Thursday, November 20, 2025
Executive Summary
A Berkeley Center for Law & Technology panel featuring former USPTO Solicitor Farheena Rasheed, German patent litigator Alexander Harguth (Bonabry), and UPC practitioner Yasmine Azzaoui (Bonabry), moderated by Jeff Kushan, compared the patent invalidity frameworks of the EPO, UPC, German Federal Patent Court, and PTAB, concluding that the UPC’s holistic, multi-document inventive-step analysis makes it a more hospitable revocation forum than the EPO for most challengers, while the PTAB’s institution rate has plummeted to near 20 percent under the current administration’s summary-denial regime, fundamentally altering the global invalidity landscape for patent owners and challengers alike.
Instructor(s)
Yasmine Azzaoui, Bonabry
Farheena Rasheed, former Solicitor and Deputy General Counsel for Intellectual Property Law, USPTO
Alexander Harguth, Bonabry
Jeff Kushan, Sidley Austin, LLP
Keywords
UPC revocation action — inventive step holistic multi-document approach • EPO opposition proceedings — problem-solution approach and added matter strict standard • PTAB IPR institution rate decline — discretionary denials under Director Squires 2025 • PTAB black-box summary denial — one-page IPR denials without explanation • German Federal Patent Court invalidation rate — suspension standard and injunction gap • UPC parallel EPO opposition — no stay rule and revocation prevails over upholding • UPC expert evidence — hot-tubbing, judge-led questioning, Cabasi Texan case (Sanofi v. Stada) • Squeeze argument in patent litigation — infringement and validity tension in one-day UPC hearing • Post-grant review (PGR) vs. inter partes review (IPR) — estoppel and institution rate comparison • Added matter / Article 123(2) EPC — EPO strict intermediate generalisation standard • “which forum is best for challenging a European patent — EPO, UPC, or national court” • “how has the PTAB IPR institution rate changed under the Trump administration 2025”
Legal Analysis
Comparative Invalidity Success Rates and the Forum-Selection Matrix Across the EPO, UPC, and German Federal Patent Court
The starting point for any European patent invalidity campaign is a comparative assessment of success rates and analytical frameworks across the available forums: the European Patent Office opposition division, the UPC’s Central and Local Divisions (whether through a standalone revocation action or a counterclaim within infringement proceedings), and the German Bundespatentgericht. Harguth presented statistical baselines that complicate the conventional assumption that Germany is an inherently patentee-friendly jurisdiction. At the EPO, full revocation on opposition is achieved approximately 25 percent of the time, with an additional 46 percent of patents upheld only in amended — and often commercially narrowed — form; taken together, fewer than one-third of opposed patents survive in their granted scope. The EPO’s primary invalidity tools, however, are formal rather than substantive: the opposition division applies an exceptionally strict standard to added matter under Article 123(2) of the European Patent Convention, and practitioners must possess “really, really good prior art” to succeed on grounds such as inventive step, where the problem-solution approach systematically anchors the analysis to a single closest prior art document.
The German Bundespatentgericht presents a different profile: its invalidation rate is high enough that Harguth described it as “even … heavily invalidat[ing] patent[s],” but the forum’s strategic value for defendants in national litigation has historically been constrained by the infringement courts’ low suspension rate. Because German infringement courts — the Landgerichte — bifurcate infringement and validity, a defendant facing a first-instance infringement judgment and injunction must seek suspension pending the Bundespatentgericht’s validity decision, and suspension is granted only where the defendant can produce novelty-destroying prior art; inventive-step arguments are generally insufficient to stay enforcement. That structural asymmetry created the well-documented injunction gap that German litigation became associated with: a patentee could obtain and enforce an injunction during the period between the infringement court’s decision and the validity court’s eventual ruling, a gap that generated strong settlement pressure regardless of the patent’s ultimate validity. By contrast, Harguth’s analysis of UPC revocation outcomes showed success rates “better than at the federal patent court” — a finding he interpreted as a signal that NPEs and other patentees with telecom portfolios will increasingly migrate enforcement to the UPC, where the combined infringement and validity proceeding makes the injunction gap structurally unavailable and the overall revocation odds are more favorable to challengers.
Forum selection among these options depends critically on the nature of the invalidity ground available. Harguth offered a decision-rule framework: where the challenger has identified a potential added-matter or disclosure defect — particularly one arising from divergence between the US priority application and the European prosecution, such as the introduction of an intermediate value or a term not literally supported in the description — the EPO’s formalistic approach makes it “the best place to go,” because “if you do not literally have the disclosure in your … description, then you are out.” He illustrated the prosecutorial origin of many such defects: US patent practice permits practitioners to extract a value within a disclosed range as a specific claim element (for example, claiming 7 percent where the description discloses 5 to 10 percent), a technique that “you will never” be able to replicate under European prosecution rules, and that generates added-matter vulnerability when the European patent is later litigated. Where the primary invalidity ground is inventive step and the challenger can assemble multiple relevant prior art documents rather than a single closest reference, Harguth recommended the UPC or the German Bundespatentgericht, both of which apply a more holistic approach that permits combination of starting points — a critical distinction from the EPO’s rigid problem-solution methodology.
UPC Inventive Step Divergence From the EPO, Parallel Proceedings Rules, and the Emergence of Expert Hot-Tubbing in UPC Hearings
The UPC’s developing approach to inventive step represents one of the most significant substantive divergences from the EPO’s established framework. Azzaoui identified three distinctions grounded in emerging UPC case law. First, while the EPO’s problem-solution approach requires the analysis to begin from a single “most promising starting point” in the prior art, the UPC has adopted what practitioners describe as a holistic approach: the court has determined that the relevant prior art comprises “documents that would have been of interest to the person skilled in the art,” and is “keeen to admit several prior arts and different starting points instead of just one sole document.” Second, the UPC’s panel composition — which combines legally qualified judges with technically qualified judges drawn from the relevant technical field — enables a richer engagement with the scientific context of the invention than is available at the EPO, whose tribunals assess inventive step through a more formalistic doctrinal lens. Third, where EPO opposition proceedings are running concurrently with UPC revocation proceedings, the UPC has consistently refused to grant a stay of its proceedings merely because an EPO opposition is pending, and has established — though the question of two conflicting upholding decisions in different amended forms remains open — that if one body upholds a patent and the other revokes it, the revocation prevails.
