Why is PTAB spending precious resources killing good patents?

By Gene Quinn
January 16, 2018

PTAB wasting resourcesTo date, critics of the Patent Trial and Appeal Board (PTAB) have mainly focused on issues of patent law.  Airing grievances, particularly the wisdom of Congress passing the America Invents Act (AIA), has become commonplace. There is much that can and should be made about what Congress did, and what the PTAB is doing. But there are also important questions of separation of powers and good government that demand attention. Why is the PTAB killing good patents previously adjudicated as valid in Article III federal courts?

We have recently detailed — at length — how the PTAB is engaged in a zealous, and overactive, campaign against commercially important, infringed and valid patents (see here, here, here and here). Dozens of patents the PTAB has unceremoniously killed were thoroughly litigated and confirmed valid by Article III federal courts. Why is the agency re-litigating the propriety of patents already found valid by Article III federal judges and juries? After all, this is the same agency that constantly complains about funding (see here, here, and here) — and is constantly raising fees because they need more revenue (see here, here, and here) — and year after year submits requests for an increased budget (see here and here).

If the USPTO is so starved for resources wouldn’t it make sense to stop re-litigating issues already decided?

Far more telling than any statistics are the specific instances where the PTAB has effectively overruled Article III federal district courts after re-litigating issues already decided. Indeed, there are numerous examples of good patents that had challenged claims confirmed valid in federal district court only to have the PTAB find those same claims invalid on the very same grounds litigated in the Article III federal courts (see here and here). In some cases claims were confirmed valid by the Federal Circuit only to be struck down by the PTAB, as happened with VirnetX.

Why is the PTAB spending precious resources re-litigating and ultimately killing good patents? The PTAB was created by Congress to review dubious patents and revoke bad patents. So why is the PTAB diverting its attention and re-litigating issues already addressed by federal judges and juries? Is it really likely that claims confirmed valid in federal court are invalid? It should be per se unlikely that patent claims previously adjudicated as valid in federal court are invalid.

The U.S. Supreme Court has repeatedly said patents are a property right, even comparing patents to ownership interests in real property (see here and here). The Patent Act similarly confirms in explicit terms that patents are imbued with property rights (see 35 U.S.C. 262). Yet the PTAB strikes down these property rights after a federal judge and jury has confirmed validity of the right?

Something has gone terribly awry with how the PTAB selects cases, re-litigates and operates. While reasonable minds may differ on many things relating to the PTAB, it is utterly astonishing that there is no Code of Judicial Conduct applicable to PTAB “judges” and the USPTO allowed judges to sit on and decide cases involving former clients (here, here, here and here).

In some cases the PTAB has struck down patents litigated for years, continually having claims adjudicated valid. Why is the PTAB is spending its time and limited resources on good patents that Article III federal courts and juries have confirmed valid? Is there some vendetta against patent owners and commercially important innovations? How can it be likely that these patents are invalid when they’ve been adjudicated as valid over and over again?

Patents that have withstood scrutiny in Article III federal courts are not bad patents. These good patents shouldn’t be struck down by an Article I administrative tribunal. The procedures of the AIA are working in a way to subjugate Article III federal courts to the arbitrary, capricious and egregiously overactive whims of an administrative tribunal in search of work to satisfy the several hundred newly hired “judges.” The U.S. Constitution simply does not envision Article III federal courts being inferior to administrative tribunals. To the contrary, at least since Marbury v. Madison the Article III federal courts have been tasked under the Constitution to be the final arbiters of the meaning of the law.

Current Supreme Court Chief Justice John Roberts even recently quipped during oral argument in Oil States that when the Supreme Court refers to “judges” they mean something different than an administrative judge of the PTAB, which he characterized as an executive branch employee. Still, these “judges” have managed to interpret the AIA in such a way as to allow them to re-litigate matters already decided in federal court. Is that what the AIA intended? Doesn’t it seem reasonable to assume that the PTAB would not spend its precious resources re-litigating validity? Isn’t it reasonable to assume the PTAB would spend its energy, and resources, reviewing questionable patents that Congress instructed them to review? Isn’t it reasonable to assume the PTAB would focus on patents not tested in an adversarial system and confirmed valid?

