IPR Evidence and Trial Impact for Practitioners

Scales of JusticeAlthough initially pegged as sounding the death knell for the majority of challenged patent claims, over the past couple of years, the Patent Trial and Appeals Board (“PTAB”) has issued institution determinations and final written decision determinations with more varied results than those initially observed.  Today, the PTAB’s statistics show lower institution rates.  See, e.g., PTAB IPR Statistics.  Similarly, a petitioner is not guaranteed invalidation of all of the instituted claims in a final written decision.  See id.  This apparent trend towards less petitioner-friendly outcomes at the PTAB may be traced to a number of factors, including the challenged claims being of better quality and patent owners’ defensive techniques being informed by recent precedent.

For accused infringers relying on invalidity defenses that were presented in an inter partes review (“IPR”) to fight willful infringement allegations in district court, the shift in IPR success rates can spell trouble.  Evidence of an IPR in which all asserted claims were not petitioned or some of the challenged claims were not invalidated in a final written decision can undermine willful infringement defenses.  And now that Halo v. Pulse has chipped away at the high-bar of the Seagate objective prong in favor of a fact-intensive evaluation, willfulness is more likely to be a centerpiece of jury trials. See Halo Elecs., Inc. v. Pulse Elecs., Inc., No. 14-1513, 2016 WL 3221515 (U.S. June 13, 2016); In re Seagate Tech. LLC, 479 F.3d 1360 (Fed. Cir. 2007) (en banc).  As a result, evidence regarding the strength of and reliance on IPR-presented defenses is more likely to come into the record at trial.  Petitioner-defendants need to prepare early for the possibility that evidence of perceived IPR failures will be presented to jury to avoid being left with no admissible evidence disproving willful infringement.  A well-prepared defendant can even turn the tables on the patent owner by using the perceived failures to its own advantage in front of the jury.

How IPR Evidence May Come in at Trial

When IPR success rates were sky-high, patent owners sought to block IPR evidence, like institution decisions favoring petitioners, from being presented to juries.  With the increased no-institution decisions and final written decisions finding claims not unpatentable, patent owners may now instead press to present IPR evidence to the jury.  To prepare for the impact of IPR evidence at trial, a petitioner-defendant should first understand how IPR evidence can be used in the district court.

Evidence Raised by the Patent-Owner

Before Halo, the high bar of the objective Seagate prong meant that the juries often did not hear much or any of the willful infringement evidence in the case.  Courts often held that the existence of any reasonable validity defense–such as those presented in IPRs (or reexaminations) whether or not successful–defeated a finding of objective recklessness, ending the willfulness claim before the issue could go to the jury.  Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923, 1933 (2016).  And, attempts to introduce evidence of non-final Patent Office decisions, validity challenges based on different grounds than tried to the jury, or validity challenges to unasserted claims for other purposes were met with challenges based on the risk of prejudice outweighing the probative value of the evidence under  Fed. R. Evid. 403.  In short, justifying the presentation of unsuccessful or incomplete IPR challenges to the jury was difficult.

Post-Halo, patent owners have a better avenue to present evidence of perceived IPR failures to the jury:  willful infringement.  Willful infringement is a fact-intensive jury issue without the court first intervening as a gate-keeper for the objective Seagate prong–meaning that willfulness evidence is more likely to reach the jury. If belief in the invalidity of the asserted claims is central to the petitioner-defendant’s defense to allegations of willful infringement, a patent owner may seek to introduce IPR evidence to dismantle this defense.  See generally StoneEagle Services, Inc. v. Pay-Plus Solutions, Inc., 2015 WL 3824208, *8-*9 (M.D. Fla. 2015). As an example, a patent owner may introduce evidence that the petitioner filed an IPR but did not petition for institution of particular claims that are asserted in the district-court litigation.  The patent owner would hope that the jury would draw the inference that the petitioner-defendant did not have a good-faith belief in the invalidity of those particular asserted claims; otherwise, the petitioner-defendant would have included them in the IPR petition.  A patent owner may also seek to use rejected grounds to demonstrate that the petitioner-defendant knew it was infringing a valid patent.  And once the evidence of IPR omissions or failures comes in, the petitioner-defendant faces a risk that the jury will weigh the evidence not only in determining willfulness but also in determining validity.

