This month we will publish our second annual CAFC Intelligence Report 2022, which covers the Court of Appeals for the Federal Circuit (CAFC). This report will focus on the patent-related cases filed before the CAFC during the five-year period from Jan., 1, 2017, through Dec., 31, 2021. The report not only covers the appeals originating from the district courts but also includes all cases that originate from the PTAB as well as the ITC Section 337.

Today’s insight will investigate one of the highlights of this upcoming report, the ratio of terminated IPRs that are appealed in CAFC.

The CAFC has garnered more attention since the introduction of the IPR, which has now become the key driver for CAFC appeals, as we have analyzed in Patexia 119. Around 60% of all CAFC appeals originate from the IPR cases, while appeals from District Court decisions come second.

Unlike other PTAB proceedings, when it comes to IPR cases, it is not possible to file a civil action against USPTO in a district court if one party is dissatisfied with the board's decision. Instead, there are only two options available to challenge a final written decision by the PTAB: either requesting a rehearing before the PTAB or appealing to the US Court of Appeals for the Federal Circuit. The IPR case timeline dictates that the request for rehearing should be filed within 30 days of entry of the decision in order to be considered. Furthermore, this action is not considered a common choice for every party that simply disagrees with the decision. The challenging party has the burden of showing why the decision should be modified and must identify all the points they believe the PTAB misapprehended or overlooked, as well as the place where each of these matters was addressed during the IPR trial. A quick search in our Litigation Analyzer tool shows that during the past five years, in a total of 5,363 terminated IPR cases, there have been 756 requests for rehearing. This is an indication that the CAFC appeal is a more attractive option since a panel of federal judges will review the case.

The Federal Circuit Appeal Timeline dictates that a party must file the notice of appeal to the USPTO Director within 63 days after the date of the final written decision by PTAB. Within 40 days after receiving the notice of appeal, the USPTO Director sends a certified copy of the decision that is going to be appealed. In order to find out which part of the terminated IPR cases are further appealed in CAFC, our Litigation Analyzer comes to help. This tool makes it possible to discover all the patent-related CAFC appeals filed annually and check the terminated IPR cases and see what part of the termination decisions gets challenged in a CAFC appeal.

Data shows that a total of 5,363 IPRs were terminated from Jan., 1, 2017, through Dec., 31, 2021, while at the same time, 34% of them, or 1,822 PTAB decisions, were challenged in appeals filed at the CAFC. The following bar chart illustrates the number of terminated IPRs and those that were appealed on a yearly basis:

Although both trends are linked, no correlations can be found in terms of increase or decrease in numbers. In 2021, for example, there were 1,124 IPR cases terminated, an increase of 25.7% more than the 894 terminated in 2020, while the PTAB IPR decisions that were challenged in CAFC appeals declined by 21.2%, from 363 in 2020 to 286 in 2021. This data included the IPRs terminated in November and December of 2021 that could have been appealed in the months of January and February of 2022. To better understand how the ratio fluctuates yearly, the above data is shown in percentage in the following chart:

Noticeable right away in the chart is that in the years 2017, 2018, and 2019 the ratio is somehow stable, fluctuating between 33% and 36%. In 2020 the amount of the IPRs that were appealed was higher at over 40%, while in 2021, this number dropped to 25.44%.In 2020, it was reported that the CAFC attempted to narrow the availability of IPR appeals. Following the Arthrex, Inc. v. Smith & Nephew, Inc. decision, CAFC set the rules for cases when multiple appeals were filed by parties unhappy with a PTAB decision. In the decision, the Federal Circuit held that the appointment scheme for PTAB judges (APJ) was unconstitutional. The Arthrex decision raised several questions but will impact cases currently on appeal to the Federal Circuit as well as pending IPR cases before the PTAB.

The full CAFC Intelligence Report 2022 provides several valuable insights related to the filing trends, the appeal originating court, precedential vs. nonprecedential cases, outcome analysis, etc. Furthermore, consulting with our IP community, we developed our ranking methodology that allocates scores based on activity and performance, allowing us compare stakeholders in CAFC cases. Finally, using powerful machine learning and natural language processing techniques, we extracted attorney names that were involved in the cases but were previously undetected making this report more accurate compared to the first version.

Stay tuned, as in the next few weeks, we will continue the coverage of best performing and most active entities from our recently published IPR Intelligence 2022 Report.