Posts Tagged: "IPR institution decisions"

While the PTAB statistics demonstrate the profound effect that the AIA trials have had on issued patents, it seems to have the greatest impact on non-manufacturing patent assertion entities (PAE). With the increased tendency of district courts showing a willingness to grant stays of the concurrent litigation, the AIA trials have become an effective weapon against PAE. However, nevertheless, it is not surprising that with any dynamic system we have seen a settling process where institution rates have been dropping and the information provided by the PTAB in its publication of informational and precedential decisions has served to provide clarity to those practicing before the PTAB in administrative trials.

While the Patent Office likes to tout statistics that assert most patent claims challenged in IPR are not invalidated, those statistics are simply not credible. When reporting its statistics the Patent Office ignores the reality that once an IPR is actually instituted few claims are actually adjudicated to be patentable. The Office is also grossly misleads when they characterize claims not subject to a final written decision as “remaining patentable.”… Recently I’ve heard a story from a former PTAB judge who explained that institution of IPR challenges is far more likely when there are multiple petitions filed against the same patent because it makes it easier for PTAB judges to meet their production quota. If that is not proof that the PTAB is hopelessly broken I don’t know what is.

After much public comment and debate, new changes to rules for post-grant administrative trials before the Patent Trial and Appeal Board (PTAB) go into effect on May 2, 2016. These final rule changes, which are the second set of changes since the America Invents Act (AIA) went into effect, are the culmination of a series of PTAB listening tours and public comments to the rule change proposals published in August 2015. Among other things, the new rules are intended to address concerns that patent owners were at a disadvantage in responding to patent challenges, particularly during the pre-institution stage of a PTAB proceeding. The rule changes also introduce certification requirements for documents filed with the PTAB, confirm the broadest reasonable interpretation (BRI) standard, as well as exceptions to the BRI standard for expiring patents, and adopt an appellate-style word count limit for major briefs.

Finjan Holdings, Inc. (NASDAQ: FNJN), the parent of wholly-owned subsidiary Finjan, Inc., announced several weeks ago that the Patent Trial and Appeal Board (PTAB) of the United States Patent & Trademark Office (USPTO) issued the final rulings on attempts by Symantec Corporation’s (NASDAQ: SYMC) to invalidate 8 different Finjan’s patents through inter partes review (“IPR”). In total, Symantec filed 11…

The Supreme Court will hear oral arguments in the Cuozzo Speed Technologies, LLC v. Lee on April 25, 2016, with a decision expected sometime before the end of June… [S]ome of the Federal Circuit judges have shown signs that their position on these questions are not as rigid as previously thought. This is not unprecedented – for example, when the Supreme Court was on the verge of considering the patent fee-shifting statute of 35 U.S.C. § 285 in the Octane Fitness case, Judge Rader was seen criticizing the Federal Circuit’s established test in a concurrence to the Kilopass Tech. Inc. v. Sidense Corp. case. The current Federal Circuit may also be recognizing that the present understanding of PTAB jurisprudence may be soon changing.

The Federal Circuit held, pursuant to 35 U.S.C. § 314(d), that it does not have jurisdiction to review an institution decision, because a “determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.” The PTAB’s decision on the redundancy of Harmonic’s asserted grounds for review constituted a portion of the Institution Decision and was therefore unappealable, absent some other appealable question.

Kyle Bass and Erich Spangenberg (Coalition for Affordable Drugs) won two more victories at the Patent Trial and Appeal Board (PTAB). This time Bass and Spangenberg obtained favorable institution decisions in two inter partes review (IPR) petitions filed against the University of Pennsylvania, which challenged patents covering Juxtapid, which it intended to slow cholesterol production so that your body has less cholesterol to remove from the bloodstream.

One major takeaway from this PTAB trends report is that, despite claims of high rates of patent invalidation, the reality is that many patents escape the PTAB petitioning process unscathed. To be fair, 18 percent of all PTAB trials lead to an invalidation of every claim challenged in the patent, but one-fifth of all trials are terminated because the petitioning party is denied institution. Thus, the most common result of an inter partes (IPR) or covered business method (CBM) review is that the petitioner is told that they did not make a good enough case for the challenge to progress beyond a hearing before a panel of administrative patent judges (APJs).

That Finjan would prevail in six separate IPR institution decisions relating to the same patent litigation seems an extraordinary long shot. While Finjan has not said it in a press release or to me directly (see more later), allow me to notice that this speaks volumes both about the relative strength of the Finjan patents and the relative weakness of the Symantec invalidity case against these patents. If the PTAB wasn’t even willing to take another look in a proceeding that is so hopelessly stacked against the patent owner these patents are about as rock solid from a validity standpoint as they could possibly be.

The PTAB said that the full pilot study had not been made of record, which apparently also meant to the Board that the available description of the pilot study (described in the Kappos reference) was somehow not prior art. This reasoning, if you can call it that given that it was provided in only two short sentences, is extremely troubling. Clearly, the publication of a description of the pilot study would in and of itself be a publication that could be relied upon even if the entirety of the report was not available. Frankly, not considering a published description to be prior art flies in the face of volumes of Federal Circuit decisions on what it means to be a publication. The Kappos reference was a publication and to pretend that something described in that publication is not prior art is unbecoming the dignity of the Board.

In siding with the patent owner the PTAB explained that the petitioner insufficiently made a case that the claimed invention was obvious. A proper obviousness argument must articulate some rational underpinning to support a legal conclusion of obviousness. Unfortunately for Volkswagen, the PTAB saw only conclusions and impermissible hindsight in the IPR Petition. Ultimately, the PTAB was not persuaded that the Petition demonstrated a reasonable likelihood that Petitioner would prevail.

Presently the USPTO has a panel of three APJs decide whether to institute a trial, and then normally has the same three-APJ panel conduct the trial, if instituted. Under the proposed pilot program the single APJ making the IPR institution decision would be on the panel conducting the IPR trial, joined by two other APJs not associated with the IPR institution decision. Regardless of efficiencies, having a single APJ make institution determinations is fraught with due process concerns because decision whether to institute an inter partes review is not appealable.

The USPTO declined to initiate an inter partes review of two patents owned by Acorda Therapeutics, Inc. Acorda patents were challenged by the Coalition for Affordable Drugs, LLC, the entity formed by billionaire hedge fund manager Kyle Bass. I have to wonder whether this decision represents a shift in the worldview of the PTAB or whether they sought out a reason to deny the petition because it was filed by Kyle Bass. Unfortunately, I suspect these two denials have everything to do with who was behind the challenge and little to do with the merits of the challenge.