IPR: Not Just for Litigants

In just a few years, the inter partes review (IPR) petition has changed the game of patent litigation. This relatively new administrative procedure offers a faster, targeted process to challenge the validity of patents, as RPX has previously reported (IPRs: Balancing Effectiveness vs. Cost; Rising and Falling: IPRs at Institution).

Not surprisingly, defendants are using IPRs to complement traditional defense tactics in district court litigation. The four most experienced IPR petitioners account for nearly 14% of the approximately 5,600 IPR petitions filed through the end of last year.

But IPRs are not just for litigants. Non-litigant filers—including RPX—independently use IPRs to eliminate questionable patents. For RPX, the IPR process is also a cost-effective way to address irrational price expectations in the patent market and encourage a more rational market. That’s what makes an IPR special: it gives petitioners an effective way to address patent validity and value outside of full-blown litigation.

Of all the top non-litigant and litigant petitioners, RPX has the highest IPR success rates on the merits, combining institution success rates (95%) and final outcomes canceling challenged claims (100%):

The success rates at final outcome show that once an IPR is instituted, the odds of having at least one claim ruled unpatentable are quite high for these active petitioners. This is not too surprising in light of the threshold for institution decisions.

On the other hand, the rate at which these top filers succeed at the institution decision is much more variable. In part, this may be due to a form of “selection bias.” RPX and other non-defendants have the luxury of “choosing their battles” and focusing on patents that are most vulnerable to a validity challenge, without facing the immediate pressure of litigation. This should lead to higher institution and final decision success rates.

In contrast, many top filers are frequently defendants in litigation; as such, the battle is brought to them, and some of them use IPRs liberally, as much to leverage settlement as to win on the merits. Thus, a litigant’s relatively lower success rate may be merely indicative of a more liberal IPR filing strategy.

Regardless, IPRs have become a remarkably effective part of a holistic approach to reducing patent risk, for litigants and non-litigants alike.

Methodology

1. Analysis covers petitions filed through December 31, 2016 and final outcomes through January 31, 2017. Institution decisions are not counted for petitions with filing dates that are still within the six-month pre-trial window (i.e. to avoid bias against those petitions for which an institution decision remains pending).
2. Institution decisions are counted on a per petition basis, including only those denied at least in part on the merits.
3. Institution decisions and final outcomes are considered successful if at least one claim challenged in the petition is instituted or ruled unpatentable, respectively.
4. Final outcomes include adverse judgments against the patent owner and final written decisions.
5. Terminations for other reasons (e.g., pursuant to settlement) are not considered.