There are divided camps between patent holders that perform patent searching prior to launching a monetization campaign, and those that don’t.
As patent holders begin to feel the sting of Inter Partes Review, this will quickly change—thorough prior art searching prior to campaign launch will become standard procedure.
Prior to Inter Partes Review, patent holders were incentivized to file a lawsuit, regardless of the prior art landscape, because the cost of defense virtually guaranteed a six-figure nuisance value settlement. Even if prior art were to surface, it would cost the defendant more than a low six-figure settlement to invalidate the patent, without much cost to the patent holder.
Moreover, if a patent holder found prior art prior to launching its campaign, the prior art may raise a substantial question of patentability, which would prevent the patent holder from filing lawsuits, thereby creating a self-imposed barrier to monetization.
But the AIA’s Inter Partes Review will significantly alter these economics for patent holders. Namely, if killer prior art exists and a defendant initiates an Inter Partes Review on the patent, this will pose significant costs on patent holders. Particularly, the patent holder will need to pay hourly or flat-rate attorney’s fees to defend its validity case in a parallel trial—a cost sink that didn’t exist prior to the AIA.
Because prior art could now pose a significant cost sink on the patent holder, expect to see patent holders conduct thorough prior art searching prior to launching a campaign—yet another example of how Inter Partes Review will change the monetization landscape.