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Supporters of the Patent Trial and Appeal Board (PTAB) continue to claim that the facts and figures showing the PTAB is overruling Article III federal district court adjudication on patent validity is fictitious. Ignoring the truth doesn’t make the truth any less correct. Still, in some circles the fiction spewed by those who champion the patent killing fields of the PTAB continues to be persuasive.
Recently we’ve published a series of articles demonstrating the problem of the PTAB, which is erasing federal district court verdicts on patent validity. First, we’ve noted that in 168 cases where patents were adjudicated as valid in Article III federal district courts the PTAB subsequently invalidated those patent claims. That means there have been 168 cases where the PTAB — a tribunal made up of executive office employees — has overruled the final determination of constitutional judicial officers.
Second, we’ve noted that in 58 of those 168 cases the constitutional judicial officers of the Article III federal district courts entered final verdicts that stamped the patent claims asserted as being valid after considering novelty (35 U.S.C. 102) and obviousness (35 U.S.C. 103). In this subset of 58 cases the PTAB later invalidated the claims specifically and definitively adjudicated as valid. It is hard to characterize such actions of the PTAB as anything other than overruling the decisions of Article III district courts.
Finally, we’ve also recently gone through in step-by-step fashion what the statistics available from independent third party providers Lex Machina and Docket Navigator show — and it is not a pretty picture. 82.5% of patents reviewed by PTAB in a final written decision are found defective. 69% of cases reaching a final written decision by the PTAB have all claims invalidated. 5% of patents reviewed by the PTAB are disclaimed by the patent owner, which makes them unenforceable. 23% of all petitions are settled, which universally results in a free license to the challenger, or in the case of Unified Patents to all the members who pay to fall under the Unified Patents umbrella. With these statistics how can anyone honestly call the PTAB anything other than a patent killing field?
Still the critics protest. How they can do so while still being taken seriously is a curiosity.
Let’s move past the statistics and put a face on the patent killing field of the PTAB; a tribunal of executive branch employees that erases federal district court rulings on patent validity. More alarming, in many of the cases where the PTAB has overruled district court adjudication of the patents there were findings of willful infringement, meaning the defendants (and ulitmately the IPR petitioners) knowingly and intentionally infringed the patents adjudicated to contain valid claims. Notwithstanding, the PTAB dutifully complied with their role as executioner of patents.
Consider the following illustrative examples.
1. Uniloc’s U.S. Patent No. 5,490,216 had been asserted in 65 cases filed in U.S. district court going back to September 2003, without claims ever being found invalid. After adopting a previous claim construction from the District Court the PTAB still found the challenged claims invalid.
2. VirnetX patents had been awarded nearly $1.1 billion in damages, not including sums paid to settle disputes prior to a final decision in Federal District Court. All of VirnetX patents survived every challenge of invalidity in Federal District Court. Furthermore, the United States Court of Appeals for the Federal Circuit itself had previously confirmed the validity of the ‘135 and ‘151 patents. Notwithstanding, after multiple IPR petitions at the PTAB, the PTAB invalidated claims to the ‘151 patent, the ‘135 patent, the ‘504 patent and the ‘211 patents.
3. The International Trade Commission issued a final determination finding a Section 337 violation by Arista relating to infringement of Cisco’s ‘577 and ‘668 patents. Not finding any of the invalidity defenses persuasive, and infringement ongoing, the ITC issued a limited exclusion order and cease-and-desist order against Arista. The PTAB declared claims of both the ‘557 and ‘668 patents invalid.
4. Imperium IP Holdings’ U.S. Patent No. 7,092,029 survived all 35 U.S.C. § 103 challenges for obviousness made by Samsung in a district court trial. In this particular trial enhanced damages were awarded both for willful infringement and the presentation of demonstrably false testimony. A jury decided that Samsung had not demonstrated obviousness of the ‘029 patent. Samsung then took its Section 103 challenge to the PTAB. The PTAB invalidated the patent claims as being obviousness.
