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IPR Appeals: Pendency And Success Rates At Fed. Circ.
February 8, 2017, 12:19 PM EST
Law360, New York (February 8, 2017, 12:19 PM EST) --
Kerry S. Taylor
Daniel A. Kamkar
In our first article, we analyzed how the Patent Trial and Appeal Board treated inter partes reviews that were remanded from the Federal Circuit. In this article, we provide an analysis of each IPR appeal decided by the Federal Circuit in 2016, along with statistics on the timing and success rates of those IPR appeals.
Inter partes reviews are designed to quickly and efficiently settle patent validity disputes on novelty and obviousness. The timing for IPR proceedings is set forth by statute. Therefore, the overall time to reach a final written decision on validity is highly predictable — it takes approximately 18 months from the filing of an IPR petition to reach a final written decision. Either party may appeal the final written decision to the Federal Circuit. The overall time to reach a decision by the Federal Circuit is not strictly controlled, and the timing varies from case to case. Litigants entering into IPR proceedings often need to determine the total amount of time through appeal that the proceeding will be pending.
To help litigants forecast the amount of time an IPR appeal will take, we analyzed each IPR appeal decided by the Federal Circuit in 2016, and compiled statistics on the timing and success rates of those IPR appeals. In summary, it took an average of 15.4 months to reach a Federal Circuit decision after conclusion of an IPR proceeding, and the Federal Circuit affirmed 75 percent of IPR final written decisions. The details of our empirical study are provided below.
Figure 1
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Figure 1 shows the pendency distribution of all appeals that were the subject of Federal Circuit decisions in 2016 (written opinions and Rule 36 summary affirmances) on an appeal of an IPR’s final written decision. This pendency period describes the time it takes the Federal Circuit to issue a decision on an appeal once the matter leaves the hands of the PTAB. Pendency in this study is measured by the time between a Federal Circuit decision and the later of the PTAB’s corresponding final written decision or decision on rehearing if requested.[1]
On average the Federal Circuit took 15.4 months to publish a decision. The standard deviation of pendencies was 3.3 months. There was a 68 percent probability that a decision would issue within 12.1 and 18.7 months, and a 95 percent probability that a decision would issue within 8.8 and 22.1 months. Additionally, the shortest and longest pendencies in 2016 were 8.5 and 23.5 months, respectively.
The average time period between a PTAB final written decision and a PTAB decision on rehearing (not shown) was 2.7 months. This means that if a rehearing is requested at the PTAB, a party will have to wait on average 18.2 months after a PTAB final written decision before the Federal Circuit’s decision. In 2016, all PTAB decisions on rehearing were denials of the request.
Figure 2
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Figure 2 shows the distribution of pendencies for 2016 Federal Circuit decisions divided into written opinions (blue lines) and Rule 36 summary affirmances (green boxes). On average the Federal Circuit took 17.2 months to issue a written opinion. The standard deviation of written opinion pendencies was 3.4 months. There was a 68 percent probability that a written opinion would issue within 13.8 and 20.5 months, and a 95 percent probability that a written opinion would issue within 10.4 and 23.9 months. The shortest and longest pendencies of 2016 were 8.5 and 23.5 months, respectively.
On average the Federal Circuit came to a decision 3.3 months more quickly for Rule 36 summary affirmances, issuing them on average in 13.9 months.[2] The standard deviation of Rule 36 pendencies was 2.3 months. There was a 68 percent probability that a Rule 36 summary affirmance would issue within 11.5 and 16.2 months, and a 95 percent probability that a decision would issue within 9.2 and 18.6 months. Additionally, the shortest and longest lead times of 2016 were 8.5 and 20.0 months, respectively.
If a rehearing is requested at the PTAB, a party will have to wait on average 19.8 months after a PTAB final written decision before a Federal Circuit written opinion, and 16.6 months before a summary affirmance.
Figure 3
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Figure 3 shows the average pendency for Federal Circuit decisions from each month of 2016. Although there is an expected month-to-month variability throughout the year, the Federal Circuit’s average pendency each month generally kept around the 15.4 month average with a slight, yet statistically insignificant, upward trend later in the year. This figure shows that the Federal Circuit is maintaining its timing for handling IPR appeals to a fairly constant period, with no significant indication that backlogged cases are increasing delays.
Figure 4
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Figure 4 shows the results of the 99 panel decisions from the Federal Circuit in 2016 that ruled on an IPR final written decision from the PTAB (en banc decisions and appeals from the PTAB without final written decisions were excluded). In 53 percent of the decisions, the Federal Circuit affirmed the PTAB’s final written decision by a summary affirmance under Rule 36, and 22 percent of the time the Federal Circuit affirmed by a written opinion. Thus, 75 percent of appeals were affirmed. Only 3 percent of the Federal Circuit’s decisions reversed a PTAB’s final written decision and took the matter out of the PTAB’s hands. The remaining 22 percent of the time, the Federal Circuit remanded the case back to the PTAB in some way: 6 percent (about a quarter of the remaining 22 percent) vacated and remanded the entire final written decision, and 16 percent (about three quarters of the remaining 22 percent) were mixed decisions vacating and remanding part of the final written decision. Of these mixed decisions, 94 percent also partially affirmed the PTAB’s final written decision.
This shows that litigants pursuing an appeal in the hopes of reversing the outcome of the PTAB’s decision met little success in 2016 (75 percent full affirmance versus 3 percent full reversal), and even mixed outcomes are typically affirmed in part. If this trend continues into the following years, future IPR appeals will continue to have low likelihoods of success. Even when the Federal Circuit does find fault with a PTAB decision, litigants typically have to face the PTAB again for at least a partial rehearing. With these outcomes, IPR litigants must understand that an appeal to the Federal Circuit will likely either uphold the PTAB’s decision or extend litigation on at least some issues at the PTAB.
Conclusion
An IPR litigant can expect to wait an average of 15.4 months before the Federal Circuit comes to a decision. The Federal Circuit issues summary affirmances by Rule 36 in around 13.9 months, while written opinions take longer at around 17.2 months. If a rehearing is requested at the PTAB, the average pendency of all decisions is extended to 18.2 months. Furthermore, in 2016 the Federal Circuit affirmed 75 percent of the PTAB’s final written orders from IPR appeals, with 22 percent affirmed by written opinions and 53 percent by Rule 36 summary affirmances.
These results demonstrate that an IPR proceeding that goes to appeal will take roughly 2.5 to 3 years to complete, but the Federal Circuit will typically leave the PTAB’s final written decision intact. The results of the empirical study presented in this paper should allow litigants to better forecast the likely timing and success rates for future Federal Circuit appeals of IPR final written decisions.
—By Kerry S. Taylor and Daniel A. Kamkar, Knobbe Martens Olson & Bear LLP
Kerry Taylor, Ph.D., is a partner in the San Diego office of Knobbe Martens and leads the firm’s efforts in IPR in the life sciences, biotechnology and chemical industries. Daniel Kamkar is an associate in the firm's San Diego office.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
[1] A party may request rehearing of an adverse final written decision. This is a request for the PTAB to reconsider its decision. If such a request is made, the timing for appeal to the Federal Circuit begins upon the PTAB’s issuance of a decision on the request for rehearing.
[2] The Federal Circuit issued Rule 36 summary affirmances of IPR decisions an average of six days after hearing oral arguments.
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