Five Years after the AIA Created the PTAB

By Russell Slifer
September 16, 2017

Congress wanted to make changes to the U.S. patent system when it passed the America Invents Act (AIA) six years ago. Some of the changes were good, some not so good. For example, providing more stability to USPTO funding and granting the Agency fee setting authority were very positive. (Although, Commerce initiatives, such as Shared Services and FITARA (Federal Information Technology Acquisition Reform Act), threaten to siphon tens of millions of inventor fees from the USPTO.) Allowing the creation of regional USPTO offices was also great for inventors. Other parts of the AIA, such as post-grant proceedings (which became effective five years ago) have resulted in unintended consequences that contributed to a weaker U.S. patent system for inventors and innovators.

I want to believe Congress ultimately sought to strengthen the U.S. patent system with the AIA by providing a mechanism to more easily remove a small percentage of granted patents that were being inappropriately used in litigation. Specifically, patents that were being asserted with claim constructions not contemplated when the patent was examined. After all, Congress had been heavily lobbied with the narrative that NPE’s had been stretching patents well beyond the four corners of the granted patent and hurting the integrity of the patent system.

When the AIA was drafted, the new IPR, PGR and CBM proceedings promised to add some balance to a litigation system that had become too pro-patent in the technology areas (See E.D. Texas). Congress wanted to provide a more efficient system for challenging patents that should not have issued and reduce unwarranted litigation costs and inconsistent damage awards. By moving the decision of patent validity to the USPTO, it was reasoned, defendants would be spared from emotional decisions by unskilled juries. Unfortunately, the final AIA language, and its implementing regulations, lowered the requirements for invalidating a patent in addition to moving the decision to the PTAB. Thus, the defendant abuse exhibited in district court litigation has been replaced with patent owner abuse in the PTAB. Had the burden of proof and claim interpretation standard remained the same in both district court and the PTAB we would be better positioned to determine if the AIA achieved its intended goals of a more efficient system.

Earlier this year I made some suggestions in an IP Watchdog article to improve IPR’s by addressing some abusive practices. I hope that Andrei Iancu will consider these ideas once he is confirmed as Director of the USPTO. I also suggest that the Director reconsider all the regulations the USPTO implemented under 35 U.S.C. § 316(e), starting with the BRI claim interpretation standard.

Recent Supreme Court decisions, in just about every area of patent law, combined with the initial results of IPR’s, have unnecessarily moved the U.S. into the anti-patent territory. I remain optimistic, however, that changes can be made by the USPTO, and Congress, that will demonstrate 5-years from now that the AIA was good and that the U.S. values a strong patent system for inventors.

 

The Author

Russell Slifer

Russell Slifer is a Principal at Schwegman Lundberg & Woessner and the former Deputy Under Secretary of Commerce for Intellectual Property & Deputy Director of the United States Patent and Trademark Office. For more information or to contact Mr. Slifer, please visit his firm bio page.

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 14 Comments comments. Join the discussion.

  1. Night Writer September 16, 2017 11:49 am

    I have a question: how well have the NPEs done after the AIA? Seems like some continue to do quite well, but they are the big ones that have the sophistication to navigate the AIA.

    For example, IPRs are fine and good, but what do you do if they keep a continuation going and keep coming up with new claims? It is more expensive to invalidate the claims then to generate a new set of claims.

  2. Edward Heller September 17, 2017 5:36 am

    Russ, as you identified, there are more than just BRI problems with IPR. There is a lower burden of proof issue as well. Ideally, a judgment between the parties in court would be binding in the PTO just as a judgment of the PTO in an IPR is binding in court.

    What was set up is really unfair to a patent owner in so many ways. Rather than permit a particular accused infringer one bite at the apple – either in court or in the PTO – an accused infringer can keep re-filing IPR until one is instituted; and if they lose, their buddies can continue to file. The patent owner cannot bring IPRs and therefore cannot bring all of the accused infringers in to the IPR to bind them.

    Then we have no standing requirement. Short-sellers and general interest groups who might be partly funded by infringers can file IPR.

    And we also have the fact that the PTAB simply is not enforcing the requirement for privity, and it has successfully argued to this point that the Federal Circuit has no review of this PTAB abuse.

    I could go on and on and on. There are multiple other things wrong with IPRs away it has been implemented as documented so well hereby this blog. There are no small fixes that can alleviate all these problems. The system is entirely flawed in concept and should be ended. There is no way that the patent owner can ever get due process in the patent office.

  3. Paul F. Morgan September 17, 2017 11:21 am

    Mr. Slifer, thank you for hot-linking your prior article to specific suggested improvements in IPRs, especially joinders, since most of the comments on this blog are only personal views for its complete elimination.

    NW, yes, keeping continuations pending is a great litigation tactic, but most of the patents acquired by PAEs [properly distinguished from NPEs] do not still have pending continuations or divisionals, even continuations must avoid double patenting rejections or defenses, and other ways than continuations to add new claims to the same invention usually invoke recapture and/or intervening rights doctrines.

  4. CP in DC September 17, 2017 1:36 pm

    Mr. Silfer thank you for providing the link to the prior article. I agree that improvement is necessary in the IPR procedures. In particular, I agree with sections III and VI of your prior article.

    I would like to add my voice in calling for stopping multiple petitions against a patentee. I can understand a limit, but haven’t thought about how to estop others from challenging a patent which was enforced against them.

