Time to Quiet Title for Patents: Fixing the PTAB by Recognizing Patents are Property

By Gene Quinn
March 16, 2017

Congress made an enormous mistake with passage of the America Invents Act (AIA). Special interest groups convinced pretty much everyone on Capitol Hill that sweeping new procedures were necessary to challenge already issued patents. Post grant review (PGR), inter partes review (IPR) and covered business method (CBM) review were created based on the promise that they would be faster, cheaper alternatives to riding the system of dubious patents that should never have issued in the first place. By any objective measure these procedures have failed miserably.

So far speed has been obtained thanks to systematic and purposeful denial of procedural due process to patent owners, and so many technology companies continue to scream that the patent troll problem simply has not subsided. In fact, so bad is the patent troll problem – apparently – that companies are continually forced to settle bad cases where weak, low quality patents are being asserted by bad actors (i.e., patent trolls). If you listen to the narrative of America’s elite technology companies you are led to the inescapable conclusion that the Patent Trial and Appeal Board (PTAB) and the aforementioned three new procedural challenges to issued patents are an abysmal failure.

We were promised the PTAB and post grant procedures would put an end to patent trolls using bad, weak, low quality patents. But that just hasn’t happened. In a sane world that would mean after 54 months of experience we would be talking about making wholesale changes, particularly given that the PTAB and these new post grant proceedings have so dramatically impacted the value of all patents in an extraordinarily negative way.

While it remains a mystery as to why technology companies continue to pay patent trolls to settle bad cases rather than use the tools Congress provided, we do know some things with great certainty. It is absolutely certain that at least some patent owners are constantly being harassed with multiple post grant challenges on pretty much every patent of consequence they own. In some cases there are multiple challenges against the same patent filed on the same day by the same challenger. In other cases, challenges are filed repeatedly and even when they are not instituted by the PTAB the same or very similar challenge is filed again, then refilled and filed yet again, and again, until finally a PTAB panel relents and institutes the challenge. These serial challenges that ultimately do get instituted is one reason why it is very hard, if not thoroughly impossible, to take the Patent Office statistics seriously when they show a decrease in the institution rate.

What exactly is the institution rate on a patent that has been challenged four times and not instituted four times, but then challenged a fifth time and instituted on that fifth request? Is that a 20% institution rate? To call this a 20% institution rate is laughably ridiculous. From the patent owners perspective this is worse than a 100% institution rate. The Patent Office in concert with the challenger forced the patent owner to successfully defend four petitions and then still instituted on the fifth request. Calculating this as anything less than 100% institution is misleading if not completely bogus. Why USPTO Director Michelle Lee allows these types of repeated challenges to be filed over and over again is a mystery. Lee has the statutory authority to protect patent owners from exactly this harassment, but she has never once used it despite the legislative history being very clear that Congress specifically wanted the Director to be able to step in and stop these types of serial, harassing challenges.

How the Patent Office reports statistics relative to institution rates, as intriguing as it may be, misses the real problem though. The real evil of the post grant challenge system is that a patent can be challenged repeatedly and at any time. Title to a patent never quiets, and for that reason a patent is not a property right like any other.

What other property right must the owner fight repeatedly and in multiple jurisdictions and venues to preserve? What property right can be challenged by Party A for X reason, and then after X reason is found unpersuasive the property right can be again challenged by Party B for X reason again? The statute says patents are supposed to have the characteristics of property. The modern U.S. patent is the most bizarre property right I’ve ever seen. So bizarre is the modern U.S. patent that it is hardly fair or accurate to call it a property right at all. At best the modern U.S. patent is an illusory right that only fools owners into hoping and believing they have some property right. But a property right that never settles isn’t a property right at all, which would be obvious if the principles of modern patent law were applied to real or personal property.

While there are many fixes that need to happen to bring about even a modicum of fairness and justice to the PTAB processes, the most important fix that must occur is a change to the law that recognizes a quieting of title for patents. Serial challenges against the same patent must end, period.

