The new Post-Grant Review (PGR) and Inter Partes Review (IPR) proceedings will broaden a third party’s ability to challenge patent validity. There seems to be a prevailing assumption that both proceedings will be significantly cheaper than bringing an action in district court. This assumption may not be true, however, given the fees associated with initiating a PGR or IPR proceeding.
This article discusses the proposed fees associated with each new proceeding, and the differences in costs between filing third-party submissions (PGR and IPR) and filing a district court action.
Post-Grant Review and Inter Partes Review Filing Fees
The proposed schedule of fees for third-party submissions in PGR and IPR proceedings was published on February 10, 2012. Filing a petition requesting IPR will cost $27,200 for a review of 20 or fewer claims, $34,000 for a review of 21 to 30 claims, $40,800 for a review of 31 to 40 claims, $54,400 for a review of 41 to 50 claims, $68,000 for a review of 51 to 60 claims, and an additional $27,200 for a review of each additional group of 10 claims. The proposed fees for filing a petition for PGR will cost $35,800 for a review of 20 or fewer claims, $44,750 for a review of 21 to 30 claims, $53,700 for a review of 31 to 40 claims, $71,600 for a review of 41 to 50 claims, $89,500 for a review of 51 to 60 claims, and an additional $35,800 for a review of each additional group of 10 claims. Moreover, there is no scheduled refund for a portion of the filing fees if settlement occurs before the Patent Trial and Appeal Board hears the case, or if the Director institutes a review of fewer claims than originally paid for and challenged.
Filing Fees (and Other Fees) Associated With a District Court Action
Conversely, the average district court filing fees are markedly less, ranging from approximately $250 to $350. Nonetheless, AIPLA estimates that a patent infringement suit worth less than or equal to $1 million in damages will cost a litigant on average $916,000 to get the case through trial. According to AIPLA, the cost associated with going to trial in larger actions (between $1-$25 million in damages) is significantly higher. An average patent infringement action of this size through trial can cost on average between $2 to $4 million. However, the cost associated with bringing a patent infringement action through trial can be greatly reduced if the case is settled early or before trial.
Although the initial fees for filing a PGR or IPR proceeding are high (as compared to other USPTO fees), these third-party submissions can provide a viable alternative to invalidating a patent in district court. Considerations, such as the inability to recover a portion of the third-party submission fee if settlement occurs, should be considered. Nonetheless, PGR and IPR may pose a viable option to patent owners that do not want to engage in a more costly district court action. Therefore, although PGR and IPR are not the answer to invalidating patents in all scenarios, each proceeding should be seriously considered as part of an overall business strategy.