As PTAB nears its fifth birthday the “death squads” have more than just NPEs in their sights 15 Jun 17
In September, the Patent Trial and Appeal Board (PTAB) officially celebrates its fifth birthday. Depending on your point of view, this is either a cause for much celebration or consternation. Whichever side of the argument you fall on, though, there’s no doubt that the PTAB has had a significant impact on US litigation strategies, patent values and the sleep patterns of many patent owners.
With the PTAB’s forthcoming anniversary in mind, the data analytics team at Lex Machina crunched the numbers and this morning released a comprehensive five-year report which digs down into topics like the most common resolutions of board trials, the top petitioners, most targeted patent owners and the leading law firms. In terms of the leading outcomes, the table below shows the top five.
|All petitioned claims unpatentable||20%|
Perhaps the most memorable remark about the PTAB remains former Chief Judge of the Federal Circuit Randall Rader’s comment that the board’s administrative judges were “acting as death squads killing property rights”. That may have been overdoing things slightly - and those who leap to the defence of the PTAB like to cite numbers such as those above to show that denied institution is, in fact, the most common outcome. However, this ignores the settlement rates and while the exact details of settlements are never made public, it’s safe to assume, given the high claim kill rate after institution, that any deal struck following the institution of a trial is unlikely to be favourable to the patent owner.
Lex Machina’s ranking of the top petitioners will not surprise many. Predictably, it reads like a who’s who of the tech world. Apple is far ahead with 370 reviews, followed by Samsung Electronics, Google, Microsoft and LG Electronics. Despite its lead of over 100, the iPhone maker does seem to be losing some of its zeal for the PTAB, having filed just 24 so far this year while its rivals Google and Microsoft don’t even make it into the top 10.
On the patent owner side the top 10 is, not surprisingly, dominated by NPEs - with Intellectual Ventures, Finjan, VirnetX and Smartflash (which has been targeted by a particularly rapacious Apple) all featuring. However, it is interesting to note the way in which the most targeted patent owners have varied since the PTAB came into existence.
Here’s the top five from 2013:
|Magna Elctronics||24 reviews filed against|
|American Vehicular Services||15|
|Bonutti Skeletal Innovations||13|
And here’s the top five for 2017 so far:
|Godo Kaisha IP Bridge 1||24|
So while NPEs have overall been the most frequent targets, so far this year operating companies have been among the most frequently filed against – while the one NPE in the top five is based in Asia. That probably reflects that there are far fewer US NPEs these days - the PTAB has had a particularly chilling effect on that part of the market - but also how post-issuance reviews are becoming an accepted tactic by a much broader pool of petitioners. The presence of two biotech companies in the top five is also notable and may, in part, owe something to the activities of hedge funds and other speculators who have become active in the wake of the campaign launched by Kyle Bass back in 2015.
Whether Lex Machina is going to be able to do another report like this to mark the PTAB’s 10th birthday will have much to do with the upcoming Oil States Energy Services v Greene’s Energy Group at the Supreme Court. As we reported earlier this week the decision to grant cert in a case which questions the constitutionality of IPRs has created a significant stir in the market even if many observers don’t think the justices are going to kill off the death squad just yet.
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