Don’t listen to the critics for a moment, there absolutely could be changes made to the patent laws that would lead to a quiet title for patents. We know how to do this for property, and in fact it happens literally every day in courtrooms all across the country. For example, when real property is used to secure a loan and the loan is not paid the property will be sold, but anyone with rights is notified before a sale can take place. In fact, the law in every jurisdiction on what notice is required is well established, whether it be the notice due so that a lien can be place on a property, or the notice due prior to a sale. There are also detailed notice provisions for matters of zoning and planning when adjacent properties will be impacted. And if actual direct notice cannot be given there are provisions that allow publication of such notice in newspapers and via other means. The same or similar also happens in bankruptcy courts every day.

So, in other words, we know very well how to both legally notify interested parties in ways that have been thoroughly vetted for constitutionality, and we know very well how to legally extinguish the rights of interested parties who choose not to participate in proceedings for one reason or another. So anyone who says that it is not feasible to quiet title in a patent once and for all and extinguish any and all challenges moving forward is either unfamiliar with American jurisprudence, or has an agenda that finds the quieting of patent rights unappealing.

As you’ve probably surmised, the fix to the law that is so desperately needed is one that would make any post grant challenge a single event. If a party challenges a patent in a post grant proceeding notice should be provided to the industry, such as through the Patent Office Gazette and/or other mechanisms, providing any and all interested parties the ability to similarly file a challenge against the same patent with a certain number of days – perhaps 90 days or maybe 120 days. Then once the time period for challenges has run the PTAB can determine which claims to institute, if any, and the case can proceed.

This proposal puts an end to the serial, never-ending, harassing challenges that patent owners face. Once a challenge is brought to the patent speak now or forever lose your right to seek redress through the PTAB.

This one and done approach to post grant challenges is hardly a radical idea, although you can expect critics will no doubt portray it as such. But since when is significantly streamlining a dispute resolution system so that it more efficiently and effectively utilizes precious resources radical? One and done challenges to patents are a fiscally conservative and responsible approach to government, and the only legitimate way to treat what the Patent Act tells us is supposed to be a property right – by at some point settling title of the patent at least insofar as challenges at the United States Patent and Trademark Office are concerned.

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and founder of IPWatchdog.com. Gene is also a principal lecturer in the PLI Patent Bar Review Course and an attorney with Widerman Malek. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 40 Comments comments. Join the discussion.

  1. angry dude March 16, 2017 10:00 am

    Technically, if new prior art surfaces somewhere in the world (perhaps in a different language) then patent re-examination is a must – with the provision that patent owner can amend claims even if patent is old.
    But that’s not what happens now of course

    The whole thing is a travesty

    How is PTAB allowed to cancel patents on the very same prior art already submitted and considered by the PTO during patent examination ?
    Is there liability in the agency at all ?

    Are those PTAB judges smarter than everyone else ?

  2. Invention Rights March 16, 2017 11:44 am

    Angry Dude, that is a balanced observation regarding prior art discovered after issuance. I would temper it though to say that reexamination would only be warranted under 102, if the newly discovered prior art anticipated each and every limitation. It normally could not raise a question of obviousness under 103 if it was not known generally to those skilled in the art. The fact that it was unknown to the applicant and the USPTO after searching for it, means it could not be obvious.

    Note: this comment should not be construed as support for reforming the PTAB. In fact, PTAB should be abolished and post issuance procedures rolled back to pre-AIA. Patent quality must be performed before issuance, not after. Even one shot to circumvent due process as proposed by Gene is too many.

  3. Bluejay March 16, 2017 11:50 am

    Amen, brother Gene.

    My fondest hope is that SCOTUS grants cert in Oil States and then finds the PTAB to be unconstitutional; which it is.

  4. Edward Heller March 16, 2017 11:55 am

    Good idea.

    Better idea: repeal.

  5. David March 16, 2017 1:30 pm

    Gene,

    At least for now it’s not a property right, it’s a public right.

    Don’t kill the messenger – thank the CAFC.

