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Report finds that PTAB is less harmful to patent owners than many believe


By David Schwartz
Published: January 27th, 2016

A recent report by legal analytics firm Lex Machina finds that patents brought before the U.S. Patent Trial and Appeal Board (PTAB), which has a general reputation for stifling intellectual property owners, are less at risk than many observers think.

Patent experts had a certain right to be suspicious: when the PTAB started deciding patent cases in 2012 as part of the America Invents Act, 17 of the first 20 challenges that made it to a final decision resulted in losses for the patent holders. But the study by Lex Machina, which examines all 2,700 decisions from the Board’s first three years of operation, finds that patents are surviving the process 66% of the time.

“A lot of press says that PTAB is basically mulching its way through patents,” says Brian Howard of Lex Machina. “But what data shows is that it’s not like an ATM, where you just submit a petition and you get an invalidation of a patent back.”

Howard suggests that other studies have overblown the negative effects of PTAB by focusing only on the success rates of challengers who made it to a final decision, even though the ones that never reach a formal hearing make up nearly half of the total.

There are some who are skeptical of Lex Machina’s findings. Jim Brogan, chair of the intellectual property practice at Cooley LLP, comments, “I think the statistics that you’re seeing from Lex Machina and the PTO can be misleading for this reason: both groups count settlements as wins for the patenteee because the patent survives. Our view is that we count those as losses, because we believe that inevitably the people that settle are terrified their patents are going down.”

As Borgan puts it, even though a patent “survives” in a settlement, the patent holder may no longer be able to enforce the patent against the petitioner.

Still, others agree with the new report’s findings. According to Ted Behm, a partner in the IP department at Barnes & Thornburg, “When [PTAB] started invalidating patents for the first time, there was a lot of press on it. But our own experience, and these numbers bear it out, is that it’s not truly a death knell when someone files a petition.”

Source: Bloomberg BNA

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