When Congress enacted the America Invents Act (AIA) and created the new administrative proceedings for challenging patents (Inter Partes Review, Post Grant Review and Covered Business Method Review), the AIA provided an incentive for the parties to resolve their differences by settlement.  However, less than five percent of the Inter Partes Reviews (IPRs) filed last year have been settled “out-of-court” so far.

Unlike the old Ex Parte Reexamination process where a request for reexamination obligates the USPTO to resolve the substantial new questions of patentability that are presented by a requestor, the new Patent Trial and Appeal Board (PTAB) can – and perhaps is even obligated to – terminate the proceeding without resolution if the parties reach a settlement and file a joint motion to terminate.  35-USC-317 states that “[a]n inter partes review instituted under this chapter shall be terminated with respect to any petitioner upon the joint request of the petitioner and the patent owner, unless the Office has decided the merits of the proceeding before the request for termination is filed.”

Of the ninety-four (94) IPR petitions filed in 2012, only five have been terminated to date by joint motion to terminate.  This may not be surprising when one considers that the timeline for IPR’s gives the PTAB up to six months to institute a review proceeding (assuming the Patent Owner files a preliminary response):


Thus, the simplest explanation for the lack of settlements so far appears to be that patent owners are willing to hold onto their cards at least until a decision whether or not to grant the petition is made by the PTAB.

The process for settling an IPR is very straightforward.  The parties need only file a joint motion to terminate and attach a copy of the settlement agreement.  Either party can request under 35-USC-317 that the agreement or understanding be treated as business confidential information.  The AIA provides that such sealed document “shall be kept separate from the file of the involved patents, and shall be made available only to Federal Government agencies on written request, or to any person on a showing of good cause.”