We operate under the legal fiction that Congress specifically intended whatever happens as the result of its actions. But this chaos simply can’t be what Congress intended. No rational person would have designed or sanctioned the operation of such a tribunal in 21st century America.

An aggressively overactive PTAB has managed to make Article III federal courts report to the superiority of the administrative tribunal made up of executive branch employees. This was, of course, foreseen as a problem with the drafting of the AIA, but in all honesty no one could have ever predicted it would become such a blatant power grab. This is what you get when Congress enacts what is supposed to be an alternative to district court litigation and then creates different burdens and evidentiary standards. It is also what you get when you triple the size of the Board and hire employees who are told by the Chief Judge that if they are not a “death squad” they are not doing their jobs.

An overly aggressive PTAB is also what you get when executive branch employees have no real independence. After all, if a panel is unlikely to reach the desired outcome of the agency the panel is simply stacked in order to ensure an outcome favored by the Office. Never mind that such stacking eliminates the independence the Administrative Procedures Act (APA) is supposed to guarantee.

Still, all of this begs a critically important question. If the PTAB is killing patents that have for many years been repeatedly confirmed as valid (i.e., good patents), what is the PTAB doing with the other patents that have yet to be independently reviewed in federal district court?

It would seem naive to believe that the PTAB is somehow less zealous in their efforts to kill patents when there has been no independent review of the integrity of the right granted. Indeed, if the PTAB is willing to strike down continually confirmed, good patents, it stands to reason that they are acting at least as aggressively with respect to patents not that have not been independently reviewed by an independent judiciary.

And then there is the pesky question about patent examination quality. If 82.5% of patents reaching a final written decision iat the PTAB are defective, what does that say about patent examination quality? The patent office would have you believe examination quality is 95% or higher. They would also have you believe the PTAB is always correct. These statistics are incongruous in a nearly Monty Phythonesque way.

At a minimum, what the PTAB is doing with respect to good patents previously adjudicated as valid raises very serious questions about an overactive, even rogue tribunal that seems to have a vendetta against patent owners and patents, regardless of whether those patents are good or bad. It is well past time for the USPTO to take an honest look at the PTAB. It is similarly well past time for Congress to step in and fix a hopelessly broken system that is destroying America’s patent system.

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 28 Comments comments.

  1. Night Writer January 16, 2018 10:38 am

    What this illustrates is that the rules at the PTAB can invalidate any claim.

    Currently, with KSR and as many petitions as you want, there is no way any claim is safe.

  2. Invention Rights January 16, 2018 10:39 am

    Power grab is exactly right. Most recently chief executive employee David Ruschke trampled on the judicial branch by pronouncing new law on sovereign immunity. There is no limit to this runaway tribunal.

  3. Invention Rights January 16, 2018 10:50 am

    Gene, I wonder if these stolen patents can be restored to their rightful owners. Imagine the hope and joy if next week Andrei Iancu were to vacate the PTAB decisions on the Zond patents and allow them proceed against the multi-national infringers in a real court of law.

  4. David January 16, 2018 10:50 am

    It’s Chief Justice John Roberts, not Chief Judge.

  5. Pro Se January 16, 2018 11:30 am

    This is all a calculated con:

    When a patent is initially examined, in most cases a patent examiner plays “devil’s advocate” and combine prior art to speculate someone could have came up with your patent claims by combining the prior teachings. This scheme was generated as a solution to ensure patents are not frivolously issued.

    Since 2010, before the AIA enactment, patents ARE NOT easy to win by any measure.

    To hear the Justices and others speak on “fixing mistakes” by the PTO, this is nothing more than a con.

    The PTO doesn’t make mistakes.

    The PTO does a thorough search of prior art and determines within the 101, 112, 102 and 103 the patentability of patent claims should the specification support. That’s it. Most patent applications are denied.

