USPTO Data Supports Notion That Filing A Patent Owner Preliminary Response May Raise the Likelihood of Denial of an IPR or CBM Petition

Following the filing of a petition with the Patent Trial and Appeal Board (PTAB) seeking to initiate either an Inter Partes Review (IPR) or Covered Business Method (CBM) Review, the patent owner may file a preliminary response addressing the arguments in the petition and also potentially raising arguments regarding statutory bars that may prevent the IPR or CBM proceeding from being initiated. The filing of a Patent Owner Preliminary Response (POPR) is optional and, in fact, has for some years not been filed in almost 20% of cases. There are a number of reasons a patent owner may choose not to file a POPR including pending settlement or a reluctance to hint to the PTAB the arguments that will be made in the patent owner response. But, as discussed below, statistics released by the PTAB suggest that filing a POPR may be a good idea for patent owners because there appears to be a correlation between the rate of filing of POPRs in IPR and CBM proceedings and the rate in which petitions for IPR or CBM are denied. Further, while the data suggests that IPR denial rates are closely tied to POPR filing rates, the data suggests that the denial rate of CBM petitions is increasing at a much higher rate than the increase in the POPR filing rates in those cases. This suggests that other factors may be at play with respect to the decreasing rate of CBM institutions.

With respect to the correlation between POPR filing rate and institution rate in IPR proceedings, according to the below data released by the PTAB, in fiscal year 2014, a POPR was filed in response to about 80.4% of IPR petitions. This proportion rose to about 85.6% in fiscal year 2015, but has dropped to about 84.9% so far in fiscal year 2016 (*as of January 31, 2016).

This rise and fall of the proportion of IPR cases in which a POPR is filed reflects a similar rise and fall of the number of denials of IPR petitions over the same time period. For example, according to the below data, also released by the PTAB, in fiscal year 2014, IPR petitions were denied in about 25.2% of cases. This number rose to about 31.7% in fiscal year 2015, but dipped to about 30.6% thus far in fiscal year 2016.

The below chart tracks the change in rate of filing of POPRs in IPR cases against the rate of denial of IPR petitions over the same time period. Interestingly, a change in the rate in which POPRs are filed appears to closely track the change in the rate at which IPR petitions are denied. This suggests that a change in the rate of IPR denials is closely related to the rate of POPR filings, and further supports the conclusion that filing a POPR in response to an IPR petition will increase the chances of denial of that petition.

The rate of POPRs filed in response to CBM petitions also reflects the rate of denials of CBM petitions over the same time period. For instance, according to the data released by the PTAB, in fiscal year 2014, POPRs were filed in about 86.5% of CBM cases. This number rose to about 92.7% in fiscal year 2015 and, thus far in fiscal year 2016, the number is 100%.

This continuous rise in the rate of POPRs filed in CBM cases reflects a similar continuous rise in the rate of CBM petition denials over the same time period. For example, in fiscal year 2014, CBM petitions were denied in about 24.5% of cases. This proportion rose to about 29.8% in fiscal year 2015, and, thus far in fiscal year 2016 sits at 59.0%.

The below chart tracks the change in rate of filing of POPRs in CBM cases against the rate of denial of CBM petitions over the same time period. But, as the below chart shows, the number of CBM petition denials has increased at a much higher rate than the rate of filing CBM POPRs since the beginning of 2016.

While this data does not keep track of all variables that may affect the outcome of petitions for IPR or CBM review, at least two conclusions may be drawn: (1) it is still likely a good idea for patent owner to file a preliminary response in both IPRs and CBMs as an increase in the rate of filing POPRs seems to correlate to an increase in petition denial rates, and (2) there appears to be another factor in play that is causing a further increase in the rate of CBM petition denials possibly independent of whether or not a POPR was filed in those cases.

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