For Taiwanese corporates developing critical technologies in the face of shifting global supply chains, the need to protect intellectual property assets has never been more pressing. The biggest IP-related drag on company operations remains the prospect of costly, high-stakes litigation in the U.S., where recent significant drops in patent case filings will be notable.

Increase in re-examinations to reduce uncertainty

While PTAB petitions are down overall, we have noted an increase in ex parte re-examinations, which occur when the USPTO re-examines patent applications due to substantial new questions of patentability. They rose 6.7% in 2023 versus 2022. One reason these proceedings are becoming more widespread is because they have got quicker, with it now typically taking less than 18 months from filing a re-examination request to the issue of a certification. In addition re-examinations do not create estoppel, while IPRs prevent petitioners from trying to invalidate patents in federal courts on grounds that could have been raised at the PTAB.

An additional consideration is that the Fintiv rule, which compels PTAB judges to deny IPRs on the basis that parallel district court cases will finish first, doesn’t apply to re-examinations. Re-examinations are also anonymous, unlike IPRs, and if someone loses an IPR, they can still go to the USPTO and request an ex-parte re-examination.

PTAB proposed rule changes

In April, the U.S. Patent and Trademark Office announced plans to change several rules impacting PTAB proceedings, including those around discretionary institution practices, petition word limits and settlement practices for America Invents Act proceedings.

The package of proposals includes limitations on both PTAB proceedings against patents owned by under-resourced inventors and challenges to patents that have previously had their validity upheld in U.S. District Courts or the PTAB. One proposed change expands the ability of PTAB judges to enter discretionary orders to deny patent challenges, while there is also a proposal to change petition word limits, potentially allowing additional word limits to be purchased by a petitioner. The USPTO hopes fewer parallel actions will be necessary if word limits are relaxed, permitting a more thorough discussion of a petition’s merits and potentially allowing a single petition to challenge more claims, and on more grounds.

The USPTO is also considering requiring a patent owner and a petition to affirmatively disclose parties that have any interest in the proceedings, including any ownership interest in the patent owner or petitioner, any government funding to the patent, any third-party litigation funding support, and any stake any party has in the outcome of the proceeding.
These proposed rule changes went out for consultation last year and we can expect that exercise to result in new rules sometime soon.

Outlook for case numbers

Looking forward, while the downward trend in patent filings in district courts is unlikely to continue, the same may not be true for PTAB actions. The number of patent portfolios that have made their way into the hands of patent-monetization entities in the past year will undoubtedly fuel an uptick. At the same time, as patent owners get access to new tools such as generative AI, which raises the prospect of patents and even pleadings being substantially drafted by AI, it will become cheaper and easier to get district court filings underway.

At the PTAB, however, we can expect filings to be flat or even continue on a downward trend, as the extension of discretionary orders hits volumes and efforts to reduce parallel actions lead to fewer cases even if there is no change in the number of patents being challenged.