American Intellectual Property Law Association

Comparison of Federal Court, ITC, and

USPTO Proceedings in IP Disputes
TOM ENGELLENNER

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Pepper Hamilton, LLP

IP in Japan Committee Meeting
AIPLA MWI Meeting, Phoenix, AZ
January, 2014

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Comparing Court , ITC and USPTO Proceedings

Federal District Court proceedings

International Trade Commission (ITC) proceedings

New mechanisms for challenging patents under the AIA
Key features of Inter Partes Review (IPR) proceedings

Some Statistics for the first year of IPR availability

Stays of Federal Court and ITC Cases
Comparisons and Conclusions
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Patent Infringement
And Invalidity Trials
In the Federal Courts
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Patent Litigation in the Federal Courts

35 U.S.C. 271 provides:
whoever without authority makes, uses, offers to sell, or
sells any patented invention, within the United States or
imports into the United States any patented invention
during the term of the patent therefor, infringes the patent.

35 U.S.C. 281:
A patentee shall have remedy by civil action for
infringement of his patent.

35 U.S. C. 282:
(a) A patent shall be presumed valid. . .

(b) The following shall be defenses . . . :

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noninfringement,
(2) invalidity of the patent or any claim in suit

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Rise of Patent Suits in the Federal Courts

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Source: PWC 2013 Patent Litigation Survey

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Top 5 Patent Forums in Federal Courts (2010)

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Typical Federal Court Patent Suit Budget

$800,000
$700,000
$600,000
$500,000
$400,000
$300,000

$200,000
$100,000
$0

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Disposition of Patent Suits in the Federal Courts

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Source: PWC 2013 Patent Litigation Survey

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The US International
Trade Commission

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Patent Litigation at the ITC

19 U.S.C. 1337 provides:
[T]he following are unlawful, and when found by the
Commission to exist shall be dealt with, in addition to any
other provision of law, as provided in this section: . .
(B) The importation into the United States, the sale for
importation, or the sale within the United States after
importation of articles that
(i) infringe a valid and enforceable United States patent

or a valid and enforceable United States copyright

registered under title 17; or
(ii) are made, produced, processed, or mined under, or by
means
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enforceable United States patent.
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Rise of Patent Suits at the Intl Trade Comm.

60

50

40

30

20

10

0
99

2010

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Source: David Hill, Report to WIPO on US Patent Litigation (2012)

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Comparison of District Court & ITC Proceedings

Fed. District Ct.

ITC

Decision
maker

Federal District Judge or

Jury

Administrative Law Judge

subject to Commission and
Presidential Review

Timing

Average time to Initial

Determination: 12 months

Average time (to trial):

28 months

Burden of
Proof for
Invalidity

Patent Presumed Valid Clear

and convincing evidence to
the contrary is needed

Patent Presumed Valid Clear

and convincing evidence to
the contrary is needed

Average Cost

$1-10M:
$10-25M:
>$25M:
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$2,100,000
$3,554,000
$5,911,000

$1-10M:
$10-25M:
>$25M:

$1,967,000
$3,410,000
$6,242,000

Source : AIPLA Economic survey (2013)

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Typical ITC Patent Suit Budget

$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$0

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Federal Court and ITC Budget Comparison

$800,000

$700,000

$600,000

$500,000

$400,000

$300,000

$200,000

$100,000

$0
Q1

Q2

Q3

Q4

Q5

Q6

Q7

Q8

Q9

Q10

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New AIA
Alternatives
to Litigation
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The America Invents Act

The America Invents Act (AIA) established
several new mechanisms for challenging
issued U.S. Patents:

Inter partes review

Post grant review
Cover business method review
Derivation proceedings

All of these new proceedings are conducted

before a new Patent Trial and Appeal Board.
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Comparison of AIA Proceedings

IPR

CBM

PGR

Grounds

102 & 103 but only

patents and
printed
publications

101 (ineligible
subject matter)
112 (enablement or
written description) &
all102/103 prior art

101 (ineligible
subject matter)
112 (enablement or
written description) &
all102/103 prior art

Timing

Pre-AIA patents:
Anytime
Post-AIA patents:
9 months after
issue and after
termination of PGR
challenges

