A Closer Look at the PTAB Operation

Prior to the passage of the America Invents Act (“AIA”) in 2011,[1] allegedly low-quality patents were allowed to proliferate. Many of these low-quality patents contributed little to innovation because holders of these patents did not practice the technologies they had exclusive rights over. Rather, these patent holders used the patents to challenge actually productive patents owned by operating companies. Unfortunately, there are only two ways to challenge such low-quality patents: through federal court litigation or administrative patent opposition mechanisms.

In light of these problems, Congress passed the AIA and empowered the United States Patent Trademark Office (“USPTO”) to reevaluate and revoke previously issued patents through the creation of the Patent Trial and Appeal Board (“PTAB”).[2] The goal of these post-grant administrative proceedings is to serve as an efficient alternative to district court litigation and to lower the cost of invalidating low-value patents.[3] Despite Congress’s best intentions, there is still much uncertainty regarding these cancellation procedures. Contrary to congressional expectations, the U.S. patent system ranking dropped consecutively from first to tenth to thirteenth in its patent protection ranking between 2017 and 2018, receiving the lowest score in patent opposition out of all developed countries’ post-grant opposition mechanisms.[4] Such downward trend raises the question: Are these subpar ratings merely a result of the new tribunal’s growing pains which will soon subside, or do they indicate a systemic flaw of the U.S. patent opposition system?

Out of the new PTAB’s proceedings, inter partes review (“IPR”), a process by which the PTAB reconsiders or cancels previously issued patents, has been exceedingly popular for patent challengers. This Note analyzes over 11,000 PTAB proceedings across different industries and technologies, and attempts to evaluate the PTAB’s run over its eight-year life in order to provide an empirical perspective on whether the PTAB has gone too far invalidating patents.

This Note will inform the debate over how well the PTAB is working by looking at: (1) its treatment of Non-practicing Entities (“NPEs”) and Patent Assertion Entities (“PAEs”); (2) serial IPR petitions; and (3) concurrent litigation. All three areas will be analyzed across different industries using original empirical data. The data will show that while Congress has mostly achieved its intended goals of making patent opposition litigation faster and cheaper at the PTAB, there are unintended consequences of the PTAB mechanisms.

As I will describe in greater detail below, the specific findings are the following:

       First, the PTAB has largely succeeded in providing an additional avenue to raise invalidity challenges against NPEs and PAEs, especially in the information technology (“IT”) sector. However, there has also been an alarming rise in invalidity petitions aimed at actual operational companies, a trend across industries but especially in the biosciences. Among PTAB invalidity proceedings against NPEs/PAEs, 52% of them are against patents related to the IT industry whereas only 6% are against patents in life science;

Second, among 11,909 PTAB petitions filed, there are 7,074 unique patents addressed. In other words, 41% of the time the PTAB looks at a petition, the Board had already seen the same patent challenged some other way in another petition. On a per-patent basis, 32% of the patents have been challenged more than once. Such serial petition problems also exist across industries. The problem is the most prevalent within the IT industry. In fact, 36% of the patents addressing software technologies are challenged more than once, whereas 30% of the patents addressing biosciences are challenged more than once;

Third, the PTAB mechanisms are used in unintended ways by certain entities.[5] For example, almost one in five patents in front of the PTAB, 19% to be precise, faces multiple invalidation petitions brought by the same challengers.

Fourth, while the institution rate is decreasing across industries, petitions against software patents are instituted at the highest rate of 75%, whereas petitions against bioscience patents are instituted at the rate of 68%;

Fifth, the heightened concerns on the invalidity rate of PTAB petitions (most commentators report a rate of around 80%) could be misleading because the overall rate of petitions being held partially or entirely invalid out of all petitions filed is only 22%. The 80% invalidity rate is calculated by dividing petitions that are held partially or entirely invalid by petitions that received final written decision; however, the majority of petitions filed do not ever receive a final written decision;

Last, patent challengers who resort to invalidating patents at the PTAB are highly likely to have parallel lawsuits against the same patents, as 83% of the PTAB petitions have a co-pending district court case.

In Part I, I will introduce the U.S. patent system, the history and purpose of the AIA, and the PTAB. I will discuss the popularity of one specific PTAB proceeding IPR and present both sides of the debate around IPRs, the USPTO director’s discretion, and the Supreme Court’s scrutiny over the PTAB in recent years. In Part II, I will describe the study design, which includes its data source and data structure. In Part III, I will expand upon the findings and review how the PTAB operations have changed under different directors. At the end, I will conclude my analysis.



          [1].      35 U.S.C. §§ 311–319. In September 2012, petitions for inter partes review first became available. Id.

          [2].      See id. § 6(b).

          [3].      H.R. Rep. No. 112-98, pt. 1, at 39–40, 48 (2011), as reprinted in 2011 U.S.C.C.A.N. 67, 69, 78 (discussing that post grant reviews were intended to be “quick and cost effective alternatives to litigation”).

          [4].      See U.S. Chamber of Com., Glob. Innovation Pol’y Ctr., U.S. Chamber International IP Index 7–9 (6th ed. 2018), http://globalipcenter.wpengine.com/wp-content/uploads/
2018/02/GIPC_IP_Index_2018.pdf [https://perma.cc/NH7B-MW29] (commenting that the change is primarily driven by relative weakness in patentability requirements and patent opposition and noting that all other EU countries patent opposition system scored higher than that of the United States). In 2020, the U.S. IP system ranking went back up according to the 2020 International IP Index. See U.S. Chamber of Com., Glob. Innovation Pol’y Ctr., U.S. Chamber International IP Index 38 (8th ed. 2020), https://www.uschamber.com/assets/documents/023881_gipc_ip_index_2020_fullreport_final.pdf [https:

          [5].      Subcomm. on Intell. Prop., Innovation in America: How Congress Can Make Our Patent System STRONGER, Comm. on Judiciary (Sept. 11, 2019, 2:30 PM), https://www.judiciary.senate.gov/
meetings/innovation-in-america-how-congress-can-make-our-patent-system-stronger [https://perma.cc/
KW4C-2M2J] (broadcasted at 1:53; Senator Tillis urging Director Iancu to make administrative changes to the PTAB). 

*      Executive Editor, Southern California Law Review, Volume 95; J.D. Candidate 2022, University of Southern California Gould School of Law; B.S. Mechanical Engineering, B.S. Earth Science, Rice University. I would like to thank Yoko Hongyu Li for her invaluable guidance on data gathering and software programming. To my parents Xiao and Wei, thank you for encouraging me in all my pursuits and inspiring me to follow my dreams. Finally, many thanks to editors at Southern California Law Review who made this process a breeze.

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