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Use of Arbitration In Place of Inter Partes Review Proceedings

By David L. Newman

An inter partes review (IPR) might be more efficiently accomplished through arbitration than an IPR through a Patent Trial and Appeal Board (PTAB) proceeding, so it should be considered by practitioners. An IPR Arbitration process can be completed in less time and result in a binding decision. In response to the Supreme Court's SAS ruling that arguably has resulted in a more complex IPR system, litigants may substitute an IPR Arbitration to obtain a patentability ruling in a shorter, less expensive, and less complex manner.

Supreme Court: SAS Institute v. Iancu

The Supreme Court in SAS Institute v. Iancu, 584 U.S. ___, No. 16-969 (April 24, 2018), held that all claims asserted by an IPR petitioner must receive adjudication through a full PTAB review including a final ruling. As a result, in August the U.S. Patent and Trademark Office (USPTO) announced that in view of the SAS decision, fees for PTAB trials are to increase by roughly 25%. So the filing fee for an IPR filed in 2019 is likely to rise to nearly $20,000 (plus $18,750 Post-Institution fee, both up to 20 claims). The USPTO announcement noted that as a result of SAS, the PTAB will no longer be able to institute an IPR on less than all claims challenged in a petition, leading to the fee increase due to significant additional work for a given instituted IPR.

The SAS ruling effectively ended the PTAB's partial institution practice — which allowed only part of the claims originally challenged by a petitioner to be adjudicated. Many attorneys have predicted that SAS will increase the patent holder's expenses resulting from the requirement to defend all the asserted patent claims. Small to midsize companies and start-ups who could have mustered the resources to participate in an IPR pre-SAS might now be unable to participate fully in an IPR due to the increased filing fees and attorney's fees now required to withstand a more involved PTAB proceeding and even lengthier appeal.

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