Are all U.S. Patent Claims Invalid?

By Gene Quinn
September 24, 2018

The fight goes on to invalidate claims until the patent owner loses and the claims are invalidated.

https://depositphotos.com/188304816/stock-illustration-cartoon-of-angry-businessman-or.htmlRecently the United States Court of Appeals for the Federal Circuit issued a decision in Nobel Biocare Srvcs. AG v. Instradent USA, Inc., which makes one wonder whether all U.S. patents are invalid, or will eventually become invalid.

Nobel Biocare owns U.S. Patent 8,714,977 (“the ‘977 patent”), which relates to dental implants. On October 27, 2014, the U.S. International Trade Commission (“ITC”) instituted an investigation of Instradent USA, Inc.’s (“Instradent”) Drive CM dental implants based on a complaint filed by Nobel alleging violations of 19 U.S.C. § 1337 by reason of importation of an implant product that infringes the ‘977 patent and U.S. Patent 8,764,443. On May 11, 2016, the ITC issued a Commission Opinion finding Instradent failed to show by clear and convincing evidence that the ABT Catalog was prior art under § 102(b) for claims 1-5 and 19 of the ‘977 patent. In 2017, the Federal Circuit affirmed.

The claims 1-5 and 19 of the ‘977 patent were finally adjudicated as being valid by the Federal Circuit, with Instradent failing to demonstrate invalidity.

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On August 20, 2015, Instradent petitioned for IPR of claims 1-7, 9, and 13-20 of the ‘977 patent. The PTAB, using the lower preponderance of the evidence standard applicable to inter partes review challenges, found that the ABT Catalog was prior art and that the claims of the ‘977 patent were invalid under 35 U.S.C. § 102(b). The Federal Circuit affirmed the PTAB on September 13, 2018.

The claims 1-7, 9, and 13-20 of the ‘977 patent have been adjudicated as being invalid, with Instradent demonstrating them to be invalid.

Thus, the absurd result is now that claims 1-5 and 19 of the ‘977 patent have been both finally adjudicated by the Federal Circuit as both being valid and invalid.

What does this mean? It suggests several things.

First, this case very clearly demonstrates the ridiculousness associated with having different standards of proof in different fora. Those who opposed the different standard for invalidating claims at the Patent Trial and Appeal Board (PTAB) said this would happen, and here we see the absurd result. Even Chief Justice John Roberts seemed to appreciate the likelihood that this type of absurd result would happen, during oral arguments in Cuozzo, although it didn’t lead him to do anything other than observe that this “fix” is extraordinary.

Second, this case demonstrates that nothing is final until the patent owner loses. When the patent owner wins there is no finality. There is no res judicata or collateral estoppel or quieted title. The fight goes on to invalidate claims until the patent owner loses and the claims are invalidated.

Third, this case demonstrates the superiority of the USPTO and the PTAB. While this astonishing result occurred to overrule an ITC final decision that was affirmed by the Federal Circuit, the same can and will happen with respect to federal district courts. The subjugation of Article III courts to the power of an agency is beyond breathtaking.

Finally, this case demonstrates that decisions affirming the validity of patent claims by the Federal Circuit are nothing more than advisory opinions. Decisions affirming validity of patent claims are merely a preliminary round in a fight that will last until the patent claims are all finally invalidated.

 

Image Source: Deposit Photos.

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 28 Comments comments. Join the discussion.

  1. JNG September 24, 2018 3:11 pm

    As my first mentor at the big patent D firm used to say proudly, “there are no valid patents, only patents that we haven’t yet spent enough time and money invalidating “

  2. Josh Malone September 24, 2018 3:41 pm

    Great reporting Gene. Also note that this case turned exclusivley on a factual question. Yet no jury was convened. Perhaps the value in controversy was less than $20?

  3. Pro Say September 24, 2018 3:57 pm

    “All your patents are belong to us.”