    What the AIA and IPR/PGR allowed is the public to comprise patchwork theories, stitching together 7-10 publication writings to construct “pieces” of patent “claims”.

    This is the exact same as using a dictionary to invalidate a literary work. Because patent examiners utilize the practice of stitching together prior art references to force rejections in a patent examination, the PTAB somehow adopted this culture and accepts the same art stitching from public challengers.

    Very rare do you find 102 rejections in initial examinations and PTAB results, most are 103 “obviousness” challenges.

    Then, in IPR filings, petitioners lead off with a list of associated cases where the patent has been asserted, as a “tattle tell” exploit in a way that tells the PTO/PTAB that they should “do something” to “stop” the patent owner’s activity.

    The problem with the PTAB is they have the discretion to deny or “make” a theory work for institution if they want to. Did you need to sue 100 defendants over a clear infringement accusation? Do you file claim charts with your complaints in district court?

    WATCH OUT… the IPR exist to tell on you…

    And eventually, the PTAB will get you.. it doesn’t matter how long your patent claims are, how complicated the technology, as long as a petitioner can tie together 15 references to make a petition read on your claims, you will be instituted to fight again for your patent rights..

    And guess what?

    When you defeat the main 1-2 references in a previous IP that the PTAB institute on partial claims, if you cancel the instituted claims to keep the non-instituted claims going in litigation, your next defendant will reuse the 1-2 references and add another 5 to them to patch the holes the PTAB expressed existed in the last IPR you beat.

    The PTAB and your defendants work together to progressively develop an invalidation theory. They can keep going until something stick. If you have a commercially viable patent, you will get hit with many IPRs.

    I’m personally at 14 IPR filings so far.

    And here’s the best part of this for IP Jackals – they can file, file, file IPRs.. the PTAB refunds the fee to the petitioner when institution isn’t successful.

    The “Judges” of the PTAB are former lawyers at all of the top law firms infringers retain. The PTAB “Judges” are not technical engineers that you find in the examining corps.. they are all former litigation or IP lawyers, with tenure alumni from the law firms you are facing in district court.

    I know for a fact, many of these PTAB “Judges” are on golf courses, luncheons, and industry social events, with the very group of defense counsels at their former firms. It’s a culture that lawyers protect each other from exposing, as a matter of “professional courtesy”.

    I’ve paused all of my patent activity around the results of Oil States. It’s really this simple:

    If Oil States is ruled AIA is unconstitutional, I can renegotiate all of my agreements due to having been rendered under duress and undue influence of an unconstitutional vantage…

    If Oil States is ruled AIA is constitutional, I see the U.S. patent system as being fully destroyed and I will never pay another maintenance fee. The fact here is shucksters like Unified Patents will be paid more money to attack, attack, and attack, they will create subsidiaries to take 3,4,5, 6th bites at patents… patching the theory holes the PTAB help create in progressive filings.

    I read these articles and think everyone is absolutely delusional. Oil States is the healing or full destruction of patents. Period.

  6. Anon January 16, 2018 11:31 am

    Another example of “not asking the right question.”

    The resources are being spent because Congress set up a system (non-Article III, thus no standing), and that system is being used in accord as to how that system is set up.

    The resources are being engaged – in total accord with the way the system was set-up.

    Therefore, the attempt to re-label the resources being used in accord with the system as “a waste,” is a misfire and a distraction from what the questions should be (and to whom those questions should be aimed at).

  7. step back January 16, 2018 11:31 am

    Gene,

    Is you testing whether any of us is reading your post titles?