    As for the trolls, they are asking for less (a lot less), sometimes less than the cost of the answer. Hence settlement.

  6. Anon March 16, 2017 3:39 pm

    David,

    Your position is at best debatable.

    The CAFC cannot over rule the direct words of Congress.

    They can try, and until someone (bluntly) reminds them, they will continue to try, but seriously, any such try is ultra vires and beyond the authority of the courts.

  7. step back March 16, 2017 8:11 pm

    @6 Anon

    There is a difference between a democracy on paper and a democracy (rule of law rather than men) in actual practice.

    It appears that more and more we are becoming a democracy only on paper but not in actual practice.

    http://www.azquotes.com/picture-quotes/quote-democracy-is-a-way-of-life-controlled-by-a-working-faith-in-the-possibilities-of-human-john-dewey-60-39-27.jpg

  8. Night Writer March 17, 2017 5:58 am

    @7 step back: and the academics like Mark Lemley of Stanford University are making things much worse. No ethics. Vanity press publications that are worth no more than an ad in the WSJ by Google.

  9. Eric Berend March 17, 2017 6:21 am

    Thank you, Gene – for advocating a position in law, that I urged some months ago.

    Either we are entitled to regard U.S. patents as property; or, let these be called mere licenses subject to mere bureaucratic fiat; as is the reality, at present.

  10. Nancy March 17, 2017 8:22 am

    I couldn’t agree more.

  11. Edward Heller March 17, 2017 9:29 am

    Apple opens R&D centers in China.
    http://www.reuters.com/article/us-apple-china-r-d-idUSKBN16O0MF

    Who could have predicted?

    We need to once again give preference to inventions made in America — to the greatest extent we can.

  12. Anon March 17, 2017 10:06 am

    Mr. Heller,

    You will have to forgive me if I find your cries to be a bit shallow, considering how much (as well as your tactics) you advocate against innovations concerning business methods and software.

    A friend of the enemy is a friend not to be trusted.

  13. Edward Heller March 17, 2017 10:18 am

    anon, please do not conflate business method patents with software patents.

    I have long believed in and patented software inventions – for most of my career in fact.

  14. Gene Quinn March 17, 2017 12:31 pm

    David @5-

    I have absolutely no sympathy for any of the coward defendants that pay extortion to trolls even if they pay less than the answer. They allow the troll problem to persist by paying ransom to hostage takers. They created the problem in the first place and by paying extortion they not only allow it to continue but they encourage it to continue.

    Over the last several years it has become much easier for district courts to award attorneys fees. Those who are complaining about trolls should actually do something to stop the activity they complain about rather than feed the trolls.

    FYI… If any companies think it is impossible to take the fight to the true trolls why not hire me to do it for you? There are most certainly ways to do it and if the attorneys you use aren’t willing to fight then hire me. I’m wiling to fight and I will take the fight in the most aggressive way to the bad actors. Of course, we all know that none of the complaining companies that moan about trolls would ever hire me because they don’t want the troll problem solved. They want trolls to exist, which is why they pay their extortion. They get more benefit from the existence of trolls so they can parade bad actors in front of Congress and demand action as if it is indicative of some larger problem, which of course it is not.

    Still, if anyone wants to take the fight to trolls and can’t figure out how to do it I’m available for hire.

    -Gene

  15. Anon March 17, 2017 3:58 pm

    Mr. Heller @ 13,

    With all due respect, I call you out for your B$ – on two levels.

    The first level is that you refuse to fully accept what software is, and attach as hoc and extra-legal strings to what you will and will not accept.

    The second level is that your tactics for being anti-business method are indistinguishable from the tactics of being anti-software.

    You really have zero credibility in these areas.

  16. Night Writer March 18, 2017 8:51 am

    @15 Anon

    What is clear is that Ed the Ned is part of the R. Stern camp of Benson. R. Stern has even half admitted that Benson was judicial activism to try to get rid of software patents. No thinking person could ever think that Benson is anything but a twisted bunch of witch words whose goal was activism rather than legislation.