    The PTAB
    (aka Death Squad)

  4. John White September 24, 2018 4:22 pm

    Spot on Gene. The PTO is large and in-charge. It both grants and, presto-change, takes away patents. Regardless of whatever else and whomever else has passed judgment. The view that is determinative above all others, is theirs, at both ends of the process. Wow.

  5. concerned September 25, 2018 2:39 am

    It is naïve to think inventors will continue to spend their own money, time and effort to participate in an environment that completely abuses them. At times, it seems impossible or lucky to just break even.
    Once the small-time inventor is driven out of the picture, the big-time players will be forced to cannibalize each other. The policies the big-time players applauded initially, because of the slanted advantage, works against them.
    The same thing happened in horse racing. The big-time players, called whales, can bet straight into the betting “tote” pool a split second after the race starts using algorithms that determine the bet size based on wagering pool, odds and probabilities. In other words, the whales are always the last bets and the small-time bettor has no chance.
    The advantage the whales enjoy have placed an additional takeout of 7% of each wagered dollar due to the efficiency of the whales’ algorithms coined the “advantage player tax”. The published win pool takeout of 18% is effectively 25% due to this phenomenon. The churn of this additional hidden tax renders the small-time player with no chance, forcing them to leave the game en masse. The whales are now completing against themselves due to the declining wagering pools, cannibalizing each other. My home town race track closed after 91 years of existence. The other race track nearby is on life support.
    The small-time inventor is being forced out of the patent game. The patent policy makers, just like in horse racing, feel the patent game will continue status quo no matter what burdens are placed on the inventor. This “head in the sand” mentality continues down the same path refusing to ignore the signs of destruction, such as the United States dropping to 12th in the patent world.
    The patent game is making the same mistake as the horse racing game. Instead of trying to grow their environment by encouraging people to invent, the policy makers are relying on get rich quick schemes that favor the patent whales who have been given a license to steal everyone’s ideas de facto. This “smoke and mirrors” approach will also fail miserably.
    It was the small-time bettor that really made horse racing. It is the small-time inventor that makes the patent world go around. Think about it.
    What do preachers, dentist, and the USPTO all have in common? All three are trying to put themselves out of business!

  6. Benny September 25, 2018 7:20 am

    Concerned,
    you tell me that the small-time inventor makes the patent world go round. I have a different opinion. To take the case in the article, a patent was drawn up, filed, prosecuted, disputed in a federal court and at the PTAB. That involved a lot of money, and a fair amount of work. If you chase those greenbacks to their destination you might conclude that actually it is patent and litigation attorneys who make the patent world go round, as they account for the vast majority of the expenses involved. The current situation exists primarily because there IS a financial incentive for it, and, unfortunately for you, you hold the short end of the stick. Had you chosen patent litigation as a career, you would have probably been on friendlier terms with your bank manager.
    Oh, and another couple of points – one , few of us bemoan the decline of horse-racing, and two, you don’t have to hide behind the handle “concerned”, you have already told everyone here your real name.

  7. Michael Palmer September 25, 2018 7:22 am

    Thanks for this reporting and analysis, Gene. Alas, while the patent adjudication system is a stunningly egregious example, the phenomenon you describe is characteristic of the broader judicial system, in which Judge A grants a TRO, Judge B dissolves it and denies a preliminary injunction, Judge C then grants a permanent injunction after trial, Judges D and E reverse on appeal with Judge F vehemently calling his colleagues blind idiots (in polite judicial speak, of course), and the en banc court reversing D and E and reinstating the trial court’s judgment but for entirely different reasons than those stated by Judge F. Our judicial system suffers from fundamental epistemological problems and is in bad need of a complete makeover. The absurd situation in the patent world brings this problem into sharp relief and provides a good occasion to do something about the problem.
    If not fixed, the current uncertainty surrounding patent validity in the US system will have far-reaching consequences for the commercial viability of innovation in our economy. We should not simply shrug it off.

