The only solution for the transgressions of the PTAB is to disband this runaway tribunal

Later this week the Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office (USPTO) will celebrate its fifth anniversary. Brought into existence by the America Invents Act (AIA), which was signed into law on September 16, 2011, by President Barack Obama, the PTAB and the various post grant challenge procedures ushered into being by the AIA did not take effect until the first anniversary of the AIA – September 16, 2012.

With this in mind we will publish a series exploring the PTAB on its Fifth Anniversary. I’ve invited an all-star panel of contributors to weigh in, providing little guidance other than to take this opportunity to comment on the PTAB as the tribunal turns 5. As of the posting of this article I’ve received contributions from Manny Schecter (IBM), Bob Stoll (Drinker Biddle), Paul Morinville (US Inventor), Kate Gaudry and Thomas Franklin (Kilpatrick Townsend), Jennifer Bush (Fenwick), Jeremy Cubert and David Thibodeau (VLP Law Group) and I expect contributions for others throughout the week.

While not all of the contributors to this series will likely agree with me, it is difficult for me to imagine a tribunal having caused more damage in less time than the PTAB has brought to bear on the U.S. patent system. In short, the PTAB is a kangaroo court – the type of court with the type of process and proceedings that you might expect in a third world nation suffering from a complete collapse of the judiciary. Indeed, with every passing day there seems to be fresh evidence of a tribunal so thoroughly compromised that it is difficult to believe it exists within the U.S. system.

There is a fundamental lack of due process at the PTAB, the decisions are arbitrary and capricious, the PTAB refuses to consider timely submitted evidence, the tribunal has misapplied the law of obviousness, determined that an MRI machine is an abstract idea as if the huge machine that takes up an entire room in a hospital is a figment of the imagination, they have ignored the law with respect to what is a CBM patent and instead created their own test that goes directly against the dictates of the statute (which is a common theme for the tribunal). The PTAB also takes more than 1 year to decide IPRs even when the tribunal itself concludes there is no reason joinder should or will disturb the original scheduling order, which makes it difficult to understand how that presents good and sufficient cause to miss the statutory decision deadline. Of course, the PTAB refuses to write a final written decision on all challenged claims, which prevents estoppel from attaching to claims not instituted, which seems to clearly violate 35 U.S.C. § 318(a), an issue that will be decided by the Supreme Court during the October 2017 term. And the PTAB refuses to allow amendments to claims in virtually all circumstances, which seems to clearly violate 35 U.S.C. § 316(d), an issue the Federal Circuit took en banc in Aqua Products after first agreeing with the PTAB that they could deny amendments for any reason.

Of course, the USPTO itself is not without fault with respect to the PTAB. As an institution, the USPTO has allowed very serious conflicts of interest to exist at the PTAB where Administrative Patent Judges (APJs) are deciding post grant challenges brought by former defense clients, which at a minimum creates an inescapable appearance of impropriety that compromises the integrity of the PTAB processes. Worse than that, which could possible be described as reckless mismanagement, is the seemingly intentional deletion of pro-patent eligibility decisions from the PTAB database. Still worse, the USPTO has admitted stacking PTAB panels to ensure outcomes desired the by Director, which fundamentally violates the requirements of the Administrative Procedures Act (APA), which requires decisional independence. And one of the latest blows, the PTAB refuses to follow Supreme Court pronouncements on indefiniteness in Nautilus v. BioSig Instruments, which is being backed up by Office policy.

More mundane, but nonetheless demonstrative of the magnitude of the problems posed by a runaway PTAB are the tribunal issuing inconsistent rulings dealing with the same issues on the same record and between the same parties (see also here), shifting the burden to prove patentability to the patent applicant and failing to explain or articulate reasoning to support its decision making (see also here, where the PTAB just disagreed with the patentee without explanation) and failing to consider material evidence. Each of these transgressions were highlighted by Federal Circuit decisions within just the last few months.

It is no wonder Allergan partnered with an Indian Tribe to protect its drug Restasis from challenges at the PTAB. This brilliant move is something I’ve been suggesting patent owners consider ever since the PTAB ruled it did not have jurisdiction over University owned patents. I must confess I hadn’t considered it with an Indian Tribe, and thought it would be done with a University, but perhaps this in-your-face move that insulates Restasis from the death squad known as the PTAB will wake up other patent owners, and wake up Congress too!

Hiring senior associates to be Administrative Patent Judges was a mistake, hiring so many senior associates from the same firm was an even bigger mistake. Making it clear that their job was to kill patents at all costs was inexcusable. Interpreting the rules at every turn to be disadvantageous to patent owners is un-American, violates fundamental notions of fairness of procedure, and tilts the balance so heavily toward challengers that it has become more feared by patent owners than any government agency or body. In short, the Patent Trial and Appeal Board has destroyed the U.S. patent system and the value of U.S. patents. In my opinion, the only solution for the very serious transgressions of the Patent Trial and Appeal Board is to disband this runaway tribunal.

 

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51 comments so far.

  • [Avatar for Invention Rights]
    Invention Rights
    September 15, 2017 11:19 pm

    Benny, U.S. patents are currently unenforceable. We rank off the charts – worse than no patent system at all. That we are ranked as high as 4th or 10th is because the metrics lag and fail to measure the actual condition.

