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Using IPR to Manipulate the Stock Price of Patentees Which Won in District Court


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The below is copied from a post on the Patently-O blog.  I thought others on the board should be aware of this.  An "IPR" stands for "Inter Partes Review" and is the new procedure whereby a third party can contest the validity of a patent at the US Patent Office after the patent has been granted.



Here is the blog post:


Update: Using IPR to Manipulate the Stock Price of Patentees Which Won in District Court

Posted: 03 Oct 2014 09:35 AM PDT

The creativity of American lawyers never ceases to amaze.  I’ve heard of variations on this theme:  using an IPR to coerce payment, a license, or something from the patentee.  Variation on the theme:

A third party sees that a patentee has won a big judgment, defending its patent against a charge of invalidity.  The third party then cobbles together an IPR petition based upon the arguments that failed in the district court, relying upon the lower burden of proof and broader claim construction that will apply in IPR, and sends it to the patentee with a note:  “pay us or we’ll file this.”  This was discussed a few months back here.

A third party uses IPR as a tool to manipulate stock price:  sell the stock short and then file the IPR.  Or, it sees the patentee is in litigation and says, “give us a license (which we’ll turn around and use to license the defendants) or we’ll file an IPR.”  A story about that allegedly happening is here.


Gotta love America.

The ethics of this are fascinating:  it may be that the OED (Office of Enrollment and Discipline) could be brought in to show that the IPR was filed for an improper purpose and nip it in the bud.  But that’s probably a long shot, given the right to petition and what-not.  Perhaps Congress limiting standing in IPRs to competitors?  It’s too early for me to think in depth about a creative solution to this creative problem.


Patently-O blog website:




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