Requesting a government evaluation of whether a patent was properly issued, known as reexamination, is cheaper than a lawsuit and has an easier standard for discrediting a patent than what is allowed before a judge or jury. With a success rate of about 90 percent, companies have almost doubled requests in the past five years, turning the patent office into a reliable forum to shoo away competitors’ claims of patent infringement.
“It’s a proxy fight for litigation,’’ said Brad Wright, a lawyer with Banner & Witcoff in Washington. Companies are “having a pretty good success rate at knocking out or damaging a patent, or at least bottling up the litigation.’’
There are two types of reexams: one that involves only the patent owner and a second in which a third party can participate. While total requests have almost doubled, cases in the latter category, known as inter partes, have jumped fivefold since 2006, to 374 in the year ended in September, patent office data show. About 70 percent of those cases are known to involve companies being sued for infringement.
More to come?
The agency anticipates an increase in those numbers, as changes to U.S. patent law start to take effect this year, expanding the ability to file inter partes, which had been limited to patents issued after 1999. The law signed by President Obama in September opens the process to all patents, and also creates a procedure, called an opposition, that lets third parties file challenges on a wider range of validity questions.
The law also sets a time limit of 12 months for the proceedings, with a six-month extension for good cause. The agency’s new policy begins in September for business-method patents, and in March 2013 for all other types.
“It’s going to be quicker, it’s going to be cheaper, and I think it’s going to be more accurate,’’ said Robert Stoll, a lawyer at Drinker Biddle & Reath in Washington, who ran the agency’s patent operations from late 2009 until Dec. 31.
As the number of reexamination requests began to grow, the patent office created a central unit to speed the cases. Now it’s looking to hire 100 administrative law judges — doubling their ranks — by the first quarter of 2013. The Board of Patent Appeals and Interferences also has worked to keep backlogs low so it can be ready for the new cases, Chief Administrative Patent Judge James Donald Smith said.
The agency’s review is limited to questions of a patent’s validity, so companies that are being sued can’t argue that they don’t infringe the disputed patent.