  • [Avatar for Benny]
    Benny
    September 14, 2017 03:47 pm

    PTOIndentured,
    My only source is the report itself, and the previous year reports, which you might not have read carefully. In terms of interpretation, since the US and Hungary share the same score, it would be equally true to state that the US ranks 11th rather than 10th. It would be also be true to say that the US earned the fourth highest score in the rankings. Half full or half empty, take your pick, but do yourself a favour and check facts before you repeat them.

  • [Avatar for PTOIndentured]
    PTOIndentured
    September 14, 2017 01:52 pm

    Hi Benny,

    My response to American Cowboy at 46 cited a U.S. Chamber of Commerce report made just months ago ranking Hungary in tenth place currently tied with the USPTO. I see that you’re countering the conclusion made in that report with a number of stats not identified with a source. Knowing the source(s) you’re using would be helpful in assessing the rank of the PTO more objectively.

    No surprise copyright IP places the U.S. in the top copyrighting position. The music, film and publishing related industries alone (all copyright-reliant entities) abound in the U.S. as do their copyrights. But that stat has no relevance to this article, and surely is no consolation (and of no consequence) to American inventors. The USPTO has no bearing or adverse impact on copyrights, and no “runaway tribunal” has been setup (thus far) authorized to kill copyrights, and render them free to whoever wants to sell and use them commerically. Such is not the case with AIA/PTAB’s de-valued, 90%-relegated defenseless U.S. patents.

    Imagine: how writers, musicians, actors and entertainers would fare, if each, due to not being an ‘actual producer and seller’ of a finished commercial product, was deemed a “Non-Practicing Entity”, then subjected to an organized, well-funded and ongoing campaign aimed at vilifying each NPE as a ‘Copyright Troll’.

    Sound far-fetched? Look into how writer-shares’ (meant to be a guaranteed ‘property’ portion of copyright IP) have continually been encroached and are being whittled down by publishing and production entities. Would it come as any surprise that the guaranteed-property trampling is rationalized by a familiar arguing: “Hey, ‘they’ don’t actually make and sell the commercial products WE do.” Still, there is some consolation in the IP of Copyright Trolls not yet being invalidated by a tribunal.

  • [Avatar for Benny]
    Benny
    September 14, 2017 04:04 am

    American Cowboy (41) and PTOIndetured (46),
    The numbers are not quite so simplistic. The rankings can be found for years 2012, 2014, 2015, 2016 and 2017. The 2012 report compared just 11 nations, and the US ranked first. For 2014 and 2015 the ratings slipped a bit, for 2016 the US tied in first place with UK, Sweden, Switzerland, Singapore, Germany and France. In 2017, the countries above remained at number 1 in the charts, with the exception of Singapore which dropped to 3rd place, sharing the spot with Italy, and Japan coming in as a new entry at second place, leaving the US at fourth place and sharing the spot with Hungary. Pharma patents are consistently reported as a weakness in the US patent system. Note that this ranking is for patents alone – for overall IP (including trademark and copyright) the US takes the number 1 spot.

  • [Avatar for PTOIndentured]
    PTOIndentured
    September 14, 2017 03:16 am

    American Comboy at 41 RE “First-ranked to TENTH-ranked” See 2017 report by U.S. Chamber of Commerce RE USPTO referenced in a number of IPW Blog articles.

  • [Avatar for Eric Berend]
    Eric Berend
    September 13, 2017 11:59 pm

    @ 38., ‘John Wu’:

    Thank you once again, for such detailed explications.

    I fear the members of Congress are too corrupted and distracted, to pay enough attention to the manifest economic threat this issue represents. The truth is: until the ‘American people’ or “ordinary citizen” perceives the threat to their economic future and those of their children; campaign $$, academic postering and ‘K Street’ will predominate this essential issue.

    I fear that, despite your best efforts and considerable intelligence and prowess of argumentation, the legislators will continue to obfuscate and dissemble: they being too attached to the power of their influence peddling – to be blunt.

    This entire generation of American inventors, is being immolated as mere kindling to the economic fire, so to speak. When ‘seed corn’ is not only consumed as “food”, but seized from its owners and passed around for free; then, that is a society hell-bent on self-destruction.

  • [Avatar for Anon]
    Anon
    September 13, 2017 09:35 pm

    Mr. Heller,

    Your simple question merely serves as a distraction to EITHER of the two points that are on the table with you.

    Stop distracting and settle the points first.

    Once we have concluded those points, then we can talk about your point.

  • [Avatar for Carrie]
    Carrie
    September 13, 2017 05:30 pm

    I agree with Gene completely. By allowing the USPTO PTAB review board to eliminate up to 80% of US patents they review, weakens US intellectual property rights in this country, deters US innovation, hurts US inventors and startups, and allows foreign companies and foreign countries to simply copy US ideas and inventions. 80% of the patent examiners can not all be wrong. Who knew China would now have a stronger patent system than the US.

    Can you imagine receiving property rights when purchasing a house, and then having another division in the very same department then question whether they made a mistake or not? And then take your house away and not even give you your money back?

