Inaugural IPR Decision Provides Insight for Patent Challengers Deciding Between IPR and District Court Litigation

The recent Garmin decision raises strategic implications for litigants deciding whether to pursue inter partes review (IPR)  or district court litigation. The Board in Garmin upheld petitioner’s claim of unpatentability of claims 10, 14, and 17 of U.S. Patent No. 6,778,074 as obvious under 35 U.S.C. § 103 in view of a three-reference combination and separately under a four-reference combination. The question becomes—would the same result have occurred if the case had proceeded before a district court? Not likely for at least two reasons.

Higher Standard in Federal Courts: IPR applies a lower evidentiary standard than district court litigation; the petition is reviewed under the “preponderance of evidence” standard, with the burden placed on the petitioner. In contrast, petitioners in a district court proceeding must provide clear and convincing evidence that one or more of the claims are invalid which presents a much higher bar to challengers. Another key difference: The district court, but not the USPTO, is required to presume that the patent is valid.

Federal Court Judges and Jury Typically Lack Technical Expertise: District court judges typically lack technical and/or patent expertise in contrast with USPTO administrative patent judges, who all have extensive patent experience. That distinction may be significant. An IPR panel is more likely to invalidate claims based on a complex multi-reference obviousness combination simply by being more familiar with the subject matter or the types of arguments typically presented by Examiners during patent examination. Federal court judges and/or juries, on the other hand, are less likely to invalidate claims under a complex obviousness combination because they tend to lack the specialized knowledge of patent practitioners. With the added presumption of validity requirement, there is a much lower risk of invalidation in district court proceedings based on a three-reference combination or four-reference combination obviousness challenge.

Garmin provides some interesting considerations to patent challengers contemplating multi-reference obviousness claims. IPR may provide a more efficient, less expensive alternative to proceeding in the district court where invalidation based on a three-reference combination or four-reference combination obviousness challenge is less likely.