United States: PTAB Institution Rate Continues To Lag Behind 2014 Rate, Highlighting Need For Expert Reports To Adequately Support Petition

Data released by the USPTO Patent Trial and Appeal Board (PTAB) for the Fiscal Year 2016 reveals that the PTAB is granting petitions to review at a rate similar to FY 2015, and significantly below the higher rate in FY 2014.

Thus far in FY 2016, the Board has denied instituting trial on about 33% of all IPR petitions. This is consistent with the denial rate in 2015 (34.7%) and illustrates a dramatic increase in the rate of institution denials since FY 2014 (25.7%). In these statistics, a trial that is instituted in part (where only a portion of the claims in the petition are instituted) is still counted as an institution.

A recent case, Hughes Network Systems, LLC v. Elbit Systems Land And C41 Ltd., Case No. IPR2016-00496, decided July 14, 2016, illustrates the PTAB's current approach to institution decisions. On July 14, 2016, the PTAB denied institution on Hughes Network's second challenge to a patent owned by Israeli defense contractor Elbit Systems Land and C4I Ltd.

U.S. Patent Number 7,245,874, assigned to Elbit Systems, relates to an interface in a cellular telephone network for converting between communication links using traditional telephony protocols and links using satellite-system protocols. The July 14 decision denying Hughes Network's petition is the second time the Board has rejected an attempt by the petitioner to institute inter partes review of the patent.

This decision illustrates that the PTAB will only institute challenges to patents that it deems reasonably likely to succeed. In this case, the Board did not find that Hughes Network presented enough evidence that the combination of cited references disclosed all of the limitations of the patent's claims. The Board further noted that the petitioner's expert did not provide enough explanation or support and that the testimony was conclusory. In the prior challenge, the Board also explained in a rehearing decision that the petitioner's expert declaration testimony "merely restates Petitioner's conclusory assertion."

Even under the lower "reasonable likelihood" burden associated with institution of IPR review, success is not guaranteed. The decisions by the Board on Hughes Network's petitions highlight the need for thorough discussion and explanation in an expert's declaration to support the petition for institution of inter partes review.

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