    Inventors spend tens of thousands or even hundreds of thousands fighting the patent office to try to get a patent. If PTAB then says the USPTO made a mistake, then at the very least you would think that they should give the money back to the inventor plus interest.

    The focus should not be improving PTAB. It should be eliminated. The focus should be on more training for the patent examiners to issue quality patents in the first place, not an ‘after the fact’ committee making decisions.

  • [Avatar for Edward Heller]
    Edward Heller
    September 13, 2017 01:45 pm

    John Wu, the problem we have is the narrative promulgated by big international businesses and Silicon Valley. The narrative says that the USPTO issues too may patents of low quality that are not inexpensively invalidated thus leading to the so-called troll problem that exploits this system by settlements less than the cost of litigation.

    While you ably use math to prove that most patents cannot stand validity challenges indefinitely, you should close the loop by pointing out that each successive challenge learns from the last by getting better evidence and/or arguments. Why is this important? We invalidate based on “obviousness” which is all but entirely subjective. At least, in a criminal case, it always remains a question of whether the accused committed the crime.

    What we really need is to get the PTO out of invalidating patents for obviousness. If there is anticipation, I can see an argument for a quick and dirty process. But I cannot see any argument that allows a system where the question of validity is all but entirely subjective and where multiple bites at the apple are permitted.

  • [Avatar for Edward Heller]
    Edward Heller
    September 13, 2017 01:33 pm

    anon, I ask a simple question once again: how does one have a constitutional right to a trial in a court of law and to a jury for validity based only on the fact that patents are the property of their owners.

  • [Avatar for American Cowboy]
    American Cowboy
    September 13, 2017 11:45 am

    PTOIndentured at 37 says “from first-ranked to TENTH-ranked.”

    I don’t disagree, but the assertion needs to have some citation to authority to be convincing to the skeptics. Who did the ranking? Using what criteria?

  • [Avatar for Ternary]
    Ternary
    September 13, 2017 10:30 am

    Curious@33. Very good notes. The negative value is an excellent point. One way to minimize that aspect is to keep applications alive by filing continuations and CIPs and loading up the specification with any imaginable feature. And hope for better times. The current situation is an unprecedented and disheartening transfer of “private property” from inventors to infringers.

  • [Avatar for Night Writer]
    Night Writer
    September 13, 2017 10:06 am

    @38 John Wu: lots of good points.

  • [Avatar for John Wu]
    John Wu
    September 13, 2017 09:58 am

    On August 10, 2017, I sent this follow email to the parties of Oil States Energy Services case, with copy to the DOJ, concerning the IPR:

    ***start***

    I write this email letter concerning the IPR proceeding. In an article, I pointed out that such a procedure clearly violates established scientific principle. The reason is similar to the the prohibition against double jeopardy. The evolution of double jeopardy law from the twelfth century to today cannot be easily summarized, but English commentator Sir William Blackstone could state confidently in 1765 that there was a “universal maxim of the common law of England, that no man is to be brought into jeopardy of his life more than once for the same offence.” This “universal maxim” led directly to the Fifth Amendment double jeopardy clause, which is strikingly similar to Blackstone’s statement of the common law maxim. The Fifth Amendment provides: “nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb.”

    Fifth Amendment is scientifically valid! When a person is prosecuted one time, it could be a fair game. If the same person is prosecuted for the same crime twice, it is statistically bias in favor of conviction. If one can be prosecuted M times–where M is very large, it is certain that the person will be convicted… or just give up.

    Unlimited IPR, plus reexamination, plus validity challenge in federal courts have the same problem. Its purpose is to invalidate patent and deprive the patent owner of property right. All patents can be invalidated by such triple combination. The following is an excerpt from one of my articles I have written for ipwatchdog.com.

    “I show by a hypothetical example how this anti-patent movement has become. The AIA provides multiple post-grant procedures for invaliding patents. An issued patent may be challenged for unlimited times. Thus, if a patent with a marginal merit which would be invalidated by 0.5 probability, its survival probability after five times independent challenges would be 0.03. For one hundred such patents, if the Patent Office only hears challenge once, about 50 patents would survive. If each of the patents is challenged five times independently, only about 3 patents would survive. The designers of the invalidation procedures are not aware of this fatal flaw in the common law model which was developed by Kings in an ancient time. By conducting an simple model study, they should see that successive challenges will result in a bias in favor of invalidation. Unlimited challenges eventually hit a lottery, repetitive dismissal motions will succeed in throwing plaintiffs out of court, and repetitive prosecution of defendants would surely result in conviction. A nation cannot use such a clearly flawed procedure to deliver justice. This kind of patent justice is no justice. It is a patent joke that should shock the world. In reality, the outcome of the above hypothetical example would be worse. Even that three patents would not survive according to hypothetical probabilities because the outcome of each challenge would be heavily influenced by political climate. In this anti-patent time, it must be “right” for patent judges to invalidate a patent. So, patent judges can use unlimited devices from technicalities, no-mercy rules, procedural features, evidence credibility, to personal bias to reach what they think is a right result. When nothing can be used to achieve a result of invalidating patents, they just call apples oranges. No body can see factual distortions in their opinions because they characterize facts in their languages. Many patent board decisions are as worse as calling apples oranges. On top of all, they can use the most powerful weapon: using worldwide references in any combinations. Any patent can be invalidated in one challenge, two challenges, more challenges, and still more challenges. Even after a patent has survived one-hundred challenges, more references may be dug out from a graveyard somewhere in a remote country, or translated from rare languages, or manufactured and planted by patent thieves. Now, the patent is finally invalidated because no body can show reference problems. The absolute accuracy ideology is incomprehensible in contrast to the extremely low validity of legal theories and procedures originated from common-law courts. The Patent office must stop invalidation procedure now because the entire invalidation procedure based on NO science violates substantive due process.”