    Shameful. The root of all evil in patent law is Benson. Lemley is a disciple of this type of thinking that the Constitution and laws don’t matter as long as you get what you want.

  17. Night Writer March 18, 2017 8:52 am

    And, let’s all remember that Ed the Ned said for years that software was fine as long as it was put into a ROM.

  18. Benny March 19, 2017 3:22 am

    Edward @ 11,
    Why do you need to give preference to American inventions? Isn’t it possible that there are smart engineers outside the USA whose innovation could benefit society? Inventors of the ICE, or the jet engine, or radar, just to throw a few examples at random. Innovation should not be restricted by political boundaries.

  19. Anon March 19, 2017 9:55 am

    Benny,

    Patent law remains a sovereign-specific law.

    There is no such thing as a “One World Order” that may rightfully “benefit society” as you want to use that term with a surfeit of gloss.

    Innovation may not be restricted by political boundaries, but the reward of innovation is surely (and quite necessarily) bound by those very real political boundaries.

    This is not a bug, but a feature.

    Respect the choices of the individual sovereigns, please.

  20. Benny March 19, 2017 10:49 am

    Anon,
    No idea what you are on about. As far as I understand the law, US and non-US inventors have identical rights in US granted patents. Edward (in case you didn’t read his post) mentioned giving preference to “inventions made in America”, he didn’t mention giving preference to patents granted in America.

  21. Anon March 19, 2017 12:32 pm

    What I am “on about” is your insistence on removing the sovereign from aspects of patents.

    You conflate innovation and patents, when, while related, are in fact distinct things.

    Perhaps unwittingly, you spout the Kool-Aid stained mantra of the Trans-Nationals (Big Corp).

  22. Edward Heller March 19, 2017 1:42 pm

    Benny, giving preference to inventions made in America provides incentives to locate R&D jobs in America. R&D in America strengthens everything about this country.

  23. Benny March 19, 2017 3:30 pm

    Edward,
    Are you suggesting that the USPTO apply different standards of examination to applications by non US inventors ? Because that’s what you sond like, and it doesn’t make any sense to me. If you had something else in mind, please expain. While you are at it, you might also explain why you consider innovation from offshore R&D centers deficient.

  24. angry dude March 19, 2017 7:51 pm

    ed the ned and benny from outside of the us

    why don’t you guys stop talking nonsense about “innovation” and R&D incentives ?

    There is currently no incentive to do any R&D in USA for small (< 10M cap) entities UNLESS the results of that R&D can be protected by trade secrets. Period. End of discussion.

  25. Eric Berend March 19, 2017 10:12 pm

    Aaaaandd once again, the Occam’s Razor of scathing truth arrives in the voice of ‘angry dude’, to frame the discussion in real world terms.

    Okay, ‘Benny’, ‘Ed/Ned’ : are there not, economic strata of inventors, in your regard? Is it not true, that your vision of patent prosecution practice, includes only those entities with substantial financial resources (above, say, $50,000,000)?

  26. angry dude March 20, 2017 1:08 am

    Eric Berend @25

    The destruction of the US patent system by special interests is a product of very clever design and painstaking execution.
    They wiped out contingency patent litigators like Niro as a class (he publicly complained that he could not take any more abuses from courts in the form of sanctions) AND they put a threshold of capital expenditure in PTAB and other bs PTO proceedings at about 300-500K just to assert that your *officially granted* patent is sort of valid and can be presented before the court – making sure no investor will touch any patent before patent holder spends this money out of his pocket
    This is called cartel – illegal in USA btw
    Thanks but no thanks

  27. Night Writer March 20, 2017 6:47 am

    @26 angry dude:

    Don’t give them so much credit. It isn’t really that clever. They write large checks to K Street firms and lobby. They pay some patent litigators and prosecutors to figure out how to weaken patents in the next round of cases and laws. Not that hard.

    I’ve seen some of their handy work first hand. They just hire people. A lot of their efforts are very ham handed. That’s why I have been harping on Google for like 5 years. I saw what they were doing from the start.

