Supreme Court hears oral arguments in Cuozzo Speed Technologies v. Lee

By Gene Quinn
April 25, 2016

Chief Justice John Roberts, United States Supreme Court.

Chief Justice John Roberts, United States Supreme Court.

Earlier today the United States Supreme Court heard oral arguments in Cuozzo Speed Technologies v. Lee, the first case in which the Supreme Court will have the opportunity to opine on the controversial post grant administrative proceedings for challenging issued patents created by the America Invents Act (AIA). See Oral Hearing Transcript. The Supreme Court will address two critically important questions associated with inter partes review (IPR) proceedings in this case. The first question asks whether it is appropriate for the United States Patent and Trademark Office to use a different claim constructions standard than is used in federal district court. The second question, on which very little time was spent during oral arguments, relates to whether institution decisions are insulated from judicial review.

Starting with a bang, Garrard Beeney, the attorney for the Petitioner, began his argument explaining “why the use of the broadest reasonable interpretation expedient in no way comports with the Congressional purpose of inter partes review.”

Beeney would go on to say that there are four reasons why the broadest reasonable interpretation standard, or “expedient” as he kept calling it, should be reversed. The first of the reasons was that the broadest reasonable interpretation standard “demands a broad ability to amend claims.” Justice Sotomayor interrupted Beeney to say that she doesn’t think this helps him since Congress did provide for a right to amend.

Beeney correctly pointed out that the right has only been interpreted as a right to file a motion to amend, not an absolute right to amend, with virtually all motions to amend being refused. Obviously prepared for the question, Beeney explained that the PTAB has denied motions to amend 95% of the time. Further, Beeney explained that while the PTAB has canceled 10,000 claims over the last 42 months during inter partes review proceedings fewer than 30 claims were allowed to be amended.

Chief Justice Roberts pushed Beeney away from this to address the other reasons why broadest reasonable interpretation is not the proper standard. Beeney explained that it makes no sense for the PTAB to give patent rights “a hypothetical interpretation of their metes and bounds rather than doing what district courts do, which is to give claims their actual plain and ordinary meaning.” Beeney’s third reason was that application of broadest reasonable interpretation leads to claims meaning different things at the PTAB than in the district courts, which he characterized as untenable. Finally, Beeney took exception with the USPTO’s offered reasoning that they have always used the broadest reasonable interpretation standard, which means they did not take into consideration the fact that post grant proceedings are a district court substitute.

[Supreme-Court]

After getting his four reasons out Beeney began to be peppered with questions. Justice Alito asked several general questions, Justice Ginsburg asked whether the standard chosen was outcome determinative, and then Justice Kennedy asked why broadest reasonable interpretation isn’t the proper standard, asking: “if the patent is invalid under its broadest, reasonable interpretation, doesn’t ­that mean the PTO should never have issued the patent in the first place, and doesn’t that give very significant meaning and structure to this process?”

Unfortunately, Beeney fumbled the answer here, at least in my opinion. The answer should have been a resounding NO! Property rights should not be stripped without proper process and treating an issued patent claim, which is by statute and Supreme Court precedent a property right, the same as an unissued claim is simply inappropriate under our laws. It is also inappropriate under a property rights regime. Once a patent has been issued as a property right applying a lower standard cheapens the examination process and ignores the property right mantle bestowed by the federal government.

Justice Breyer picked up on the Kennedy line of questioning and it did not take long for him to bring up the issue of patent trolls, which is a disconcerting trend in Supreme Court patent cases. Rather than confine themselves to the case before them the Supreme Court simply cannot help but interject the patent troll issue. It is becoming so cliché for the Supreme Court to talk about patent trolls in a hypothetical and largely irrelevant manner. But today Justice Breyer went further, showing both his complete ignorance of the issue and utter disdain for patents. Breyer said:

But there is another way to look at it. And the other way to look at it — ­­and that’s what I would like your comment about — is that there are these things, for better words, let’s call them patent trolls, and that the ­­Patent Office has been issuing billions of patents that shouldn’t have been issued ­­– I overstate — but only some. And what happens is some person in business gets this piece of paper and ­­– and looks at it and says, oh, my God, I can’t go ahead with my invention.

