Patent Office Defends PTAB Denying Motions to Amend

Yesterday the Director’s Forum, a blog run by the United States Patent and Trademark Office, published a guest article written by Nathan Kelley, the Acting Chief Administrative Patent Judge. In the post Kelley explains that there has been great public interest on motions to amend in post grant administrative trials, which led the Patent Office to conduct a study on motions to amend.

Of those 192 cases with motions to amend the Patent Trial and Appeal Board (PTAB) had occasion to review only 118 motions, which is in part due to settlement prior to decision on the motion in a number of cases, or the motion being contingent and becoming moot because the panel found the original claims patentable.

Of the 118 motions to amend, only six were granted or granted-in part by the PTAB, which corresponds to a paltry 5%. Some 94 motions to amend were denied on specific grounds of patentability and 22 were denied solely on procedural grounds.

If amendments to claims in post grant administrative proceedings would not place the claim in condition for allowance it is hard to fault the PTAB for refusing to allow the amendment. But if nearly 80% of the motions to amend are being denied for legitimate substantive reasons why does the Patent Office continue to argue, even excuse the practice of near universal refusal to amend claims in post grant proceedings by saying they have only a limited amount of time for each case and they simply cannot allow amendments?

No Time for Back-and-Forth Examination

Kelley writes: “[U]nlike in the examination context, the PTAB proceedings must be completed within a year, and there is no time for the back-and-forth between the applicant and the USPTO that happens during prosecution.”

The position taken by Kelley here is not new. This is the position taken by the Patent Office since the beginning. Essentially, the PTAB is telling the patent owner — sorry, we just don’t have the time it takes to allow you to amend so we won’t. A terrible reason to refuse a patent owner the ability to amend, but this has consistently been the justification provided by the Office.

The PTAB believes they can tell patent owners that they cannot amend patent claims being challenged in post grant proceedings because they interpret the statute allowing amendments to merely provide a right to ask for an amendment, not the right to amend.

35 U.S.C. 316(d) says: “During an inter partes review instituted under this chapter, the patent owner may file 1 motion to amend the patent…”

What good is a right to file a motion to amend if there is not a right to amend? Clearly, this is a misinterpretation of the statute — and I say that regardless of the fact that the Federal Circuit has ratified this misinterpretation. That the Federal Circuit acquiesced to the Patent Office interpretation merely means they too are misinterpreting the statute. Even a casual perusal of the legislative record will show over and over again how Members of Congress quieted the fears of patent owners by explaining patent owners facing a challenge would have the right to amend claims. No one was trying to take patents away, they just wanted to make sure claims were of appropriate scope. Of course, that isn’t how post grant proceedings have played out.

The real problem with the PTAB position relates to the false claim that the Patent Office couldn’t possibly complete the proceedings within the year time frame required by the statute if they were to give the applicant a full and fair opportunity to amend claims using a back-and-forth prosecution process between the applicant and the USPTO. Indeed, the Patent Office uses this one-year time frame as an excuse for every one-sided procedural rule that has been implemented against patent owners.

Simply stated, the Patent Office is wrong, and it is getting quite tiresome to hear such a bogus argument over and over again. The fact that it is said often does not make it any truer than the first time it was said. It is a convenient excuse used by the Office that has allowed them to justify a completely one-sided process against the patent owner.

Up to 18 Months to Complete Proceedings

You might not know it listening to the Patent Office, but the statute actually gives the Patent Office up to 18 months to reach a final determination. According to 35 U.S.C. 316(a)(11), ordinarily proceedings are to conclude within 12 months, but can be extended up to an additional 6 months for good cause. If providing a property owner with proper due process and procedural rights before stripping a vested property right (see 35 U.S.C. 261; yes, patents are property) isn’t “good cause” I guess I don’t know what is “good cause.”

It is also incorrect for the Patent Office to say, suggest or claim that there is no way to expedite the prosecution process. The Office already allows for examination to be expedited, including under the option known as prioritized examination (sometimes referred to as Track One). Prioritized examination moves an application to the front of the line in exchange for the payment of an extra fee. By paying the extra fee, which presently ranges between $1,000 to $4,000 depending upon entity status (see USPTO fees), the applicant is guaranteed a patent decision within 12 months. In many if not most cases the patent decision is reached within 6 six months or less. In fact, so few people use prioritized examination that the length of time an applicant must wait for the patent to actually issue after receiving a notice of allowance is longer than the length of prosecution with the examiner.