  8. Kirk Hartung September 25, 2018 8:22 am

    It makes no sense that the same challenger, using the same evidence, can get two different results on whether a reference qualifies as prior art, which is a question of fact. Facts don’t change. In this case, the question of whether the catalog was or was not prior art should get the same answer, regardless of the burden of proof.
    One solution is to not allow the same challenger to get two bites at the apple. It’s the simple concept of estoppel, which applies to patent owners (Festo) and should also apply to infringers.

  9. Tim September 25, 2018 8:35 am

    It’s sad that all owners of patents that have won, and then had Appeals Court pull the rug out from under us and reverse decision of 12-person juries sue the corrupt judges, like Mayer & Wallach, after we owners and shareholders lose hundreds of thousands of $$$’s. Vringo vs IP Internet, as Google owns the government and knew all along that they would just have the decision reversed. What a corrupt system!

  10. Patrick G September 25, 2018 8:55 am

    Great article Gene! I wonder if it would cost less for the companies to come to a licensing agreement. It probably would’ve saved them both lots and lots of attorneys fees for the invalidation fight. Also, a license could allow them to still compete with other aspects of their product or service, while delivering the value of the patent to more and more end users.

    Use the patent as a business asset rather than a legal weapon. Plus, instead of spending money trying to defeat a patent (@JNG), try gaining access to the technology and respect the intellectual property that has been awarded.

  11. Peter September 25, 2018 8:56 am

    Prost and Chen are on this decision- meaning we continue to be led off the straight and narrow and into the abyss by the uninspired Chief Judge. Soon there will be no room left in Hades as a burial ground for invalidated patents.

  12. Joachim Martillo September 25, 2018 8:58 am

    It’s not exactly the same issue, but it is related. I made the following comment on “Alice at Age Four: Time to Grow Up.”

    A constitutional amendment is needed to undo the damage associated with Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, 584 U.S. ___ (2018).

    As obnoxious and illogical as it was for SCOTUS to find that letters patent to an invention constitute a public franchise or natural monopoly, one cannot deny that the Constitution never actually states that Congress creates property in the sense of the fifth amendment when it gives Congress power “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…”

    This proposed amendment will get determinations of validity of letters patent to an invention out of the PTAB and out of the ITC. Adjudication of validity at the PTAB is an open invitation to corruption while adjudication of validity at the ITC is a source of chaos. If a defendant at the ITC believes a patent is invalid under which the owner seeks exclusion pursuant to Section 337, the defendant can bring an action for declaratory judgment under 28 U.S. Code § 2201 – Creation of remedy.

  13. PTO-Indentured September 25, 2018 9:54 am

    Invalidated Trust

    There’s a story about a mafia boss who’s young boy, perched atop a wall wants his father to catch him if the child musters the courage to leap from the wall. Appearing to encourage the boy, the father spreads his arms wide, assuring his son he will catch him. The boy jumps, but at the last second the father steps aside and the child crashes into the ground. Thinking, he has just taught his son a valuable lesson, the father walks away saying (adding to the abuse) “See, in life you must never trust anybody!”

    “Agreements,” so the saying goes “are only as good as the parties (entity) behind them.” Formerly, a U.S. patent, duly prosecuted, and issued by the PTO to an independent American inventor, was the ‘encouragment to risk a leap’ — with some reasonable expectation that the patent would afford a promised protective right (or at minimum a defensible ‘agreement’) — intended to in effect ‘catch’ the encouraged-to-jump patentee.

    Instead, as we have seen over, and over, and over again the PTO is perpetuating a firmly entrenched double-standard system (AIA), outrageously biased to large-entities, including an elite handful with near-oligarchic powers. No damage, to the standing of their own institution suffices to reverse an unprecedented plummeting, inseparable from their self-destructive acts, and witting purge of the independent inventor — to an extent genocidal-like in scale.

    The acts of the decision-makers perpetuating this: not unlike that of the mafia boss above.

    Such is a trust invalidated — and a cynicism it surely breeds. In a safety-net alleged but never really there. In a wreaking of harm and/or damages directed at individuals, any fair-minded behaviorist would assert are punitive, if not likely to yield in each felled-patentee a PTO-induced PTSD and well-earned fear, that an AIA-directed (submissive?) PTO is no longer worthy of trust.