5. Eight patents owned by Wisconsin-based Ultratec were twice upheld as not invalid in district court, once on summary judgment after a challenge on 35 U.S.C. § 102 grounds for anticipation and another time on Section 103 obviousness grounds in the jury verdict entered in the case. The defendants in that case, Sorenson Communications and CaptionCall, then moved on to the PTAB challenging claims from the eight Ultratec patents asserted at district court. The PTAB dutifully invalid the patent claims under Sections 102 and 103.
6. Jazz Pharmaceuticals asserted 18 patents in district court in response to abbreviated new drug applications (ANDAs) filed with the U.S. Food and Drug Administration (FDA) for generic versions of Jazz’s Xyrem narcolepsy drug. The ANDA, filed by Amneal, included a Paragraph IV certification alleging invalidity of Jazz’s patents on multiple statutory grounds. One defendant in the case, Wockhardt Bio, entered into a consent judgment where they agreed that the generic drug would infringe Jazz’s patents and stipulated to an injunction against producing the generic. Wockhardt, Amneal and other defendants ithen turned to the PTAB to invalidate six Jazz patents after defenses of patent invalidity didn’t work at the district court. The PTAB dutifully complied.
7. Twice, Novartis AG’s U.S. Patent No. 6,335,031 was upheld as not invalid in district court after defendant Noven Pharmaceuticals challenged the patent’s validity on grounds of obviousness, once in a trial opinion from August 2015 and then again in a final judgment issuing from the court a few weeks later. Noven and fellow pharmaceutical firm Mylan then teamed up at the PTAB to have the ‘031 patent deveined of seven of the patent’s original 20 claims. The PTAB delivered for the defendants invalidating the patent claims for obviousness.
8. Four patents owned by American firms Paice and The Abell Foundation were asserted in a case against Korean automakers Hyundai and Kia where those giant auto manufacturers were found guilty of willfully infringing the patents-in-suit. In a jury verdict issued in October 2015, none of Paice’s asserted patents were found invalid in light of Hyundai and Kia’s anticipation and obviousness arguments. The reasonable royalty awarded in the case was nearly $29 million, and that was prior to any enhanced damages for willfulness. And then Hyundai and Kia, with help from Ford and Volkswagen, turned to the PTAB. The four patents adjudicated valid and willfully infringed in district court were invalidated as obvious. One of these patents, U.S. Patent No. 7,237,634, had 26 petitions filed against it, demonstrating that the gang-tackling phenomenon is indeed very real. In 13 PTAB cases, including four petitioned by Hyundai and Kia, the patent owner settled prior to institution, capitulating to the challengers. In the other 13 PTAB trials, each of which was petitioned by Ford, the PTAB found all challenged claims invalid on obviousness grounds.
9. Two patents, U.S. Patent Nos. 8,023,580 and 8,457,228, were adjudicated valid and infringed in a jury verdict entered in district court in February 2015 against Samsung. The verdict also awarded $15.7 million in reasonable royalty damages to patent owner Rembrandt Wireless. Samsung had raised invalidity of the ‘580 and ‘228 patents as affirmative defenses in the district court case. Although these patents were only asserted in one district court case, seven IPRs were filed against the ‘228 patent and another six petitions filed to challenge the ‘580 patent. Samsung was the petitioner in each of those cases. In three separate IPRs, the ‘228 patent was found invalid as obvious. Two of the six IPRs petitioned against the ‘580 patent also resulted in invalidated claims on grounds of obviousness.
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Join the Discussion
13 comments so far.
Anon
January 16, 2018 08:30 amangry dude,
“ and nothing will save it at the moment”
Is exactly the song that the Efficient Infringers want you to be singing.
“Focus on future generations”
That’s a little bit better – but completely absent from your earlier posts.
You do not seem to understand what a puppet you are when you play to your emotions and leave reason behind. And it’s not like you have not been told this many times now.
Help or get out of the way. The path you take is unhelpful as it aligns with the Efficient Infringer game plan.
angry dude
January 16, 2018 12:30 am“The doc said ‘to the morgue’ – to the morgue it is !”
is well known Russian anecdote relevant to the current situation with patents in USA:
The nurse is wheeling terminally sick patient from one location to another.
The patient asks “Where are you taking me, nurse, to reanimation unit?
She answers: “The doc said to the morgue – to the morgue it is !”
