Ex Parte Reexamination May Cost Apple $177 Million

June 5, 2018 | Insights

On May 24, 2018, Apple was awarded a verdict of $533 million for Samsung’s infringement of three Apple design patents. While unsuccessful ex parte reexaminations (EPRs) were filed against two of those three design patents, the third design patent stands rejected in an EPR that is still pending before the U.S. Patent Office. If that rejection is upheld, then that EPR could end up costing Apple one third of the verdict, or $177 million.

An EPR is a patent office proceeding that is relatively inexpensive compared to an inter partes review (IPR), and which has other beneficial attributes compared to an IPR. In regard to cost, an EPR costs only $12K in filing fees and as little as $3K in filing fees under certain circumstances. Attorneys’ fees can total less than $10K to place an EPR on file. In contrast, the filing fees alone for an IPR are at least $15.5K, plus an additional $15K if trial is instituted. The attorneys’ fees for the length of an IPR are substantially more, often over $200K, not including additional costs for experts.

In regard to estoppel, the party that challenges a patent in an EPR can remain anonymous, and there is no estoppel created by an EPR – the same prior art that is used for an EPR can also be used at trial. Not so with an IPR. The party that files an IPR is not only known to the patent owner, they are estopped not only as to the prior art that is used in the IPR, but also to prior art that they reasonably could have raised in the IPR.

A party can also file as many EPR requests as desired, as long as they are able to support their request with an analysis that a substantial new question of patentability is being presented. In contrast, multiple IPR challenges are difficult to bring, and the failure to obtain an institution decision in the first IPR request is often used by the Patent Office to reject future requests, regardless of the merits.

EPRs have been very useful to invalidate some or all claims of challenged patents, with 92 percent of EPRs being granted and 88 percent resulting in the cancellation of some or all challenged claims. In contrast, even though IPRs were initially very successful in obtaining the invalidation of challenged patents, institution rates have dropped from 87 percent in 2013 to only 63 percent in 2017. Thus, after spending substantially more to file an IPR, a challenger can essentially lose on the merits even before trial is instituted, and not be able to file subsequent IPR challenges.

Jackson Walker has substantial EPR expertise

Attorneys at Jackson Walker have used EPRs in numerous matters to invalidate all claims of asserted patents in related litigation or prior to suit, to obtain litigation stays pending the outcome of the EPR, and to reduce over 80 percent of damages being sought prior to trial. In addition, Jackson Walker attorneys will be glad to present a seminar to in-house counsel on the effective use of EPRs to reduce or eliminate the threat posed by third party patents. For further information, contact Chris Rourk.

Meet Chris

Christopher J. Rourk is a Dallas intellectual property attorney who handles high-profile matters for clients in intellectual property, corporate transactions, commercial litigation, and other complex interdisciplinary matters. Chris has prosecuted over 400 patents to issuance in diverse technological fields such as nanotechnology devices, semiconductor systems and devices, radio frequency systems and devices, analog systems and devices, telecommunications systems and devices, medical devices, image data processing systems and devices, and consumer electronics. His unique combination of ten years of work experience as an engineer and diverse legal experience has given him insight into solutions for many business problems encountered by clients, as well as preventative measures and strategies for avoiding those problems.