In For a Penny – Are Fee Increases Reducing the Number of Ex Parte Reexamination Filings?

By Ben Snitkoff

In September of 2012, the old inter partes reexamination system gave way to the new inter partes review proceedings. The America Invents Act (AIA) gave the US Patent Office authority to set the fees for IPR proceedings at level reasonable related to the anticipated costs of these new, more robust, proceedings. Not surprisingly, the IPR fees were set substantially higher than those for the old inter partes reexamination system.

However, along with this change and accompanying fee differences, the Patent Office also raised the filing fees for ex parte reexaminations dramatically. (Ex parte reexamination, as the name suggests, provides a mechanism for challenging patents with very limited opportunities for the challenger to participate.  Originally, ex parte reexamination was the only option for third parties to request review of issued patents.  The AIA largely left this system untouched.)  As the Patent Office’s fiscal year comes to a close, we have an opportunity to examine how the first year of higher fees affected filings of ex parte reexaminations and inter partes reviews.

Before the fee increase, a petition for ex parte reexamination cost $2,520, per request. That fee was raised to $17,750 per patent, before being lowered to $12,000 in March, 2013. Before they were phased out, inter partes reexaminations cost $8,800 per request, while inter partes review proceedings come with a fee of $23,000 (partially refundable if the review is not initiated).

The data show that the number of requests for reexamination (of both types) had been steadily increasing from 2008 through 2011 (the year before enactment of the AIA).

Petitions Filed Per Fiscal Year (Oct. 1 – Sept. 30)

Type of Proceeding 2008 2009 2010 2011 2012 2013 (projected)
Ex Parte Reexam 680 658 780 759 747 290
Inter Partes Reexam 168 258 281 374 640 (partial year) n/a
Inter Partes Review n/a n/a n/a n/a 42 (approx.) 616
TOTAL 848 916 1061 1133 1429 906

The projected totals are based on the best currently available information, projected out to the end of the fiscal year.

In 2012, reexamination filings appeared to be on track to continue this trend – until the AIA was enacted in the fall of 2012.  Among other things, the act authorized the Patent Office to immediately raise the fees for reexaminations. As a result, There was a large spike in filings of ex parte reexaminations in September of 2012 before the effective date of the fee increases, but because of a substantial drop in filings after the fee increase, the numbers averaged out for the year, remaining essentially flat from the previous year. The USPTO also saw a significant rise in in the number of inter partes reexaminations in 2012 before they were phased out in favor of the more expensive inter partes review proceeding.

Based on the numbers for the 2013 year to-date, the fee increases have dramatically reduced the number of ex parte reexaminations that were filed, while increasing the number of inter partes proceedings (reexaminations previously, compared to reviews now). Overall, the changes appear to have reduced the total number of newly filed post-grant proceedings by a third.

The old ex parte reexamination required a large investment up-front in preparing the petition, but no further costs after the relatively modest filing fee. It seems that the greatly increased fees have caused some filers to think, “In for a penny, in for a pound,” and accept both the increased filing cost, and the ongoing legal fees that come with an inter partes review.

As a result, despite inter partes review fee being nearly twice that of the fee for an ex parte reexamination, more challengers appear to be opting for the inter parte review over ex parte reexamination, compared to historical trends.

The data also suggest that others may be having second thoughts about challenging patents at all, essentially finding themselves priced out of post-grant proceedings entirely by the high fees.

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