    I have written a series of articles concerning patent quality problems. The AIA has turned the U.S. patent system into an instrumentality for controlling the U.S. market by foreign corporations. I see that the share of U.S. patents owned by foreign-entities has steadily and rapidly increased from 20%, 30%, 40%, 50% (keeping going up). I do not have data to show patent share of foreign entities among all enforceable U.S. patents now, but the trend is very obvious: it will rapidly increase. When the foreign-patent share hits 70% or 80%, what is left for the U.S.? The U.S. will become a nation without its own identity and the U.S. will become a world market controlled by foreign corporations as far as newest technologies are concerned. See my article I sent to the Congress, Senators, and The White House (attached to this email).

    I feel that it is absurd to spend resources to address such an issue. Even reporting the case on a case report will be an embarrassment to the legal system. Even before the arrival of the science age, the founders of the nation and/or the early leaders understood biased probabilities caused by keeping trying a case or prosecuting a case in dual paths. The DOJ should not ignore such an obvious flaw. The Congress’s failure to do its own homework is not the reason to defend it. I think that a best solution is let this “crack” go into a toilet silently. The DOJ may ask the President to see that he wants to do.

    While the DOJ has a legal duty to defend existing laws, it has discretion to not exercise the duty. I do ask the DOJ to consider two things: (1) a delay in eliminating IPR will cause irreparable damages to the nation, and (2) the IPR is clearly absurd for violating substantive due process (even if IPR can pass this challenge due to limited issues in front of the court, it would be condemned by generations of Americans). The DOJ officials can do anything, but history will judge what the officials do now. Taking the normal judicial path or legislature will take a long time, each day of delay will harm the nation more. As I have shown, there is no way to get out of this technological crisis, but each of small actions may mitigate damages to national economy and U.S. future. Each day, a large number of U.S. patents owned by the U.S. individuals are invalidated. The market controlled by foreign corporations is increasing in multiple ways.

    To DOJ: I request that my email be forwarded to Attorney General, Mr. Sessions. I hope he will personally see my data and analysis: U.S. is suffering a technological crisis. It will trigger dollar failure, GDP loss of value (on foreign currencies), bigger trade deficits, less tax revenues, and creased national debt…..

    ***end***

  • [Avatar for PTOIndentured]
    PTOIndentured
    September 13, 2017 09:54 am

    Based on AIA devastating consequences to US patent VALUE during its 5-yr history, ‘USPTO’ could more rightly be characterized the ‘U.S. Patent Tribunal Organization’.

    Congress Take Note: This requires no more than to ‘Judge a [AIA] tree by the fruit it bears’. It is under your watch that the U.S. patent system rapidly devolved from first-ranked to TENTH-ranked. Is there more than 1% of our elected ‘leaders’ / patent policy decision-makers who have seen, acknowledged and given this due weight?

    Patents made defenseless and thereby ‘FREE’–at a ‘90% invalid’ loss rate–represent HUGE U.S. revenue and job losses for many years to come. Many will become patent-right based revenue generators in (shifted to / filed first in) foreign countries who defend their IP, such as those subsuming our current TENTH-ranking.

    The AIA-meets-USPTO results could not be more devasting than if its five-year PTAB marching orders had been:

    “Do not stop de-valuing patents available to U.S. inventors and small entities until they’re left with little more than trinkets, gizmos and oddities.”

    “If systems or methods of substantial value come up, make sure they’re killed, or rendered vulnerable as can be.”

    “Better still, make the U.S. inventor or small entity ‘losers’ responsible for all attorney fees. That way, they’ll be devastated too.”

    Granting U.S. big-corps who built THEIR empires on pre-AIA patents, major IP innovations of others for free (efficient infringement), is only half an equation. No revenue flows into the U.S. from a licensing of major U.S. innovations to any of numerous companies abroad, when the U.S. Patent Tribunal Organization makes American innovations FREE to make, use, sell.

  • [Avatar for Benny]
    Benny
    September 13, 2017 07:30 am

    Ternary,
    And if I take your pocket calculator, place it in the glove compartment of my car, and write a claim for “a car, comprising a pocket calculator in the glove compartment, the calculator being programmed to calculate my personality problems to 5 decimal places…”, what have I invented, a car or a digital psychologist ? Gene’s headline (though not content) would portray that as a claim directed to a car, whereas anyone trying to learn the new discovery would realize that the preamble is not the invention.