  14. Concerned September 25, 2018 10:33 am

    Benny @6:

    Horse racing was the number 1 spectator sport in America at one time, so many people probably bemoan the decline of the sport.

    Ironically, I married the bank manager, no kidding.

    And I would not count my patent down and out so fast. A higher authority is involved. That is how a knucklehead like me got the idea. My attorney’s last name is even miracle.

  15. Anon September 25, 2018 10:49 am

    Benny @ 6,

    Please stop with the dissembling (vis a vis “you might conclude that actually it is patent and litigation attorneys who make the patent world go round, as they account for the vast majority of the expenses involved.“).

    Kirk @ 7: “It makes no sense that the same challenger, using the same evidence, can get two different results on whether a reference qualifies as prior art, which is a question of fact.” — I suggest you read a bit closer. the second challenge was not only in a different forum (with different rules), it also had different evidence.

  16. Curious September 25, 2018 11:37 am

    JNG @1 — that is pretty much it. With IPRs, it becomes even more easier. At least in a patent litigation, if the patentee wins, they get a judgment. With a IPR, a win by the patentee just gets them another chance to spend well in excess of 6 figures to do it again until a PTAB panel can be found who are willing to invalidate the patent. That being said, it doesn’t take long for that to happen.

  17. Michael W. Shore September 25, 2018 11:40 am

    The entire patent system was designed to curb the power of economic monopolists by creating a counter-balancing innovator monopoly via a patent. Economic monopolists hate patents because they represent a rival that cannot be bought out cheaply or copied & destroyed through predatory pricing. So of course, any sane economic monopolist will try to maintain their stranglehold on market share by killing the rival monopoly, in this case by destroying the patent system. What does Google, Microsoft or Apple or FaceBook or any other economic “winner” using out-dated technology fear? Innovation they cannot use their market dominance to copy and bring to their existing customers. What is the only thing that stops that? Patents.

    The patent system also is a cure, to a real extent to the wealth disparity created by economic monopolies. Is it a coincidence that we now have 4 segment dominating companies worth a trillion dollars (Alphabet, Microsoft, Amazon and Apple) and more on the way now that the US patent system has been decimated, gutted by politicians who want those behemoths to give them money to fund their campaigns? The United States is no different than Russia, controlled politically by a few oligarchs who can tell the government how to tax them, how to regulate them and whether or not to allow competitors. We are the Banana Republic.

  18. Anon September 25, 2018 2:25 pm

    Michael W. Shore,

    I would amend your view with one slight “tweak:” the patent system was not so expressly geared to the “little guy” for such game changing innovation, as even large scale corporations (if they be attuned to innovation) are more than welcome to engage in their own “destructive innovation.” There is much literature about such forward thinking larger companies, and the reward of patents is every bit available for such.

    A better “picture” then would be to label this protection as agnostic to size of the innovator. In truth then, the advantage based on agnostic-to-size is that the typical size-dependent factors become less important for the path of innovation, and competition on the non-innovation factors is more likely to be displaced by competition on innovation factors.

    This is why (as well) that I am a proud “maximalist,” as when one understands what it means to be a patent maximalist, one understands that everyone benefits from such a strong patent view**.

    **And to dispel some of the intentional dissembling that is out there, being of a philosophy of strong patents is not saying that anything and everything should get a patent. There ever was (and is) a sense of Quid Pro Quo and the exchange is still a meaningful one for us “maximalists.”

  19. Concerned II September 25, 2018 5:47 pm

    I believe Mr. Quinn is right. This PTAB thing is likely to do permanent damage to our patent system and our country.

    Apart from its obvious constitutional problems, the PTAB scheme enables parties to force patent owners (and “real parties in interest”) to engage in armed combat in a remote forum, where they must defend to the death their issued patents in an expensive, unprovoked, and unsought adjudicatory process that is rigged against them. Their only “crime” was successful participation in the patenting process.

