Recent Statistics Show PTAB Invalidation Rates Continue to Climb
“Since 2021, the invalidation rate has been increasing and is currently at 71% for the first two quarters of 2024. In 2023, all challenged claims were found invalid 68% of the time. These are daunting statistics for patent holders.”
The invalidation rate of patents in America Invents Act (AIA) proceedings, such as inter partes reviews (IPRs), has been high since the inception of the PTAB. Just one year into the AIA, Chief Judge Randall Rader famously referred to the PTAB as a “death squad” at the 2013 American Intellectual Property Law Association (AIPLA) annual meeting because the invalidation rate was so high.
This article focuses on the “total invalidation” rate where all challenged claims are found invalid such that the patent is effectively killed off. (For convenience, we refer to “invalidation” with the understanding that the PTAB adjudicates claims as “unpatentable”).
Of course, not all petitions result in institution, and the U.S. Patent and Trademark Office (USPTO) is correct when it points out that invalidation rates are lower when the rate of institution (currently about 67%) is factored in. Still, most petitions result in institution. Additionally, many patents are subjected to multiple petitions over time so they eventually will be subjected to a full AIA trial. This article focuses on what happens when AIA trials are conducted and final written decisions are issued.
Early PTAB Invalidation Rates
In the first two years of AIA proceedings, the PTAB found all challenged claims to be invalid 77% of the time. The institution rate was 84%. See Inter Partes Review: An Early Look at the Numbers, Brian J. Love and Shawn Ambwani, University of Chicago Law Review, Vol. 81, 93-107, at 94 (2017). (Note: The PTAB statistics page starts with FY2015).
In this timeframe, the conventional explanation for the high invalidation rate was that the PTAB was “weeding out” the most egregiously invalid patents that should never have issued. Many commentators postulated that over time the invalidation rate would come down and approach something of an equilibrium where the rate of invalidation would be relatively constant over time.
That hypothesis has not borne out because total invalidation rates have remained high, at least over the last several years. Additionally, the total invalidation rate has not been steady; instead, it has significantly changed over time.
PTAB Invalidation Rates Since 2015
The PTAB’s total invalidation rate has fluctuated considerably since 2015, as illustrated in the graph below:
Source: www.uspto.gov/patents/ptab/statistics (see Outcomes by Petition).
The figures are computed based on the outcome of final written decisions when there has been an institution. “Total claims invalidation rate” means the percent of final written decisions where all challenged claims are found unpatentable.
In 2015, the total invalidation rate was 72%. From 2015 to 2019, the total invalidation rate fell steadily to 55% by 2019.
However, since 2021, the invalidation rate has been increasing and is currently at 71% for the first two quarters of 2024. In 2023, all challenged claims were found invalid 68% of the time. These are daunting statistics for patent holders. They mean that if there is an institution, all challenged claims will be found invalid about 70% of the time.
The unavoidable question: Why is the rate of invalidation so high?
Most would agree that the patent examination process has improved over the last decade. Additionally, the Alice decision and its application by the examining corps has reduced the percentage of weak “business method” patents and other vague patents finding their way into the patent marketplace.
Still, we are confronted with this fundamental fact: At one end of the pipeline, we have the USPTO examining corps examining applications and issuing patents. At the other end of the pipeline, another body in the USPTO is finding all challenged claims of patents invalid over 70% of the time when the patent is reviewed. Something seems awry from a systems perspective.
The Significant Variation in Invalidation Rates Over the Years is Problematic
The invalidation rate has not settled into a steady-state average rate within some statistical bounds, as most expected. From 2019 to 2024, the invalidation rate increased from 55% to 71%–a drastic change over a relatively short period of time.
This increase cannot be explained away as a statistical anomaly, because each year well over 1,000 petitions are presented, meaning that the data set is robust. We are not witnessing statistical “noise.”
The increase cannot be explained by changes in the law. The law of obviousness today is much as it was 10 years ago. Also, the PTAB moved from a broadest reasonable construction standard to the Phillips standard in late 2018, which should have reduced the invalidation rate somewhat. It has not.
Contrast the changing rate of invalidation in PTAB proceedings with the affirmance rate of the PTAB in ex parte appeals. The affirmance rate in ex parte appeals ranged between 55.9% and 59.8% between 2019 and 2024, a spread of less than 4%, while the invalidation rate of IPRs had a spread of 16%.
The affirmance rate in ex parte appeals (blue line) is noticeably flat compared to invalidation rates for IPRs (red line):
See www.uspto.gov/patents/ptab/appeals-and-interferences-statistics-page
The fluctuation in the invalidation rate at the PTAB over time should be a concern for all stakeholders.
We again have the “why” question: Why has the total invalidation rate at the PTAB increased by 16% over the course of five years?
Closing Thoughts
When the AIA was passed, few people foresaw that the PTAB would end up invalidating all challenged claims in patents 60-70% of the time. Further, it is extremely surprising that the invalidation rate of the PTAB has varied so much over the years, increasing from 55% to 71% over the last five years.
The significant fluctuation in the PTAB’s invalidation rate over time is the most troubling statistic, and there is no ready explanation that accounts for it. But it is not a sign of health for the AIA’s post-grant review system, and it needs to be addressed, whether that comes in the form of internal USPTO policy adjustment, rulemaking, or legislative reform.
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Author: kentoh
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