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Tech companies turning to inter partes review for IP challenges

The new procedure allows challenges to go to the PTO rather than court

What if there was a way to fight contested patents without ever going to court? Using a new procedure called inter partes review created by the 2011 America Invents Act, your wildest dreams could become reality. And now, many top technology companies are beginning to hop on board with the procedure.

Inter partes review allows companies to bypass court proceedings, instead having their case heard by the U.S. Patent and Trademark Office (PTO). As InsideCounsel has previously examined, there are both positives and negatives to this type of system. But a little more than a year after the PTO originally started accepting petitions, technology companies are saying that the positives outweigh the negatives.

According to Bloomberg, companies such as Google Inc., NetApp Inc. and Oracle Corp., as well as smaller technology firms such as Rackspace Hosting Inc., are increasingly turning to inter partes review rather than court litigation. Lower costs are cited as one main reason for inter partes review, especially considering that a patent troll case can cost as much as $2.8 million on average if the case gets to trial.

“We are looking at the most cost-effective way of dealing with dubious suits,” said Doug Luftman, chief IP counsel of data-storage company NetApp, told Bloomberg. The Bloomberg report says that costs are cut in half on average when compared to court challenges, all the way down to $300,000.

However, there is a downside to this type of review. Inter partes review is limited to only challenges of prior patents and printed publications. A similar type of review, Post Grant Review, is more expansive in its scope, yet may only be filed nine months after the patent’s original issuance. In addition, according to Bloomberg, the PTO doesn’t automatically assume the patent is valid, taking more technical evidence (such as whether earlier inventions invalidate the patent) into account.

Decisions on whether a patent is valid under inter partes review is required within 12 months, shortening the time span of previous IP court rulings that could take years. Two cases have already been decided as of Oct. 3, and the office has stayed open during the government shutdown.

Assistant Editor

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Zach Warren

Zach Warren is Assistant Editor of InsideCounsel magazine, where he oversees online content submissions and administers InsideCounsel's enewsletters. Zach specializes in new media and multimedia...

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