    Any person of ordinary sensibility should see the unfairness and abuse potential of this process.

    How much clearer must it be that our patent system has been hijacked? Whether intended or not, the PTAB process has become a vehicle for parties to ambush any/all issued US patents that threaten their business interests? The public was duped by the “patent troll” and “patent reform” nonsense into agreeing to implementation of an extra-judicial process for selective and coercive termination of threatening patents.

    Wide public awareness of this patent-attack process will soon cause people to lose interest in innovation, which in turn will significantly diminish patenting efforts. It should be stopped.

    Unless agreed to by the patent owner, no tribunal other than an Article III federal court with jurisdiction over the parties and the subject matter should have the power to make a binding final judgement that the owner’s issued US patent is invalid.

    We should focus efforts to address US patent quality entirely on how the USPTO examines patent applications. And we should focus efforts to address perceived problems with how patent matters are adjudicated entirely on and within our excellent the federal court system, with its built-in constitutional safeguards.

  20. SVI September 26, 2018 2:10 pm

    @Anon #19 “the patent system was not so expressly geared to the ‘little guy’ for such game changing innovation”

    If I might challenge you on that assertion, why do you say so? The system was set up by the Founding Fathers not just for the little guy but for the new country, so that its citizens could hit above their weight against more established businesses with deeper pockets. Since then, it has indeed become more and more a system for large corporations to the point we’re at now: unusable by the little guy. The system has been bastardized and it is no longer doing what it was set up do to.

    In comments to another post you oppose giving greater rights to the little guy. I submitted a comment in response but for whatever reason it was not published, so maybe we could continue the conversation here. Would not the FF support giving greater rights to the little guy, and if so do you not pose a threat to the true intention of the system by opposing the Inventor Protection Act?

  21. Concerned II September 26, 2018 2:55 pm

    In reference to SVI, all this policy stuff could be debated till the cows come home. But it seems clear Congress messed up in creation of the PTAB. The quicker we cut it out, the less likely it will become an uncontrollable malignancy that kills our system altogether.

    And, yes, “micro” and “small entity” qualifications should be broadened to promote wider access to the patent system, but the basic criteria for patentability, etc. should be the same for everyone, don’t you think?

  22. Anon September 26, 2018 5:50 pm

    SVI,

    You may challenge all that you want to. The plain fact of the matter is that patents — as property — have always been agnostic as to the property owner**

    You say “The system was set up by the Founding Fathers not just for the little guy but for the new country,” but the truth of the matter is as I have stated: the system was set up AGNOSTIC to the size of the “guy.”

    There are several parts to this:

    First part is that our system was set up requiring an actual real person inventor (juristic persons cannot be inventors).

    Second part is that our system was set up such that the inchoate right (of that real person inventor) that becomes a Private personal property right at grant was a property that was designed to be fully and completely alienable.

    In other words, once obtaining the status of Legal Property, that Legal Property was agnostic as to the owner of the property – and explicitly designed to be so.

    This agnosticism simply does not care — nor should it what happens to the property after grant. After grant, then it is the market (the free market) that embraces whatever may be deigned to happen with that property. It simply matters not at all whether that original real person inventor has mortgaged the future property to Large Corps, nor does it matter to the patent system if Larger Corps (or even [gasp] “Tr011s”) buy up properties (after grant).

    As to “In comments to another post you oppose giving greater rights to the little guy.” – you misspeak – and gravely so. It is NOT that I oppose giving greater rights to the little guy. Not at all. I oppose the FALLACY of pretending to “give rights to CERTAIN subset of little guys” that ends up not only hurting ALL little guys, but hurts the very foundation of the patent system. I clearly explained ALL of this in my prior posts.

    If you really want to carry on the conversation, may I suggest that you go back and get that conversation correct in the first instance.

