Porter Hedges Patent Team Secures Four Denials on IPR Petitions Filed by Phillips 66 before PTAB
Porter Hedges has secured four denials on inter partes review (“IPR”) petitions filed by Phillips 66 (“Phillips 66”) against our client Magema Technology, LLC (“Magema”) before the Patent Trial and Appeal Board (“PTAB”). Magema is a Houston-based, veteran-owned, small business that owns patents related to low sulfur marine fuel oils.
The most recent published PTAB statistics show an institution rate of 65% when viewed per patent, making a complete denial on the merits across multiple patents an increasingly rare result. Since it was established in 2012, the PTAB has invalidated more than 2,000 patents. IPR is patentability challenge before the PTAB that often proceeds in parallel to patent litigation before the district courts. Generally, it is believed that the PTAB is a more favorable forum for patent challenges than district courts for a variety of reasons. When IPRs are instituted district courts often stay cases to allow the PTAB to resolve questions of patentability first. Stays can last years and may result in duplicative work should a patent ultimately be found to be patentable at the conclusion of an IPR. Some smaller patent owners argue that large companies have misused the IPR process by filing multiple, costly petitions that lack substantive merit, in an attempt to use the IPR process to make enforcing patent rights more difficult.
The PTAB will institute an IPR when a petitioner demonstrates a reasonable likelihood that it will prevail with respect to at least one challenged claim. In the first two months of fiscal year 2022, the PTAB has instituted IPR for 66% of all petitions, which is a slight increase over the 65% of petitions for which IPRs were instituted in fiscal year 2021.
In 2020, Magema filed suit against Phillips 66 for infringement of four of its patents. In response, Phillips 66 filed petitions for IPR challenging multiple claims in each asserted patent. These challenges relied on varying combinations of nine patents and other printed publications. In total, the petitions raised 83 challenges to the validity of 23 claims.
In response, Magema argued that the PTAB was within its discretion under the precedential Fintiv decision to deny institution and that the petitions failed to show any reasonable likelihood of prevailing on any of the challenges.
Ultimately, the PTAB agreed with Magema and found that the Phillips 66 petitions failed to show the facts necessary to demonstrate a reasonable likelihood of prevailing in any of their 83 challenges to the patented claims.