Patent reexamination a real threat to value

Patent reexamination is the process whereby either a patent owner or third party has a patent reexamined by the U.S. Patent and Trademark Office (USPTO) to verify the claims are patentable.

An ex parte application can be undertaken by any party (anonymously) with the goal of having the USPTO review new evidence regarding patentability. According to USPTO’s quarterly filing report, there have been 11,415 ex parte reexamination requests submitted to the PTO since its inception in 1981. To date, the patent owner has filed one-third of the requests. Here’s the key: 92% of all ex parte reexamination requests are granted, and two-thirds of those result in claim changes!

An inter partes proceeding can increase the odds of getting a claim changed, but the anonymity is removed; the applicant can participate in the process and discuss the facts with Patent Office examiners (not so with ex parte filings), but they cannot employ prior art evidence.

The success of patent reexamination applications is due in large part to the growing sophistication in USPTO, and with these “success” statistics, competitive strategies should probably include at least a look at an ex parte filing, and valuation analysts should look at a patent’s reexamination history.