    Second “is” may need to be sent to the PTAB for reevaluation and nullification. 🙂

  8. Bemused January 16, 2018 11:39 am

    Gene,

    The disdain that the PTAB has regarding prior patent validity determinations by Article III courts is highlighted in the recent article by Steve Brachmann in the D’Agostino v Mastercard dispute. See:

    http://www.ipwatchdog.com/2018/01/15/inventor-appeal-challenges-ptab-authority-remand/id=91943/

    I read through D’Agostino’s appeal brief to the CAFC and have excerpted below the relevant language:

    “In Cultec, [Inc. v. Stormtech LLC, Case IPR2017-00777 (PTAB Aug. 22, 2017)], the Board refused to institute IPR proceedings because the examiner previously considered the asserted references – one raised in a third-party submission that the examiner discussed in rejecting the claims, and the other which the examiner cited and applied throughout prosecution. Id. at 8-13.

    The Board found that these facts embodied the scenario described in Section 315(d) / 325(d) – “the same or substantially the same prior art or arguments previously were presented to the [Patent and Trademark] Office.” Id. at 7 n.6. Thus under the “norm” announced in Cultec, the Board will not institute IPR proceedings in such cases where the examiner previously considered the references. As of October 24, 2017, this became the Board’s policy. Cultec applies here, and justifies at least a remand. In Mr. D’Agostino’s case, numerous examiners considered the prior art ultimately used by the Board – Cohen and Musmanno. This included reexamination examiners. Case: 18-1000 Document: 15 Page: 58 Filed: 12/20/2017 51 Those examiners concluded that the art did not render any claim unpatentable, even in the face of MasterCard’s own arguments that it later recycled within IPR proceedings. Appx270-272; Appx1306-1308; Appx2385-2388; Appx2641-2651.”

    If D’Agostino’s arguments about PTAB policy are correct, what we have is a PTAB policy is to deny institution of inter partes review and defer to administrative agency employees when USPTO examiners have reviewed the same prior art (either in prosecution or in reexamination proceedings). Yet, the PTAB gives no such deference to Article III tribunals. Particularly, when the PTAB institutes inter partes review and then kills a patent even though the same prior art was previously rejected by a district court.

    When all this nonsense started with the PTAB, I mistakenly thought that the CAFC would come out strongly against administrative agency encroachment of Article III jurisdiction. Perhaps CJ Prost et al like being the PTAB’s b**ch?

    B

  9. PatentOwner January 16, 2018 1:00 pm

    How about, “YOU didn’t invent THAT!”

  10. PTO-Indentured January 16, 2018 1:18 pm

    In addition to ProSe @5.

    Let’s not forget perhaps the most destructive of all AIA acronyms ‘BRI’.

    BRI – Reasonable to who? Talk about ideal PTAB wiggle-room.

    IPRs need a ‘substantial’ new question (SNQ) to get initiated, Sooo… (in the con) — enter the ‘BRI’ — which rolls out the red carpet welcoming an IPR by virtually guaranteeing one or more SNQs can readily be found: BECAUSE the standard to kill a patent at the PTAB (under the BRI handicap) is considerably easier than the standard used by the PTO to issue valid (stronger / defensible) patents.

    The PTO issues patents that are stronger under a first standard / BRI makes patents that are weaker (typically defenseless) under a second standard, thus one or more claimed features of the latter are ‘easier to question’ — so voila! an IPR is born.

    SNQ? So fans having no question about betting on a prize fighter’s ability when using both arms, would have (could raise) no ‘substantial new question’ about the fighter’s ability (strength) when one arm is tied behind the fighter’s back?

    I’ve personally experienced the PTAB (under BRI – ‘as reasonable’) cite a first fragment of a single sentence in a specification, alleged to support a 103 basis for invalidity, by ignoring a second half of the same sentence which clearly contradicted/refuted their alleged basis. The PTAB prevailed.

    BRI – reasonable to who?

    This is an ideal AIA ‘con’ because you don’t “have to get rid of independent U.S. inventors” (or ‘appear’ to be doing so), when you have an ‘efficient’ system proven (since 2012) that makes their patents worthless / defenseless.

    Why is it a con? In part, because the PTO takes all of the independent inventors’ application, issuance and on-going maintenance fees ‘as if’ — patents issued as valid (to this lower class of inventors) will not (if covering valuable IP) be subject to a subsequent PTO process, that 9 times out of 10. relegates patents of ‘lower-class’ inventors invalid.

