In IP: Do the new patent office trials really make patent litigation cheaper? Mr. Cyrus Morton tells us patent litigation is famously expensive, but then argues that because you can lose at various stages in patent office trials and end up in court, they are on average probably not much more cost effective.
Does the data support his views? The AIPLA Report of the Economic Survey stated in 2013 (1) when $1-25 million is at risk the median patent infringement suit cost is $1.4 million through discovery and $2.6 million including all costs; and (2) when more than $25 million is at risk the median patent infringement suit cost is $3.5 million through discovery and $5.5 million including all costs.
How about the cost of going to trial before the Patent Trial and Appeal Board (PTAB)? The inter partes review is recent so the AIPLA Economic Survey has not published any data. However, for inter partes reexamination, which is the closest procedure to inter partes review IPR, the AIPLA Report of the Economic Survey states in 2013 the median costs are (1) $50K for filing of a request, (2) $70K including the first patent owner response, (3) $100K including all patent owner responses, (4) $130K including an appeal to the Board, and (5) $250K including an appeal to federal court.
However, it is important to note IPR has fundamental differences with inter partes reexamination, which would raise its costs. IPR is more trial-like, has limited discovery and motion practice, and a hearing, unlike inter partes reexamination which has a prosecution style after the request is granted.
Although the AIPLA does not break out how much is at risk in the inter partes reexamination, if we triple the $250K total of inter partes reexamination to give us a rough comparison it still looks favorable to patent litigation, e.g., $750K vs. $2.6 million. Thus, if you get into a patent dispute, it is smart to consider filing a request for ex partes reexamination (the lowest cost option) and/or filing a petition for inter partes review and in either case requesting a stay of any pending patent litigation.
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