Breyer would go on to defend the broadest reasonable interpretation standard as a means for saving “those who were suffer from too many patents that shouldn’t have been issued in the first place.”

I suppose they teach you to ridiculously exaggerate to the point of absurdity at Supreme Court Justice finishing school.

For those who actually care about facts, since 1836 the United States Patent Office has issued just over 9,320,000 patents in total. So, for Justice Breyer to say that the Patent Office is issuing “billions” of bad patents to patent trolls is not only false, it is asinine. That Justice Breyer actually has a vote on issues of such great importance to the patent system is a travesty. This kind of exaggeration of the so-called patent troll problem is done for two very specific purposes – to vilify patent owners and to denigrate the Patent Office. This utterly absurd, breathtakingly dishonest statement should have right thinking people questioning Breyer’s intellectual integrity. Chicken Little scare tactics have no place in this debate and Justice Breyer should be ashamed. Given these statements and Breyer’s well-documented and unmistakable anti-patent philosophy he has clearly already made up his mind.

Later on during his argument Beeney mentioned that 85% of the time patents challenged in inter partes review are subject to district court litigation and that district courts stay the litigation about 70% of the time, which means “the Judiciary is deferring to the Board in making decisions about the patentability of the claims that are at issue.” Chief Justice Roberts referred to this as “a little burdensome to the district court” because the district court will get “into the patent case and then take whatever the Board says is the proper – whether it’s valid or not.” Beeney argued this is yet another example of why inter partes review was conceived as a substitute for district court litigation and requires the use of the district court standards. Roberts would again bring this issue up at length with the Repsondent.

Justice Kagan brought up the fact that looking at the statute there is no mention of whether broadest reasonable interpretation or the district court standard should apply, and with the PTO doing everything using broadest reasonable interpretation she seemed inclined to think that if Congress wanted the district court standard they would have, or should have, stated that in the statute. Justice Ginsburg, however, correctly pointed out that the proceedings created by Congress are a little bit like an administrative proceeding, and a little bit like a district court proceeding.

With almost all of his time gone on the issue of broadest reasonable interpretation, Beeney pivoted to very briefly bring up the appealability issue. Beeney explained: “our position is that under the heavy presumption of judicial review of administrative actions, there’s nothing in the statutory scheme that meets the heavy burden to overcome that presumption.” Justice Ginsburg asked the only questions, and she was skeptical because if the reviewing court can only review final judgments she said that would mean that the “statute is doing no work, because there would be a bar on interlocutory review under the final judgment rule.”

Next up was Curtis Gannon, Assistant to the Solicitor General, arguing on behalf of the Department of Justice. Gannon began his argument as follows:

The PTO has reasonably decided to use its longstanding broadest­ reasonable construction approach in inter partes review proceedings because, as Justice Ginsburg just noted, that they are a hybrid between ­­– they’re not exactly like anything that has gone before. But the PTO reasonably concluded that they are materially more like all of the other proceedings that the PTO, and before that, the Patent Office, has had in which it has repeatedly used precisely this approach. And it has expressly used it when it is possible for claim amendments to be made because it promotes the improvement of patent quality that Congress was interested in promoting in the America Invents Act by eliminating overly broad questions.

Interrupted quickly, and nearly simultaneously, by Chief Justice Roberts and Justice Sotomayor, Gannon was asked by Justice Sotomayor how different the broadest reasonable interpretation standard is from the district court standard. Gannon replied that he did not think they were different in most circumstances, saying “these two different forms of construction are going to end up in the same place.” Pushing harder, Justice Sotomayor asked, “So when doesn’t it end up in the same place?”

[PTAB-1]

Gannon admitted that the Patent Office does not use prosecution history to interpret claims, while district courts do use prosecution history to interpret claims. Gannon then finally admitted, in a rather disjoined way, that district courts are supposed to adopt a construction that saves the claims where the Patent Office does not similarly apply a saving construction for claims.

One of the more disingenuous moments of the oral argument came when Gannon explained: “Only about 13 percent of patentholders in IPRs have actually filed motions to amend. And there have now been six motions to amend that are granted. There was one new one last week. It’s a small number.”

