New Study Shows That IPR Delivers An Economic Benefit, Even If The District Court Doesn’t Stay Litigation

New research from the Perryman Group shows that inter partes review (IPR) is economically beneficial, even if co-pending district court litigation isn’t stayed.  The Perryman study, commissioned by Unified Patents, examines IPR’s economic impact, including the difference between staying or continuing on with a co-pending district court case.  There are two important findings in this study.

First, when IPR is conducted in parallel with district court litigation, it still has a positive impact on the overall efficiency of the patent system and the economy.  This means that in any analysis focused on the overall efficiency of the patent system or the overall impact on the economy, institution of IPR is favored even when there is co-pending district court litigation.  And since those are the precise factors that the Director of the USPTO is required to consider in prescribing regulations, this study is a signal that regulations that would deny IPR on the basis of co-pending litigation may well contravene the statutory factors which Congress directed the USPTO to use in rulemaking.

And second, the grant of a stay is associated with significantly greater savings and more positive impact.  Over the 2014-2019 period of the Perryman study, around two thirds of requests for stay were granted.  But while there were twice as many stayed cases as non-stayed, the Perryman study finds that stayed cases represented nearly fourteen times as much positive economic impact.  That means that, for a given case, the positive economic impact of an IPR is multiplied approximately sevenfold if a stay is granted.  That is a strong signal that there should, as many courts believe, be “‘a liberal policy in favor of granting motions to stay’ pending IPR.”

District courts should take this information into consideration when deciding on motions to stay, given the substantial likelihood that a stay would be economically beneficial to all parties involved.  But just as importantly, the USPTO’s continued application of the Fintiv precedent threatens the value of IPR.  That precedent is based in part on the mistaken belief that co-pending IPRs have a negative impact on the patent system and the economy.  And that belief is now shown to be false by the Perryman study.  That’s just one more reason that the USPTO should reject the disastrous Fintiv policy put in place under the previous Director and return to instituting technically meritorious reviews regardless of whether co-pending litigation exists.  There’s no reason to leave invalid patents in force just because someone is trying to use them in a lawsuit.

After all, if a petition lacked merit, the PTAB wouldn’t need Fintiv to deny it.

Joshua Landau

Joshua Landau is the Patent Counsel at the Computer & Communications Industry Association (CCIA), where he represents and advises the association regarding patent issues.  Mr. Landau joined CCIA from WilmerHale in 2017, where he represented clients in patent litigation, counseling, and prosecution, including trials in both district courts and before the PTAB.

Prior to his time at WilmerHale, Mr. Landau was a Legal Fellow on Senator Al Franken’s Judiciary staff, focusing on privacy and technology issues.  Mr. Landau received his J.D. from Georgetown University Law Center and his B.S.E.E. from the University of Michigan.  Before law school, he spent several years as an automotive engineer, during which time he co-invented technology leading to U.S. Patent No. 6,934,140.

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