PTAB chief judge Ruschke discusses ex parte appeals, PGR reform and more with PPAC

PTAB Chief Judge David Ruschke addressing PPAC on May 4, 2017.

PTAB Chief Judge David Ruschke addressing PPAC on May 4, 2017.

On Thursday, May 4th, the U.S. Patent and Trademark Office’s Patent Public Advisory Committee (PPAC) convened its quarterly meeting at the USPTO’s headquarters in Alexandria, VA. At approximately 1:30 PM, an update on operations at the Patent Trial and Appeal Board (PTAB) was given by PTAB’s Chief Judge David Ruschke. Despite recent reports of questionable ethics surrounding potential conflicts of interests of administrative patent judges (APJs) at PTAB (see here, here, here and here), the day’s discussion revolved mainly around appeal inventory, pendency rates and America Invents Act (AIA) trial proceeding trends at PTAB.

Slides presented by Ruschke at the PPAC meeting showed that judges at PTAB have been reducing the pendency of ex parte reexaminations across a range of tech centers. The most dramatic drop in pendency was seen in tech center 1600 for bio/pharma patents, decreasing from an average pendency of 33.2 months at the end of fiscal year (FY) 2016 down to an average pendency of 20.7 months at the end of FY 2017. Other tech centers seeing major reductions in average pendency over the past year include 2100, 2400, 2600 and 2800 for electrical/computer patents and 2900 for design patents. In one case involving tech center 3900, the central reexamination unit, average pendency actually increased slightly, from 7.1 months to 7.3 months. Overall, the average pendency for ex parte reexams dropped from 27.5 months at the end of FY 2016 to 19.2 months at the end of FY 2017.

Reductions in PTAB’s inventory of pending ex parte appeals have been accomplished along with the lowered average pendencies. PTAB’s pending ex parte appeals have dropped from a high of 26,484 pending cases at the end of FY 2012 down to an eight-year low of 14,611 as of this March 31st, the end of USPTO’s second quarter for 2017. Ruschke indicated that PTAB’s goal was to achieve a 12-month average pendency with a pending ex parte appeal inventory of 12,000 cases or lower. “We don’t want to hit zero, it wouldn’t be particularly useful for our judges,” Ruschke said. He added that, since PPAC’s last quarterly meeting, PTAB had completed every ex parte appeal docketed in FY 2013 and it only had 50 cases remaining from FY 2014.

Of course, it doesn’t seem the PTAB is in any risk of hitting zero given we are nearly halfway through 2017 and there are all those appeals docketed in 2015, 2016 and through the first half of 2017 still to resolve.

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Ruschke also spoke to the hiring practices of administrative patent judges (APJs) at PTAB, noting that it was standard practice of having recent APJ hires to “spend a significant amount of time on ex parte work” before moving APJs over to AIA trial casework. Later, Ruschke would note that judges moving over to AIA trials are typically given an APJ experienced in AIA trials as a mentor. Judges which are then moved back to ex parte cases after having worked on AIA trials provided what Ruschke called “extensive firepower” for deciding ex parte appeal cases in an extremely efficient manner. A higher percentage of electrical cases on the AIA trial side of PTAB has led to increased hiring of judges with electrical expertise in recent months.

Currently, PTAB is operating with 275 APJs and Ruschke called that number “pretty static.” “We’re not planning on doing any hiring in judge ranks in the near future, except maybe for attrition,” he said. When the PTAB has hired judges in recent years, they have sought to hire judges with expertise in multiple areas, such as a judge who has a degree in electrical engineering but also has work experience in mechanical engineering. “It’s that kind of mining of the judge’s expertise that we use to realign their workloads,” Ruschke said. That line of thinking certainly seems to support why APJ Matt Clements would have been assigned AIA casework coming from a petitioner who Clements used to represent as an attorney. PTAB decisions finding something as tangible as an MRI machine to be an “abstract idea” are the natural consequence of assigning APJs to cases involving technologies outside of the core competencies (more on this below).

At least one voice at the meeting opined that the 12-month pendency goal was far too long in the eyes of some of their clients, noting that a year was “a lifetime” in certain business cycles. Ruschke noted that, in his discussions with PTAB stakeholders, some prefer a longer pendency while others prefer shorter. In either case, an average of 10,000 ex parte appeals are filed with PTAB each year, making reductions to the average pendency difficult to achieve. Ruschke said that while the current goal was to achieve a 12-month average pendency, PTAB might look at reducing pendencies to eight- or six-month averages. “It depends on the overall intake and the firepower of our judges,” Ruschke said.

