One-fifth of all IPR petitions denied institution according to 2015 PTAB report

uspto-building-angle-335 copyIn January, legal analytics firm Lex Machina released a report on activities at the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB) through the end of 2015. This report helps shed some light on key trends that can give patent owners and lawyers a better idea of what to expect if they find their intellectual property facing a challenge through a PTAB petition.

The Lex Machina PTAB report summarizes trends in petitions filed since the administrative body was formed in September 2012 through petitions terminated as late as December 2015. The 2,700 PTAB petitions analyzed in this report are more than half of the total petitions filed at PTAB; this study doesn’t include data from petitions that haven’t terminated as of yet.

One major takeaway from this PTAB trends report is that, despite claims of high rates of patent invalidation, the reality is that many patents escape the PTAB petitioning process unscathed. To be fair, 18 percent of all PTAB trials lead to an invalidation of every claim challenged in the patent, but one-fifth of all trials are terminated because the petitioning party is denied institution. Thus, the most common result of an inter partes (IPR) or covered business method (CBM) review is that the petitioner is told that they did not make a good enough case for the challenge to progress beyond a hearing before a panel of administrative patent judges (APJs). In 19 percent of petitions, claims are settled before a decision on institution is made by the APJ panel. The upholding of all petitioned claims and mixed claim findings, where some claims are left intact while others are invalidated, both occurred in about 3 percent of petitions.

The large percentage of petitions which are denied institution flies in the face of a general narrative, which has developed surrounding supposedly high rates of invalidation at PTAB, according to Brian Howard, Lex Machina data scientist and author of the PTAB report. “The fact that 20 percent of petitions are denied institution, to me, that’s a very strong against that,” Howard said. A sizable 10 percent of all PTAB petitions are also procedurally dismissed because of administrative matters, such as unpaid fees, prior to the institution decision. When combined with statistics on mixed claim findings, settlement and more, the reported data reflects a PTAB reality which is much less stark than many have been led to believe.


The inter partes review is, by far, the most popular type of petition used to challenge a patent’s validity at PTAB. In 2014, IPR petitions spiked up to 1,185 petitions filed. If you look at Lex Machina data you will notice what appears to be a drastic dip to 436 IPR petitions in 2015; but Lex Machina reports only on IPRs that have reached a conclusion. In 2013, there were 702 IPR petitions filed at PTAB. By contrast, there have been a total of 281 CBM reviews petitioned since PTAB was established in 2012. A 2015 end of year trends post on Lex Machina’s official blog shows that, save for one quarter, there had been steady and rapid growth of IPR petitions filed between the fourth quarter of 2012 and the second quarter of 2014. Every quarter since, however, has seen quarterly IPR petitions fluctuate between about 460 and 375 filings per quarter, with a high water mark of 466 IPR petitions filed in the second quarter of 2015.

Those organization with patent portfolios which rely heavily upon communications and semiconductor technologies face the greatest risk of being served with a PTAB challenge; those two technology centers were responsible for 18 percent and 17 percent of all terminated petitions, respectively. Patents found in the tech centers for transportation and computer architecture technologies were the next most common among terminated PTAB petitions, with either account for 15 percent of all petitions. Following them was mechanical engineering at 10 percent of petitions and biochemistry at 8 percent.

Here on IPWatchdog, we recently reported that Apple Inc. (NASDAQ:AAPL) is facing its first PTAB challenge on a patent which is integral in its ongoing patent war against Samsung Electronics Co. (KRX:005930) Apple likely won’t have much trouble navigating the PTAB process, however, because as the Lex Machina PTAB report indicates, the Cupertino, CA-based tech firm is the leading filer of PTAB petitions with a total of 252 trial filings (197 IPRs, 55 CBMs). Perhaps unsurprisingly, Samsung is in second place with a total of 155 PTAB trial filings (141 IPRs, 14 CBMs). According to Howard, each of the top 10 companies filing PTAB petitions are all tech companies, which he says makes a lot of sense. “Since the petitioner at PTAB is seeking to destroy the patent… they have a concern about patent infringement,” Howard said. “Otherwise, why spend the extraordinary amount of money required to have a PTAB trial?”

In our coverage of Lex Machina’s recent report on patent litigation trends during 2015, we noticed that a single judge in the Eastern District of Texas possibly handles one-fifth of the nation’s patent infringement cases. At PTAB, it appears that trials are much more evenly spread among APJs, although there is still a scale of experience. As of January 14th, there were two APJs at PTAB who have handled more than 300 cases, but the dropoff in cases handled per judge was not all that steep according to data presented by Howard. “From a 30,000-foot view looking down, it’s not like the federal courts when it comes to patents where a huge percentage of the whole is filtering through one set of hands,” he said. Howard also noted that parallel petitions challenging the same patent would often be grouped into sets handled by a single APJ, further explaining the disparity in the number of cases handled per judge.

The success rate of IPR petitions seem to be unaffected by the grounds of the petition when comparing challenges to validity under Section 102 (novelty) and Section 103 (non-obviousness) of U.S. patent code, although Section 103 does appear to be a much more popular ground for challenging patent claims. In CBM review, Section 101 (patentability) has been the most successful challenge; it has the lowest rate for denial of institution among any statute, the second-highest number of trials (40) where the final decision has found the petitioned material to be unpatentable and only once has a CBM trial upheld the patented material in a Section 101 trial after institution has been granted. Law firm data

Other key findings indicated by the recent Lex Machina PTAB report indicate that institution decisions on PTAB petitions are made at a median of 181 days from filing. Law firm data analysis shows that Finnegan, Henderson, Farabow, Garrett & Dunner is the most experienced law firm at PTAB, taking the top spot amongst defense firms with 40 trials as well as third-place in firms representing plaintiffs with 16 trials.


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2 comments so far.

  • [Avatar for Patent Investor]
    Patent Investor
    February 10, 2016 10:43 am

    What an absolutely negligent manipulation of numbers here (whether intentionally or not, I make no claim to know). The author writes, “If you look at Lex Machina data you will notice what appears to be a drastic dip to 436 IPR petitions in 2015; but Lex Machina reports only on IPRs that have reached a conclusion.” No IPR instituted in 2015 is going to have reached a final conclusion of invalid claims this early in 2016. So a little over 1/7 of all IPRs looked at were, by their very timing alone, impossible to have been anything other than settled or petition denied (statistic say mostly petition denied).

    Another problem I have with this factual conclusion is the number of non-instituted IPRs very early on in the process that were filling in the holes of what was and was not allowed to be instituted. Apple, for one, filed multiple, multiple IPRs where they were clearly time barred for being able to file, but were arguing nuanced approaches to the law that were not only inflating this 20% number but the billable hours column of IP attorneys as well.

    Death Squad Indeed has another fine point as well, the PTAB seems to have no qualms in indicting the entire PTO initial application examination program as completely inept. Many of the final decisions I have read have indicated that every piece of prior art submitted by the petitioner was found to be enough to invalidate the patent.

    My guess is the ALJs have their own dining area in the PTO building (quite possibly catered by big tech businesses, but that is a different matter).

  • [Avatar for Death Squad Indeed]
    Death Squad Indeed
    February 9, 2016 04:33 pm

    Love your work, Steve, but this is one you muffed:

    Given the facts and figures, here’s how your headline should read:

    “Four-fifths of all IPR petitions instituted according to 2015 PTAB report”

    … and since once instituted, in almost all cases some to all of the challenged claims (and normally the most valuable claims of the patents) are invalidated, Judge Rader’s powerful observation that the Board is a patent death squad remains clearly and unquestionably accurate.