  23. SVI September 26, 2018 6:48 pm

    @Concerned II #21

    Policy is just a bad haircut routine, in which one administration cuts too much here and another too much there, supposedly all done to remedy the hairdo. To mix metaphors, the pendulum has swung way too far against the little guy for too long. And I question why anyone who cares about patents at all would be opposed to the pendulum swinging in favor of the little guy for this next round of haircuts, even at the expense of the big guys or of some ideologically driven view of patents as a property right that exists for all.

    Coming down in the little guy’s favor is far overdue and in-step with the purpose of the system as laid out by the FF. The haircut is now so ugly that the Inventor Protection Act would be a pretty picture by comparison. If you then want to fix the system on ideological grounds, great. But please don’t oppose greater rights for little guys that’s been proposed.

  24. JTS September 26, 2018 7:29 pm

    They really should stop putting ribbons on the front of issued patents. A question-mark would be more approp.

  25. Mike September 26, 2018 10:21 pm

    @JTS.
    A question mark rather than a ribbon on the face of the patent. So true.

    @SVI
    The issue of property no longer being truly alienable under the Inventor Protection Act might hurt inventors in that a patent will have less value if assigned to an entity other than the inventor(s). That’s possible.

    However, would this now increase the negotiation power posessed by the inventor? The value proposition shifts from being the enforcement of text on paper to being the will of the inventor. New agreements between company of interest and inventor will emerge. The inventor gains power. “You must play along,” says the inventor, “lest I do this.” Isn’t that what a patent used to be? (If we ignore the ‘who is the owner’ argument for a moment). Investments will be paid directly to inventors to enable them to assert their IP while maintaining their title. Kickback agreements will be in force. Only until the inventor is satisfied with the return of his investment will he assign.

    Should we pursue ideals and principles for alienable property? Sure. But I conclude that we will have to play by different rules until the words “grant”, “secure”, “exclude”, and “property right” have meaning. Right now, they all carry an asterisk, and the footnote is anybody’s guess.

    I’m not going to wait for my patents to expire crossing my fingers for SCOTUS to have a change of heart or for Congress to magically see and correct the AIA.

    I’m going to call my representative and get them to support the Inventor Protection Act. Let’s put some points on the scoreboard. A field goal and 3 points is better than losing 4th down and giving the ball away with 0 points. Because the clock is ticking. My patents will expire. And to those who haven’t yet filed, someone else will file before you, and their goes your clock.

    Take action.
    See http://usinventor.org/ipa

  26. SVI September 27, 2018 12:03 pm

    @anon “You say ‘The system was set up by the Founding Fathers not just for the little guy but for the new country,’ but the truth of the matter is as I have stated: the system was set up AGNOSTIC to the size of the ‘guy.'”

    Those are not mutually exclusive because it was a new country of little guys. Why are you so interested in the ideology of fixing the latter that you would miss the opportunity to fix the former? We are now a long way from the type of country we had back then, as we all know, and are increasingly ruled by a plutocracy of FANGA. Awaiting a return to agnosticism is a fool’s errand. The government is incapable of distributing property rights evenly precisely because of FANGA’s corruptive influence on government. Here is a chance to circumnavigate that. In doing so, it may indeed force the return to agnosticism and real private property rights that we all agree are critically important.

  27. Anon September 27, 2018 2:38 pm

    There is NO “fixing the former,” SVI.

    You have yet to seek to understand the reasoning that I have already provided (and continue to miss the points of which I previously discussed).

    All that you are doing is not liking the fact that you do not have support for this bill that seeks to benefit a subset of the small guys.

    Further, this concept I share is not “waiting” for anything. It is protecting the essence of what is still present (and avoiding the selling out of that item for the subset that is being “race-horsed” as a “step in the right direction.” As I have put forth though, this is not a step forward at all. And it is in that regard that I do not (and cannot) supper the effort.

    Part of your position here can be likened to attacking Sir Thomas More for “defending the devil.” I suggest that you reconsider the sacrifice being asked for (as it is NOT the panacea being made out to be).

  28. Anon September 27, 2018 5:39 pm

    Egads – apologies for the broken links and typos…

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