The first quarter of 2017 saw a record number of petitions for inter partes review (IPR) proceedings at PTAB. Ruschke said that he couldn’t discern why 237 IPR petitions were filed in January alone as no single petitioner or patent seemed to be driving the upswing in petitions. Graphs included in Ruschke’s slides showed how February saw a large drop in IPR petitions but they spiked up again to higher than normal levels in March.

Discussion during the meeting also centered around the low number of post grant review (PGR) petitions filed at PTAB and changes to PGRs, which could encourage a greater number of filings. Estoppel provisions that prevent PGR petitioners from bring multiple petitions were considered as one aspect of those proceedings which could be changed to encourage greater filing activity. Later, members of the meeting discussed whether making PGR petitions anonymous, similar to ex parte review petitions, could encourage PGR filings from entities who don’t want to become “a target.”

Any patent owner who feels as though PTAB takes an extraordinarily dim view of their intellectual property rights could be forgiven for making that assumption, especially given this discussion on ways the Office can increase PGR petitions. Particularly alarming for patent owners will be any attempt to water down or do away with the PGR estoppel provision, which is a not too thinly veiled attempt at enabling perpetual challenges to any patent. Patent owners are already being harassed with gang-tackling by multiple petitioners, for example. What patent owner would want to encourage further validity challenges on a property right that was deemed valid when the USPTO originally granted it but is no longer even presumed valid when it is challenged?

The PTAB treats patents like they were piñatas. If a challenger’s first IPR petition wasn’t instituted, that entity gets to take swings at the piñata until an IPR is finally instituted. Now, PTAB is trying to think of ways to give petitioners even more cracks at a property right that, to many owners, increasingly feels like it’s made out of papier-mâché and not held together by the strength of the U.S. Constitution. Enough whacks and the patent is finally torn asunder, the candy falling to the floor for efficient infringers like Apple and Google and the rest of Silicon Valley to scoop up like greedy children.

Ruschke then spoke about institution rates for all trial types, which he said was stabilizing at about two-thirds of all petitions filed at PTAB. Of the 6,700 PTAB trials for which petitions had been filed through the end of this March, about half of the petitions (3,382) were instituted and less than one-quarter of all petitions filed (1,539) got to a final written decision. “The message is, two-thirds of your petitions are instituted, one-third are not,” Ruschke said. “Those never see the light of day of an AIA trial.” Of course, some might take away the message that final written decisions tend to be a death knell for patents, as 1,014 of the 1,539 trials reaching final written decisions found all claims to be unpatentable and only 269 decisions found that all claims were valid.

Of course, any talk of PTAB institution rates is incomplete without acknowledging the highly questionable manner in which the PTAB calculates statistics. It is not unheard of for a petition to be denied, but if a petition is denied the petitioner can refile again and again. In some cases the petitioner has refiled virtually the same petition over and over again and for reasons that are never explained on the 4th or 5th filing the petition is instituted. What is the institution rate in those cases? According to the PTAB it would either be 25% (1 in 4) or 20% (1 in 5). For the patent owner, the institution rate is worse than 100%. Not only was the patent ultimately instituted, but the patent owner had to deal with the same or very similar petition multiple times. For more on the questionable PTAB statistics see here, here and here.

“I can understand getting a patent and having it invalidated later on,” Ruschke said, noting that, as a chemical engineer who developed IP that his firm decided not to file on, he can understand a patent owner being dismayed by proceedings at PTAB. Quickly thereafter, however, he surmised reasons why patent owners might face PTAB petitions which almost made it sound like the patent owner is culpable in how many petitions are filed. “Let’s say that the patent owner sues 10 defendants,” Ruschke said. “Should the patent owner expect 10 petitions back?” Ruschke evinced a similar point of view for patent owners who sue and then amend the asserted claims. “If I sue on claims 1 through 10, and then amend to claims 11 through 20, should I expect two petitions? Maybe,” he said. PPAC member Julie Mar-Spinola questioned this logic, wondering aloud whether such validity challenges should be made on the merits and not simply the number of times the patent has been asserted. “Basically, the petitioner is saying that the PTO got it wrong 10 times,” Mar-Spinola noted. Ruschke noted that he had heard this argument before.

Another question was raised by another PPAC member on a common concern among clients that PTAB judges may not be well-versed in the subject matter of a case in front of them. Ruschke responded that, in ex parte appeals, PTAB only assigns judges who have a very specific technical expertise. “You will not see a chemist paneled on an electrical case,” Ruschke said. However, the analysis was more “multifactorial” when assigning judges to panels deciding AIA trials. “Judges like myself, my resume doesn’t reflect that I could probably do mechanical [cases], but judges, if they run into a case they’re uncomfortable with, they very frequently recuse themselves,” Ruschke said.