  28. angry dude March 20, 2017 7:38 am

    Night Writer @27

    Maybe you are right, I dunno

    But to add insult to injury, they put a nice little cherry on top of the cake:
    micro-entity patent filing status :):):)
    Now for a cost of dinner for one at a mediocre restaurant everyone can file a provisional patent application in the US…
    Thanks but no thanks – I’d rather eat my dinner

  29. Benny March 20, 2017 7:59 am

    Angry,
    …and for the price of a couple of romantic dinners at an up-market restaurant, you can get a granted patent for the curing the common cold. US9072753. Let’s see the micro-entity take on a drug company with that one.

  30. Night Writer March 20, 2017 9:59 am

    @29 Benny: >…and for the price of a couple of romantic dinners at an up-market restaurant,

    What? Are you saying that someone bribed the examiner? I doubt that. This sounds like more garbage from you where you try to conflate issues and make up things.

  31. Edward Heller March 20, 2017 9:59 am

    Eric, I am surprised you would even ask such a question of me who has been tirelessly arguing for the small inventor/startup for years.

  32. Benny March 20, 2017 10:12 am

    Night,
    Who the blazes mentioned bribery? I was referring to the cost of filing and prosecution. What did you think Angry was referring to when he mentioned dinners? Is it so difficult to comprehend the literal written word?

  33. angry dude March 20, 2017 10:31 am

    Benny @32

    Dude,

    please do not conflate things

    I was referring to provisional app which is not examined but gives many people a false hope of “protection”
    The actual patent prosecution can take years and many tens of thousands in lawyers fees of which micro-entity filing fees will be minuscule part
    Then of cause those tens of thousands will pale in comparison with hundreds of thousands for PTAB etc
    And then you would need at least 2M to actually go to court..

    bait and switch it’s called

  34. Benny March 20, 2017 10:39 am

    Angry,
    The full application is only five bucks more than a provisional. It’s just a hamburger away.

  35. Anon March 20, 2017 8:50 pm

    Benny,

    Why bother being so obtuse? Do you not realize that the only person that you are amusing is yourself?

  36. Tiburon March 21, 2017 12:06 pm

    Angry Dude –

    You are wrong with: “There is currently no incentive to do any R&D in USA for small (< 10M cap) entities UNLESS the results of that R&D can be protected by trade secrets."

    Pull your head out of the hole and take a look around you at all the software innovation going on. Just on this webpage alone the following components are in use and rely on 0 patents:

    WordPress: 0patents
    jquery: 0patents
    OpenTracker: 0patents
    FormSwift: 0patents
    Feedburner: 0patents

  37. angry dude March 21, 2017 1:37 pm

    Tiburon @36

    I suggest YOU pull your head out and tell me how I can protect my embedded software ?
    Patents don’t work, agree, so trade secrets and copyrights on binaries
    actualluy copytergth sucks
    I’d rather encrypt the whole binary executable and do hardware-enabled description at run time

    that will slow them down

  38. Tiburon March 21, 2017 2:01 pm

    angry dude –

    Community, proprietary data, network effects. There’s 3 to get you started. All a heck of a lot cheaper and more efficient barriers to entry for a startup than what patents today can provide. Note the word ‘startup’ – large corporations are different matter – and this fact is the straw on camels back because what’s the point of patents then?

  39. angry dude March 21, 2017 2:16 pm

    Tiburon @38

    I agree that patents are useless to startups (unless you are some SV super duper VC funded with 100M to spend)
    but the rest of the stuff you mention is crap – i don’t even understand what you mean
    it is not a server-based web-app – its all on a client side, embedded inside a device
    hardware-enabled code encryption or ASIC – and let the “community” worry about “promoting the progress”

  40. Tiburon March 21, 2017 2:33 pm

    angry dude –

    if you don’t understand what I mean then start by researching those 3 options.

    …or stick with your pre-eBay world where patents were viable for startups and keep trying to make a square peg fit in a round hole.

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