The patient (US patent system) is terminally sick and nothing will save it at the moment
Focus on future generations
Bemused
January 15, 2018 07:59 pmangry dude@9: You just don’t stop, do you? How many people (myself included) have suggested to you to turn that anger to something constructive? How many times have folks on here written that your constant “the sky has fallen” plays directly into the goal of the infringer lobby to have inventors/patent holders just give up the fight?
How nice would it be for everybody (and how therapeutic for you most of all) if you channeled that anger into something constructive like actually sitting down and writing a few articles for this blog which could be used by pro-patent reporters or by folks like Paul Morinville at US Inventor who ceaselessly lobby Congress as additional examples to of how the current US patent system has failed inventors. I’d even help you write those articles.
PS. That comment you wrote (and have previously written 30 or more times in previous articles) “The doc said to the morgue – to the morgue it is” is just plain stupid.
Anon
January 15, 2018 07:54 pmNice “quitters” Efficient Infringers message there, angry dude.
angry dude
January 15, 2018 07:02 pmThe doc said ‘to the morgue’ – to the morgue it is !
Joachim Martillo
January 15, 2018 11:51 amHere is the link to the review of the Intervenor Brief.
https://www.linkedin.com/pulse/usptos-new-motto-you-innovate-we-expropriate-joachim-martillo/
Joachim Martillo
January 15, 2018 11:50 amBTW, I reviewed the USPTO’s Director’s Intervenor Brief in the Tinnus appeal from the PGR. The brief is shameful, pitiful, and vicariously embarrassing. I would have been ashamed to put the brief before the CAFC under my name.
Joachim Martillo
January 15, 2018 11:38 amAnon makes important points.
I have to add that we should not get lost in the statistics.
In financial crime the financial crooks use various strategies to lead forensic statisticians and forensic accountants away from the real scams, insider trading, fixes, etc.
When I look at the Tinnus-Telebrands saga, Occam’s Razor tells me that the PTAB is a vehicle for a “bait-and-switch” con scam that some group is perpetrating at the USPTO.
Now we don’t know whether the saga describes a primary crime, a practice crime, or a distraction, but after investigating Telebrands, I can’t state that a payoff is out of the question.
I do suspect that we are seeing several separate layers of criminality and of buffoonery. It is necessary for an independent prosecutor to grovel through USPTO records at least back to 1994 (institution of SAWS), but events back to 1985 (the Söderblom debacle, in which I was tangentially involved) or even back to 1969 (Prater, In re, 415 F.2d 1393 (CCPA 1969)) may be relevant.
Here is a description of the Tinnus-Telebrands saga.
https://www.linkedin.com/pulse/how-do-i-hate-post-grant-review-let-me-count-ways-joachim-martillo/
Anon
January 15, 2018 10:08 amBob,
I am sorry to disagree with you, but Congress – the branch of the government that enacts law according to policy purposefully created separate systems, knowing full well that the systems operate under different parameters.
THAT fact – remains.
The real issue is NOT that fact.
The real issue is whether or not Congress in setting up THEIR policy choice violated any other protections of the property rights that inure at grant.
As to your view that only a single standard should exist – since the nature of the patent right being a property right has not changed (and indeed is integral to the US Sovereign choices about patents going all the way back to the Constitution), I would think that the higher standard rather thean the lower one should remain.
Bob Hodges
January 15, 2018 08:41 amAnon,
The policy point is that we should not have a separate system that reaches the opposite result. We should not have a Patent Office review process that has rules and standards that reach a different result than a District Court does following a trial on the same issues. If your argument is that the standard should be the current, lower standard of the PTAB, then that should be the standard in District Court.
Bemused
January 14, 2018 03:39 pmAnon, I don’t think that many folks on here would disagree with you (I certainly don’t). However, I also think there is a method to Gene’s “madness” (and I use the term “madness” with all due respect to Gene and as shorthand for his tireless efforts to publicly showcase the problems with the AIA/PTAB).