  • [Avatar for Ternary]
    Ternary
    September 13, 2017 07:15 am

    Benny @24. Cheer up, you can do this too. Take a simple electronic pocket calculator which “performs” the well known and abstract algorithms for addition and multiplication. If one throws the machine at you, I suggest you duck. If one merely recites the steps of the algorithm you should be able to take this standing up. It is not a surprise to me that the legal profession finds this issue a topic for debate as it bestows a Harry Potter flavor to machine executed instructions as if they are magical incantations, which for many they probably are.

  • [Avatar for Anon]
    Anon
    September 12, 2017 07:48 pm

    Mr. Heller,

    May I respectfully suggest that you listen a little more attentively?

    Way back up at post 6 I suggested that consideration be given that patents are deemed NOT property (and yes, I suggested that such would not only be “bad” but would take a massive amount of “magic,” as it were). However, the point there was that to take as a given that the Court waived their magic wands and made all types of prior indicators (to be generous with that term) disappear.

    What then of patents as non-property? I have over the past year or so provided several indicators of other areas of patent law that would have severe ripple effects. I have not recaptured them here, but I posted the message at post 6 to see if others also see those (and perhaps other) ripples.

    Separately, and more immediately, a different post (post 31) is directed towards what I can only consider to be a rather aberrant view of yours that fundamentally seeks to limit what “property” means.

    I can only guess that you want this limited version because then your favorite argument may seem to be the only path forward.

    I find such machinations to be not only unsettling, but to be even disingenuous to the larger issues at hand. To be blunt, you have repeatedly posted with an alarming degree of ignorance (purposeful or otherwise) as to what “property” entails.

    For someone who so actively sought to be a champion of the property nature of patents, I find your errors to be especially egregious.

    I am NOT interested in any type of discussion with you that merely seeks to rehash your already well-(often) voiced arguments, and thus respectfully decline your “three distinct cases” scenario. I am simply not taking any type of position AGAINST those arguments of yours, and thus commenting on your three distinct cases will only lead off the points already presented.

    I am, on the other hand, expressing dismay (and perhaps a bit of disdain) at your insistence at post 30 that somehow the property nature of a patent is to be strictly limited to: “all one gets is a right to due process and this includes an independent trier of fact and law.

    Why in the world (I really cannot fathom a reason – aside from the one mentioned above) would you insist on this “all one gets is due process” type of view?

    Property is a critical item as a basis for our Constitution and takings law is something that should be scrutinized heavily – and this “all one gets is due process” appears to sell short (extremely short) just what protections are afforded property.

  • [Avatar for Curious]
    Curious
    September 12, 2017 07:47 pm

    The IPR regime was a nice experiment, but it was a failure. It happens. It is time to move on.

    Unless there is a real consequence for both parties (e.g., the patent is not infringed and/or invalid or damages are awarded), then whatever procedure post-grant procedure (IPRs or some modified version thereof) implemented by the USPTO is rife for abuse.

    Right now, a well-heeled and sufficiently motivated defendant can put a patent in IPR for perpetuity by serially filing (or having proxies file) requests for instituting an IPR. Eventually, the patent owner is going to give up because the cost of defending the patent will far outweigh the value of the patent itself.

    In most instances, litigation is the best way to force an honest negotiation between both sides. Both sides see the strengths and weaknesses of their positions, and can engage in a negotiation based upon these exposed strengths and weaknesses. The vast majority of litigation settles because the consequences of losing (either by the patent owner or the alleged infringer) is severe and rational actors will choose to limit their exposure to such consequences.

    Right now, there is little incentive for alleged infringers to settle because they can continue to put off the day of reckoning for a long time. Moreover, with the deck literally stacked against patent owners in the IPR regime, they have even less incentive to settle.

    The upshot of this is that a patent to a valuable technology has potentially negative value since it exposes the patent owner to an untold number of IPRs (costing hundreds of thousands of dollars to defend) with no payoff at the end. The IPR system certainly does not promote the progress of science and useful arts — rather it does the opposite.

  • [Avatar for Edward Heller]
    Edward Heller
    September 12, 2017 05:00 pm

    anon, I am listening. Just how does one have a right to a trial in a court of law and to a jury if a patent is deemed property in the following three distinct cases

    — by Supreme Court case law only;

    — by statute, e.g., 35 USC 261 or 154 (exclusive rights);

    — by the very terms of the constitutional grant of power?

  • [Avatar for Anon]
    Anon
    September 12, 2017 04:51 pm

    Mr. Heller,

    Respectfully, you are simply incorrect to attempt to limit the nature of the property that is a patent grant with your comment of:

    One has to be clear that if patents are deemed property because of the wording of the Patents Clause, particularly “secure” “exclusive rights,” then all one gets is a right to due process and this includes an independent trier of fact and law.

    Where in the world do you obtain such a crabbed view of what property means?

    I “get” your arguments, posted on various blogs and submitted to the court. But don’t mistake your arguments as somehow being the only arguments. You are fully welcome to view your Seventh Amendment argument as a “best” argument, but by attempting to limit property inappropriately, I have to wonder why you do so (and do so repeatedly and without cause).

