Lofgren is now opposing a rule change she previously endorsed as an original co-sponsor of a bill that would have changed the claim construction rule in exactly the same way proposed by Director Iancu.
On July 9th, Congresswoman Zoe Lofgren (D-CA) sent a letter addressed to U.S. Patent and Trademark Office Director Andrei Iancu regarding proposed changes to the claim construction standard for patent claims being challenged at the Patent Trial and Appeal Board (PTAB). Not only does the letter show that Lofgren is woefully out of touch with the real-world issues presented by the PTAB, it also begs the question as to her motives. Congresswoman Lofgren is now opposing a rule change she previously endorsed as an original co-sponsor of a bill that would have changed the claim construction rule in exactly the same way proposed by Director Iancu.
Lofgren’s letter comes in response to the proposed rule to change the claim construction standard in inter partes review (IPR), post-grant review (PGR) and covered business method (CBM) review proceedings at the PTAB. The USPTO is proposing a rule change that would move claim construction from the broadest reasonable interpretation (BRI) standard currently employed by the PTAB to the Phillips construction standard used in patent cases filed in U.S. district court.
It is worth noting that the United States Court of Appeals for the Federal Circuit refers to the Phillips standard as the “correct construction” when comparing it to the broadest reasonable interpretation. Judge Moore explained that currently in post grant challenges “claims are given their broadest reasonable interpretation consistent with the specification, not necessarily the correct construction under the framework laid out in Phillips.” See PPC Broadband, Inc. v. Corning Optical Communications (Feb. 22, 2016).
In the letter, Lofgren says that she has two major concerns. First, that this “change in a vacuum” upsets the Congressional intent behind the enactment of the America Invents Act (AIA) of 2011 which created the PTAB and circumvents Congress’ prerogative on the issue. Second, that this change will produce unintended consequences in the form of forum shopping and the usurpation of the PTAB’s authority on claim construction.
Lofgren does end up discussing the Innovation Act, the aforementioned bill that she co-sponsored, as the only one of a total of eight bills changing the claim construction standard that managed to be reported out of committee. However, the letter never mentions Lofgren’s co-sponsorship of that bill and she calls the Innovation Act “a complex and balanced litigation reform measure that, begrudgingly, included a switch from BRI to Phillips claim construction… To pluck this one controversial piece out of a comprehensive bill and implement it through a rulemaking disregards the current work Congress is doing on patent litigation reform to combat patent trolls.”
But how is adopting a rule that would have already been the law had Lofgren had her way possibly frustrate or disregard Congress? Of course, we aren’t supposed to ask that question. Once the “patent troll” boogeyman card is played everything else is supposed to fade away.
To Lofgren and her allies on both sides of the aisle, any measure that somehow reins in these mythical creatures is worth supporting, no matter the collateral damage it causes to the U.S. patent system. Lofgren utilizes this language despite the Federal Trade Commission’s 2016 study on patent assertion entities (PAEs) which noted that the term “patent troll” was “unhelpful because it invites pre-judgement about the societal impact” of a patent-based business model. This notion is also supported by a 2016 article published by the Stanford Technology Law Review which found that the term “patent troll” leads to a “moral panic in which rational policymaking and decision-making give way to hysteria.” Such hysteria was on full display at a USPTO oversight hearing in late May where Lofgren took Director Iancu to task for proposing the claim construction rule change, telling him that “in the real world, we have patent trolls out there holding people up.”
The July letter sent by Lofgren to Director Iancu brings up a few facts and figures to support her position, such as the low rate of stay requests granted by the Eastern District of Texas and the District of Delaware and the disparity of case-management timelines leading up to Markman hearings in different districts. But, truly, Lofgren’s recent actions prove that the efficient infringement cabal haven’t just bought the Congresswoman’s vote, they’ve hired a very effective servant who will be a mouthpiece for their interests in the years to come.
The office of Congresswoman Lofgren provided the following statement on why the Congresswoman is so opposed to Director Iancu’s proposed rule change when she supported the same rule change as a co-sponsor of the Innovation Act:
“The Innovation Act was a complex and balanced litigation reform measure. By itself, I would not support a switch from BRI to Phillips claim construction in IPR. However, as a component of a larger reform effort, I begrudgingly felt this tradeoff was worth the other litigation reforms included in the bill.
“No legislation to date has considered this change proposed by the USPTO by itself. I do not believe the change will result in increased judicial efficiency, which the USPTO has described as an increase in the granting of motions to stay in district court. The current rate of success for stays is due in large part to the abnormally low rate at which these motions are granted in two jurisdictions that hear almost one third of all requests. A frequent cause of the denial of stay motions in these jurisdictions is the USPTO’s failure to institute all the claims at issue in a court proceeding, which was fixed by SAS Institute. There is no reason to believe that changing to Phillips will have a noticeable impact in light of the bigger fix by SAS Institute.
“Instead, a change to Phillips probably guarantees that the PTAB will be subject to issue preclusion on claim construction completed by either district courts or the ITC. This creates the perverse incentive to forum shop for more favorable or faster jurisdictions with the hopes of winning the race to Markman. I think this could have a profoundly negative impact on the work done by the PTAB.”