Ruschke’s claim that only PTAB judges familiar with the technology involved are assigned in ex parte appeals seems false based on what we know has happened in at least one high-profile matter. As previously mentioned, in Ex parte Hiroyuki Itagaki the PTAB ruled a magnetic resonance imaging (MRI) machine to be patent ineligible because it is an abstract idea. See PTAB rules MRI machine an Abstract Idea. Judge Hubert Lorin, who authored the opinion in Itagaki, has a B.S. in Chemical Engineering and a B.S. in Chemistry according to his LinkedIn profile. Similarly, Judge Matthew Meyers, who was also on the panel, has a B.S. in Biology according to his LinkedIn profile. The third judge, Judge Bibhu Mohanty, does not list his technical expertise on his LinkedIn profile, but we have been told his expertise is also in the chemical area. Therefore, the PTAB does in at least some cases assign cases to judges who are not technically trained in the technology area of the invention, which in and of itself would raise an interesting ethical question if the APJs were governed by the Code applicable to attorneys. 37 CFR 11.101, which mandates practitioners provide competent representation, explains that competent representation requires scientific and technical knowledge reasonably required for the tasks at hand.

PPAC chairwoman Marylee Jenkins also raised the topic of PTAB conflicts of interest, which we have been reporting on over the last several weeks (see here, here, here and here). Ruschke indicated that the topic of conflicts would be discussed at PPAC’s next quarterly meeting.

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.

Gene Quinn

Steve Brachmann is a freelance journalist located in Buffalo, New York. He has worked professionally as a freelancer for more than a decade. He writes about technology and innovation. His work has been published by The Buffalo News, The Hamburg Sun, USAToday.com, Chron.com, Motley Fool and OpenLettersMonthly.com. Steve also provides website copy and documents for various business clients and is available for research projects and freelance work.

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 17 Comments comments.

  1. Night Writer May 8, 2017 10:38 am

    What new judges have they hired? I think there was one announcement on http://www.usajobs.gov a few months and there is no current announcement. Just type in “patent” for the search. I think they select for anti-patent people in the hiring.

    Wow. This guy seems pretty shifty to me. So much of what he said above is simply false. I don’t have the time to go into it.

  2. angry dude May 8, 2017 10:48 am

    Blah-blah-blah…

    Bottom line: the fees for instituting IPRs and re-exams MUST NOT be refunded if those challenges are not instituted by PTO and there can be only ONE challenge for each NEW piece of relevant “prior-art” found.
    Same “prior art” considered – no new IPR
    This is just common sense and this should quickly rectify the situation (if that’s what they what which they don’t…)

  3. Curious May 8, 2017 12:29 pm

    The pendency is dropping because I’m seeing a lot more “we agree with the Examiner’s findings, the Examiner is affirmed” type of decisions.

    For example, I had an application transferred to me in which the original attorney probably presented 5 or 6 different arguments as to the independent claim and separately argued about 4 or 5 of the dependent claims. The Board distilled the arguments as to the independent claim down to two — concluded that Appellant did not adequately rebut the Examiner’s findings and then ignored the dependent claims aside from saying “we agree with the Examiner.”

    The Board doesn’t spend a whole lot of time on ex parte appeals anymore — probably in an attempt to make up for time spent on inter-parte reexams.

  4. Night Writer May 8, 2017 1:15 pm

    https://www.nytimes.com/2017/05/08/science/nasa-supercomputer-pleiades.html

    OT, but I just wish the NYTimes wouldn’t print this garbage. Don’t they know that the CAFC has held that an algorithm is abstract and that it doesn’t matter if you make improvements to the algorithm. (I hear that J. Lourie questioned NASA why they weren’t using lanterns to solve the problem.)

  5. Night Writer May 8, 2017 1:18 pm

    @3 >The Board doesn’t spend a whole lot of time on ex parte appeals anymore — probably in an attempt to make up for time spent on inter-parte reexams.

    Probably because it is another way to trash patent law and increase Lee’s payout from Google when she leaves.

    (By the way, that is the way it works. The federal employees get compensated by the corporations in proportion to how much they helped the corporation while working for the federal government.)

    Lee is looking at a huge payout from Google–huge. She knows her life is taken care of.

  6. IPdude May 8, 2017 1:33 pm

    What may be lost in all of this is that if we get a pro-patent director, he/she will have the same discretion and authority and can flip the script. I suspect Google will then lobby congress and the courts to strip the overbroad powers of the USPTO director.

  7. Paul Morinville May 8, 2017 2:13 pm

    Ruschke seems to argue that because the dispute is settled, it is not realistic to count them as bad in the numbers. I don’t know the reasons why any one in particular settles, but my bet is that they are settling for either nothing or a very small fraction of the infringement damages. The patent holder has basically walked to the end of the plank, the PTAB sharks are swirling in the water below, but if the patent holder settles he doesn’t get eaten. These are not settlements. These are extortions. The whole thing is a sham.

