Ten Years of the America Invents Act

The America Invents Act (AIA) was signed into law by President Barack Obama ten years ago, on September 16, 2011. The AIA was the most significant change to US patent law since the Patent Act of 1952.

Among other things, the AIA switched the US from a “first to invent” patent system to a “first inventor to file” system, as most of the rest of the world has.

The AIA also introduced the inter partes review (IPR) via which granted patents can be challenged by members of the public – commonly, competitors of the patent owner or those being sued for infringement of the patent.

IPR challenges are heard by the Patent Trial and Appeal Board (PTAB). As Bloomberg notes,

The Patent Trial and Appeal Board has invalidated more than 2,000 patents since it began work in 2012. Apple says it alone has used the board to successfully attack almost 200 patents, many held by entities interested only in filing lawsuits and extracting royalties. Congress set up the board, known as PTAB, in 2011 as a faster and cheaper alternative to litigation.

But some smaller inventors see a chance to undercut the board, saying it’s become an anticompetitive tool for large companies. …`

So many patents have been invalidated that it’s been called a “death squad,” a term coined by Randall Rader, the former chief judge of the Federal Circuit, which oversees all patent disputes in the country. The patent office has since altered its rules, giving patent owners a better shot at surviving the challenges.

Various commentators have looked back at ten years of the AIA.

According to IP Watchdog, “the PTAB is not as bad as its critics say, nor as good as its defenders claim.”

As the At the PTAB Blog notes,

Ten years in, IPR filings have levelled off around an average of 1500 petitions per year (based on data from 2017-2021). This number is notable, as it is nearly half of the average number of district court infringement litigations filed per year over the last 5 years (approximately 3800). PTAB IPR institution rates are lower now than they were initially (60% through Q3 FY21 compared to a high of 75% in FY2014). This may represent a cooling off after a rush of challenges to the low-hanging fruit of “bad patents” that were a supposed motivation for the AIA’s IPR and PGR provisions. Or it may simply reflect a rise in discretionary denials.

According to Engine,

the AIA created accessible, affordable mechanisms to weed-out patents that never should have issued in the first place. With inter partes review (IPR), a third-party can go to the patent office’s Patent Trial and Appeal Board (PTAB) and petition it to take a second look at a patent to assess if a patent was (in)correctly granted. Since its inception, IPR has helped improve patent quality in the U.S., weeding out invalid patents that stifle innovation and helping reduce the cost and amount of abusive patent litigation filed by patent assertion entities (so-called “patent trolls”).

This, according to Engine, is good for startups, which are “unfortunately familiar with abusive patent assertion.”

As the National Review notes,

many aspects of the AIA remain in flux, as courts continue to flesh out the details of the law. Some issues to watch include:

• the Supreme Court’s decision in US v. Arthrex regarding the constitutionality of PTAB judges’ appointments, and the developing Director review procedure;
• discretionary denials of institution in IPR and PGR proceedings, especially with respect to parallel proceedings;
• the role of precedential decisions, the Precedential Opinion Panel (“POP”), and the USPTO’s role in rulemaking; and
• continuing issues with petitioner estoppel.

We will likely see clarification on these and many other aspects of the AIA in the next few years.