If you are asserting or defending against a patent, here are key points on “Inter Partes Review (IPR) of Patents” as presented to Chicago Bar Association.

The Leahy-Smith America Invents Act of 2011 (AIA) created new post-grant patent invalidation procedures including Inter Partes Review (IPR) by the Patent Trial and Appeal Board (PTAB) in the U.S. Patent and Trademark Office.

The threat of an IPR petition is very real. About 3 of every 4 IPR petitions are being granted, and new IPR petitions are being filed at a rate of over 100 per month.

As of January 15, 2015, a total of 617 IPR petitions have been terminated, according to Patent Office statistics. Petitioners sought review of 9,048, or almost half, of the 20,206 claims presented in the challenged patents.

IPRs have a high knockout rate

Trial was instituted on over 6,114 claims, or about two-thirds of the claims challenged. At the end of the day, 2,176 claims, or about a third of those reviewed, were found by the PTAB to be unpatentable. Another 893 claims were cancelled or disclaimed by the patent owners. Just over half of all claims for which trial was instituted are no longer in force. That’s a high knockout rate.

The most important take-away for innovators is this: It isn’t enough to file just any patent application and to prosecute it in an ordinary way. Instead, the new goal is to obtain issuance of an IPR-proof patent. This means preparing and filing better, more fully supported patent applications. It means conducting a thorough search of the prior art, and drafting claims that distinguish over the art. It means investing more in each patent.

Junk patents are going down. Strong patents—those that can survive IPR—are golden. Challengers who fail in instituted IPRs will have few defenses in court.

Innovators: Get an IPR-proof patent

In the new world of IPRs, patent owners must be cautious in asserting their patents even against blatant infringers. When they file patent infringement complaints in court, they should expect their patents to be challenged in IPRs. Here’s a word to those who would hope to save their patents in the IPR by moving for leave to amend claims: Fuggedaboutit! Most motions to amend are denied.

For the accused infringer,  instead of routinely defending in district court, consider an IPR. There is a cost—minimum Patent Office filing fees start at $23,000—and fees for attorneys and experts are many multiples more. An IPR costs less than a district court case, and it can be concluded faster, in about 18 months from start to finish.

To the IPR petitioner: Your petition is your trial. In that petition, you must present your entire best case-in-chief, including written expert testimony in form of a declaration and claim charts based on one or two best prior art references. If you leave anything out, there will be no opportunity to remedy the deficiency, yet there is no place for “second best” arguments, which the PTAB will disregard as “redundant.”

Challengers: Your petition is your trial

For both parties: Thorough preparation with the support of experts is essential. Start early and allow plenty of time.

With the advent of IPRs, district court patent litigation has cooled. Many district court cases are stayed pending resolution of IPRs, but accused infringers can’t count on it—they may find themselves prosecuting IPRs in the Patent Office even while defending themselves in district court. Moreover, even a successful IPR may fail to dispose of all issues. Settlement between the parties does not assure that the PTAB will terminate the IPR—they are empowered to proceed with the IPR and to knock out patent claims even after settlement.

PTAB rules must be followed to the letter in an IPR. Motion practice and trials are very different from anything you’ve ever seen in district court or in the Patent Office. I know from personal experience: I have successfully petitioned and obtained institution of trial on all 33 claims for which I sought review. I also have mediated an IPR case that was fully briefed and ready for oral hearing.

In sum, IPRs are a fast and effective way to invalidate overbroad patents. Today’s patent owners and their competitors should conduct themselves accordingly.

For more, see my new slide presentation on Inter Partes Review of Patents, as presented to the Chicago Bar Association, or contact me directly.