Are more than 90 percent of patent challenged in PTAB Defective

If we use USPTO’s statistic report, it looks like that only slightly more than 10 % of challenged claims are invalidated by PTAB, which is simply not true. Multiple petitioners will often group up to challenge single claim, which is why patent patent-owning entity like Zond can windup losing every one of 371 patents claims it owned while PTAB can claim that the institution rate for IPR challenges on Zond’s Patent was 88.6%. Perhaps instead of using perspective employed by USPTO on the percentage of claims invalidated by PTAB, we should be talking about how many patents contain error upon review by Ptab. Of course the reason why USPTO do not want to use this metric as it look like the percentage of patents that have defective claims exceeds 90% which means that the patent office has a problem with an overactive PTAB, grossly inadequate patent examination.

PTAB data based on Trial resolutions

Using legal data analytic tool available through LEX MACHINA, we are able to see different perspectives on PTAB data based on outcomes of trial resolution. Overall, 7000 Ptab petitions of which majority is from IPR, only half reach the institution stage. Again not to say that only half of the applications are reviewed. Given rules of PTAB on consolidating multiple cases challenges claims from a single patent. It could be easily assumed that there is 1:1 ratio of trials to patent after institution of trial. Many petitioners continue to challenge the same patent. 14% of the petitions are still open pre-institution and 13 % reach settlement in which a patent owner almost certainly gave up claims or otherwise agreed to end the case. It is right that only 4% PTAB petitions for review proceedings end with a final written description.

The number of invalidations continues to grow

Of the 1556 petitions for patent review proceedings at the PTAB, that have reached final written decisions left all claims upheld. Of the 84%cases, a full 69% have led to finding of all claims unpatentable, with 15% final written decisions a mixture of claims finding in which at least some claims have been invalidated. The number moved even more significantly titled when adding in both pre- and post-institutions settlement. When looking at these numbers only 8 % of the petitions reach the final stage.

Few reasons why number of PTAB Patents might reach conclusions

Lex Machina scientist noted that firstly the role of the institution decision is such that the petitioners has already prove that their invalidity challenges has merit. He said that the institution decision seems to be a gatekeeper. Aa well the scientist noted that the from petitioner’s point of view the filing of serial petition might be less a function of ganging up on a patent owner and a more strategic breaking up of a material in a way that the entities do when filing for reexamination at the USPTO. Howard also cited information from a soon-to-be-released Lex Machina report on PTAB statistics indicates that the top 55 or so patent owners targeted by PTAB challenges accounts for 20 percent of the total number of petitions filed, and Zond received the most challenges but only accounts for 1 to 2 percent of the total.

Linking Statistics with the PTAB Activity

At least 84 % of the patent applications reaching the final decision in PTAB validity challenge are adjudicated to have at least one invalid claim with 69 % having all claims invalid. Add, settlement which are virtually certain to be unfavorable to the patent owners and at least 92% of patents challenged are defective. Given that these are also patents which have been pre-vetted by owners for licensing and enforcement purpose, that suggests that either PTAB, are too aggressive in invalidating the patent.
These patents with defect are considered to be incredibly valuable patent and if those are defective at the rate of 92% what does that say about 98 percent more patents that are issued but are invaluable to assert and challenge. As former Chief Judge Paul Michel noted at the International IP Commercialization Council event in DC on May 8th,
“It’s not necessarily that PTAB is hostile to patents but that the processes of that tribunal are geared towards high rates of invalidation, which doesn’t square with results achieved in federal court.”