Trading Technologies International, the owner of U.S. Patent No. 6,766,304, recently filed a Petition for Writ of Mandamus with the United States Court of Appeals for the Federal Circuit. The premise of the mandamus petition was the that the Patent Trial and Appeal Board (PTAB) at the United States Patent & Trademark Office (USPTO) clearly overstepped when it instituted a Covered Business Method (CBM) review on the ‘304 patent, a non-business method patent that has a clear and unambiguous technological aspect. See PTAB Gone Rogue.
On Friday, March 18, 2016, in a one paragraph Order that for some reason is not available on the Court’s website, the United States Court of Appeals for the Federal Circuit denied that mandamus petition. Writing for the panel considering the request was Judge Kimberly Moore, who was joined by Judges Alan Lourie and William Bryson. Judge Moore wrote:
At TradeStation Group, Inc. and TradeStation Securities, Inc.’s request, the Patent Trial and Appeal Board instituted covered business method review proceedings for a patent owned by Trading Technologies International, Inc. Trading Technologies now seeks a writ of mandamus directing the Board to vacate its institution decision and terminate proceedings. Having considered the papers, we deny the petition without prejudice to Trading Technologies raising its arguments on appeal after the Board issues its final written decision. See Versata Dev. Group, Inc. v. SAP Am., Inc., 793 F.3d 1306, 1323 (Fed. Cir. 2015) (holding that this court has authority to address whether patent is a covered business method patent on appeal after issuance of final written decision).
IT IS ORDERED THAT:
The petition is denied.
On one hand this decision is surprising and on the other it is altogether too predictable. Let me explain.
Having actually looked at the patent, the petition, the legislative history where Senators Chuck Schumer (D-NY) and Dick Durbin (D-IL) clearly say that graphical user interfaces such as the ‘304 patent are not intended to be considered covered business methods, a district court opinion finding the ‘304 patent claims cover patent eligible subject matter, and reviewing the history of companion patent applications in Europe, it is simply absolutely stunning how any fair minded person could conclude that the ‘304 patent claims a covered business method. Simply stated, the ‘304 patent is not a business method and it is directed to a technological improvement. Thus, the ‘304 patent simply cannot be challenged in a CBM challenge at the USPTO, period.
The institution decision by the PTAB is a travesty of justice, but the fact that the PTAB has done something that can best be described as a travesty of justice is hardly a newsflash. Nothing to see here, same old same old. Move right along. PTAB screws another patent owner who has no recourse but to sit there and take it, at least until they spend many hundreds of thousands of dollars (if not over $1 million). But even then the Federal Circuit has largely been a rubber stamp to the PTAB, so what chance does a patent owner realistically have in this environment?
Unfortunately, the fact that this institution decision was so egregiously wrong doesn’t change the reality that a writ of mandamus is truly an extraordinary remedy that is almost never granted. But if ever there was a case to grant a petition for writ of mandamus it was this case. Sadly, how many times could that be written about egregious PTAB decisions? If mandamus were granted in every case where it were truly warranted the Federal Circuit would have little time to do anything other than micromanage the PTAB; not that micromanagement of the PTAB isn’t exactly what is necessary.
The nature of the fundamentally unfair procedural rules that exalt speed and efficiency over fairness and process, and the largely one-sided rulings in favor of challengers not named Kyle Bass or Erich Spangenberg, scream out for adult supervision! This Board seems hell bent on destroying patent rights, particular with over zealous use of CBM review. It is unfortunate that the Federal Circuit will not step in and rectify an increasingly hostile situation. When will enough be enough?
As disheartening as all of this is, the most disappointing part of the Federal Circuit’s Order denying mandamus is that the Court took the position that Trading Technologies simply has to go through the entire exercise of defending the ‘304 patent during a CBM review and then at the end the Court will circle back and determine whether the CBM should have been instituted in the first place. As if spending $1 million or more to defend a patent from a bogus challenge that never should have been instituted in a tribunal that clearly doesn’t have jurisdiction is no big deal. It just makes the Judges seem out of touch with the financial realities facing patent owners.
I’ve said it many times before and I’ll say it again. All of the post grant challenges ushered in by the America Invents Act (AIA) were a bad idea. They never should have been created in the first place. All inter partes review (IPR) and CBM have done is make infringing patents a more economical choice, while making it more costly for innovators to obtain and keep the protection they need to make innovating a worthwhile endeavor. It was all too predictable that a new tribunal would over assert its own jurisdiction, and if there was any doubt that there would be a predisposition toward killing patents that myth was burst when the then Chief Judge of the PTAB said at a public meeting of the Patent Public Advisory Committee (PPAC) that if the PTAB wasn’t doing death squading they weren’t doing their job.