The AIA ushered in significant changes in the patent system. At the time, there was much consternation about the change to a first-inventor-to-file system. The prospect of enhanced post-grant challenges was an afterthought, dismissed as a variation in inter partes reexamination. Inter partes reexamination filings even spiked in 2012, as practitioners were reluctant to let go of the familiar process in favor of the new post-grant trial system.
Five years on, the emphasis has flipped; first inventor to file is accepted as not much different than the patent systems in the rest of the world. Post-grant trials now get much more attention. Some see them as the only way to save American business; others call the system disastrous for innovation. However you classify the impact, AIA trials have been significant.
Out of the gate, over 90% of petitions for IPRs were instituted. The first final written decisions resulted in all claims declared unpatentable. Every attempt to amend claims during an IPR to save their validity was rejected. Unquestionably, the system was favorable to challengers, and as a result, IPR filings skyrocketed, nearly quadrupling from about 500 filings in 2013 to over 1,300 in 2014, and jumping again in 2015 by another 500 filings.
The early results have moderated, and are now less one-sided. Institution rates have dipped below 70% and, once instituted, almost 30% of claims for which a final written decision is issued remain patentable. Yet, post-grant challenges are still statistically favorable to challengers and are widely used in significant litigations. Over 80% of post-grant challenges are on patents that are in litigation.
Post-grant challenges have by no means ended patent litigation. Despite a dip in 2014, patent litigation filings are near their peak, and still above the average over the last five years. The approximately 1,700 IPRs filed per year comprise only about 20% of patent cases filed—but a much larger percentage of the patent cases that proceed to discovery and the later stages of litigation. Whether you love them or hate them, IPRs have become a significant part of litigation and will continue to be so going forward.
Some issues still remain to be worked out. Burden of proof in making claim amendments, for example, is still in play. Biotechnology companies are still evaluating the process. And some are grappling with ways to exploit the system for profit. Yet, five years on, the system has stabilized, with the Supreme Court locking in features that make the post-grant system favorable to challengers and refinements to the PTAB rules of practice, as well as several cases deemed precedential or informative.
In sum, in the last five years, post-grant trials have become the new norm and will continue to be for the foreseeable future. Follow The Post-Grant Strategist as we continue to follow new developments in this area.