How to Strengthen Your Patent Portfolio Against IPR Challenges

When you’re awarded a patent, you might think the patent process is finished. But your competitors might think otherwise! In highly competitive industries, companies often try to have their competitors’ issued patents canceled by the patent office. 

The main process for having an issued patent canceled by the United States Patent and Trademark Office (USPTO) is called inter partes review (IPR). In other jurisdictions, such as the European Patent Office (EPO), the process is called an Opposition. In either case, the patent owner must go on the defensive and show that their patent rights should be sustained.

My firm has drafted and prosecuted several patents that have survived these types of challenges in both the USPTO and the EPO. In each case, our clients ultimately prevailed because their patents covered significant innovations, and because the patents were crafted to be robust against legal challenges.

In this post, we outline some of the ways that you can strengthen your patent portfolio against IPR challenges.

Chances of Overcoming an IPR Challenge

Defending your patent against an IPR is a very expensive process — and based on statistics published by the USPTO, at least one claim in each challenged patent claim is invalidated in the majority of IPR proceedings that reach a final decision.

Whether you’re the patent challenger (the “petitioner”) or the patent owner, the cost of taking an IPR through trial can run upwards of $300,000 — much more expensive than the cost of getting a patent in the first place, by at least an order of magnitude.

In addition to being incredibly costly, the IPR process is generally viewed as more favorable to petitioners than patent owners.

This all means that you want to do as much as you can to discourage your competitors from ever filing an IPR against your patents. You should structure your patent applications and your entire patent portfolio in a way that makes them more expensive for your competitors to challenge and less vulnerable in litigation.

Why Do Companies File IPRs?

Before IPRs were introduced about a decade ago, a competitor had a very limited ability to invalidate your patent unless you’d tried to enforce your patent against them.

In the past, if your competitor was aware of your patent but you hadn’t yet threatened to enforce it against them, they typically had only two good options:

1. Design around your patent and potentially create an inferior product.
2. Risk infringing your patent and be prepared if and when you decide to enforce your patent through legal action. This option comes with enormous uncertainty: The infringing party may need to spend millions in attorney fees to defend themselves in district court — and if infringement is found, they may have to pay you millions more in damages.

But IPRs provide a much more powerful option: they can preemptively invalidate your patent before you ever enforce it, making it more expensive for you to maintain patent protection.

In fact, a bigger company with cash resources could potentially drain a smaller competitor’s resources, or drive them to surrender their patents, by forcing the smaller company to defend their patents against IPR challenges.

A bigger company also faces much less risk in filing a preemptive IPR against a smaller competitor:

• The patent owner can’t file counterclaims of patent infringement in the IPR proceeding.
• The bigger company is less likely to be countersued for infringement, because the smaller company often won’t have the resources to initiate separate district court litigation.

Thanks to the IPR process, a bigger company has a much faster and more viable path to challenging its competitor’s patents. This allows them to resolve the question of validity earlier — and often at a lower cost.

How Do IPR Challenges Affect Our Patent Strategy?

Some tech companies take a low-budget approach to patent drafting: they file patents with thin technical disclosures and shallow claims that don’t account for prior art. These are the most vulnerable types of patents because they create a much easier target for an IPR challenge.

To strengthen your patent strategy against IPRs, you should file robust, detailed patent applications and build a broad, diverse patent portfolio that disincentivizes preemptive IPRs by competitors.

1. Building a Broad Patent Portfolio

Back in “the good old days,” it may have been possible to build a business around a single patent or patent family. In other words, you could have a small, targeted portfolio of patents to scare away competitors — or at least, force them to design around your patents.

But a small portfolio can be easily challenged by IPR filings. In some cases, an entire portfolio could be wiped out through one or two IPRs. And even if the patents survive, the expensive IPR process could drain the patent owner’s resources.

So if you’re entering a competitive field, you need an arsenal of patents. You’ll want to have enough issued patents that, even if a competitor could take out a couple of them via IPR, they would still be facing a veritable minefield of other patents.

To build a large portfolio, tech companies should set a goal of filing several new patent applications every year. Your company’s goal will depend heavily on your budget and the size of your R&D program. Most small to medium size tech companies with strong patent programs are filing at least five to ten new patent applications per year. Larger tech companies will usually file hundreds, if not thousands.

Another way to build a large portfolio is to acquire patent rights from other companies. Patent rights can be obtained from another company by licensing or purchasing the patents from them, or by acquiring the company itself.

Although I generally recommend focusing your patent budget on quality over quantity, it’s also important to realize that there’s value in having a large number of patents. If your competitors realize that they can’t use IPRs to remove you from the market due to the sheer size of your patent portfolio, they’ll be more open to cross-licensing or other types of compromise.

2. Building a Diverse Patent Portfolio: Include Meaningful Claims

Your patent application should include a diverse range of claims.

1. Include independent claims of varying scope:
   1. Broad claims help you establish that a competitor has infringed
   2. Narrow claims help you defend against challenges to validity
2. Include a variety of meaningful dependent claims covering valuable embodiments
3. Utilize means-plus-function claim language more often to cover the specific embodiments in your patent application and equivalents

If your patent is thorough and includes a variety of broad and narrow claims, it’s much harder for a competitor to knock out the entire patent with a single IPR because, for example, IPR petitions have a page limit. The prospect of paying for multiple petitions to challenge all claims, or of only being able to challenge some claims, may help deter potential IPR challengers.

Of course, one way to pursue a high number of claims is to present a large, diverse claim set in your initial patent filing. The standard US patent filing fee covers 20 total claims, so you should always have at least 20 claims to take full advantage of the examination process. Many patent filings include even more claims, sometimes upwards of 100! But there are procedural and cost-related reasons that discourage most applicants from going over 30 or 40 claims in one filing.

Another way to get a diverse range of claims is to file continuations when your patent applications are allowed. A continuation filing allows you to pursue different claims based on the technical disclosure in an earlier patent application – the continuation gets the benefit of the earlier filing date, as long as all of the claims are supported by the earlier patent filing. So you can reach back in time and claim anything that was described in the original patent filing, even if it wasn’t covered in the original claims. For example, you might claim the details of a specific embodiment that has particular commercial value, or you might claim the invention more broadly in order to cover a broader array of competing products.

3. Building a Diverse Patent Portfolio: Account for Prior Art

Your patent application should also thoroughly account for prior art. For example, before you file a patent application, consider doing a thorough prior art search that includes all public sources of information — not just published patent applications and issued patents. Another tactic is to provide substantive arguments in the prosecution history for any particularly close references.

By documenting and addressing all known prior art, you may be able to diffuse IPR challenges at an early stage by showing that any issues raised were already considered during prosecution.

Continuation filings (mentioned above) also allow you to account for prior art that you encounter after a patent has been granted. For example, you can pursue narrower claims in the continuation to more clearly differentiate the prior art. This can discourage IPR challenges, since the continuation allows you to create a moving target for your competitors. Even if they find prior art that knock outs your initial patent, you can craft new claims in the continuation that will withstand the same type of challenge.  

Developing a Smart Strategy for Navigating Prior Art Obstacles

Building a broad and diverse portfolio is a critical investment in your business’s future.

But even if you’ve taken all precautionary measures, it’s still possible for you to encounter unforeseen obstacles, such as unexpected prior art. That’s why we’ve put together a FREE eBook, “Prior Art and the Patent Process,” that discusses how unexpected prior art could affect your patents and applications — and what you can do to minimize your risks. Download it now!