Supporters of the Patent Trial and Appeal Board (PTAB) continue to claim that the facts and figures showing the PTAB is overruling Article III federal district court adjudication on patent validity is fictitious. Ignoring the truth doesn’t make the truth any less correct. Still, in some circles the fiction spewed by those who champion the patent killing fields of the PTAB continues to be persuasive.
Recently we’ve published a series of articles demonstrating the problem of the PTAB, which is erasing federal district court verdicts on patent validity. First, we’ve noted that in 168 cases where patents were adjudicated as valid in Article III federal district courts the PTAB subsequently invalidated those patent claims. That means there have been 168 cases where the PTAB — a tribunal made up of executive office employees — has overruled the final determination of constitutional judicial officers.
Second, we’ve noted that in 58 of those 168 cases the constitutional judicial officers of the Article III federal district courts entered final verdicts that stamped the patent claims asserted as being valid after considering novelty (35 U.S.C. 102) and obviousness (35 U.S.C. 103). In this subset of 58 cases the PTAB later invalidated the claims specifically and definitively adjudicated as valid. It is hard to characterize such actions of the PTAB as anything other than overruling the decisions of Article III district courts.
Finally, we’ve also recently gone through in step-by-step fashion what the statistics available from independent third party providers Lex Machina and Docket Navigator show — and it is not a pretty picture. 82.5% of patents reviewed by PTAB in a final written decision are found defective. 69% of cases reaching a final written decision by the PTAB have all claims invalidated. 5% of patents reviewed by the PTAB are disclaimed by the patent owner, which makes them unenforceable. 23% of all petitions are settled, which universally results in a free license to the challenger, or in the case of Unified Patents to all the members who pay to fall under the Unified Patents umbrella. With these statistics how can anyone honestly call the PTAB anything other than a patent killing field?
Still the critics protest. How they can do so while still being taken seriously is a curiosity.
Let’s move past the statistics and put a face on the patent killing field of the PTAB; a tribunal of executive branch employees that erases federal district court rulings on patent validity. More alarming, in many of the cases where the PTAB has overruled district court adjudication of the patents there were findings of willful infringement, meaning the defendants (and ulitmately the IPR petitioners) knowingly and intentionally infringed the patents adjudicated to contain valid claims. Notwithstanding, the PTAB dutifully complied with their role as executioner of patents.
Consider the following illustrative examples.
1. Uniloc’s U.S. Patent No. 5,490,216 had been asserted in 65 cases filed in U.S. district court going back to September 2003, without claims ever being found invalid. After adopting a previous claim construction from the District Court the PTAB still found the challenged claims invalid.
2. VirnetX patents had been awarded nearly $1.1 billion in damages, not including sums paid to settle disputes prior to a final decision in Federal District Court. All of VirnetX patents survived every challenge of invalidity in Federal District Court. Furthermore, the United States Court of Appeals for the Federal Circuit itself had previously confirmed the validity of the ‘135 and ‘151 patents. Notwithstanding, after multiple IPR petitions at the PTAB, the PTAB invalidated claims to the ‘151 patent, the ‘135 patent, the ‘504 patent and the ‘211 patents.
3. The International Trade Commission issued a final determination finding a Section 337 violation by Arista relating to infringement of Cisco’s ‘577 and ‘668 patents. Not finding any of the invalidity defenses persuasive, and infringement ongoing, the ITC issued a limited exclusion order and cease-and-desist order against Arista. The PTAB declared claims of both the ‘557 and ‘668 patents invalid.
4. Imperium IP Holdings’ U.S. Patent No. 7,092,029 survived all 35 U.S.C. § 103 challenges for obviousness made by Samsung in a district court trial. In this particular trial enhanced damages were awarded both for willful infringement and the presentation of demonstrably false testimony. A jury decided that Samsung had not demonstrated obviousness of the ‘029 patent. Samsung then took its Section 103 challenge to the PTAB. The PTAB invalidated the patent claims as being obviousness.
5. Eight patents owned by Wisconsin-based Ultratec were twice upheld as not invalid in district court, once on summary judgment after a challenge on 35 U.S.C. § 102 grounds for anticipation and another time on Section 103 obviousness grounds in the jury verdict entered in the case. The defendants in that case, Sorenson Communications and CaptionCall, then moved on to the PTAB challenging claims from the eight Ultratec patents asserted at district court. The PTAB dutifully invalid the patent claims under Sections 102 and 103.
6. Jazz Pharmaceuticals asserted 18 patents in district court in response to abbreviated new drug applications (ANDAs) filed with the U.S. Food and Drug Administration (FDA) for generic versions of Jazz’s Xyrem narcolepsy drug. The ANDA, filed by Amneal, included a Paragraph IV certification alleging invalidity of Jazz’s patents on multiple statutory grounds. One defendant in the case, Wockhardt Bio, entered into a consent judgment where they agreed that the generic drug would infringe Jazz’s patents and stipulated to an injunction against producing the generic. Wockhardt, Amneal and other defendants ithen turned to the PTAB to invalidate six Jazz patents after defenses of patent invalidity didn’t work at the district court. The PTAB dutifully complied.
7. Twice, Novartis AG’s U.S. Patent No. 6,335,031 was upheld as not invalid in district court after defendant Noven Pharmaceuticals challenged the patent’s validity on grounds of obviousness, once in a trial opinion from August 2015 and then again in a final judgment issuing from the court a few weeks later. Noven and fellow pharmaceutical firm Mylan then teamed up at the PTAB to have the ‘031 patent deveined of seven of the patent’s original 20 claims. The PTAB delivered for the defendants invalidating the patent claims for obviousness.
8. Four patents owned by American firms Paice and The Abell Foundation were asserted in a case against Korean automakers Hyundai and Kia where those giant auto manufacturers were found guilty of willfully infringing the patents-in-suit. In a jury verdict issued in October 2015, none of Paice’s asserted patents were found invalid in light of Hyundai and Kia’s anticipation and obviousness arguments. The reasonable royalty awarded in the case was nearly $29 million, and that was prior to any enhanced damages for willfulness. And then Hyundai and Kia, with help from Ford and Volkswagen, turned to the PTAB. The four patents adjudicated valid and willfully infringed in district court were invalidated as obvious. One of these patents, U.S. Patent No. 7,237,634, had 26 petitions filed against it, demonstrating that the gang-tackling phenomenon is indeed very real. In 13 PTAB cases, including four petitioned by Hyundai and Kia, the patent owner settled prior to institution, capitulating to the challengers. In the other 13 PTAB trials, each of which was petitioned by Ford, the PTAB found all challenged claims invalid on obviousness grounds.
9. Two patents, U.S. Patent Nos. 8,023,580 and 8,457,228, were adjudicated valid and infringed in a jury verdict entered in district court in February 2015 against Samsung. The verdict also awarded $15.7 million in reasonable royalty damages to patent owner Rembrandt Wireless. Samsung had raised invalidity of the ‘580 and ‘228 patents as affirmative defenses in the district court case. Although these patents were only asserted in one district court case, seven IPRs were filed against the ‘228 patent and another six petitions filed to challenge the ‘580 patent. Samsung was the petitioner in each of those cases. In three separate IPRs, the ‘228 patent was found invalid as obvious. Two of the six IPRs petitioned against the ‘580 patent also resulted in invalidated claims on grounds of obviousness.