Of course only a small percentage of patent owners are wasting their time filing motions to amend that are summarily rejected in virtually all cases. The message was received by the patent community; loud and clear. The PTAB says patent owners have a right to file a motion to amend but absolutely no right to amend. They Federal Circuit has agreed with this absurd interpretation of the statute. So should you expect a large number of attempts to file a motion that has virtually no chance to succeed?

Perhaps the best question of the entire oral argument was asked by Chief Justice Roberts: “So why ­­should we be so wedded to the way they do business in the PTO with respect to the broadest possible construction when the ­­point is not to replicate PTO procedures? It’s supposed to take the place of district court procedures.” Gannon’s response pointed to the difference in the burden of proof between the district court (i.e., clear and convincing) and the PTAB (i.e., preponderance). Chief Justice Roberts responded, “it’s a very extraordinary animal in legal culture to have two different proceedings addressing the same question that lead to different results.” Gannon replied that there are “multiple reasons” why different results could be achieved, to which Roberts said: “there’s a problem here, and so we should accept another problem that’s presented where we don’t have to do it.”

Gannon would go on to push the ability to make amendments to claims as a reason to keep the broadest reasonable interpretation standard, but Chief Justice Roberts was not in a mood for that argument. “Well, that’s happened six times ever,” Roberts replied.

After questions from Justice Kennedy about standing and Justice Breyer about why business people needed IPR to stop Ground Hog Day like lawsuits from patent trolls, Chief Justice Roberts returned to the critical question of interplay between the PTAB and the district court. Roberts asked Gannon whether the district court could disagree with the Board, to which Gannon replied: “Yes. As long as the patent still exists.” Troubled by the answer, Roberts pushed, pointing out that it is the district court has a responsibility to interpret the patent using a different standard and may reach a different result. Unsatisfied with what he was hearing, Roberts asked: “So if the district court interprets the patent, is that binding on the PTO?” Gannon replied: “No.” So we are left with decisions by the PTAB that are not binding on the district court and decisions by the district court not binding on the PTAB, which lead the Chief Justice to say: “I’m sorry. It just seems to me that that’s a bizarre way to conduct legal – decide a legal question.”

Page after page in the transcript Chief Justice Roberts peppered Gannon with question after question about the very bizarre nature of inter partes review procedure. Showing his disgust, and a fair amount of comprehension I’d say, Roberts said in an exasperated way: “And this is under a statute designed to make the patent system more reasonable and more expeditious in reaching judgments?”

After broadest reasonable interpretation dominated Gannon’s argument, as it did with Beeney’s argument, eventually questions turned to the issue of appealability. While Justice Ginsburg previously seemed skeptical on the Petitioner’s position on appealability, she seemed very concerned with what the inability to appeal would mean. Ginsburg asked Gannon to turn to the reply brief at page 19 where a series of rulings the Board might make are listed, all of which would be immune from any judicial review. Gannon’s reply was that the proper recourse in those scenarios would not be an appeal, but would be to file a petition for mandamus.

After a very hot Supreme Court panel went to town asking questions, Beeney managed to escape his very brief rebuttal without any questions.

Without having had time to really reflect (like I will) on this oral argument, my instant reaction was that things did not go very well for the Petitioner. But then, things seemed to go even worse for the Respondent. Chief Justice Roberts seems extremely unhappy with the inter partes review procedure conjured up by Congress, implemented by the Patent Office and tolerated by the Federal Circuit. Robert’s objections are on an administration of justice level, which bodes very well for the Petitioner. Of course, his is but one vote, and Justice Breyer is far more interested in the patent trolls not in the room than the specific issues before the Court, or so it seems.

All in all, I’d say that the argument titled in favor of the Petitioner, but there will be time enough for second-guessing and analysis over the coming days and weeks. A decision here is expected before the Supreme Court takes its summer recess, but given we are already at the end of April, I’m not expecting a decision to be issued before the end of June 2016.

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and President & CEO ofIPWatchdog, Inc.. Gene founded IPWatchdog.com in 1999. Gene is also a principal lecturer in the PLI Patent Bar Review Course and Of Counsel to the law firm of Berenato & White, LLC. 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 29 Comments comments.

  1. Ken April 25, 2016 8:22 pm

    “Unfortunately, Beeney fumbled the answer here…Property rights should not be stripped without proper process…applying a lower standard cheapens the examination process and ignores the property right mantle bestowed by the federal government.”

