SCOTUS Ruling Increases IPRs in May 2018

SCOTUS Ruling Increases IPRs in May 2018

In May, we posted about the Constitutionality of IPRs after the Supreme Court upheld the United States Patent and Trademark Office’s inter partes review process, ruling that it doesn’t violate Article III of the U.S. Constitution or the Seventh Amendment. Following the ruling, patent review filings surged that month.

According to Bloomberg Law, their data shows accused infringers filed 159 petitions with the USPTO challenging the validity of issued patents. By comparison, 88 petitions were filed in April — accounting for a 25 percent jump in May. Bloomberg notes that the last time there was a notable increase was in 2017.

“May [2018] filings were the highest since the patent office received 195 petitions in June 2017, when the Supreme Court agreed to hear Oil States Energy Services., LLC v. Greene’s Energy Group, LLC.”

This high number of petitions also coincided with the Supreme Court upholding that the board’s review system was constitutional.

IPR was established in 2011 with the passing of the America Invents Act, offering a quicker (usually not lasting more than a year and a half), far more inexpensive (hundreds of thousands of dollars compared to millions) way of solving disputes than through court litigation. Bloomberg notes the controversy over whether the process is equally fair to patent owners and alleged infringers alike continues.

As the IPR filings increased in May, patent complaint filings in district courts decreased. Again according to Bloomberg Law data:

“Patent infringement lawsuits totaled 269, down 20 percent from April and 23 percent from May 2017.”

Bloomberg also provided stats for patent complaints filed at the nation’s top venues.

The District of Delaware notched 79 complaints in April, then dipped to 66 in May. The second top venue, the U.S. District Court for the Eastern District of Texas, received 51 complaints in May. Bloomberg notes:

“Patent complaints shed light on the shakeout following the U.S. Supreme Court’s ruling in TC Heartland LLC v. Kraft Foods Group Brands LLC. The May 2017 decision said plaintiffs must file lawsuits where a defendant resides or is incorporated, not just where it makes a sale.”

Have you ever wondered why so many patent cases are in the Eastern District of Texas and the District of Delaware? Venue selection for patent cases is all about where the corporate defendant “resides,” and there’s a history of statutes and case law that has defined just what “resides” means. Amendments in 1988 and the VE Holding case in 1990 broadened the patent-specific definition from where a company was incorporated or where it had established business and committed infringement to where the defendant was subject to personal jurisdiction. Since most corporations sell products on a national scale, then any district becomes a venue option in which plaintiffs may initiate their patent suit. After VE Holding, plaintiffs began gravitating to districts like the Eastern Texas and Delaware, where local rules work in their favor and are perceived as “plaintiff-friendly.”

For a review of the amended rules in the Eastern District and a refresh on TC Heartland, click here.

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