Posts Tagged: "aia"

U.S. Inventor, the nationwide inventor advocacy organization representing over 13,000 members, including, individual inventors, university research institutions, patent holders and intellectual property dependent start-up businesses, today announced that its members will stage a protest in front of the U.S. Supreme Court on November 27th during oral arguments in the case of Oil States Energy Services, LLC v Greene’s Energy Group, LLC.

The PTAB invalidation procedure violates due process because it drags patent owners into endless assaults by patent infringers and patent thieves. Due process requires compliance with standard notions of fair play and justice, which is lacking at the PTAB. The PTAB invalidation process does not afford due process because it allows an unlimited number of infringers and patent thieves to shoot down a patent in a never ending series of challenges. If one challenge misses the target, the second and the third challenge will hit it, or ultimately it will be hit by the Nth challenger. When patents can be attacked repeatedly in such a bizarre way, the patent reward of an exclusive right is a meaningless promise.

Mr. Matal opened his discussion stating his belief that independent inventors are the lifeblood of American innovation. He said that a patent is a property right and that whether an inventor actually manufactures the invention or seeks to license it, the rights provided by the patent should be the same. Having said this, he still believes that the PTAB should be able to invalidate a patent, but he did say that it is definitely time to look at the PTAB closely and see what can be done to make it operate more fairly. While he reiterated several times he is only acting and a permanent replacement has been nominated, he said that he would be surprised if this didn’t happen.

Sitting en banc the Federal Circuit issued a narrow ruling saying that the burden of persuasion must remain at all times on the petitioner, including with respect to demonstration of unpatentability of amended claims… Judge O’Malley explained that the majority of the Federal Circuit found the statute on this point to be ambiguous and, therefore, no deference was given to any interpretation of the United States Patent and Trademark Office (USPTO) under Chevron, U.S.A., Inc. v. Natural Resources Defense Counsel, Inc., 467 U.S. 837 (1984).

This experiment in patent validity review an executive agency by the Patent Trial and Appeal Board, an Article I tribunal in the PTO, has been unsuccessful…The chief constraints of the public rights doctrine involve consent and due process by an Article I tribunal and review of tribunal determinations by an Article III court. None of these features are present in the PTAB review of issued patents. In fact, the PTAB has shown a massive number of institutional abuses of IPRs that have undermined its legitimacy and negated its determinations… Ultimately, it will be shown that PTAB has vastly worse patent validity review results than federal district courts because of a blatant disregard for due process. As a consequence of these observations, it should be clear that the PTO is susceptible to political influences by the powerful technology lobby’s false narrative of poor quality patents that resulted in creation of a sanctimonious mechanism for patent validity review to constrain competition from market entrants, with an effect to promote technology incumbent profits.

I used to receive telephone calls, quite frequently, asking about the procedure for preparing and filing a patent application. Today, I no longer receive these calls. I suspect the main reason is that inventors are giving up an expectation that patent protection is even worthwhile. And I get it. If I were to get a call these days, I could no longer paint a rosy picture for would-be patentees… But these days, I fear the conversation would have a different tone. It might go more like this… “for a mere $2,625,000 you can disclose your most important innovation to your competitors, and they can use it and make sure that you actually have no rights to it.”

The next several weeks will see much wringing of hands and gnashing of teeth about Allergan’s transaction with the Saint Regis Mohawk Tribe. Our point is not to engage in futile “what about-ism…” but rather to illustrate how the PTAB is inherently subject to gamesmanship — from all directions — that destroys systemic credibility, which is undeniably bad for all parties, not just the one whose ox got gored today. As an administrative tribunal, the PTAB isn’t limited to resolving actual “cases or controversies” between parties like Article III courts are. The gates are open to all comers, and so are the unintended consequences.

Today’s environment demands an agile approach, one that involves substantial up-front planning, followed by continuously learning from both the client and the marketplace, using a strategy that involves constructing a defensive and offensive patent portfolio from a collection of laser-focused patents, rather than a single overarching patent intended to cover the invention in one fell swoop… More concretely, the strategy that we typically follow nearly always avoids the need to appeal, and therefore avoids the pitfalls of the PTAB, as follows. The foundation is to write a solid and comprehensive patent specification, one that is intended to cover the invention both broadly and deeply, in an effort to enable as many embodiments as possible for as long into the future as possible, encompassing both the client’s and competitors’ technologies. The first patent application that we file, however, typically has relatively narrow claims for a variety of strategic reasons…

The respondent immediately takes issue with the argument that patents are not public rights, summarily citing MCM Portfolio LLC v. Hewlett-Packard Co., 812 F.3d 1284 (Fed. Cir. 2015), cert. denied, 137 S. Ct. 292, which held that that neither Article III nor the Seventh Amendment bars IPRs, a holding that, according to the respondent, does not conflict with any decision of the Court or any other court of appeals, rendering further review unwarranted.

Those now familiar with IPR proceedings will already have recognized how little resemblance current IPR proceedings have to what most supporters of the AIA envisioned upon its passage. In current practice, the role of the Director as an independent IPR gatekeeper never materialized because the USPTO’s implementing rules bypass the Director altogether, assigning the institution function to the PTAB, which in turn routinely assigns both the institution and final decisions to the same three judge panel. As a result, most of the safeguards against patent owner harassment were lost…. By failing to adopt the implementing rules needed to carry out the intent of the AIA, and by adopting other rules and procedures that are plainly skewed towards petitioners, the PTAB has intentionally tilted its IPR proceedings against patent owners. While this has been good for the PTAB, which has quadrupled in size, it was neither Congress’s intent nor that of most of AIA’s supporters to create an unfair IPR patent “killing field.”

To fix the current incarnation of the U.S. patent system and reinvigorate the American economy, Judge Michel called upon the House IP subcommittee to adopt seven specific action items. Five of the action items relate to improvements to patent law for the strengthening of patent rights while optimizing PTAB procedures already in place, while two other action items focus on the administration of the USPTO.

The numbers are stark. As recently as 1990, individual inventors were granted 17 percent of all patents. By 2000, they received 12 percent and only 6.8 percent in 2010. In 2015, individual inventors were granted only 5.8 percent of all patents. In sum, if there is any example of a nation squandering its technological seed corn, this systematic weakening of U.S. patent protections for some “guy in the garage” is it. The great irony is that most of the people behind the screen in all this got their start in that same “garage.” They know this all too well, which is why they’re relieved to see the garage all but Closed for Business.

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.

Whether one celebrates or decries the PTAB, there can be little doubt that it has worked a profound effect on the value of American patents—and, concomitantly, on incentives to invest in research and development… Compared to their judicial counterparts, PTAB judges are biased in favor of invalidity. Personnel differences also explain a more disturbing phenomenon, mainly, that the Patent and Trademark Office seems to be at war with itself. Frequently, the PTAB invalidates claims based on prior art that examiners considered during initial prosecution. The only explanation for such discordant outcomes is that PTO examiners take a more pro-patent view of validity than the judges who make up the PTAB.

The five year experiment of the Patent Trial and Appeal Board (PTAB) is a colossal mistake. It is a failure to inventors, startups, early stage investors, job creation, economic growth, our national standing, and most importantly, our national security. The extraordinary damage of the PTAB on so many levels cannot be overstated. I’ve always believed that it’s okay to make a mistake. A mistake can be corrected. But the real sin is ignoring that mistake and watching it become a disaster. Congress made a huge mistake in creating the PTAB. If Congress ignores it, it will absolutely become a national disaster. And, we are on the brink of that national disaster right now.