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The Surging Tide of AIA Review Appeals

The America Invents Act (AIA) of 2011 ushered in a new era for the Court of Appeals for the Federal Circuit, introducing 3 new post-grant administrative proceedings that are conducted before the U.S. Patent Trial and Appeal Board (PTAB) and appealable to the Federal Circuit.  The proceedings introduced by the AIA include the inter partes review (IPR), covered business method (CBM) and post-grant review (PGR).

On February 15, 2015, the Federal Circuit issued its first opinion in review of a PTAB decision as it decided In re Cuozzo Speed Technologies, LLC—opening the gates for review of similar PTAB decisions. During this initial period of PTAB review, Rothwell Figg has analyzed each relevant decision made by the Federal Circuit in order to better understand how the Federal Circuit is reacting to PTAB decisions. Despite the relatively small sample size of cases, some interesting statistics are present.  As of June 1, 2016, the Federal Circuit has issued 110 decisions in review of PTAB post-grant proceedings.  Of these decisions, eighty-seven cases were affirmed, yielding an affirmance rate of 81%.  Another eight cases (7%) were dismissed, meaning that nearly 90 % of the PTAB’s decisions have remained intact.  While this era of review for the Federal Circuit is still presumably in its early stages, it is clear that the Federal Circuit is giving great deference to the PTAB decisions.  In its review of PTAB decisions, the Federal Circuit has generated forty-nine opinions (45%) and issued thirty-one precedential decisions (28%).  It will be interesting to note whether these trends continue as the workload for the Federal Circuit is expected to continue growing.

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Not surprisingly, the number of AIA trial dispositions has grown in a rather significant fashion over the past few years.  In FY 2014, over 1,300 IPR petitions were filed that created appellate jurisdiction for the Federal Circuit.  In FY 2015, the number of IPR petitions filed jumped to over 1,700.  For perspective, only 514 IPR petitions were filed in FY 2013. As of April 30, 2016, more than 850 IPR petitions have been filed for FY 2016.  As this wave of reviews continues, it will be interesting to analyze the exact ramification that it has on the Federal Circuit, with eighteen Federal Circuit judges reviewing the work of more than two hundred and fifty Administrative Patent Judges. As one would expect, the significant increase of post-grant administrative proceedings has led to an increase in cases appealed to and decided by the Federal Circuit, as it has issued sixty-two decisions in 2016 alone.

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While there is a noticeable increase in the workload of the court as it relates to PTAB cases, the affirmance rate and the rate of issuing precedential decisions has remained steady. Of the sixty-two decisions in 2016, the Federal Circuit has affirmed forty-eight (an affirmance rate of 77%), while seventeen decisions (27%), have been designated as precedential. When broken down by month, the increased workload becomes even more evident. Each successive month of 2016 saw an increase in the docket size of PTAB reviews.  In fact, eighteen cases were decided in May 2016, which was more than the first five months of 2015 combined.  Due to the varying number of cases each month, it is difficult to find a trend in monthly affirmance rates; however, it is noteworthy that in May 2016, the court had an 89% affirmance rate.  It is yet to be seen if the continual influx of cases will lead to a higher affirmance rate, similar to the rate seen in May.

With eighteen judges on the Federal Circuit—twelve active and six senior members—it is of interest to analyze how AIA cases were distributed by judge and how judges decided on such cases when sitting on a panel.  Despite random case assignment, several judges have significant experience hearing PTAB cases when compared to others.  For example, Judge Wallach is the “most experienced” Federal Circuit judge (in regards to PTAB cases), having been a member of thirty-seven panels.  Behind Judge Wallach in experience are Chief Judge Prost (thirty-five cases), and Judge Hughes (twenty-nine cases).  On the other end of the spectrum, Judges Reyna, Stoll, Chen, and Newman have each been on the bench for less than twenty PTAB cases.  It is noteworthy that the judges who sit on more panels also seem to have a higher panel affirmance rate.  The “most experienced” judges previously mentioned have, respectively, 89%, 89%, 93%, and 88% affirmance rates on panels on which each sits.  It is also worth mentioning that while Judge Wallach and Chief Judge Prost have presided over a larger number of cases, each has only authored two opinions — compared to Judges Taranto and Dyk, who have sat on 25 cases and authored seven and six opinions, respectively.

With such a high overall affirmance rate on PTAB cases reviewed by the Federal Circuit, it is difficult to determine significant and noticeable trends regarding the panels in which each judge sits.  While most judges have an affirmance rate above 80%, Judge Moore has noticeably the lowest affirmance rate among active judges, with panels on which she sits approving only 65% of PTAB cases.  Judge Moore has presided over twenty cases and authored four opinions — all of which are non-affirmative.  In general, of the sixteen cases we noted as non-affirmative, there is a pretty even balance of these cases being reversed on the basis of claim construction or lack of substantial evidence, with slightly fewer cases being reversed on procedural grounds. Therefore, as a practical matter, it is important to stake out and maintain claim construction arguments as well as develop the record of secondary indicia including commercial success.

In sum, the era of Federal Circuit review of PTAB decisions is in its early stages.  Over the past year and a half, the workload and number of cases being reviewed has steadily increased.  Currently, the Federal Circuit is affirming the PTAB decisions at a noticeably high rate.  As the current trend continues, it will be interesting to analyze how this new “surge” of cases stemming from the AIA will affect the Federal Circuit.