The parallel-proceedings dynamic also creates a second-chance mechanism for challengers that Azzaoui identified as strategically valuable: because EPO opposition must be filed within nine months of patent grant, a challenger who discovers a relevant prior art document after that window closes can still deploy it in a UPC revocation action, without the nine-month limitation. This creates an asymmetry in the temporal architecture of invalidity challenges: the EPO opposition window is a hard deadline that closes the most expeditious administrative route, but the UPC’s revocation jurisdiction remains open throughout the life of the patent. For a challenger who has exhausted the EPO route unsuccessfully, or who missed the nine-month window, UPC revocation with newly identified prior art is a viable second forum. Harguth cautioned that the choice of timing matters operationally: he recommended preparing the EPO opposition fully but deciding “really at the last moment whether we are going to file,” because the prior art available and the chosen ground of attack may point more compellingly to the UPC’s holistic inventive-step analysis than to the EPO’s single-document constraint.
The treatment of expert evidence at the UPC has evolved rapidly and was illustrated by Azzaoui’s account of the Cabasi Texan case (Sanofi v. Stada Arzneimittel AG and Dr. Reddy’s Laboratories) before the Munich Local Division — the first UPC proceeding in which expert testimonies were heard live during the oral hearing. In a procedure deliberately distinguished by presiding Judge Zigann from US or UK cross-examination, the court sent each expert a list of targeted questions several weeks before the hearing, confined to the most contested prior-art and common-general-knowledge points; at the hearing, experts were questioned for approximately two to three hours, first by the judge and then by each party’s counsel, without the adversarial confrontation that characterises cross-examination in common law systems. Azzaoui characterised the judge’s pre-circulated question list as providing practical advance notice of the panel’s analytical priorities: “when the judges are sending the question before you can also have a feeling of what will be important during the hearing and what you should advocate on … you know in advance what you will focus on during the hearing.” Harguth cautioned that one-day hearings covering both validity and infringement leave little time for live expert examination, and that the Cabasi Texan model should be understood as an exception rather than the emerging norm, though the UPC’s rules of procedure do accord written expert declarations greater evidentiary weight than German national courts traditionally have.
PTAB Institution Rate Collapse Under Director Squires, Black-Box Summary Denials, and the Systemic Risk of Institutional Instability
The panel’s comparative analysis of the PTAB drew on Rasheed’s direct institutional knowledge as former Solicitor and former Acting Vice Chief Administrative Patent Judge. The aggregate statistics she presented document a transformation in PTAB practice under the current administration that is without recent historical precedent. In the final period before the current PTAB Director took office, IPR institution was granted approximately 66 percent of the time and denied approximately 34 percent. Under Director Squires, those figures have inverted: denial runs at approximately 60 percent and institution at approximately 40 percent, with the discretionary denial rate alone rising from approximately 28 percent to approximately 46 percent. In some subsets of cases, Rasheed reported institution rates approaching 20 percent. Post-grant review, which had always accounted for only approximately 5 percent of AIA proceedings, remains structurally underutilised in part because of the broader universe of grounds it permits — and the correspondingly more onerous estoppel that follows if a petitioner proceeds.
The most constitutionally and administratively contested development is the emergence of what practitioners have termed “black-box” summary denials: two sets of IPR petitions — the first comprising thirteen proceedings, the second more than twenty — were denied without any substantive explanation, reduced in one instance to a single-page order. Rasheed, who described herself as having been “instrumental in establishing the non-reviewability bar the first time around,” acknowledged the legal uncertainty surrounding the Director’s authority to issue content-free institution denials, noting that existing regulations provide a right to seek rehearing and that the question of how to seek rehearing of an order that contains no reasoning is unresolved. Rasheed was careful to attribute the change to deliberate policy rather than administrative oversight: “this is completely intentional” and “consistent with how this administration has moved across” agencies, though she observed that the USPTO historically “hadn’t really … felt political changes” in the same way. On expert testimony, Rasheed noted that reliance on expert declarations to supply general knowledge — historically accepted PTAB practice — has itself become a ground for discretionary denial under the current regime, with the line between explaining what the prior art would teach a person of ordinary skill and supplying “general knowledge” treated as reason enough to deny institution: “that line … is a very, like, it’s very blurry.”
Rasheed’s systemic critique extended beyond the current administration’s specific choices to a structural argument about the relationship between legal stability and commercial investment. Patent law, she argued, is “commercial law — it governs commercial transactions, and if that’s right, you need stability, you need consistency, and if we have these wide shifts from one direction to another … this can’t be good for the system, because it creates this sense of institutional instability.” The comparative European context sharpened that argument: while the UPC and EPO have their own variability in outcomes across forums and time periods, both operate under treaty-codified procedures with explicit grounds for review, and neither has experienced the kind of executive-driven directional reversal that the PTAB has undergone within a single fiscal year. For the panel’s audience of litigants managing global invalidity campaigns, the practical implication Kushan drew out was the squeeze strategy’s continuing relevance across forums: whether in a UPC one-day hearing combining validity and infringement or in a national proceeding, a challenger who can demonstrate that the patentee must choose between a claim scope broad enough to cover the accused product and a claim scope narrow enough to survive prior art has deployed the same analytical lever in every available tribunal. Harguth confirmed that “the squeezing strategy … also applies under the rules of the UPC” and that it “can even better work in a system where everything is together,” because the defendant cannot maintain inconsistent claim-scope positions across morning validity argument and afternoon infringement argument before the same panel.