    The issue of standing should be addressed as well, mostly to prevent gaming the system. As you mentioned, the integrity of the patent system must be protected from unintended consequences.

  5. Night Writer September 17, 2017 2:52 pm

    @3: Paul. Nope. The reality is that the continuing to file the continuation is common practice.

    Not sure of the exactly lines for PAEs vs. NPEs. I do know that I have worked for some. When you acquire the patent you usually try to re-open it. Most of the patent market is for recently granted patents and the game was to then reopen them and file continuations. Taranto’s opinion made that harder.

    Still, no study that I have seen has looked at the NPE (or PAEs if you want) that existed before the AIA and were seen as the “problem” and how well they have done since the AIA. I think many have found sophisticated ways around the AIA.

  6. Eric Berend September 18, 2017 3:38 am

    This article reads as an apologist straining to describe some basis of reasonableness, where none exists.

    “QUITE DELIBERATELY, the final AIA language, and its implementing regulations, lowered the requirements for invalidating a patent in addition to moving the decision to the PTAB.”

    – there, fixed it for you.

    “Recent Supreme Court decisions, in just about every area of patent law, combined with the initial results of IPR’s, have QUITE DELIBERATELY moved the U.S. into the anti-patent territory.”

    – there, fixed it for you.

    “For example, providing more stability to USPTO funding and granting the Agency fee setting authority were QUITE DELIBERATELY arranged so as to favor infringers in the new AIA-created procedures.”

    – there, fixed it for you.

    “Other parts of the AIA, such as post-grant proceedings (which became effective five years ago) have resulted in QUITE DELIBERATE consequences that contributed to a weaker U.S. patent system for inventors and innovators.”

    – there, fixed it for you.

    Given ALL of the above edits, a more accurate description of the ‘real world’ situation begins to emerge.

    Now, say “thank you”.
    You’re welcome.

  7. Anon September 18, 2017 8:15 am

    Eric – you nailed it.

    Some of us (for example, Gene and myself) have long warned of these things and were active voices on different levels (I know that I personally contacted each of my representatives explaining exactly the dangers we see unfolding).

  8. Night Writer September 18, 2017 9:10 am

    @6 Great edits.

    (I read the AIA and did a presentation on it when it was legislation. No one had any doubt that it was going to be very, very bad for patents. I almost moved areas of law when I read about IPRs.)

    By the way, everyone thought that the IPRs were unconstitutional at the time, but the anti-patent spirit was so high that they did not care.

    So, most the people that understood patent law knew that exactly what has happened would happen. There was no surprise. I almost moved to business law with an AMLAW 50 law firm. I wish I had.

    Patents are sunk.

  9. Anon September 18, 2017 5:12 pm

    I will fully disagree with the “patents are sunk” statement.

    If that were indeed the case, then NO ONE would bother saying so, and those of us STILL fighting to correct the system and restore the glory to the patent system WOULD HAVE already jumped ship and moved to other areas of law.

    Yes – things have been dark – and may in fact become darker.

    But on the other hand, things may also be on the verge of turning around.

    I may be an optimisit, or I may care too much for the value of innovation (for which I have seen on multiple angles, from an engineer, from a business manager and finally from an attorney, but I will fight the good fight and I refuse to dwell in the land of pity and woe that “all is lost.”

    Further, I see those that do so dwell and are vocal about it are serving the interests of those who would seek to denigrate the patent system. There is a huge difference between discussions of where the problems are (and even expressing outrage over problems faced) and those that effectively say “don’t bother.”

    The first I may commiserate with and learn from, and use the energy that may on surface to be negative and turn that energy into a positive and vibrant force. The latter I would rather have you simply sulk away into some corner and not tarnish the efforts of those still willing to try to make a difference.

  10. Invention Rights September 19, 2017 6:11 am

    If Supreme Court upholds Oil States then I am with Anon. Maybe Night Writer will join as well? But if they buy the author’s idea that PTAB can be redeemed (under the Constitution), then I will join Night Writer. Affirmance in Oil States will be the nail in the coffin for our patent system. The pendulum will not be swinging back for this nation. Simple as that.

  11. Night Writer September 19, 2017 10:02 am

    @9 Anon

    All I can say is watch out. From my dealings with people, I am pretty sure we are nearing a tipping point. I think if things remain as they are that in the next recession that patent filings will drop 30% from US corporations.

    And R&D will similarly be affected. More money may go into taking what others have done.

  12. Night Writer September 19, 2017 10:04 am

    What is going to happen is VPs are going to say, we don’t really need all this R&D, we can take anything and we don’t really need all these patents as they aren’t worth that much. Let’s cut back on R&D and patents and focus more on product development.

    It is coming. You are warned.

  13. Kristen Blake September 20, 2017 7:05 pm

    @12: The problem is that, soon enough, there won’t be anything left for the VP’s to “take” – as the incentive to invent is being systematically removed from the population at large.

    The post-AIA environment has effectively told a population of 325 Million potential inventors that, “If you have an amazing idea…perhaps (insert large company name here) will be kind enough to put you on salary and monetize it themselves.”

    Not a great long term value building strategy for the US.

  14. dh September 21, 2017 4:35 am

    Thank you, Eric Berend.

    Those who do not recognize the natural gravitation to a third-world wasteland are destined to promote it.

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