Inter Partes Review as a Shield for Technology Purchasers: A Response to Gaia Bernstein’s The Rise of the End-User in Patent Litigation

INTRODUCTIONPerhaps no entity is more responsible for renewed interest in patent reform legislation than Innovatio IP Ventures.1 Its campaign to collect patent licensing fees from thousands of Wi-Fi-equipped coffee shops, hotels, restaurants, and other small technology users2 invited scrutiny from patent scholars3 and, more importantly, angered politically-powerful constituents nationwide.4 For the first time in memory, patent litigation became an issue outside major tech hubs and outside the tech industry itself, as businesses with no engineers on the payroll suddenly and quite unexpectedly found themselves knee-deep in patent law.5In the years that followed Innovatio's formation, other patent holders borrowed from the same playbook, demanding licensing fees from thousands of small business for using off-the-shelf technology designed and manufactured by large tech companies that, presumably, these patentees preferred not to face in court. MPHJ Technology Investments-the "scanner troll"- inundated the likes of doctors' offices, architecture firms, and even nonprofits with vague licensing demands based on allegedly infringing use of ordinary copy machines, eventually drawing the wrath of the Federal Trade Commission and multiple state attorneys general.6 In addition, patentees like Lodsys, GeoTag, Soverain Software, and Clear with Computers targeted users of ubiquitous e-commerce technology,7 and yet another pair, ArrivalStar and PJC Logistics, sued local governments and trucking companies en masse for using GPS technology to track buses, trucks, and trains.8In her Article, The Rise of the End User in Patent Litigation, Professor Bernstein discusses licensing campaigns like these and convincingly makes the case for legislative and judicial action-more frequent use of fee shifting is her top choice-to protect technology users from sharp patent litigation practices.9 This Essay doesn't aim to change the reader's mind on that front. In fact, I have written on similar topics myself.10 Instead, this Essay investigates the possibility that in recent months this problem has already (though quietly) been substantially mitigated by another mechanism-one signed into law more than three years ago, but only now emerging as a powerful shield for those accused of patent infringement.In 2011, Congress passed the America Invents Act ("AIA"), the most significant piece of patent legislation since 1952, spurred at least in part by concern that patent rights were regularly being enforced in abusive ways.11 Though many reforms included in the AIA were greeted by the patent community with a collective yawn,12 one reform has recently emerged as an unexpected exception: procedural modifications to post-grant patent challenges.13Specifically, the America Invents Act replaced the Patent Office's procedures for so-called "inter partes reexamination" of issued patents with a modified and renamed regime of "inter partes review" ("IPR").14 In doing so, Congress raised the bar for granting petitions to review issued patents, but at the same time, advantaged petitions that do pass muster by expediting the process and allowing the reviews to take place before the Patent Trial and Appeal Board in the first instance, rather than on appeal.15 Following these modifications, interest in administrative patent challenges grew, slowly at first, before eventually erupting in a full-blown explosion of filings in 2014.16To date, in-depth commentary on this "new normal" in patent defense has been scarce and what exists has largely focused on overall statistics spanning all types of patents and parties. This Essay breaks down statistics on IPRs to examine the extent to which they have been a boon for all accused infringers, regardless of size and position on the supply chain. As the data reported below demonstrates, technology purchasers and small businesses (as well as those with reason to step in and protect them) are beginning to seek refuge at the patent office-much as Congress intended-and have done so with a fair amount of success. …