Generated by AI based on the Interview/Transcript below.
Key Takeaways
- PTAB Institution Rate Near 20% in Some Cases: Rasheed confirmed that under Director Squires the IPR discretionary denial rate has risen from approximately 28 to approximately 46 percent, with overall institution near 40 percent and approaching 20 percent in some case categories — a “very sharp decline” that has fundamentally altered the role of the PTAB in global invalidity strategy.
- Black-Box Denials Raise Governance Questions: Two batches of IPR petitions (13 and 20-plus proceedings, respectively) were summarily denied without substantive explanation, generating unresolved questions about the Director’s authority to issue content-free institution decisions and how petitioners can seek rehearing of an unexplained order; Rasheed cautioned that “we are moving so fast that we’re not necessarily thinking about the consequences.”
- UPC Holistic Inventive Step Favors Challengers: The UPC admits multiple prior-art starting points and multiple documents for the inventive-step analysis, departing from the EPO’s single-closest-prior-art problem-solution approach; Harguth described this as making the UPC preferable to the EPO for most inventive-step challenges where the challenger can assemble a portfolio of relevant prior art.
- EPO Dominates Added-Matter Challenges: Where the invalidity ground is a disclosure defect — added matter or intermediate generalisation arising from divergence between the US priority application and European prosecution — Harguth recommended the EPO as “the best place to go,” because its formalistic standard will invalidate a patent if the claim element is not “literally” present in the original description.
- UPC Revocation Prevails Over EPO Upholding: Azzaoui confirmed that when EPO opposition and UPC revocation proceedings run in parallel, the UPC will not stay its proceedings pending EPO resolution, and that if one body upholds and the other revokes, the revocation decision prevails — making UPC revocation the more decisive of the two forums.
- UPC Is a Second-Chance Forum Post-EPO Window: A challenger who discovers new prior art after the EPO’s nine-month opposition window closes can deploy that art in a UPC revocation action with no temporal bar, giving the UPC a distinct strategic role as a second-chance validity forum for post-grant prior art discoveries.
- Squeeze Argument Works Best in Integrated UPC Proceedings: Harguth confirmed that the claim-scope squeeze — forcing the patentee to choose between breadth sufficient to cover the product and scope narrow enough to survive prior art — “can even better work in a system where everything is together,” because inconsistent claim-scope positions across morning validity and afternoon infringement argument cannot be maintained before the same panel.
- Expert Hot-Tubbing Is Structured, Not Adversarial: In the Cabasi Texan case, Judge Zigann of the Munich Local Division expressly stated the proceeding was “not a US cross-examination,” with pre-circulated judge-led questions confined to contested prior-art points; Azzaoui noted that the pre-hearing question list functions as advance notice of the panel’s analytical priorities.
- Institutional Stability Is a Commercial Prerequisite: Rasheed argued that patent law is “commercial law” that “governs commercial transactions,” and that oscillation between radically different policy regimes — “whichever side you think is right” — “can’t be good for the system, because it creates this sense of institutional instability” that weakens markets.
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Interview/Transcript
This transcript was based on a conversation on December 4, 2025 at the 2025 Berkeley-GW UPC Institute. This panel on “Understanding invalidity challenges in different forums: EPO, UPC, and the PTAB ” was given by Yasmine Azzaoui, Bonabry, Farheena Rasheed, former Solicitor and Deputy General Counsel for Intellectual Property Law, USPTO), and Alexander Harguth, Bonabry, and moderated by Jeff Kushan, Sidley Austin, LLP.
Jeff Kushan 00:19
Evan, now, because I get to introduce people to make them work, I’m going to start with Farheena is in the middle. Farheena recently left the PTO. She was the.. she had a number of interesting positions. She was the solicitor and deputy general counsel to PTO. She also is did a stint trying to fix the board for a while, as a vice deputy acting vice chief judge, she was with the office for many, many years. She’s had her hand in a lot of decisions, and I think one of the things you’ll benefit from her today is hearing a lot of the thought process of the PTO in how they do their job. Yasmine is with Bonabry in Paris. She’s admitted in the New York and Paris bars. She serves as a UPC representative. She advises clients on all areas of law, but she has a particular focus on the life sciences, and she is going to give her, give us some of her experiences with the UPC process today. Alexander is a German attorney at law, specializing in paddle litigation, also at Bonabry. He’s been doing this for 25 years.
Alexander Harguth 01:33
Yeah
Alexander Harguth 01:33
I know, maybe more, because just the time I’m already starting, not to add new years, you know,
Jeff Kushan 01:34
that’s that’s great.
Jeff Kushan 01:41
I like to think if you measure us in our age based on our billable hours, we’re about 75 years of, you know, 100 years old, 110 depends on how much work you do. In any case, he’s a great resource for us today, because he litigates in the UPC, in German patent courts, in German federal patent court and in the European Patent Office. So, what I’m going to do is hand it over fairly quickly, so they can go through their slides, and then we’re going to come back and have a conversation about some of the interesting issues about revocation proceedings as part of the broader campaign for litigation. So, we’re going to start with who I think you’re up first.
Alexander Harguth 02:22
Okay, then I, I put on the microphone, and I’m going to start, because what we did, we were putting some figures together, and in order to show what are the success rates in validating patents in the different forums in, in Europe, so starting now. And here’s a slide on the, maybe you can.
