The America Invents Act of 2011 brought fundamental changes to the U.S. patent system, one of the most important being the creation of Inter Partes Review (IPR). Patents have always been subject to “examination”—where the U.S. Patent and Trademark Office (PTO) researches prior inventions to determine if new proposed inventions are sufficiently novel and well-described to deserve a patent. However, the new law in 2011 created IPR proceedings to re-open that process, putting issued patents on trial to test their validity again.
Whereas patent validity had previously been tested in federal courts as part of patent infringement suits, IPRs created mini-trials before a second set of PTO employees referred to as the Patent Trial and Appeal Board (PTAB). Groups of PTAB judges therefore form tribunals fully within the Executive Branch. Proponents of the new IPRs spoke of weeding out “bad patents.” However, one former judge expressed concern that PTAB tribunals would become “patent death squads.”
USPTO data from 2022 could be seen to support the latter view, given that once an IPR is instituted (which occurs if the petitioner shows a “reasonable likelihood of prevailing”), approximately 80% that reach a final written decision result in invalidation of at least one challenged patent claim.
In recent years, legislators have attempted to introduce bills that would limit IPRs. The STRONG Patents Act of 2015 was the first attempt at such legislation, followed by the STRONGER Patents Acts of 2017 and 2019.
The PREVAIL Act, sponsored by Senators Coons and Tillis, represents the latest viable effort to strengthen patents and limit harm from IPRs. The act’s sponsors assert that it will restore fairness to the PTAB and promote innovation and competition. Interested parties should review the proposed statutory text to confirm, but the sponsors intend to include the following:
Standing Requirement. Only those sued or threatened by a patent could use IPRs to preemptively challenge that patent’s validity.
Limits to Duplicate Attacks. The act would prevent an entity from helping fund one IPR, then bringing a separate IPR challenge later. After challenging a patent using an IPR, challengers could not also seek to invalidate that patent in federal district court, the International Trade Commission, etc.
Limits to Duplicate Arguments. To allow IPRs based on evidence or arguments previously presented to the PTAB, the act would require “exceptional circumstances.”
Higher Burden of Proof. The act would require that patents be proven invalid by “clear and convincing” evidence (not just by a “preponderance” of the evidence).
End USPTO Fee Diversion. The act would allow fees paid to the USPTO to be used only for USPTO activities (rather than the current practice of distributing some of this money to other government entities).
If passed, the PREVAIL Act would undoubtably have a substantial impact on the U.S. patent system, so interested patent holders and patent professionals should weigh in during the legislative process.
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