If the Patent Office can rush a patent application along with prioritized examination and engage in a full prosecution of an application within a few months there is absolutely no reason why the time limits placed on completing post grant administrative proceedings should be a legitimate excuse for the PTAB to refuse a full and fair opportunity to amend. The fact that the Patent Office chooses not to avail itself of the extra 6 months allowed by the statute to complete proceedings is on the Office and should not prevent the patent owner from receiving a procedurally fair process.

The Patent Office complaining that they don’t have enough time to give applicants an opportunity to fully and fairly amend in a back-and-forth manner akin to prosecution with the examiner is rather insulting. Patents are supposed to be presumed valid once issued (see 35 U.S.C. 282). The Patent Office refuses to provide a presumption of validity when patents return to the Office and have long argued that they don’t have to because when a patent comes back to the Office it is subject to further prosecution. That isn’t the case in post grant administrative proceedings. In fact, all we hear from the Patent Office is why they can’t, don’t or won’t provide further prosecution.

If providing back-and-forth prosecution is too much of a burden then the least the Patent Office can do is presume the patents that the Office itself issued are valid. Of course, if there is no right to amend because back-and-forth examination is too burdensome then the Office shouldn’t be using the broadest reasonable interpretation (BRI) standard either.

PTAB Would Have to Allow Unexamined Claims

In any event, Kelley goes on to explain why the Patent Office can’t possibly allow for amendments to claims as a matter of right: “[I]f the PTAB grants such a motion, the new claims will issue (and be enforceable against the public) without any examination to ensure compliance with the statutory requirements for patentability.”

Frankly, this argument sounds a lot like the specious arguments you hear from government officials during a budget crisis, which might go something like this — we don’t have enough revenue, so either we raise taxes or we are going to have to close fire houses, lay off police and/or release inmates from prisons. This type of scare tactic is as predictable as it is insulting. Sure, let’s just stop providing those services that are at the core of what government is supposed to do so the people government is supposed to represent feel pain! As if there is no other spending on discretionary programs that could ever possibly be cut before releasing violent criminals into the community would make sense.

If the Patent Office wants to grant motions to amend in post grant administrative proceedings without ensuring compliance with the statutory requirements for patentability that would be just about as stupid as releasing violent felons or laying off firemen or police.

Claiming that the only option the PTAB has is to deny motions to amend or to allow unexamined patent claims to be foisted on the public is simply not true. This artificial creation of a Hobson’s choice ignores the obvious real solution. The Patent Office should do its job.

The Patent Office has 6 additional months to complete proceedings that they don’t seem to want to use. The solution is to use the time given to the Office by the statute rather than claim there is some artificial deadline that doesn’t actually exist. The fact that they don’t want to use those additional 6 months shouldn’t create a crisis situation for patent owners, who actually are presumed to own a valid property right that someone is trying to take away.

The fact that the Office can’t figure out how to accelerate or prioritize an amendment process for patents under review at the PTAB is nothing short of breathtaking given they have figured it out elsewhere. With the speed at which prioritized examination operates there really is no reason why the Office would even need to tap into the additional 6 months available in many, if not most cases.

Only 50 Motions to Amend a Year

Finally, Kelley takes issue with those who say there are so few motions to amend because the PTAB record on allowing just motions is so abysmal. Kelley points out that this year the PTAB is on pace to receive 50 motions to amend, which is about the same number received in the first year. Therefore, Kelley doesn’t think there is any merit to the argument that so few motions to amend are filed because only 5% are granted.

According to the motion to amend study there have been 4,850 petitions filed seeking the institution of a post grant administrative proceeding, and only 192 motions to amend have been filed, with only 50 per year being filed? If Kelley is right and there are never going to be many motions to amend filed it is utterly unbelievable that the Patent Office would cling to the nonsensical argument that they can’t possibly provide those 50 patent owners a year with an honest, full and fair examination of amended claims. For crying out loud, the Patent Office is in the business of patent examination and we are taking about 50 amendments a year that they say they can’t handle with special dispatch? That is pathetic.

Conclusion

Don’t let the Patent Office fool you. If they wanted to offer patent owners procedural opportunities to fully and fairly engage in an amendment process for patents under review by the PTAB they could. The truth is they don’t want to offer patent owners such a full and fair opportunity to amend claims, so they don’t.