Jeff Kushan 02:53
Yeah, I know. I was just thinking, you can’t turn your head
Alexander Harguth 02:56
would be great if, if I can happen,
Jeff Kushan 03:04
I just have to find it very quickly,
Alexander Harguth 03:06
but I can continue. We have the opposition possibility at the EPO. I think comparing it with the United States, this may be comparable to the post grant review situation, where you have nine months period after grant to, you know, to file an opposition and to get invalidated the patent, and on the slide I had added also the numbers, which are quite high, so many competitors, they are using that system in order to get in to get a patent invalidated through the BPO. At least I think it’s around 2300 cases per year filed and also decided by the by the by the by the EPO, by the opposition division, and later than by the boards of appeal, and this is, in my view, amazingly high, because from the numbers you can also say that it is not necessarily a forum which is patentee friendly, so and this is something. What you also see, what are the reasons normally invalidating patents with the EPO? What practitioners are saying is you need to have really, really good prior art in order to get a patent invalidated through the EPO, and the chances to invalidate a patent is more on on formal reasons, such as added subject matter, and it also is can be seen by by the. The success rates, which are in a way, you know, to get a full revocation of a patent, is around 25% and you have then the situation where the patent is upheld in a limited form, this is 46% but if you take both together, you have really more than two thirds, which are not staying in that, you know, in the, in the, in the, in the form as granted. Unfortunately, it is not visible through the through the statistics whether this really helps the patentee, because sometimes you get an amended claim, which is not then readable anymore on the infringing device, so can’t say, but of course the EPO is used by companies to invalidate patents, and now if we compare this, for instance, with the US situation. First, grant review is a system which is not used as much as we would expect, because it’s a kind of the counterpart, and so if we now continue with with, and I think it is also important to get an impression about the German situation, because we, Germany is known to be patentee friendly, but if you look on the numbers of invalidation, or let’s say the invalidation chances through the federal patent code, you can realize that it is not as patentee friendly, it is even, it’s, it’s even the federal patent court, a form which heavily invalidates patent, and we have anyway, we have that injunction gap, because here might be also a clash between the infringement courts and the and the federal patent court, because the infringement courts, they do not judge a judge on the on the patents, they rather have the possibility, or let’s say, as a defendant, you have the possibility to get a suspension of the proceedings if the, let’s say, the likelihood is sufficiently high for the infringement courts that you are going to be successful in the invalidation proceedings, and as you can see here, you have a court, which is more or less quite patently unfriendly, but the unfortunate thing, and this was always criticized by many worldwide, that normally the suspension rate in infringement courts is pretty low, so you, you really need in order to get a case suspended, novelty destroying prior art, and arguments such as inventive step are normally not heard with with an infringement court, and this made in a way the situation very favorable for patentees to start litigation, because then they get an injunction, and the injunction is enforceable against a pun, but in first instance, and the simple risk that you know that you could, in a way, enforce the patent is in many cases was it sufficient in order to get a kind of a deal, and I think that’s the, that is some of the idea, which was also sold by us to have that injunction gap, and you try to get in a way a settlement during that injunction gap, because you know maybe if you then have your case at the federal patent court, you might be losing it, or yeah, it might be limited to an extent that it’s not falling anymore on the on the patent and now coming to the UPC. Here I see a situation, because I was looking on this, trying to find out whether, in particular, in the telecom area, a company like an NPE is continuing litigation on the national level, or is he going maybe to use the UPC, and here we can see that the success rate in order to get an. Validation, or let’s say a revocation of the patent are better than at the federal patent court, definitely. And if we go now on the next slide, you can unfortunately have that number, need you can say that that in the in the situation of a telecom patent it is quite favorable, you can say, for someone who has a telecom patent to litigate in, in the, in the UPC, so therefore I think that’s a signal that also in the future there might be more, you know NPEs trying to get cases running on at the UPC because simply they see that it’s not what they expected that the UPC is in particular telecom area negative vis a vis the patentee rather they are in a way, in a, in a situation where you can say that it’s a, it’s a place where you can go and try to get your patent enforced, in particular if it’s an NPE with more than only one patent against the product, then, of course, what we discussed right a few minutes ago is if you have three patents against the same product and you can easily take the risk to file it might be separated might be separate cases but you can take the risk to go through the upc because if you win in only one or if you win in only one, you have already achieved what you want.