    At least, it doesn’t ‘look’ like AIA intended to kill the American inventor — his or her ingenuity, innovation and contribution to U.S. industry — just their patents.

  11. PatentOwner January 16, 2018 1:19 pm

    As in, “You didn’t build that!”

  12. Invention Rights January 16, 2018 1:37 pm

    PTO @10 – it is even worse. Exmark prevailed in 3 reexams of their lawnmower patent. They finally got their day in court. The District Court ruled the patents not invalid based on surviving multiple reexams. Last week the Federal Circuit reversed the District Court, ruling that if the claims are construed even broader than they were in the PTO then the same prior art could render the patents invalid. Exmark faces a minimum of 4 more years of litigation. Patent Owner never secures a victory. Infringer gets infinite attacks. Words must be interpreted to cover more than what the inventor claimed to invent.

    http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/16-2197.Opinion.1-10-2018.1.PDF

    To the extent the district court adopted a broader construction than the PTO’s construction, it precluded Briggs from arguing that the prior art anticipated the claims or rendered them obvious under the district court’s broader construction of the claims. The fact that the Board held that the asserted anticipating prior art reference did not disclose the claim requirements (entire baffle and meaningful effect) as construed by the Board, does not foreclose the possibility that a jury may find otherwise under a
    broader construction not requiring those aspects. Thus, contrary to Exmark’s argument, the mere fact that the asserted claims survived Briggs’ requested reexamination does not necessarily establish that it cannot meet its burden to overcome the presumption of validity under a broader claim construction.

  13. Patent Owner Counsel January 16, 2018 4:51 pm

    With Rule 36 affirmance bring all too common at the Federal Circuit, most PTAB judges are correct in feeling that there is little meaningful oversight or accountability. This drastically exacerbates the problems identified in this article.

  14. Anon January 16, 2018 5:08 pm

    Invention Rights @ 12,

    The snippet you provide shows a rather BAD misunderstanding of when terms are “considered” more broadly.

    To wit: “that a jury may find otherwise under a broader construction not requiring those aspects.

    This is the exact opposite for the Office even using BRI in the first place. That a judge thinks that post-grant construction would be broader than an Office construction turns the entire BRI mechanism on its head.

  15. Ben January 16, 2018 5:12 pm

    Pro Se:”The PTO does a thorough search of prior art and determines within the 101, 112, 102 and 103 the patentability of patent claims should the specification support. That’s it. Most patent applications are denied.”

    The bolded is simply not true. The UPR allowance rate, not including RCE abandonments, was 71.9% at the end of FY2017. Most patent applications are allowed.

  16. Pro Se January 16, 2018 5:51 pm

    @5 Because today, the AIA makes good business on PGR, the more parents to issue today, the more back-end money that’s made on challenges.

    Back in my patent priority filing date/quarter (Q1-2 2010) the PTO was in a different space (Source: https://www.uspto.gov/sites/default/files/documents/20100303_PPAC_Operations_Update.pdf)

  17. Ben January 16, 2018 6:07 pm

    Pro Se:”Back in my patent priority filing date/quarter (Q1-2 2010) the PTO was in a different space”

    Your data gives that allowance metric as 57.1%. Most patent applications were allowed in 2010.

  18. Joachim Martillo January 16, 2018 6:24 pm

    There certainly is the appearance of bidding wars for favorable decisions in post-grant review proceedings.

    https://lnkd.in/eXHrHEu

  19. Anon January 16, 2018 8:25 pm

    Joachim,

    I seem to recall seeing that bit about “if that happened in the private sector it would have been considered organized crime” before.

    That’s a pretty serious statement.

    Perhaps not so strangely, Apple does not seem to want to talk about their influence (and that six month wait to talk is pretty suspicious).

    Of course, anyone who is anyone with some semblance of administrative law can tell you just how poor of a separation between the political function and the judicial function is within the administrative agency known as the United States Patent and Trademark Office.