    As I have noted previously, I believe that there is a reason why your case was denied cert, and that reason being that your views simply were not fully proper.

    Here, again, you lose touch of some of the basics of what “property” means.

  • [Avatar for Edward Heller]
    Edward Heller
    September 12, 2017 02:38 pm

    One has to be clear that if patents are deemed property because of the wording of the Patents Clause, particularly “secure” “exclusive rights,” then all one gets is a right to due process and this includes an independent trier of fact and law. Some of the briefs argued that the APJs could not provide due process required by the Constitution because they were not independent, but were instead part of the patent office, comparing them unfavorably to the statutory independence provided by ALJs. Thus the indicated solution provided by the “property” briefs is the creation of an independent patent validity court staffed by ALJs, with no right to a trial by jury.

    Depending on how Congress reconfigures the PTAB and whether it still includes the lower standard of proof and BRI, this could be a step in the right direction. But in my view, it is a half measure because it still would allow people without standing to bring IPRs, subjecting patent owners to continuing abuse of process.

    We need to have validity tried in the courts of law and to a jury. Historically, patent owners should not be forced into into the court system unless they are prepared financially to try their cases. This requires that they obtain, in the case of smaller inventors, contingency counsel and the like.

    In order to get patent validity back in the court system, I have always considered the best argument to be the Seventh Amendment argument with a fallback to the Article III argument. The right to a trial by jury could not be clearer based upon the Seventh Amendment cases. Only a court of law can provide a right to a trial by jury.

  • [Avatar for UnhappyPracticioner]
    UnhappyPracticioner
    September 12, 2017 02:12 pm

    Gene, great article.

  • [Avatar for Night Writer]
    Night Writer
    September 12, 2017 10:57 am

    @27: I think outsourcing searches would make a big difference. Go back to TSM and give bonuses for finding TSM arguments.

  • [Avatar for Ron Hilton]
    Ron Hilton
    September 12, 2017 10:43 am

    What the administrative state (USPTO) giveth the administrative state taketh away. I continue to believe that the real solution entails getting the private sector more involved in the process. Specifically, requiring a crowdsourced search in the examination/re-examination process before enforcement/litigation can even start. That would curb the problem both with trolls and efficient infringers – stronger patents are both harder to obtain and to infringe.

  • [Avatar for Peter]
    Peter
    September 12, 2017 09:29 am

    Benny,
    Engineers have been and are impotent at the PTAB. Their voices fall on deaf ears and the political/legal environment is what is
    driving decisions.
    With that said, maybe 90,000 dropped on their heads would enlighten them to listen more closely to the engineers.

  • [Avatar for Robert W.]
    Robert W.
    September 12, 2017 09:03 am

    Gene, in your article https://ipwatchdog.com/2017/09/05/uspto-ptab-refuse-follow-supreme-court-nautilus-decision/, you stated “The PTAB is a sham, period.” and it must be disbanded (comment 32). In reply, I commented that the root of the problems is the USPTO, not PTAB (comment 33), & I showed how the American taxpayers fund its sins. Disbanding the PTAB alone would be like cutting a rotten branch of a decaying tree, while leaving the doomed tree intact & yielding more putrid branches. The question that had to be posted to your “all-star panel” should have been how to replace the dis-functioning, wasteful and obsolete USPTO with a different organization that would, by default, protect the inventors and shield them from gov prosecutors, trolls & other UFO (Unidentified Futile Organizations).

  • [Avatar for Benny]
    Benny
    September 12, 2017 08:59 am

    Anon,
    Well, I take comfort in the knowledge that engineers can immediately spot the difference between an algorithm and the machine on which the algorithm is run, even if the legal profession find this a topic for debate.

  • [Avatar for Anon]
    Anon
    September 12, 2017 08:35 am

    Night Writer at 21,

    Can you flesh out a bit more: that these patents are from the commerce clause and not the other patents.

    There are zero patents associated with the commerce clause. I do not see how the judicial branch could even begin to make that leap.

    You jump to the commerce clause, and you necessarily are no longer talking about patents.

    Benny, as to your comment to Peter (“the MRI patent was for a known machine with the added feature of an algorithm for automatically sorting images“), please revisit Diehr and realize that ALL of the equipment was old and the “point of novelty” (if one were to use that phrase) was the very same type of algorithm advance.

    It is the claim as a whole – not the parsed out algorithm that matters (or at least, if one were to be inte11ectually honest, such would be so).

  • [Avatar for Benny]
    Benny
    September 12, 2017 05:29 am

    Gene,
    Disbanding the PTAB would serve whose interest? Not the attorneys whose livelihood depends on the legal fees incurred in IPRs, and not the big corporations who use IPRs to swat their competitors. The PTAB serves those with deep pockets, maybe (pure conjecture) deep enough to finance some lobbying in DC. If some (or several) small entities get knocked over, well that’s collateral damage to them.
    I’ve said it before, but I’ll repeat it – the driving force behind these procedures is financial incentives, and as long as the incentives exist, so will the PTAB.