Jeff Kushan 11:45
Have a quick question. So, I heard earlier that there’s counting at the UPC for each patent challenge, or are they grouped together in sets of patents that will be proceeding in the revocation actions? These are like the 364 and 72 numbers are individual patents, that’s how many patents were in play, or is that
Alexander Harguth 12:06
these are individual patents. I also believe, because for the time being, we have, of course, some statistics, but they are already a little bit outdated, they are from a couple of months ago, and I added to this number something which is normally the ratio over the time, so you, but these numbers there are definitely numbers which are counted on per patent, and even so you know if you take both numbers together, counterclaim for replication plus infringement case, it’s, you know, normally it is, could be considered for someone in the United States as one one case, because it’s all done in front of the same same panel, but here we say that it is legally a new case, and you get also a new docket number, even though it is in a way the day of the hearing be heard and pleaded in front of the same panel, so normally this starts in the morning with a discussion on whether the patent is valid or not, and in the afternoon you talk about infringement, but due to the fact that it is, so you know, so a short time to get something, you know, discussed in one day, you cannot be sure that they are going like the French people are normally doing, they start with, you know, with it’s also logic to start with whether the pattern is valid, and then after you go down and you talk about infringement, there you can sometimes we experience cases where the judges are coming in and they are just trying to, in their preliminary opinion, to navigate through the proceedings, and yeah, of course, it’s more a written proceeding, and therefore in most of the cases they have already the decision in their mind, and in their only then checking testing the lawyers, whether they, whether they are some arguments, and then then they would, in a way, do what they know already, decide in a particular way, but was always, in a way, the tradition in Germany that it is, it was rather the exception that you in a hearing, and the judges did not yet know from the preliminary opinion, which is the normal way what we know from German proceedings, but the judge, the presiding judges, giving at the beginning, you get a strong feeling where you are, and of course it happened, it happened to me. That we overturned the situation, but this was really rare in situations where there was a clear misunderstanding in the panel, and that’s a, I think, for the time being that what I have here, and you have, let me only start, this is one of the reasons why, why, why the EPO, so patently friendly in my view, because they have a clear way of, you know, of analyzing inventive step in the United States, you talk about obviousness, and, and, and this makes it predictable, very predictable. The EPO case law, on the other hand, it’s patently friendly, and sometimes you know, from the implementer side, it is felt, you know, unfair, because if you start really formalistically, always from one piece of prior art, then you could end up in a situation where simply they, you feel that this is not completely correct, and also now the people, the skill person of the art normally does not always start from one piece of prior art, but I know it gives you the floor to explore how this is now different with the UPC,
Yasmine Azzaoui 16:25
and one interesting question is, what happens when there are parallel proceedings, like when there are EPO position proceedings, and in parallel UPC revocation proceedings. In this case, the UPC has stated several times that they will not grant a stay of the proceeding merely because there are parallel EPO position proceedings, but the UPC also stated that if there’s one body that upholds the patent and the other ones that revoke it, it’s the latter decision that will prevail. So, in this case, there’s one remaining question is, what happens if both uphold the patent in different forms. There’s no answer yet, but we’ll see what happens in the near future. And a second interesting point is that in the case of parallel proceedings before the EPO and the UPC, well, before the EPO, you have nine months from the grant of the patent to final position proceedings, so it can happen that you found out about, find out about a new prior art after this nine month window, and in this case, what you can do is to use UPC revocation proceedings to file these new prior arts, and to have a second chance to invalidate a process, invalidate the patent. When you are on the defendant side, of course, I will just the second, the third point that I wanted to make you notice is that there are differences of interpretation in the inventive step assessment before the EPO and the EPC, so for example, before the EPO a prior art is usually just the most promising starting point for arriving at the invention, and the EPO will only take into account one single document, whereas before the UPC there is a more flexible approach that is has been taken by the judges in the recent case law, we can see that the UPC decided that prior art could be documents that would have been of interest to the person skilled in the art, and the UPC judges are also keen to admit several prior arts and different starting points instead of just one sole document, this can also be explained by the fact that the UPC is the competition of the panel is one legally qualified judges as well as technical, technically qualified judges, which is not the case before the EPO. So the approach of the inventive step assessment before the EPO is way more strict and rather narrow, and third, next slide, the other point that I wanted to note to make you notice is the role of expert evidence before the UPC, and the difference with the national courts. So, we know that in Germany, or in France, for example, expert declarations are very often filed, but experts are very rarely heard during hearings in the UK. The expert declarations are like central in the UK proceedings, and in the Nordic countries, the judges may question also the experts during the hearings before the EPO. Only expert declarations are submitted, and usually it plays a limited role, and before the UPC, well, the in the case the PCS canine case sign of the against Amgen, the Munich Central Division stated that those expert declarations may be useful, of course, to provide proof of certain facts, but the judges will make the ultimate assessment of the relevant facts and the circumstances, which are a question of law, and so the UPC is trying to use those expert evidence as a way to assist them in making certain findings of facts, but the ultimate assessment is made by the judge and the court itself, but recently there has been a case before the Munich Local Division, the Cabasi Texan case, which was between Sanofi and Stada Zentiva and Dr. Redis. In this case, the court has heard for the first time expert testimonies during the hearing, and it was interesting to see how it can be different from the classic US or UK cross-examination of experts. So, first, a few weeks before the hearing, the judge has sent a list of questions that he will ask to the to the experts during the hearing, and he also tried to limit those questions to specific points, specific prior arts, and like the most contested points of the case, and the hearing took place in October, and it was a full day hearing where the expert, the experts were questioned during two hours, two or three hours. There were first questions asked by the judge, and then questions asked by each, each council’s parties, each parties council. Sorry, and it’s also interesting to note that the judge Sieg, during this hearing, specifically said that this would be different from US or UK cross-examination proceedings, so yeah, the we see how the judge wants to really limit the questions that could be asked to the experts.