  8. Night Writer May 8, 2017 3:12 pm

    @7 Great point Paul. Ruschke comes off as more than just a bit slimey.

  9. Jeff Lindsay May 8, 2017 9:41 pm

    “Discussion during the meeting also centered around the low number of post grant review (PGR) petitions filed at PTAB and changes to PGRs, which could encourage a greater number of filings. Estoppel provisions that prevent PGR petitioners from bring multiple petitions were considered as one aspect of those proceedings which could be changed to encourage greater filing activity.”

    So troubling! They really are treating patents like piñatas, encouraging as many swings as it takes to deny the inventors of their property. Good analogy and nicely written article.

  10. Tess Foley May 8, 2017 10:54 pm

    “In some cases the petitioner has refiled virtually the same petition over and over again and for reasons that are never explained on the 4th or 5th filing the petition is instituted.”

    Utter Nonsense. Post one example, just one where a same petitioner was successful after 4 or 5 tries on the same patent claims. I’ll even make it easier post a single example of a third try case.

    You can’t because it’s never happened.

  11. Night Writer May 9, 2017 8:20 am

    @9 Jeff Lindsay: you are right. I guess Lee wants to get up to the $100 million pay out. (For all you people who think me talking about Lee taking a payoff for her service to Google at the PTO: you know nothing of inside the Beltway politics. Lee is going to get very, very rich when she leaves the PTO.)

  12. Ternary May 9, 2017 8:49 am

    “You will not see a chemist paneled on an electrical case,” Ruschke said. But we do, as Steve points out in the MRI machine case, which was ruled an “abstract idea” by PTAB judges with a chemical/biology background.

    Judge Ruschke’s statement is verifiably and empirically false as checked and reported by Steve.

    Judge Ruschke makes a refuted statement that creates doubt on important skills required of PTAB judges to make well-reasoned decisions as expressed by Judge Ruschke himself.

    This does not improve confidence in the PTAB.

  13. Paul F. Morgan May 9, 2017 9:51 am

    This is likely the result of the way the PTO classifies and assigns patent applications to art units, as aalso affecting who gets ex parte appeals from those art units. E.g., even if this MRI patent application was entirely directed to an improvement in magnets, image processing or other electronics, it would likely get sent to examiners in a medical arts unit to which MRI applications are assigned.
    Also, when an art unit backlog runs low examiners can get reassigned to an art unit with a longer backlog even if their technical education is not really appropriate for that.

  14. Ternary May 9, 2017 10:30 am

    Paul. I could have come up with such explanation also. As a former government worker I would have “determined” that an MRI case is not an electrical case.

    The MRI case was about an MRI machine with “moving stations” using “a classification processing unit.” The classification was related to MRI imaging parameters, technical parameters, just to refresh people’s minds.

    What Judge Ruschke said was “You will not see a chemist paneled on an electrical case.” (they would even recuse themselves) This was said to create confidence in PTAB cases being decided by technology specific knowledgeable Judges. The statement is false, and thanks to Steve’s article verifiably so. Basically, what Judge Ruschke said is factually not true and it is not true in the spirit in which it was said, as further explained by you.

    If the statement is so obviously not true in view of current PTAB and PTO practices, don’t say it. Maybe suggest that current practice should be changed if technology knowledgeable judges are desirable. But don’t try to pull the wool over our eyes with promoting non-existing formal practices.

  15. Gene Quinn May 9, 2017 10:49 am

    Tess-

    It has happened. Please see the harassment that Finjan has experienced. There are others. Enjoy!

    -Gene

  16. Tess Foley May 9, 2017 1:30 pm

    Gene,
    An example of a patentee that sues 20 DIFFERENT companies and sees 20 invalidity defenses is not surprising in any forum.

    The point made in the article is that the SAME petitioner can’t try 4 or 5 times at the PTAB, this is false.

  17. Gene Quinn May 9, 2017 1:50 pm

    Tess-

    As I said, it is not false. You asked for me to tell you where you could verify what I said was true. I provided you that information. If you choose not to look and prove to yourself I am right that does NOT make me wrong. It makes you obstinate.

    As far as your characterization of Finjan, again you are wrong. Finjan is the owner of many valid property rights that are both presumed valid statutorily, and which are confirmed as valid over and over and over again by PTAB trials and refusals to institute. Finjan property rights are also confirmed as valid over and over and over again by federal district courts.

    It is time to stop blaming the victim and start blaming the tortfeasors. Those stealing valid property rights are the villains, not property rights owners.

    -Gene