Looking Behind The Different Invalidation Rates Of Oppositions And IPRs

January 28, 2015

Janice A. Vatland PhD, Y. Jenny Chen PhD

(as published in Intellectual Property Watch)

Opposition proceedings in Europe have long served as a powerful tool for third parties to challenge the validity of a patent before the European Patent Office (EPO). Now, under the America Invents Act (effective September 2012), the United States (US) has two new procedures for challenging the validity of a patent before the US Patent and Trademark Office (USPTO): inter partes review (IPR) and post-grant review. Current statistics indicate a higher invalidation rate for IPRs as compared to EPO oppositions.

Based on the 126 final IPR decisions as of September 11, 2014, the USPTO’s Patent Trial and Appeal Board (PTAB) has cancelled all challenged claims in approximately 65% of the cases. This is in contrast to only 29% of patents being revoked, with 31% of patents upheld without amendment and 40% upheld in amended form, in EPO opposition proceedings according to the 2013 EPO annual report. While the sample size for final IPR decisions is not yet a large one, there are two factors that likely contribute to a higher invalidation rate for IPRs: litigation estoppel and a high claim amendment bar.

Litigation Estoppel

In the US, challengers of patents using the IPR procedure are incentivized to develop a robust case and put forth their best arguments. Once the PTAB issues a final written decision in an IPR, the petitioner is barred from asserting in a court that a patent claim involved in the IPR is invalid on any ground that was raised or reasonably could have been raised during that inter partes review. Thus, if a petitioner loses in an IPR proceeding, it may be prohibited from challenging the involved claims in court on any ground that could have been raised in the IPR.

In contrast, there is no such estoppel in Europe. An opponent that loses an EPO opposition can still seek to invalidate the same patent on similar grounds in nullity proceedings in a national court. An opponent in an EPO opposition, therefore, does not have to approach the opposition in the same way as a challenger in the US and may strategically choose to refrain from using its best arguments in the opposition, saving such arguments for a future proceeding.

High Claim Amendment Bar

While claim amendments are technically allowed in both US IPRs and EPO opposition proceedings, the rules governing claim amendments in IPRs are much stricter; therefore, the likelihood that claim amendments can be made to avoid cancellation of a claim in an IPR is substantially decreased. Thus far, in fact, claim amendments have been rarely allowed in IPRs.

In an EPO opposition, a patentee can submit claim amendments at various stages during the proceeding, including in responses and during oral proceedings. In contrast, a patentee typically has only one chance in an IPR proceeding to propose claim amendments. This is done in a motion to amend, and a showing of good cause is required for any supplemental motion to amend.

In addition, there is no official restriction as to the number of claim amendments a patentee can submit in an EPO opposition, so it is standard practice to submit multiple claim sets that represent various fallback positions. In an IPR, on the other hand, there is a presumption that only one substitute claim is needed to replace each challenged claim, unless a patentee can rebut the presumption by demonstrating a need for additional substitutes. Thus, absent special circumstances, each challenged claim in an IPR may be replaced by only one substitute claim.

Further, the burden on a patentee to show patentability of an amended claim over prior art is very different. In an EPO opposition, a patentee only need establish that the amended claim is novel and inventive over the prior art cited during the proceeding. In contrast, a US patentee in an IPR must show that the proposed amended claim is patentable not only over the cited art but also over any prior art known to the patentee. A feature added to a challenged claim to distinguish over cited prior art in an IPR must be shown by the patentee to be novel and nonobvious over the art from the perspective of an ordinarily skilled person in the art. For a US patentee, this is a much higher burden to satisfy, making the likelihood of using amendments to avoid a claim cancellation lower than for a patentee in an EPO opposition.

While IPRs and EPO opposition proceedings are both mechanisms by which patents may be challenged by third parties, there are important differences, and the outcomes thus far have likewise been different. Based on IPRs that have progressed to a final decision, US patent claims have been invalidated at a higher rate than EPO patent claims in opposition proceedings. Litigation estoppel and the high claim amendment bar in the US are two major factors that contributed – and will likely continue to contribute – to this difference.