    I was also very disappointed that he conceded there is no presumption of validity in IPR!

  2. Jim Ruttler April 25, 2016 8:22 pm

    Gene, I heard your plug from the audience member at the Washington University panel on this decision. He mentioned that he was asking your question regarding why the PTO accepted fees if their argument was that they were protecting the public from patents that shouldn’t have issued. The response was that they were a user-fee-funded agency. The panel laughed it off, but the response seemed to prove your point. The PTO should be getting rid of bad patents on their own dime instead of benefiting from their own apparently sloppy work.

  3. Edward April 25, 2016 8:52 pm

    Gene,

    I agree with you that Breyer seems to think that the vast majority of patents the PTO has been issuing for some time are invalid and feed the troll phenomenon. To Breyer, the patent before him here seemed to be of the suspect variety and he said so.

    It would have been better had the patent in question been sustained in court with a different claim construction while being held invalid in the PTO using BRI. But, we cannot have everything just right all the time, now can we?

  4. Edward April 25, 2016 8:57 pm

    Jim@2, Agree in spades.

    If bad patents were issued in the billions per Breyer, the PTO should be protecting the people by offering bounties on bad patents, with summary execution or the like, instead of demanding large fees and proof by a preponderance of evidence by a petitioner.

  5. Gene Quinn April 25, 2016 9:09 pm

    Ken-

    I see no reason to concede there is no presumption of validity in IPR. I also think that is wrong. The burden is reduced via statute to a presumption versus clear and convincing in court, but I don’t see any reason why there shouldn’t be a presumption of validity afforded to an issued patent. I think he is wrong.

    -Gene

  6. Robert Buckley April 25, 2016 9:16 pm

    Good review, Gene. Thank you.

  7. Kip April 25, 2016 10:26 pm

    Gene –

    Congress pretty clearly indicated that there is no presumption in IPR because it set the review standard as preponderance of evidence. 35 U.S. Code § 316(e).

    I agree that Garrard missed an opportunity there. The right answer was: “Justice Breyer, your question focuses on companies hurt by bad patents, and that is one of the policy concerns that motivated Congress. But it wasn’t the only policy concern. In the AIA, Congress substantially overhauled the entire patent system, which protects both business targeted by patent trolls, and also legitimate patent owners. For example, under the Director’s proposal, a patent could be perfectly valid in district court but, if the petitioner hails the owner into the PTO, a small business could lose its entire patent investment. That doesn’t make sense.”

    Justice Breyer just came off as pompous as usual. I would like to watch that smug look on his face drain away as he reads the dozens of amici briefs in Ariosa explaining how God awful the Mayo decision is.

  8. Mark April 26, 2016 3:47 am

    To the point of counting votes on this case, anybody have an idea of where Justice Scalia would have come down? I ask because Justice Thomas’ vote will be whatever Scalia’s would have been. I sincerely hope that Chief Justice Roberts’ arguments seeped into the minds of those justices who remained silent during the hearing.

  9. Night Writer April 26, 2016 5:44 am

    >Justice Breyer just came off as pompous as usual. I would like to watch that smug look on his face drain away as he reads the dozens of amici briefs in Ariosa explaining how God awful the Mayo decision is.

    I’d like to see it as he resigns from the SCOTUS. He is unquailed.

    I think the strongest argument against BRI is that IPRs were meant as an alternative to dist. ct. litigation. I think there is a problem with absolute unreviewability. Think of that in other contexts within the wider admin law. The problem is that the gov could then show favorites or become tyrannical.

    I would need to listen and read some briefs before making an actual prediction, but based on basic principles I am guessing that reviewability is going down. And that BRI is going down.

    And there can still be a presumption of validity with preponderance of the evidence. Everything is presumed valid unless you prove otherwise with the preponderance of the evidence.

    What are people’s predictions?

  10. Edward Heller April 26, 2016 6:43 am

    Gene, the presumption of validity and the burden of proof of Clear and Convincing evidence began well before 1836, when examination began. The inventor discloses his invention in exchange for exclusive rights for a limited term. This makes the patent a extremely valuable property right. Before it can be invalidated and lost, the burden of proof must eliminate mistakes not unlike the heightened burden of proof when constitutional rights of the defendant are at stake; or the life or property of a criminal defendant.