Pre-AIA patents:
Anytime if sued or
threatened by PO.
Post-AIA patents:
9 months after issue
and after all PGR
challenges are
terminated

Available only for

Post AIA patents:
Must be filed within
9 months of grant

More likely than not

that a claim is invalid

More likely than not

that a claim is invalid

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Standard
Receivable
likelihood success

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Key Features of
IPR proceedings

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Key Features of IPR Proceedings

Initiated by a Petition (and fee payment):
Formal recitations
Must identify all challenged claims and recite all
grounds for review
60 pages or less, 14pt. font, double spaced

Must be accompanied by all supporting evidence

PTAB expects in most cases the evidence will
include one or more expert declarations.
What does a reference disclose? What does the
reference
mean to a person skilled on the art?
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Why a feature in inherent in the prior art?
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Key Features of IPR Proceedings

Patent Owner (PO) Initial Response (optional):

Decision to Initiate Proceedings
PO takes discovery of Petitioners Expert(s)
Patent Owner Response (with POs Expert Declarations)
and Motion to Amend Claims (only one opportunity)
Petitioner takes discovery of POs expert(s).
Petitioners Reply (w/ rebuttal declarations) and
Opposition to Amendments
PO discovery of rebuttal experts
POs Reply
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Trial (Oral Hearing) ~~~~~> Final Written Decision
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Typical Inter Partes Review Budget

$80,000
$70,000
$60,000
$50,000
$40,000
$30,000
$20,000
$10,000

$0
Q1- Petition

Q2 - P.O. Discovery
Q3 - Petitioner
& Response
Discovery and Reply

Q4 - Motions

Q5 - Hearing

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Comparison of Federal Court, ITC & IPR Costs

$800,000

$700,000

$600,000

$500,000

$400,000

$300,000

$200,000

$100,000

$0

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Q3

Q4

Q5

Q6

Q7

Q8

Q9

Q10

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IPR STATISTICS
9/16/2012 to 9/15/2013

FirmSpecial
Logothanks to Yasser El-Gamal, Ehab Samuel and Peter Siddoway
who compiled some of the following data for the AIPLA
http://www.aipla.org/learningcenter/live_webinars/Pages/Wednesday,-October-9,-2013-Webinar.aspx
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Statistics
483 petitions filed in the first year

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Statistics
Most IPR petitions have been against NPEs

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Statistics
About 6% of IPRs involve Japanese companies

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Statistics
During the first year, about 8% (37) of the IPR
petitions resulted in settlements (20 before, and
17 after, institution)

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Statistics
403 of the 483 petitions (83%) were related to
pending patent litigation between the same parties

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Statistics
The 403 Petitioners involved in related Federal
Court litigation has filed for stays 159 times

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But Petitioners are very unlikely to get a stay at the ITC

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Forum Comparison
USPTO (IPR)

ITC

DISTRICT CT

Grounds

102 & 103 but

only patents
and printed
publications

101 (ineligible
subject matter)
112 (enablement or
written description)&
all102/103 prior art

101 (ineligible
subject matter)
112 (enablement or
written description) &
all102/103 prior art

Presumption
of validity?

No. Petitioner
need only show
that it is more
likely than not
that a claim is
invalidity

Yes. Respondent
must prove invalidity
by clear and
convincing evidence

Yes. Defendant must

prove invalidity by
clear and convincing
evidence

Not conclusive
unless affirmed by
the CAFC

Not conclusive on
other proceedings
unless affirmed

Collateral
Conclusive on
effect of
all other
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invalidity?
proceedings

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Forum Comparison (Continued)

USPTO (IPR)

ITC

DISTRICT CT

Jury Trial?

No

No

Yes

Timing

12 months from
Initiation to
Decision

12 Months from
Initiation to Initial
Determination

Average time to trial:

28 months

Damages?

No

No

Yes

Injunction?

No

Yes

Maybe

Resolve
Infringement

No

Yes

Yes

~$2M - $6M

~$2M - $6M

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Costs
~$300K 500K

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Thanks for your attention! Questions?

TOM ENGELLENNER
Pepper Hamilton, LLP
High Street Tower, 19th Floor
125 High Street
Boston, MA 02110
+1-617-204-5189
engellennert@pepperlaw.com
www.postgrant-counsel.com

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