To wit, if one wants to resolve the legal problems created by Congress in the AIA, there are two ways to do this: (1) Get Congress to pass legislation to get rid of that abominable piece of garbage legislation; or (2) Get SCOTUS to rules that the AIA a violation of separation of powers. Both those institutions (Congress and SCOTUS) are very susceptible to the public’s hue and outcry, media coverage and public policy think tank influence. IMHO, Gene’s “madness” (that word again) actively influences those constituencies.
In sum, I don’t believe that there is a “right” or “wrong” approach/argument. Just different ways of trying to get to the same end result.
Anon
January 14, 2018 12:01 pm“It is hard to characterize such actions of the PTAB as anything other than overruling the decisions of Article III district courts.”
This is a bit of comparing Ends and ignoring Means.
To that end [sic], this article is NOT helpful.
The bottom line here is that the Article III courts and the judicial function within the Executive Branch administrative agency do NOT have the same structure of “Means.”
If one is only looking at Ends then, one ends [sic] up comparing apples and oranges.
NONE of the examples actually get to the important distinctions that are necessarily in play between the “forum of apples” and the “forum of oranges.”
“Still the critics protest. How they can do so while still being taken seriously is a curiosity.”
Sigh.
One must ask the right questions. Not asking the right questions permits those protests to “have legs.”
Complaining that “apples are not oranges” is NOT asking the right questions.
Aiming at the PTAB for items within the powers of PTAB misses the critical point of Congress being at fault in how Congress granted that power to the PTAB.
Apples NOT BEING oranges is a problem – but this article does not reach exactly why that is a problem.
Targeting the PTAB (with whatever labels) will NOT address the underlying problem.
The underlying problem is that Congress created a vehicle for an administrative agency that improperly treats a property right.
Once granted, the inchoate right of an inventor is made into a full, legal, property right.
Once granted, the aspects of that property right inure other Constitutional protections (the protections that inure to property).
Once granted, not even Congress – which is the appropriate branch of the government to exercise the Constitutionally directed authority to write patent law in the first place – not even Congress may write a law that violates other Constitutional protections.
An analogous situation in a different IP realm is readily available: Trademarks and Tam.
NO ONE ever said in that case that Congress was the incorrect entity to write trademark law. But all the same, what Congress did was write a law that violated other protections of the Constitution (for admittedly different reasons).
Some have postulated that Congress can do whatever it wants to do with patents and if Congress wants to create a post grant recall mechanism, then that is the end of it.
This is simply not so.
Another analogy serves to make the point that it such is not so: eminent domain and the Takings laws.
Our government CAN engage in takings of (importantly) personal property (real property and otherwise).
However, our government can NOT engage in takings while ignoring other Constitutional protections that are in place.
And takings need not rise to the level of a physical takings to inure those same Constitutional protections.
SO….
While I “get” the consternation of the effects of the IPR regime, and even “get” the desire to use a label for the PTAB when the PTAB is exercising its rights given to it by Congress, I do NOT “get” the continued attempts to put focus on the “wrong questions.”
Yes, “apples” are not “oranges.”
But they are both fruits.
“Apples” need not be “oranges” for all of the complaining that the two are not the same. Being correct in that they are not the same is necessary but not sufficient. The different mechanisms – with their known different attributes because they are in different forums – are different, and NO AMOUNT of complaining does anything to change the facts that the different forums are different.
Therefore, any effective argument must be presented as to why “apples” and “oranges” do not mix – that the real position is that the “category” of fruit is not the proper category.
The proper distinction then is that at the moment of grant, the nature of the item is changed in a fundamental manner – and that change in fundamental manner is the achievement of obtaining full property status – and the rights (ALL of the rights, even and especially other Constitutional rights) that inure to property, and which rights not even Congress can blindly write a subsequent law affecting without the considerations that such other Constitutional rights imbue.
Articles such as this one then, may assuage the feelings of the advocates involved, but are ultimately UNHELPFUL to the degree that such articles do not provide the proper focus for resolving the legal problems created by Congress in the AIA.
Bluejay
January 14, 2018 11:53 amSeven plus years, three jury verdicts, one appellate court victory and Apple hasn’t paid a dime to Virnetx. Now Apple wants a federal judge to stay a scheduled trial.
Apple is an IP pirate and deadbeat.