    The lowering of the burden to preponderance to invalidate a patent is a direct assault on the patent owner’s interests in a patent as his property. It treats a patent as a public right, not a property right, as if the government made inventions and bestowed them on the public.

    Whoever came up with IPRs, and all involved, have to be roundly condemned.

    Repeal is in order. But short of that, everyone who sees value in a patent system has to get behind Cooper/MCM petitions to the Supreme Court.

  11. Paul F. Morgan April 26, 2016 10:16 am

    Just to add a couple of other statements of interest in the oral argument:
    Mr. Gannon [for the PTO] also said about BRI:
    .. it [the PTO] has expressly noted that it will use prosecution history in a proceeding like this, the IPR.”
    [This directly contradicts what Cuozzo’s attorney had said to the Court earlier, and that was noted. They cannot both be correct, and this is a key issue in the key dispute over how much real difference there is between BRI and Phillips claim construction.]
    —————–
    J. Bryer also raised the applicability of the “Chevron deference” Sup. Ct. case law, an issue surprisingly ignored by Cuozzo and most amici.

  12. EG April 26, 2016 10:59 am

    ” like to watch that smug look on his face drain away as he reads the dozens of amici briefs in Ariosa explaining how God awful the Mayo decision is.”

    Kip,

    Completely agree. Breyer is a disingenuous philosophy “wonk.” His Mayo opinion is a disgrace, wrong on bJustice Breyer just came off as pompous as usual. I would like to watch that smug look on his face drain away as he reads the dozens of amici briefs in Ariosa explaining how God awful the Mayo decision.”

    Kip,

    Completely agree. Breyer is a disingenuous philosophy “wonk.” His Mayo opinion is a disgrace, wrong on both the law and the facts. I hope he does get “heartburn” from reading those Sequenom amici briefs.

  13. EG April 26, 2016 11:05 am

    ” Justice Breyer just came off as pompous as usual. I would like to watch that smug look on his face drain away as he reads the dozens of amici briefs in Ariosa explaining how God awful the Mayo decision.”

    Kip,

    Completely agree. Breyer is a disingenuous philosophy “wonk.” His Mayo opinion is a disgrace, wrong on both the law and the facts. I hope he does get “heartburn” from reading those Sequenom amici briefs.

  14. step back April 26, 2016 11:43 am

    I’m still scratching my head, wondering where all those homey analogies went. You know. Like plucking leaves off the banana tree or lathing a baseball bat out of its trunk?

    Why isn’t this like a land owner whose property is vaporized in its entirety simply because he had the boundary lines off by an inch or two?

    But no.
    Here the analogy is Jack and the candle stick. The PTO was working way too fast. They needed to slow down. Issue fewer patents. That’s it. That’s the correct analogy.

    Jack be nimble. Jack be quick.
    Jack jump over the candle stick.
    But Jack was slow and Jack was low.
    So now we call ‘im Mary.

    http://patentu.blogspot.com/2016/04/the-end-justifies-vaporization-of-that.html

  15. staff April 26, 2016 3:37 pm

    ‘The first question asks…’

    But we think there’s a bigger question that should be asked. Is it proper, legal, or just for the PTO to review the validity of an issued patent, especially where there is related ongoing litigation?

    There are multiple problems with this. First, inventors do not trust the PTO. For years now they have forced inventors to fight them to get a patent. With the disclosure of the secret SAWS program at the PTO it has all become clear to us. And with the former head of patents for a large repeat infringer who has been a central player in what they call ‘patent reform’ at its helm it becomes even more so. Inventors believe PTO management is not impartial and cannot be trusted, certainly not when it comes to validating patents caught up in litigation. There is a reason why we have the courts.

    Beyond due process another issue is that post issue reviews often pit inventors and small entities against large infringers. In court we have access to contingent litigators where we stand a better chance of a fair fight. But at the PTO we do not have that access. It becomes a fight of who can spend the most and naturally the well financed most always win out. Denying inventors the right to judicial review on questions of validity deprives them of their property rights without due process and makes it child’s play for large infringers to steal at will. It’s just not fair.