    Peter at 20 – the MRI patent was for a known machine with the added feature of an algorithm for automatically sorting images. Adding “A 40 ton machine comprising” before going on to explain your nifty algorithm means you invented an algorithm, not the ironworks.
    (Full disclosure – the funny money spent on IPRs is out of my company’s league, I’m more likely to be taken down at the PTAB than benefit from them, but I’m facing up to reality).

  • [Avatar for Night Writer]
    Night Writer
    September 12, 2017 04:21 am

    The problem with the property Article I section 8 arguments is that the Scotus could rule that these patents are from the commerce clause and not the other patents.

  • [Avatar for Peter]
    Peter
    September 12, 2017 02:42 am

    “Sticks and stones will break my bones but names will never hurt me”

    The same is true for “abstract ideas”

    One of these ethereal ideas is the Hitachi Altieri MRI. It weighs in at a trim 90,000 pounds.

    Here is a weighty idea. The Hitachi MRI should be flown high above the patent office and then dropped on it.

    This should have much the same effect as the apple had on Newton. However, Newton was much smarter than the collective brains at the patent office and the additional weight is necessary for getting the point across.

  • [Avatar for Tom Lanni]
    Tom Lanni
    September 11, 2017 11:53 pm

    Bemused,
    You make some good points. It seems as though the Court frowned upon exclusion since it would put someone out of business. Clearly this was a policy decision not based on the clear exclusionary language of Article I Section 8. This certainly a concern in the case at hand. But I think the difference that might swing the scales in our favor is that we are now dealing with Congress bypassing the courts altogether. I think this may be a bridge too far. Having the PTAB effectively overturn the courts might be a bit too much for them to swallow.

  • [Avatar for Roger Heath]
    Roger Heath
    September 11, 2017 10:24 pm

    I would like to see an article (at least an informed comment posted) on the pro’s and con’s of excluding the US from patent application.

    Like, does the invalidation of a patent by the US death squads invalidate the patent in all countries? What are the (legal)requirements/downsides of not applying in the US (especially if it could wind up like what they did to Tesia)?

  • [Avatar for Gene Quinn]
    Gene Quinn
    September 11, 2017 08:50 pm

    Tom-

    I don’t know how the Supreme Court could logically rule that a patent is a public right, but I’m experienced enough not to be surprised by much with respect to the Supreme Court. Yes, they would have to overrule over 100 years of case law, and that might be to much of a trick for even them to explain away, but the Supreme Court getting a patent case correct? That just doesn’t sound right.

  • [Avatar for Bemused]
    Bemused
    September 11, 2017 07:06 pm

    Tom,

    I (and probably a lot of other folks that read this blog) agree with you. My real big concern is that this is a tribunal that has shown very little problem in arriving at results-oriented decisions and statute or precedent be dam*ed.

    One horrible example of this results-oriented decision making is eBay v MerchExchange. How did SCOTUS square the Constitutional language which mandates that inventors are granted “exclusive rights to their respective writings and discoveries” with eBay’s four-factor “balancing” test which effectively did away with injunctive relief for patent owners – even after the patent at issue has been adjudicated as valid and infringed?

    Although I appreciate your analysis and the numerous amicus briefs submitted in Oil States discussing the historical and constitutional underpinnings of patents as private rights, I would have liked to have seen more ink on the consequences of declaring patents as public rights.

    Remember, SCOTUS granted the petition for certiorari in Microsoft v i4i and everyone freaked out that they would change (lower) the standard for finding patents not invalid. I very strongly suspect that was the intention when SCOTUS granted cert in i4i. However, the outpouring of support from large companies with extensive patent holdings and economic policy groups for retaining the higher invalidity standard, (in my mind) resulted in SCOTUS affirming (which begs the question why did SCOTUS even grant cert in i4i?).

    Stated another way, we (the pro-patent folks) have the law, the Constitution, history and precedent on our side. But is that enough for these justices that comprise the current SCOTUS?

    B

  • [Avatar for Tom Lanni]
    Tom Lanni
    September 11, 2017 05:08 pm

    Gene,
    I spent the last few days reading most of the Amicus briefs in the Oil States case and it seems to me that the question of private vs public rights of a patent are articulated in the words of the constitution itself “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries”. In that clause it is clear that the rights being secured are that of the inventor not of the public. The operative language being “securing” “to” the authors and inventors the exclusive right “to their” respective writings and discoveries. Many of the briefs touched on this and also on the precedent of the Supreme Court rulings which up until now have agreed with this interpretation. The Supreme Court would have to break with its own precedent and the plain language of the Constitution to find otherwise. I may be engaging in wishful thinking but I don’t see a compelling reason for them to do so. This then leads to the question as to whether or not the validity of a patent must be tried in an Article III court with a jury as the fact finder. I am having a hard time seeing how they could rule otherwise in a strictly legal sense.

  • [Avatar for Night Writer]
    Night Writer
    September 11, 2017 04:03 pm

    I think you need more details about the compensation of the patent judges and how their point system. I think that would shed light on more problems.

  • [Avatar for American Cowboy]
    American Cowboy
    September 11, 2017 03:57 pm

    Thanks for the nod, Anon. (nodanon has a nice ring to it, doesn’t it – like NanoNano)

    The fly in the ointment may turn out to be the opening of 261: “Subject to the provisions of this title,” suggesting that the property rights are what Congress says they are and subject to the kind of abuse Congress created in establishing IPR’s and PGRs.

