant proceeding, given that the numbers appear to be moving away from the high levels of institution seen in the past.  Patent owners should similarly focus significant effort when responding to a petition, because the likelihood of the patent owner prevailing once a post-grant proceeding has been instituted appears to be in decline.

While the USPTO’s most recent statistics reveal interesting trends at both the institution phase and the trial phase, given the possibility of significant changes in PTAB trial practice, e.g., by the Supreme Court’s recent grant of certiorari in In re Cuozzo, it will be important to keep an eye on the PTAB’s statistics through 2016 to see if these trends continue.