    For our position and the changes we advocate to truly reform the patent system, or to join our effort, please visit us at https://aminventorsforjustice.wordpress.com/category/our-position/
    or, contact us at tifj@mail.com

  16. Gene Quinn April 26, 2016 4:29 pm

    staff-

    There is another that is asking the Supreme Court to specifically address that question. The Court hasn’t decided whether to accept cert. yet, but take a look at Cooper v. Lee. See:

    http://www.ipwatchdog.com/2016/01/21/scotus-asked-consider-constitutional-challenge-post-grant-patent-proceedings/id=65129/

    -Gene

  17. Gene Quinn April 26, 2016 4:33 pm

    Kip-

    You say: “Congress pretty clearly indicated that there is no presumption in IPR because it set the review standard as preponderance of evidence. 35 U.S. Code § 316(e).”

    I disagree. Of course, I don’t disagree that is what 316(e) says, but this boils down to a tie going to the runner (to use a baseball analogy). I also think if you look at the way the burdens are created the preponderance standard of 316(e) means that the petitioner must prove by a preponderance of the evidence that the patent claim is invalid. So that means that there needs to be 50.1% certainty. That should mean that the patent is presumed valid in IPR. You don’t need clear and convincing evidence (which is ridiculous) but the patent should still be presumed valid. I don’t personally see anything in 316(e) that undoes 282.

    -Gene

  18. Edward April 26, 2016 5:16 pm

    Gene, clear and convincing is a standard for deciding a factual issue — every reasonable doubt must be decided in favor here of the patentee. Microsoft Corp. v. i4i Ltd. Partnership, 131 S. Ct. 2238, 564 U.S., 180 L. Ed. 2d 131 (2011) at notes 4 and 5.

    “A preliminary word on terminology is in order. As we have said, “[t]he term `burden of proof’ is one of the `the slipperiest members of the family of legal terms.’ … Historically, the term has encompassed two separate burdens: the “burden of persuasion” (specifying which party loses if the evidence is balanced), as well as the “burden of production” (specifying which party must come forward with evidence at various stages in the litigation). Ibid. Adding more confusion, the term “burden of proof” has occasionally been used as a synonym for “standard of proof.”

    Here we use “burden of proof” interchangeably with “burden of persuasion” to identify the party who must persuade the jury in its favor to prevail. We use the term “standard of proof” to refer to the degree of certainty by which the factfinder must be persuaded of a factual conclusion to find in favor of the party bearing the burden of persuasion. … In other words, the term “standard of proof” specifies how difficult it will be for the party bearing the burden of persuasion to convince the jury of the facts in its favor. Various standards of proof are familiar—beyond a reasonable doubt, by clear and convincing evidence, and by a preponderance of the evidence….”

    The lowering of the standard means that the infringer can invalidate a patent on flimsy proof and argument, where the balance slightly favors invalidity. Now to me, that is a major, major change, and heavily, if not decisively, in favor of infringers and against patentees.

  19. Kip April 27, 2016 6:00 am

    Gene, as you know, the standard of proof was the key issue in the i4i decision. In that case, the Supreme Court reaffirmed Supreme Court, Federal Circuit, and other precedent that goes back a century and that establishes the presumption of validity as requiring clear and convincing evidence.

    I presume, when I i4i was going on, that you supported i4i (strong presumption), and not Microsoft (weak presumption). It wouldn’t take me long, with google, to find those articles. So I’m not sure why you would backtrack now and say that the clear and convincing standard is unneeded and “ridiculous.”

    The mere preponderance standard that you’re endorsing dilutes the presumption of validity to essentially zero. It means that, for example, the PTAB will revoke the patent even if the petitioner only got 50.1% certainty in making its case, instead of 60, 70, 80% certainty.

    Why do you think the PTAB is a death squad and so many patents die there, compared to district court? The standard of evidence is a huge part of it, and the “substantial evidence” standard of review (court/agency rather than court/court) is another huge part of the problem. The claim construction issue is problematic but only a small part of the problem.

    If you step back and think about it, I’m confident that a zealous defender of strong patent rights, like you and me, will come to see that your comment above is almost completely inconsistent with both the i4i decision and your preferred policies for a strong patent system (I wonder if Mark Lemley hacked your account?).