Jeff Kushan 23:10
We’re going to come back to this. All of us in the US are completely obsessed with this question of hot tubbing of the experts, so we’re going to be entertaining ourselves by looking into that, all right. So, you have to do the impossible thing, which is turn your head exactly backwards,
Farheena Rasheed 23:28
you know. I actually, I have paper copy, so I can, I can run through it, I think. So, Alex, you had started off by mentioning the counterpart to the EPO proceedings being the PGRs, and why we don’t see as many PG, the same rate of PGRs being filed in the US, and that’s true historically. PGRs are about 5% of all of the AIA type proceedings that are at the agency, but when you look at it in the context of the number of patents that the United States Patent and Trademark Office issues, it’s, it’s sort of, you know, it makes sense that we’ve got, I think, we’re at 12 million plus patents right now. The grant rate is extremely high, I think upwards of 70 to 80% and the number of live patents that exist right now are close to about 4,000,003 point 9 million, based on the USPTO slide, and so when you have that many patents, it’s kind of hard to get in within the first nine months to kind of evaluate fully whether or not you’re going to challenge it. Some industries are, you know, are prone to doing that. The life sciences, I think, are very keen on this, because they’re very much attuned to what the competitors are doing, and so they are monitoring, but there are just so many bands in the other areas, especially in the the electrical side and the computer side, that there’s just.. it’s not really as feasible. So I think that’s why it’s also, you know, very stringent estoppel considerations, because you can raise a lot more. Issues in a PGR, as opposed to an IPR, and so those concerns also I think discourage folks from applying, but you know these figures are interesting, but obviously currently what’s happening, and John Wayland alluded to this, is there’s just been this completely dramatic shift in IPR practice compared to historic norms, it’s really been turned on its head. I think John had said it right, you know, it was two thirds versus 1/3 denial previously, and now it’s the other way around. And most recently, in light of the summary denials under Director Squires, we’re looking in close to 20% of institution rate in some instances, so there has been a very sharp decline in proceedings at the agency. There are three types of proceedings, and I know you all know this: there is the two AIA proceedings, the inter parties review, the post grant review, and there’s also reexamination proceedings that are postgrad proceedings that have existed since 1980 so in this slide I think we were just showing, sorry, we were just looking at comparing, you know, what’s happened when in the first half of the year, the fiscal year for the United States is from October to September, so not the calendar year, and so when the prior to the new administration coming on board, where the PTAB panels were handling institution, you had a institution you know, granted 66% of the time, denied 34% once the director came on board, that really has shifted, where you’ve got a denial rate of 60% and a referral rate of about 40% so this is a huge seismic shift in how things are happening at the agency. It’s going to have ramifications in district court litigation, and it’ll be interesting to see if it has ramifications in Europe as well, in the UPC. The next slide, you know, you had also mentioned, you know, we were not sure which court is more patent friendly, whether it’s the EPO or the UPC. I can tell you right now that PTAB is the most patent friendly court tribunal. I would almost go in so far as to say it is the patentees’ best friend at the moment. Patentees are sitting pat and happy, and you know, but I think there are some certain considerations that they should also think about, and not necessarily take current dynamics for granted.
Audience 27:50
You think it’s a friend the last nine months, or,
Farheena Rasheed 27:55
oh no, last nine months, but, but John, John, I think you know, if you look at, if you look at this slide, right. Okay. Well, if you, it kind of depends on how you look at it. I mean, there’s an argument that the PTAB has always been patentee friendly, and the reason I say that, and these are numbers from the patent office, it’s because it’s because when you look at, you had talked about decisions where all of the claims, all the challenge claims, have been invalidated, and when you look at that number, it’s 17% which is nowhere near, you know, an astronomically high number of
Audience 28:38
final decisions (inaudible)
Farheena Rasheed 28:42
that’s because it all depends on how you’re counting. I give you that, all right. Well, I went down this road because you had asked, but I do think there is an argument to be made. This idea that the PTO was not patentee friendly, I think the numbers speak for themselves. So, it’s something to think about
Audience 29:09
(Inaudible) I go to my favorite people on LinkedIn, I don’t think they’re going to agree
Farheena Rasheed 29:15
It might be true, it might be true, but I’m just talking about what the numbers show in terms of overall
Audience 29:21
numbers you were selected
Farheena Rasheed 29:23
is this is this is the PTO numbers, not my numbers, that’s the PTO numbers. Okay, well, this is the PTO numbers, including the discretionary denial numbers under this administration. So, just putting that out there. Also,
Audience 29:42
everybody in the audience, this has been a longstanding issue about the numbers versus the general feel of, especially small fac, these folks like Josh Malone, that that always been that gut feel that people have based off of Judge Raiders’ comments, which he didn’t show up, so we can talk about him today. That it was a patent death squad, so
Farheena Rasheed 30:11
that’s right.
Audience 30:12
This is a long-standing issue. Yeah, you’re just nodding. You should, you should
Jeff Kushan 30:15
I’m just, you know, I didn’t know how hostile this audience. I’m just gonna lay low right now
Audience 30:27
John started it
Farheena Rasheed 30:27
but I can take John, former solicitor. I can handle John all right.
Jeff Kushan 30:32
You want to talk about this one
Farheena Rasheed 30:35
You know, I was here, I was just trying to show you the comparison between the prior year, fiscal year, versus the current year, just to show you how, how drastic the change has been with the discretionary denials, that was my only point
Jeff Kushan 30:48
46% denials currently, and that’s up about it, used to be 28% right? So we went from 28 to 46% stopping them at the before they’re instituted,
Farheena Rasheed 31:07
Right, yeah
Jeff Kushan 31:10
that’s a pretty noticeable chunk.
Farheena Rasheed 31:12
Definitely noticable, definately noticable
Jeff Kushan 31:15
this last slide.
Farheena Rasheed 31:16
Yes, and and now we’re in this world where we’ve got black box decisions. There have been two sets of these. The first one involved 13 IPRs. The next set involved 20 plus IPRs, where they were summarily denied without any sort of explanation. Whether or not the agency has the authority to do that, I think is debatable. I was, I was, you know, instrumental in establishing the non-reviewability bar the first time around, so I’ve litigated this. Oh no, I mean it’s these are just facts
Audience 31:56
Just so everybody knows I has everybody seen these piece of paper? I didn’t know if it had made its way to Europe. I think it’s very, very green, very efficient. No trees
Farheena Rasheed 32:16
it can be
Audience 32:17
13 IPRs, millions of dollars of work denied one page. That’s government efficieny.
Farheena Rasheed 32:23
and the feelings haven’t changed, just keep that in mind. Yeah,
Jeff Kushan 32:27
but that Europe is familiar. Remember, Europe was run by the Romans, right? They got most of Europe, and how’s that thing in the gladiator? Yeah, this or this, right? This is because they’re going Roman gladiator type, you know, of action actions on the institution,
Farheena Rasheed 32:42
so you know there are lots of governance issues I think related to that. There’s some transparency issues related to that, whether those are litigation risks or not. Those are questions that will be answered in the future, but you know there are other things to kind of keep, keep in mind there are existing regulations in place that allow you to appeal to seek rehearing of an institution decision. I don’t know how you seek rehearing of that. What do you say?
