High invalidation rates destroy pharma companies and result in investment chilling --- only 34.4% of pharma patents survive.

Even before the Federal Court of Appeals endorsed PTAB regarding its rules and procedures, 55 two years of IPR reporting have shown that IPRs are quite combative to patents.25 6 One study reviewing the first two years of IPR proceedings has shown that (1) USPTO institutes IPR petitions for at least one challenged claim 84% of the time, (2) USPTO institutes IPRs for all challenged claims 74% of the time, and (3) PTAB reached a final written decision, on the merits, and invalidated or disclaimed all instituted claims more than 77% of the time. 25 7 As of September 30, 2014, IPRs, on average, are filed at the rate of 75.1 per month, for a total of 1,841 IPRs filed in IPR's first two years.258 This IPR filing per month rate is six times the IPX filing rate in IPX's entire history.259 In total, IPRs in the first two years have nearly totaled the maximum number of IPX filings in IPX's thirteen-year history.260 In February 2015, PTAB "invalidated 93% of the claims from all industries that reached a final written decision." 261 In a new study that analyzed over four hundred final written decisions by PTAB from September 2012 through August 1, 2015, 88% of final written decisions resulted in at least one claim being invalidated; 21% of all final written decisions resulted in a complete patent invalidation; 82% of instituted IPRs result in final written decisions that result in some type of patent invalidation, thus "PTAB's first impression of the petitions strength appears to affect the entire proceeding and ultimate outcome."26 2 If IPRs are so effective in invalidating patents, the concern is that if an IPR invalidates a patented drug that is financially important to a pharmaceutical company, it could seriously deter potential investors from providing the funding that is needed to complete an NDA. These results could potentially destroy an entire business and thereby result in thousands of lost jobs. 26 3 In February 2015, it was reported that IPR challenge rates against biotech/pharmaceutical patents have tripled and the total number of IPRs already filed in 2015 (73 as of March 26) has exceeded the total number of combined IPRs filings against biotech/pharmaceutical patents from 2012 to 2014.264 During the 2015 fiscal year, 167 of the total 1,897 AIA petitions have been petitions to challenge bio/pharma patents. 265 That is an increase from the 2012-2014 combined totals of 111 petitions. 266 Pharmaceutical companies alone have filed a combined total of 115 IPRs. 267 Broken down further, of the bio/pharma petitions filed in the past three years: 45 IPRs were filed in 2013, 91 IPRs were filed in 2014, and 176 were filed in 2015, a yearly increase. 268 With respect to bio/pharma IPRs: 51 are not yet decided, 61 have fallen under the settled/dismissed category, and 193 have been instituted on the merits.269 However, PTAB is less likely to institute a bio/pharma petition, holding a 61% institution rate compared to 72% all other tech challenges.27 Even if instituted, bio/pharma claims are more likely to survive than any other technical field.271 Their survival rate is still low because bio/pharma patents have a 34.4% survival rate compared to the 13.4% survival rate in all other technical fields.272 This is because pharmaceutical drugs are seen as the "unpredictable arts," and thus patent owners can argue more effectively to save the patent.273 In 2016, PTAB began issuing its first PGR final decisions. 274 This means an increase in bio/pharma challenges by both IPR and PGR. 275 In 2016, IPR and PGR institution rates have increased. 276 Examining a combined 254 IPR and PGR decisions against bio/pharma patents, PTAB instituted these petitions 65.7% of the time.277 On all other patents, institution rates have been at 66.8%. Institution rates are understood to mean one, more, or all of a patent's claims will likely be invalidated, which means a win for the patent challenger. 278 In contrast, an IPR petition that is not instituted means the patent is strong and it is a win for the patent holder.