IPRs are efficient---they adopted the default standard for reviews, facilitates higher quality patents, and hires expert judges.

PTAB has also been increasingly cautious about whether to institute trials in the first place. Since the beginning of IPR, the rate at which the PTO institutes trials in response to petitions is significantly lower than it was under IPX and it has been declining: In 2016, it was at 67 percent, down from 87 percent in the first year of IPR and roughly 90 percent under the IPX regime.

Standing

A second benefit of IPR is that it does not have the same standing requirements as district court litigation. Any interested party can petition PTAB for IPR of a patent it thinks is invalid—even if that party has not been accused of infringement.

Claim construction

Claim construction, an essential first step in any challenge, is the process by which a patent owner makes clear what he or she thinks is the scope of the claims in the patent. Often, the fate of a claim depends upon how narrowly it is constructed. Overly broad claims are likely to run afoul of the novelty and nonobviousness requirements.

One of the most notable properties of IPR is the difference in how claims are interpreted. Prior court decisions compose the basis for the creation and sustenance of the type of patent claim construction employed in IPR. An important case to consider in this regard is Markman v. Westview Instruments, in which the Supreme Court held that claim construction was a question of law to be determined by judges. The unanimous opinion argued that: “judges, not juries, are the better suited [actor] to find the acquired meaning of patent terms.” This is the origin of “Markman hearings,” or those held to construe patent claims prior to trial in district court.

In a later decision in Phillips v. AWH Corp., the U.S. Court of Appeals for the Federal Circuit held that terms in patent claims should have their meanings interpreted in the context of the patent itself.  Extrinsic evidence may be used—such as dictionaries, scholarly articles and expert testimony—but these must be of secondary importance to the intrinsic evidence.

The most notable feature of claim construction in IPR is the use of the “broadest reasonable interpretation” (BRI) standard, rather than the “ordinary and customary meaning” standard used by the district courts in claim construction. This difference has generated much discussion. Central to PTAB’s application of BRI is the Supreme Court’s 2016 decision in Cuozzo v. Lee, which upheld the USPTO’s ability to use BRI in patent re-examination. The court specifically cited the positive incentives this practice creates and noted that: “use of that standard encourages the applicant to draft narrowly.”

Since ambiguous or overly broad claims often form the basis of abusive litigation, the BRI standard calls for patent holders to clarify the scope of their patents to other inventors and the public. This facilitates the direct rejection of overly broad claims and encourages higher-quality patents in the future.

The AIA does allow for patent holders to petition to amend claims during the trial and provide substitute claims that PTAB could institute if the originals are found to be invalid. This can produce a narrower patent without completely invalidating it. In practice, however, PTAB has been reluctant to accept such petitions. Only 5 percent of motions to amend have been even partially granted. However, the Federal Circuit is currently considering a case that could open up the door to more amendments.

Standard of review

In Teva v. Sandoz, the Supreme Court ruled that district court decisions about the facts underlying claim construction are questions of fact, rather than of law, and are, therefore, entitled to significant deference from the Federal Circuit, which should not consider the issues de novo. Instead, the Federal Circuit should only reverse the lower court’s decision on those underlying facts if it clearly violates Federal Rule of Civil Procedure (FRCP) Rule 52(a). The Federal Circuit has applied Teva to decisions from PTAB and the district courts. Thus, PTAB decisions with regard to claim construction are reviewed under the Teva standard and the Federal Circuit treats PTAB’s claim construction decisions as partial questions of fact, rather than of law.

For this reason, when IPR decisions are appealed, they are usually upheld. In 2017, Christopher A. Suarez’s study for the American Bar Association found that the Federal Circuit has affirmed 82 percent of IPR decisions. As such, the PTAB has continually adapted to the Federal Circuit’s concerns regarding rulings, thereby decreasing the chance of successful appeals moving forward. As of June 2017, the Federal Circuit had 616 pending cases from the USPTO. In recent years, PTAB has instituted about 1,000 cases.

Standard of proof

District courts use the “clear and convincing evidence” standard to invalidate a patent claim. This standard requires that the evidence must show that invalidity is substantially more likely than not. However, IPR uses a “preponderance of the evidence” standard, which requires merely that the plaintiff show that more than half the evidence points to invalidity. Incidentally, this is the default standard for civil cases. It is preferred for IPR because of the limited scope of the inquiry, as well as the PTAB’s expertise.

Stay of litigation pending IPR

Finally, while district court proceedings can occur alongside an IPR, judges in many districts generally stay litigation pending the outcome of the IPR proceeding. A notable exception is the Eastern District of Texas—the favorite court of patent owners who file lawsuits—which had the lowest rate of IPR-based stays in the nation. But this may be subject to change, due to the Supreme Court’s recent decision in TC Heartland LLC v. Kraft Foods Group Brands LLC, in which the court ruled a patent may only be litigated either in the district where the defendant was incorporated or where the infringement occurred.

This system also allows complex questions of obscure prior art to be adjudicated by expert administrative patent judges, rather than unskilled juries.