Jeff Kushan 33:11
I would say you failed to read the petition
Farheena Rasheed 33:16
so you know there are issues like that that sometimes it makes me think that we are moving so fast that we’re not necessarily thinking about the consequences of, you know, the existing structure, which has been codified in rules at the agency. Those are just some, some thoughts
Audience 33:35
you know there’s a whole group of people that think they’re moving at exactly the speed they intended.
Farheena Rasheed 33:38
Oh, I think they.. this is completely intentional. I think that’s right. Yeah, I think that’s right.
Speaker 1 33:42
There’s patenting for all the other agencies (inaudible)
Farheena Rasheed 33:46
yeah. No, no, no. This is not.. this is consistent with how this administration has moved across. I don’t think the PTO is is unique. What I think is different, this is though, that the PTO has historically been hasn’t really kind of felt political changes, and I mean I understand full well that that elections have consequences, but those consequences weren’t always felt at the USPTO, which is, you know, an institution with a very discreet mission, and sometimes I do wonder whether these sorts of drastic changes are good or healthy for the system as a whole. My view is patent law is commercial law, it governs commercial transactions, and if that’s right, you need stability, you need consistency, and if we have these wide shifts from one direction to another, whichever side you think is right, or whichever side you align with, this can’t be good for the system, because it creates this sense of institutional instability, and when you think about how markets are governed, you know any kind of in. Instability like that weakens the system as a whole, and you know, I think it can be dangerous territory. Yep,
Jeff Kushan 35:09
so what we thought we would do is kind of tackle a couple of different questions that parties who might want to think about starting a fight, or are in a fight. Should consider, and I would like to start with the European perspective, and say, all right, if you have, if you’re the party who wants to, you see a threat, you’re the potential infringer, you see a threat, and you want to take action to try to forestall that threat. What’s the best path? What’s the best option for you as a patent challenger, UPC, EPO, national action? Let’s kind of get a sense of what the factors are that drive that choice. Now you have three choices, at least.
Alexander Harguth 36:05
It really depends on the case
Jeff Kushan 36:08
You can’t answer like that. You have to give nice clear guidance.
Alexander Harguth 36:12
I have given you. Thank you. It depends on the case, and in order to start, for instance, EPO position, you really need to know what, how you are going to, you know, oppose the patent, and to some extent, sometimes I recommend to my clients we have to prepare the opposition, but we decide really at the last moment whether we are going to file, because in consideration of a inventive step assessment, which is, you know, more patentee friendly. I feel better in a system like the UPC, where you have a whole holistic approach. They call it also holistic approach. What we know also from our German federal court, where you have the possibility to somehow combine the starting point in order to get to your, let’s say, to a conclusion whether it is invented or not, and therefore it depends on the case, and I would really want to see first the prior art, which is available, and of course, if the patent has a problem with respect to disclosure or added matter, then the best place to go is the EPO, because they are very radical in terms of, and this happens often in international prosecution, that you have a US priority where everything starts and then goes over PCT and later to the European Patent Office, that changes are made in the claim, which are somehow changes not well reasoned, and they have been integrated in your, in your application, and later when you start to litigate the patent, you realize, oh my gosh, why did they change, you know, a particular term into something else, and we are at least the EPO is very strict on these, you know, if you do not literally have the disclosure in your, in your, in your description, then you are out, and you could then also kill the patent better at the EPO
Jeff Kushan 38:32
so that’s your scenario where your priority application has combined A, B, and C, and somebody shifts to make it a B prime and C in the national filing, and now you are going from a more generic description to more selection out of the genus or the vice versa, so you have discrepancy between your, your, your own priority chain, and you lose your priority benefit.
Alexander Harguth 38:59
I think the reason why this is sometimes going wrong is because you know there are differences between the US in prosecution, for instance, if we, if in the description, a range is in a way described, I think, and I’ve heard from patent prosecutors in the United States that you could also, for instance, you have 5% to 10% you could also, for instance, take the 7% because it’s in between, that’s something what you will never can, you can never do in the in Europe, and because you have only the possibility to take exactly what is written in your, let’s say, in your description, what is the inventor at the beginning originally disclosing to the world?
Jeff Kushan 39:53
I want to, we’re, I got a sign thrown at me in the back there, be a very few minutes, we’re. Left, so I want to go to the variable that often is a big question mark for us litigants. What is the role of the expert in the fight, and how can that help us or hurt us in a proceeding? And I was very intrigued by the hot tub question, because maybe you can just give us a flavor for how the experts are guided when they’re in the hot tub, and just so you know, this, this is Australia’s fault, right? Australia is the first place that I’ve heard of the hot tub, where they put the experts together in front of the court, and they let the experts kind of have the interaction directly in front of the fact finder or the, but that is terrifying in the US process, but go ahead,
Yasmine Azzaoui 40:58
yeah, so it’s still very well structured. It’s not a real, like, confrontation between the two experts, like the judge is leading the questions, asking questions to each expert separately. So, yeah, it’s not.. I mean, it’s kind of structured, and it’s interesting also to see how, when the judges are sending the question before you can also have a feeling of what will be important during the hearing and what you should advocate on during the hearing, so you know in advance what you will focus on during the hearing, and that’s actually something like a real bonus compared to, for example, hearings before French national courts, where you just arrive and, like, plead the whole case during three hours, and you don’t really know what will really interest the judge. So, yeah, that’s a, that’s a good hint.
Jeff Kushan 41:55
are the are the judges in the hot tub setting testing the credibility of the witnesses or are they just really looking at the scientific questions or the technical questions?