Evidence Raised by the Petitioner

Patent owners are not, however, the only parties that can benefit from seemingly bad IPR results.  If the PTAB rejected grounds based on narrow distinctions between the claims and the prior art, the PTAB’s decisions may be useful to drive down the royalty rate.  The evidence could be used to show that, at best, the claimed invention is only a narrow improvement over old modes under Georgia-Pacific factor number 9 and should be valued accordingly. Georgia-Pacific Corp. v. United States Plywood Corp., 318 F. Supp. 1116 (S.D.N.Y. 1970), mod. and aff’d, 446 F.2d 295 (2d Cir. 1971), cert. denied, 404 U.S. 870 (1971) (detailing fifteen factors to consider in determining a reasonable royalty rate, including “[t]he utility and advantages of the patent property over the old modes or devices, if any, that had been used for working out similar results.”)  Further, depending on the arguments raised by the patent owner in the IPR proceedings, the IPR record may be rife with admissions about narrow distinctions over the old modes.

How Petitioners can Prepare for Evidence of Perceived IPR Failures or Weaknesses at Trial

Regardless of how IPR evidence is admitted, be it evidence of asserted claims that were not petitioned or asserted claims not found unpatentable, a petitioner must prepare for the potential unfavorable perception that a jury may formulate when faced with that evidence. Lack of preparation in dealing with adverse IPR evidence can lead to disastrous scenarios like the following hypothetical situation.

Imagine a corporate representative on stand at trial, being cross-examined by an attorney for the patent owner:


If a petitioner-defendant chooses to embrace evidence of perceived IPR failures for its own benefit—such as for establishing a lower reasonable royalty rate—the petitioner-defendant must be mindful that it is opening the door to the patent owner being able to use that same information on cross-examination for willfulness.  The petitioner-defendant should also be prepared to address juror confusion regarding the impact of the adverse PTAB finding on the merits of the other tried issues.Petitioner-defendants should develop a plan early for controlling the narrative surrounding potentially damaging IPR evidence.  Corporate representatives should be prepared to answer difficult questions regarding the IPR evidence.  For example, it may be useful for the witness to be able to communicate that he or she understands the PTAB’s procedures and standard of review and why the witness and the company do not agree with the outcome.  Other available defenses should be considered and developed early in the case to account for the changing PTAB statistics and the impact of Halo.


Given the increased possibility that evidence of IPR failures will come in at trial and the potentially deleterious effects of IPR evidence coming in without a plan to address its impact, petitioner-defendants should consider ways to handle any resulting fallout early in the case. Foresight and a multi-faceted approach are critical to preparing for negative IPR evidence in a post-Halo jury trial.


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One comment so far.

  • [Avatar for Eric Berend]
    Eric Berend
    October 6, 2016 02:37 pm

    Ah, yes…as the legal tidal wave unleashed by the unquestionably infringer-friendly provisions of the AIA and a commensurate sharp tilt in CAFC and SCOTUS jurisprudence completely swamped the factual (e.g., “individual”) inventor’s U.S. Constitutional interests; in such a wake, the overwhelming effects against genuine innovation are now being picked at by the new lords of technological legitimization.

    However, the ugly truth is that ‘Humpty Dumpty’ has fallen, and no amount of obfuscation or public relations legerdemain can restore what is now destroyed, in this nation.

    N.B.: (Excerpt) ‘ “The question is,” said Alice, “whether you can make words mean so many different things.” [e.g., “inventor” now equated with ‘patent troll’]
    “The question is,” said Humpty Dumpty, “which is to be master—that’s all.” [e.g., the very point of this overall power ploy]

    ‘Through the Looking-Glass’ (Lewis Carroll, 1872) [notes added]

    Let’s not pretend that these mere crumbs thrown at a corpse now choked to death (i.e., ‘individual inventors’), can make any difference, except to the ‘window-dressing’ performed for these sycophants’ efficient-infringer corporate masters, for the mere sake of appearences and to assuage their monstrous, meglomaniacal egos.