    “When I use a word,” Humpty Dumpty said in rather a scornful tone, “it means just what I choose it to mean — neither more nor less.”
    “The question is,” said Alice, “whether you can make words mean so many different things.”
    “The question is,” said Humpty Dumpty, “which is to be master – – that’s all.”
    http://www.alice-in-wonderland.net/resources/chapters-script/alice-in-wonderland-quotes/

  • [Avatar for Anon]
    Anon
    September 11, 2017 03:45 pm

    (the nod would have included Gene at 10, had my post not crossed in transition)

  • [Avatar for Anon]
    Anon
    September 11, 2017 03:43 pm

    A follow on comment to Night Writer at 9: that gam playing would make it so that McCormick Harvesting (among a host of others***) would have to be expressly overruled.

    Of course, it THAT happens, then we (once again) run smack into the problem of separation of powers and the judicial branch actively writing (or re-writing) statutory law that our Constitution has allotted authority to write to only one single branch of the government.

    *** I note that by others, I not only mean other Supreme Court cases, but other statutory law as well – with a nod to American Cowboy at post 8.

  • [Avatar for Gene Quinn]
    Gene Quinn
    September 11, 2017 03:30 pm

    Anon, AC-

    I agree. If SCOTUS decides that patents are a public right that would eviscerate anything that remains of the right to exclude and de facto rule that patents are not property. Such a ruling would obviously violate 35 U.S.C. 261, but SCOTUS has issued rulings in direct violation of the statute before. Just look at patent eligibility where they have said discoveries are not patent eligible when the statute clearly and unambiguously says the opposite, for example.

  • [Avatar for Night Writer]
    Night Writer
    September 11, 2017 03:00 pm

    @6 Anon: yes, I think if SCOTUS says the PTAB is fine, then it will be based on playing games with the whether patents are actually property.

  • [Avatar for American Cowboy]
    American Cowboy
    September 11, 2017 02:00 pm

    35 U.S.C. 261 Ownership; assignment.
    Subject to the provisions of this title, patents shall have the attributes of personal property.

  • [Avatar for curoius]
    curoius
    September 11, 2017 01:57 pm

    Anon – re property, you are absolutely right. Personal, private property is the foundation of freedom. The government should not control all property, and especially not at the whim of politics or moneyed interests. But that is what is happening to our intellectual property.

  • [Avatar for Anon]
    Anon
    September 11, 2017 01:31 pm

    A thought to consider***:

    Patents are deemed NOT to be property rights after all, thus the Due Process arguments do not reach.

    *** granted, I think that such would be not only a huge mistake, and go against the Court’s own mistakable views on the subject, but this “non-property right” is really what all this comes down to, and is a necessary item to be obtained if the larger agenda of the Efficient Infringers views are to come to pass.

    Property has ever been one of the great “Liberties” that this country was built upon.

    But if patents are deemed “not property,” then the repercussions will be extensive.

  • [Avatar for Night Writer]
    Night Writer
    September 11, 2017 11:57 am

    http://caselaw.findlaw.com/us-supreme-court/419/565.html

    Seems like the PTAB even fails this test.

  • [Avatar for curoius]
    curoius
    September 11, 2017 11:49 am

    Gene – you have made these seemingly alarmist calls to disband the PTAB for quite some time. At first I thought they were just that, alarmist and over the top. But each time you uncover or shed light on another “transgression” by the PTAB, your calls become more sane, to the point that I now tend to agree with you. Things really have gotten (or been) way out of control and out of line with the Constitution and purpose of a patent system. Please keep up the good work.

  • [Avatar for Night Writer]
    Night Writer
    September 11, 2017 11:48 am

    I think it should be added that the lower standard (preponderance of evidence) and the ability to file IPRs repeatedly until one is instituted means that the odds are against keeping any patent.

    @1 I agree. The two sides of the story. It is the problem with pretty much everything in the USA. And, much of it is happening because there is no enforcement of ethics so people just tell false stories because there are no negative consequences and there is the upside of confusing the issues.

  • [Avatar for American Cowboy]
    American Cowboy
    September 11, 2017 09:58 am

    I was under a rock that day. From which firm did the senior associates come?

  • [Avatar for John Wu]
    John Wu
    September 11, 2017 09:17 am

    The root cause of all discussed problems is that the board is an administrative body run like common law court. Patent judges are sensitive to political pressure because they must answer to their leaders; they have some powerful to set precedents for the Patent Office but lack understanding of judicial process; and they have all kinds of personal interests, but are not subject to any conflicts of interest rule. It is destined to become an uncontrolled instrumentality that has caused more damages than any thing to the patent system. There is no fix.

    To dismantle it, the patent owners need to show its decision quality and process problems in hard statistics. Now, they can get away with anything because the public and lawmakers always hear two sides stories or two sets of arguments. One thing I am doing is to build a massive search-able database, log their opinions in the database, and all original files. So, the public can see what the board has done. Patent owners cannot win unless volumes of data speak. The same needs to be done for office actions.