Since its enactment in 2012, the America Invents Act (AIA) has fundamentally altered the landscape of patent litigation in the United States. A typical patent infringement lawsuit generally involves two main issues: (1) whether the asserted patent claims are infringed, and (2) whether the asserted patent claims are valid. Recognizing that validity of a patent claim is a legally and technologically intensive issue, the United States Congress has created a new type of proceeding—the Inter Partes Review (IPR). IPRs allow the parties to efficiently resolve the issue of patent validity before a panel of administrative judges prolific in patent law—the Patent Trial and Appeal Board (PTAB). IPRs streamline litigation and reduce legal costs for both parties and have become an integral part of patent infringement lawsuits. An accused patent infringer will almost inevitably challenge the validity of the patent in an IPR proceeding prior to engaging in substantive settlement negotiations. It is common for district courts to stay litigation pending the outcome of the IPR—if the patent is invalidated, the lawsuit is automatically dismissed. The converse is also true—a patent that survives an IPR becomes virtually bulletproof.
IPRs heavily favor the petitioners. Unlike litigation, there is no presumption of validity in an IPR. Furthermore, the claims are interpreted under the broadest reasonable interpretation standard making them more susceptible to invalidation. The limited discovery and condensed timelines reduce the legal cost and uncertainty. For these reasons, filing an IPR has become a staple strategy for the patent infringement defense. Indeed, some have argued that not filing an IPR petition in a patent infringement lawsuit may amount to legal malpractice.
A well-informed patent owner should always prepare for the IPR prior to initiating litigation. It is axiomatic that an invalid patent cannot be enforced regardless of the strength of the infringement case. After the defendants file a petition for an IPR, the patent owner is given only three months to respond. Consequently, it is essential to have a qualified IPR counsel on deck ready to initiate work on the preliminary response as soon as the IPR petition is filed. Ideally, the IPR counsel should be retained prior to litigation to conduct a thorough prior art search to identify the references that the accused patent infringers may likely use to challenge the validity of the patent. This will ensure that, from the onset of lawsuit, the litigation team and the IPR defense team are working in concert especially on key issues such as claim construction.
Retaining an IPR counsel in anticipation of an IPR petition will ensure that the IPR counsel has sufficient time to thoroughly analyze the patent, its prosecution history, and the closest known prior art. This strategy will maximize the chances for the dismissal of the IPR petition, which would yield substantial savings in time and money and would provide immense leverage in settlement negotiations. Although IPRs generally favor the petitioners, a well-prepared patent owner represented by strong IPR counsel can turn the odds in its favor.