Yasmine Azzaoui 42:06
so that’s that’s exactly why Judge Zigann stated that we are not in a US cross-examination proceeding, so that’s only there were only very objective questions about what did what the experts interpret from the prior art or from clinical trials, and what was the common general knowledge at the priority date
Alexander Harguth 42:30
but you have to keep in mind what the judges said, that you have only one day, and and there is an inclination, we heard it from the French chart has an inclination not to have, you know, this. This is maybe already a case which is a little bit abnormal from what is typically the situation in UPC litigation, but is at least in Germany. I’m talking about the German divisions of the UPC because they want to finish the case in the evening, and if you have only eight hours and you have to anyway to split it in two parts, because you start with the validity and later to talk about infringement, it is even the situation is even what concerns time worse than what we had with the federal patent court in Munich, where we have had only a discussion on the validity, but the whole day,
Jeff Kushan 43:32
right.
Alexander Harguth 43:32
So I think this is rather the exception, but if we read now the rules of procedure, there is a difference to what we know all out of the German law, and this is maybe because UK lawyers were also drafting these, these, these rules, the private, the privately appointed expert has in the should have a different position than what we know from German proceedings, because in Germany it was for a long time, a long time only the statement of the party, and not has no had no had no additional value, therefore they didn’t want to hear the, the, the, the expert, but here there might be in the future a shift towards something which is then more, because it starts also with the declaration, because they have to bring a written declaration into the proceedings that we will have something which is then in particular, I find it’s not so, in a way, bad to have two experts from two sides, because to some extent it bubbles out the truth. They are often people, they have their own, you know, their own renom, and they do not want to be somehow brought in a situation. Where they in with the other side says if you’re wrong or they
Jeff Kushan 45:05
I think it’s what’s it we’re running out of time, but I want to flag this point with Farheena. My sensation has always been that that what you are describing now, two declarations go in and there’s kind of like a narrowing of the issues of dispute, and then the fact finder can look at the disputed questions and do some kind of assessment of the narrower set of questions that have been engaged, that kind of feels at some level what is what goes on with the at least the historical PTAB proceeding, right, we’re all on paper we have depositions to test kind of the weaknesses of the other side’s experts’ testimony is that kind of, I mean, give us a sense of kind of the philosophy of how the board uses expert testimony.
Farheena Rasheed 45:53
I think that’s right, but I mean, even even the use of expert testimony right now under the current, just it’s another discretionary denial factor, relying on expert testimony to fill in gaps. I mean, there’s the question, you know. Yes, you don’t want to necessarily rely on use the expert to explain what a person of skill in the art would have understood for general knowledge, and you know, you want to rely on the prior art itself, but that line of when the expert is simply explaining what the prior art would have taught to a person of ordinary skill in the art, and whether they’re providing general knowledge, is a very, like, it’s very blurry, so to use that as a basis to deny institution is, you know, is interesting, it’s very different than historic practice, where the expert reports were very helpful to the judges. I think you know, John had alluded to how the board decisions, the quality of the board decisions, you know, I do think that they’ve improved over time, and the reason I think that they’ve improved over time is because the litigants that have appeared before the board have has really gone up, the quality of the litigants has gone up. You’ve got very big law firms now litigating in the PTAB, and that is why you’re also seeing better decisions and also better use of expert testimony. So that’s been the historical practice, but I do think that’s different now in the current regime.
Jeff Kushan 47:18
I think we’re out of time, right?
Audience 47:20
You’ve got a couple more minutes
Jeff Kushan 47:28
where I wanted to go. The only other question I wanted to kind of get a sense from the panel, one of the things I’ve always learned in working alongside European litigation with kind of a like a global campaign is the the European lawyers tend to come in with a kind of analytical approach of how do we create the squeeze right the squeeze between the tensions and I want to get a sense of whether in the setting of national proceeding individual revocation proceeding versus integrated UPC proceeding, where you have a counterclaim within the broader case. Are you feeling that you still have all the options for squeezing when you’re taking a revocation action or a national action, or do you feel it’s sometimes better to choose a place where you can kind of have them in that one day hearing to hear both infringement and invalidity questions.
Alexander Harguth 48:30
I personally believe that the squeezing strategy, let’s call it squeezing strategy, also applies under the rules of the up UPC, so whether you are arguing the squeeze the same day or in, in, in different, let’s say, poem is at the end of the day valid, a valid way to find something which might be either not non infringing or it is simply invalid because you have to decide at one point and and it’s a completely valid way how to strategize your case, and I think, in particular, in the telecom area, where you have notions which are not so clear sometimes, and you have prior art where you read it 10 times, and at the end of the day, you even could, you know, find the infringing device, and that kind of description there. The squeeze is very important to us, because then there must be the other side must take also a decision where they want to go, and I think the squeeze can even better work in a system where everything is together. Better, because you cannot say in the morning I have that understanding of how it works, and then the in the afternoon when it’s up to talk about infringe and infringement about something something else.
Jeff Kushan 50:17
Do you have any additional thoughts?
Yasmine Azzaoui 50:19
I would say that it may be easier to bring a squeeze argument before the European Patent Office, since they are very sensitive to, like, that the assessment of the inventive step and the validity of the patent is stricter and narrower than before the UPC, but yeah, I mean, that’s, I think, that in the end it’s like in before both the courts it will be like a good argument, and like the also the I also think that since there is legally qualified judges before the UPC, they are maybe more keen to hear a story about how the patent has been well, how the invention has been done, and when, and what was the common general knowledge before the priority date, and so it depends actually on the what kind of squeeze argument.
Jeff Kushan 51:19
Yeah, I think what you started with was where we will end, which is your facts dictate how you’re going to approach this, right? If you can tell that narrative coherently based on what you can prove, you may go in into the UPC court integrated in one proceeding if you’ve got a really good invalidity case and you don’t want it clouded by kind of the fact that the product is not very successful, then maybe you keep that separate and you choose a revocation proceeding in one of the forum. All right. Well, thank you very much. I appreciate the panel putting all this work into the remarks, and that’s what we have.