  20. Joachim Martillo April 27, 2016 7:12 am

    I almost have to wonder whether examiners were encouraged to grant a tremendous number of ridiculous patents in order to create a crisis during which the PTO could make a power grab according to the script that Naomi Klein outlined in The Shock Doctrine.

  21. Night Writer April 27, 2016 8:24 am

    @20 that is the same scenario that was outlined for the financial industry. They created this giant problem and then the ones that created it were hired to fix it and made 100’s of millions of dollars breaking and then fixing it.

  22. Prizzi's Glory April 27, 2016 9:20 am

    @21, Manipulating IP rights can be at least as lucrative as insider trading.

    The STOCK Act probably does not go far enough. PTO officials and employees should not be able to hold any investments in a corporation, whose value could be affected by PTO deliberations.

    The possibility of IP Shock Therapy might help explain the hostile reception that Kyle Bass’s use of IPRs received from the PTAB. He barged in uninvited blatantly to use IPRs in a way others intended but less obviously and ultra vires.

    If there were a document that was floating around a financial corporation and that was comparable to the SAWS FOIA documents, it would be a red flag to the SEC.

    Official US government documents in which PTO officials or personnel are almost certainly lying in violation of 18 USC 1001 and 18 USC 371 have come out of the PTAB or out of examination.

    The federal government claims to treat such violations as comparable to perjury. I don’t understand why the FBI isn’t crawling all over the PTO or why a special prosecutor has not been appointed.

  23. Gene Quinn April 27, 2016 10:41 am

    Kip-

    You say: “I’m not sure why you would backtrack now and say that the clear and convincing standard is unneeded and “ridiculous.””

    I’ve never said the clear and convincing standard is unneeded and ridiculous. That is simply untrue. What I’ve said is you can still presume a patent is valid even if the PTAB is statutorily required to use a presumption standard in 316(e). I think the presumption standard is ridiculous and clear and convincing evidence should be required in order to invalid a granted property right.

  24. Edward Heller April 27, 2016 11:49 am

    Gene@23, I assume then that you would agree that reexaminations should also use clear and convincing evidence to invalidate unamended claims, especially since amending them causes intervening rights?

  25. Kip April 27, 2016 12:12 pm

    Gene you wrote:

    “I’ve never said the clear and convincing standard is unneeded and ridiculous. That is simply untrue.”

    Yes, you said that in your earlier comment above: “You don’t need clear and convincing evidence (which is ridiculous).”

    “What I’ve said is you can still presume a patent is valid even if the PTAB is statutorily required to use a presumption standard in 316(e).”

    Yes, that is what Microsoft argued in i4i: use a preponderance standard, but just call it a presumption because the petitioner has the burden. As I explained above, the Supreme Court rejected that in i4i, that’s not what the term “presumption” means in patent law (certainly not after i4i), and, even if you could get away from that from a semantics perspective, it’s *horrible* policy. You haven’t changed the substance of what the PTAB does – it already puts the burden on the petitioner to prove invalidity – you have simply hijacked the “presumption of validity” terminology to refer to what the PTAB does in its death squad trials.

    “I think the presumption standard is ridiculous and clear and convincing evidence should be required in order to invalid a granted property right.”

    I think you mean “preponderance standard,” not presumption standard (or else several sentences in your comment don’t make sense). I agree with you that clear and convincing evidence should be required, but it is not, and Congress mandated that in section 316(e). There’s no getting around it without legislation.

  26. K April 27, 2016 12:14 pm

    One more thought: in hindsight, maybe you were saying that the lack of clear and convincing evidence at the PTAB is ridiculous, not the clear and convincing standard itself. OK. The rest of my comment and critique still stands.

  27. Gene Quinn April 27, 2016 2:45 pm

    Kip-

    You caught me… I see where the problem is. I did NOT mean to say “presumption standard.” I meant to say that that the “preponderance standard” is ridiculous. The PTO should be applying the same standards as in the district court. 316(e) is ridiculous on its face because it sets up a different standard for invalidation depending upon whether you go to the district courts or the PTAB.

    -Gene

  28. Kip April 27, 2016 2:53 pm

    Gene – ok now we agree 100%. I knew you were a good guy.

  29. Joachim Martillo April 27, 2016 4:24 pm

    IANAL, but as I understand SCOTUS has long had problems with forum shopping — hence the Erie Doctrine.