Patent Law News + Insights

How to Strengthen Your Patent Portfolio Against “Preemptive Strike” IPR Challenges

October 26, 2017

When the America Invents Act (AIA) came into force in 2012 and 2013, it introduced a new USPTO procedure called inter partes review (IPR). This procedure basically allows anyone to preemptively challenge an issued patent before the United States Patent and Trademark Office (USPTO).

Since the IPR process was introduced, many high-tech business owners have grown concerned about whether the new IPR process makes it easier for larger, cash-rich companies to sabotage the patent portfolios of their smaller competitors.

These concerns are understandable, especially if you have limited resources to defend your issued patents against IPR challenges. With that in mind, we’ll first break down how IPRs have affected the patent process, and then lay out the steps you can take to strengthen your patent strategy in the IPR era.

Chances of overcoming an IPR challenge

Defending your patent against an IPR is a very expensive process — and based on statistics published by the USPTO, at least one claim in each challenged patent is invalidated in the vast majority of IPR proceedings.

Whether you’re the patent challenger (the “petitioner”) or the patent owner, the cost of taking an IPR through trial can run upwards of $300,000 — much more expensive than the cost of getting a patent in the first place, by at least an order of magnitude.

In addition to being incredibly costly, the IPR process is generally viewed as more favorable to petitioners than patent owners.

This is mainly because IPR petitions are heard by the Patent Trial and Appeal Board (PTAB) at the USPTO, not by a district court. Importantly, this means your patent will be interpreted more broadly in an IPR proceeding (and will therefore be easier to invalidate based on prior art) than if you had enforced it in district court litigation.

In other words, even if you have a moderately strong patent that would survive challenges in district court litigation, you may still be vulnerable to a successful challenge before the PTAB.

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How IPRs have affected patent litigation

Before IPRs were introduced, a competitor had a very limited ability to invalidate your patent unless you’d tried to enforce your patent against them first.

In the past, if your competitor was aware of your patent but you hadn’t yet threatened to enforce it against them, they typically had only two good options:

  1. Design around your patent and potentially create an inferior product.
  2. Risk infringing your patent and be prepared if and when you decide to enforce your patent through legal action. This option comes with enormous uncertainty: The infringing party may need to spend millions in attorney fees to defend themselves in district court — and if infringement is found, they may have to pay you millions more in damages.

But in today’s IPR era, the competitor has a much more powerful option: Preemptively invalidate your patent before you ever enforce it, making it more expensive for you to maintain patent protection.

In fact, a bigger company with cash resources could potentially drain a smaller competitor’s resources, or drive them to surrender their patents, by forcing the smaller company to defend their patents against IPR challenges.

A bigger company also faces much less risk in filing a preemptive IPR against a smaller competitor:

  • The patent owner can’t file counterclaims of patent infringement in the IPR proceeding.
  • The bigger company is less likely to be countersued for infringement, because the smaller company often won’t have the resources to initiate separate district court litigation.

Thanks to the IPR process, a bigger company has a much faster and more viable path to challenging its competitor’s patents. This allows them to resolve the question of validity earlier — and often at a lower cost.

How do IPR challenges affect our patent strategy?

Many early-stage tech companies file patents with shallow claims and poor accounting for prior art. That’s because they’re filing simply for the sake of having a patent, they have limited resources, or they might not fully understand the importance of thorough patent protection.

To strengthen your patent strategy against IPRs, you should build a broad, diverse patent portfolio that disincentivizes preemptive IPRs by competitors.

1. Building a broad patent portfolio

Back in “the good old days,” it may have been possible to build a business around a single patent or patent family. In other words, you could have a small, targeted portfolio of patents to scare away competitors — or at least, force them to design around your patents.

But under the IPR process, a small portfolio is easily challenged. In particular, the entire portfolio could be wiped out through one or two IPRs. For example, a particularly bloodthirsty competitor could use the IPR process to drain a startup of resources or destroy their patent portfolio, putting them out of business.

So if you’re entering a competitive field, you’ll want to have enough issued patents that, even if a competitor could take out a couple via IPR, they would still be facing a veritable minefield of other patents.

If your competitors realize that they can’t use IPRs to remove you from the market, they’ll be more open to cross-licensing or other collaborations.

2. Building a diverse patent portfolio: Include meaningful claims

Your patent application should include a diverse range of claims.

  1. Include independent claims of varying scope:
    1. Broad claims help you establish that a competitor has infringed
    2. Narrow claims help you defend against challenges to validity
  2. Include a variety of meaningful dependent claims covering valuable embodiments
  3. Utilize means-plus-function claim language more often to cover the specific embodiments in your patent application and equivalents

If your application is thorough and includes a variety of broad and narrow claims, it’s much harder for a competitor to knock out your entire patent application with a single IPR because, for example, IPR petitions have a page limit of 60 pages. The prospect of paying for multiple petitions to challenge all claims, or of only being able to challenge some claims, may help deter potential IPR challengers.

3. Building a diverse patent portfolio: Account for prior art

Your patent application should also thoroughly account for prior art.

  • Conduct a thorough prior art search that includes all public sources of information — not just published patent applications and issued patents.
  • Provide substantive arguments in your prosecution history for any particularly close references.

By documenting and addressing all known prior art, you may be able to diffuse IPR challenges at an early stage by showing that any issues raised were already considered during prosecution.

Developing a smart strategy for navigating prior art obstacles

In the IPR era, building a broad and diverse portfolio is a critical investment in your business’s future.

But even if you've taken all precautionary measures, it's still possible for you to encounter unforeseen obstacles, such as unexpected prior art. That's why we've put together a FREE eBook, "Prior Art and the Patent Process," that discusses how unexpected prior art could affect your patents and applications — and what you can do to minimize your risks. Download it now!

prior art and the patent process

POSTED IN: Startups, Patent Prosecution, All Posts

Michael Henry

Michael Henry is a principal and the founding member of Henry Patent Law Firm PLLC. Michael specializes in creating comprehensive, growth-oriented IP strategies for early-stage companies who are developing emerging technologies.

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