A Leg Up for Your Competition? How the USPTO's Proposed Rules Hurt Early Stage Companies

In April, the U.S. Patent & Trademark Office (USPTO) proposed new rules to limit eligibility for inter-partes review (IPR). Issued patents can be challenged and invalidated in IPR proceedings, as an alternative to traditional litigation. Traditional litigation can be expensive, time-consuming, and include a multitude of claims besides patent infringement. IPRs offer a cost-effective and efficient route to invalidate a patent without the distraction of other claims. IPRs focus on one issue and one issue only: is the challenged patent valid?

The new proposed rules would allow the USPTO to deny IPR "[p]etitions challenging under-resourced patent owner patents where the patentee has or is attempting to bring products to market."  In other words, the USPTO would consider the relative resources of a patent challenger and a patent owner when deciding to allow the IPR to proceed.

While at first glance, this rule seems designed to help early stage companies, this rule could be applied when competitors are racing to provide the same or similar competing products to the marketplace.  While the USPTO likely designed this rule to prevent abuses by the big tech companies, this rule could easily be twisted and applied to early stage competitors.