    After all, that poor separation is not anything new.

  20. Tim January 17, 2018 7:20 am

    How many times was Vringo patent pulled, and repelled and examined? Google was just stalling and re-stalling. (Vringo vs IP Internet). 12 jurors spent a huge amount of time getting to a 12-0 guilty verdict on all 14 charges, only to have the win tossed by Judges Mayer & Wallach at the Appeals Ct, as the only qualified Judge Chen, highly dissented. En Banc failed to see Vring’s side, and the US Supreme Court refused to hear the case, leaving company and shareholders to lose their donkeys. Stock crashed, and re-crashed, and did a reverse split, renamed and re-invented itself twice and the new company, X-Press Spas, symbol: XSPA “again dropped yesterday to $1.15 a share.

  21. Bemused January 17, 2018 8:42 am

    Tim@20: Agreed. Vringo (and its stockholders) was royally screwed by the CAFC which invalidated its search patents on obviousness grounds under the theory that it would have been “common sense” to combine the asserted prior art references.

    Funny thing, I don’t recall ever seeing “common sense” as a statutory (or otherwise) basis to invalidate a patent.

    The CAFC should be ashamed of themselves for blatantly protecting Google which has NEVER lost an appeal at the CAFC.

  22. question January 17, 2018 3:10 pm

    Bemused@20: Can anyone confirm if the following statement, “Google has never lost an appeal at the CAFC” is valid?

    If so, that is truly worrisome…

  23. MeToo January 17, 2018 4:02 pm

    Google’s former subsidiary, Motorola, has lost at the CAFC.

  24. Anon January 17, 2018 6:01 pm

    Was not that Motorola subsidiary rather a “arms-reach” affiliation?

    I believe the point here is that “Mother-Google” herself has (apparently) used its influence (based on numerous factual assertions of level of influence-spending and STILL undocumented meetings with USPTO representatives) to position itself in an undue favorable power position.

  25. Joachim Martillo January 18, 2018 9:32 am

    Anon@19 January 16, 2018 8:25 pm,

    I wrote “secret bidding wars” because Apple’s complaint looks to me like the whining of a loser in a secret auction.

    In How Do I Hate Post Grant Review? Let Me Count the Ways I pointed out the following.

    With the AIA post-grant review proceedings Congress has transformed the US patent system from a mechanism of economic growth as well as political and economic inclusiveness into a means of highly extractive and exploitative insider trading.

    This sort of crap won’t stop until a number of senior USPTO officials and of APJs cease to serve as US government employees but become guests of the US government in the federal prison system.

    Because of the standard operating procedures of the USPTO, the size of this group need not be large. There are specific controls that can be manipulated by a small number of officials and that enable them to transform the USPTO from a means of economic stabilization and of general economic benefit for the nation into a mechanism of self-enrichment or of power aggrandizement.

  26. Joachim Martillo January 18, 2018 9:50 am

    I have to add the following.

    Even if the USPTO (or more correctly a small group of senior officials therein) appears to be holding secret auctions on patent validity, the post-grant review proceedings in general seem to have transformed the USPTO into a three card monte stand.

    USPTO’s New Motto: “You Innovate – We Expropriate!”

  27. Tim January 19, 2018 6:51 am

    Joachim,
    Loved the article you linked. Please send it to the White House. Obama placed GOOGLE personnel/spies throughout our government, including the NSA. The Vringo vs IP Internet case (fraud against our jury system) should be put under a microscope, and forced to be adjudicated by the Supreme Court. This was more of the corrupt Obama system at it’s best!

  28. Joachim Martillo January 25, 2018 10:00 am

    While Obama was friend neither to inventors nor to small business, the current PTAB buffoonery and corruption seems to go back to the Clinton administration when SAWS seems to have started. USPTO employees and officials that seem involved or entangled in the conspiracy are named in SAWS After SAWS.

    SAWS looks like POC for stealing IP from lone inventors and small businesses. Post-grant review proceedings have perfected the bait-and-switch con scam.