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2015 Patent Reform Update
Brian J. Love & Colleen V. ChienDecember 11, 2015 APLI
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The Call for Reform
“What we need to do is pull together additional stakeholders and see if we can build some additional consensus on smarter patent laws” – Feb. 14, 2013
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The Call for Reform
Executive Priorities and ActionsReduce “unnecessary costs”Fee-ShiftingComputer Enabled Patents / Functional ClaimingDemand LettersReal Party in InterestITC Reform
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The Call for Reform
“And let’s pass a patent reform bill that allows our businesses to stay focused on innovation, not costly and needless litigation.”
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Reform Efforts
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How well have the calls been answered?
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Call: “Innovation, not… litigation”
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Overall Level of Litigation
Source: Lex Machina; Unified Patents
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Overall Level of Litigation
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Overall Level of Litigation
Source: Lex Machina; Unified Patents
0
1000
2000
3000
4000
5000
6000
7000
8000
2010 2011 2012 2013 2014 2015 (proj)
Projection ~5900 cases
=~500 cases per month
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Overall Level of Litigation
0100020003000400050006000700080009000
2010 2011 2012 2013 2014 2015(proj)
District Courts + PTAB District Courts
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Percentage of NPE Suits
Source: Unified Patents
Through 3Q15: 67% NPE
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Percentage of NPE Suits
Source: RPX
61% 71% 70% 69% 69% 61% 71%
0%
20%
40%
60%
80%
100%
Jan-June July-Dec2012
Jan-June July-Dec2013
Jan-June July-Dec2014
Jan-June July-Dec2015(proj)
Tota
l Num
. Sui
ts
NPEs Prod Co's
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Percentage of NPE Def’s
Source: RPX
57%68% 67% 64% 62% 55%
66%
0%
20%
40%
60%
80%
100%
Jan-June July-Dec2012
Jan-June July-Dec2013
Jan-June July-Dec2014
Jan-June July-Dec2015(proj)
Tota
l Num
. Def
enda
nts
NPEs Prod Co's
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Distribution of Unique NPE Defendants
Source: RPX
54%
59%
62%
58%
57%
63%
67%
13%
13%
10%
12%
14%
9%
9%
19%
17%
17%
18%
17%
16%
13%
10%
8%
8%
8%
8%
8%
7%
4%
4%
3%
4%
4%
4%
3%
1H
2H
1H
2H
1H
2H
1H
2012
2013
2014
2015
$0-100M$100M-1B$1B-10B$10B-50B$50B+
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Call: “Reduc[e] unnecessary costs of patent litigation”
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Litigation Costs – AIPLA
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Litigation Cost – AIPLA
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Litigation Cost – AIPLA
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Call: “More discretion in awarding fees”
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Fee Shifting Post-Octane
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Fee Awards Post-Octane
Federal Circuit Bar Association
No. Granted RatePre-Octane
[May 2013-April 2014] 46 6 13%
Post-Octane[May 2014-March 2015] 85 31 36%
Motions by Accused Infringers
Total Motions 85 over 10 months, 8.5/month
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Fee Awards Post-Octane
Source: Hannah Jiam, Berkeley Tech. L.J.
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Call: “Computer-enabled patents”
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Early Alice Motions
No. Granted Rate
Motions to Dismiss 47 35 74%
Motions JOP 42 29 69%
Motions for SJ 59 43 73%
Source: Bilski Blog (Nov. 6, 2015)
Federal Court Decisions 174 over 16 months, ~10 per month
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Early Alice Motions
No. Granted Rate
D. Del. 31 28 90%
E.D. Tex. 23 8 35%
N.D. Cal. 19 15 79%
Source: Bilski Blog (Nov. 6, 2015)
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Claim Clarity PTO Initiatives
Enhanced Patent Quality Initiative
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Post Grant Challenges
Source: PTO
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Post Grant Challenges
61%17%
22%
PTAB Filings By Industry (as of 3Q15)
High-Tech
Medical
Other
PTAB
Source: Unified Patents
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Post Grant Challenges
Source: Unified Patents
Through 3Q15: 43% NPE
~150 petitions/month, ~12% of unique litigated patents has been challenged in IPR
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Inter Partes Review
Petitions filed by 3/31/2015PTAB activity as of 10/19/2015 2694
SettledPre-InstitutionPost-Institution
687376311
25%55%45%
Institution DecisionsInstitutedNot Instituted (On Merits)
22611639622 (462)
84%73% (78%)27% (22%)
Adverse Judgments 96 4%
Final Written Decisions (updated to 10/31)
All claims unpatentableAll claims confirmed
63045386
24%72%14%
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Call: “Demand Letter Transparency”
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Demand Letter Reform
Source: Patent Progress
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Venue
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Concentration in E.D. Tex.
Source: Lex Machina
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Concentration in E.D. Tex.
Source: RPX
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Whither venue reform?
In re TC Heartland
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Dir. Michelle Lee, 2015 Santa Clara Bobblehead