IPWatchdog recently published an article dealing with the federal government’s writ of certiorari in which it claims that it is a “person” entitled to file petitions to invalidate patents before the Patent Trial and Appeal Board. IPWatchdog also recently published an article highlighting the inequity of repeated and concerted patent attacks.
These issues, and a few others, are discussed in the dialog between Inocencia Erfinder, the heroine in my forthcoming book Plight of the Patentee, and her lawyer.
Inocencia: Can a series of attackers file inter partes review petitions and, to the extent those petitions are granted, stay patent litigation for years on end?
Lawyer: Yes. That can happen. Let me tell you a true story.
On November 8, 2013, Applications in Internet Time sued Salesforce.com for alleged infringement of the plaintiff’s patents (7,356,482 and 8,484,111). Salesforce.com tried to invalidate these patents by filing a petition for the Patent Trial and Appeal Board to review the patents in-suit under its Covered Business Methods program. The parties agreed to a stay their litigation at the time of this filing but that stay was lifted after the PTAB denied the CBM petitions.
A short while after the CBM petition was denied, RPX Corporation filed an inter partes review petition with the PTAB. Salesforce.com filed a new motion for a stay which the district court judge granted after the PTAB granted RPX’s inter partes review petition. The district court judge’s reasoning for granting the stay was that Salesforce.com was not a party of interest in the RPX petition which in unfathomable given the points discussed below.
Inocencia: Okay. I see how multiple players could elongate stays by filing consecutive inter partes review petitions. But, just for my education, did Applications in Internet Time also initiate patent infringement litigation against RPX?
Lawyer: No. Applications in Internet Time never accused PRX of infringing its patents.
Inocencia: I’m confused. If PRX was not a defendant, why did that company move to invalidate Applications in Internet Time’s patents?
Lawyer: Well, you may want to pose that question to RPX. But here is my take. RPX is in the business of extricating the companies that pay it large sums of money from paying damages resulting from such clients’ (allegedly) infringing activities. While Salesforce.com was busy with its CBM petition, it lost its one-year window (subsequent to the initiation of patent litigation) to file a petition for inter partes review. So, a few months later, RPX swooped in and filed its own inter partes review petition in efforts to invalidate the patents that were asserted against Salesforce.com.
Inocencia: Aren’t there standing requirements to move to invalidate someone’s patents via inter partes review proceedings? Can anyone at any time use inter partes review to seek to invalidate someone’s patents?
Lawyer: Let me answer your second question first. Anyone can attempt to invalidate any patent at any time for any motive (or for no motive). The only exception is that defendants in patent litigation who choose to go the inter partes review route must file a petition for inter partes review within one year of the beginning of the patent litigation. I suppose I inadvertently answered your first question; there are no standing requirements to file an IPR. However, Section 312 states that inter partes review petitioners must disclose all real parties in interest.
Inocencia: So was it just coincidental that RPX’s inter partes review petition dovetailed with Salesforce.com’s efforts to invalidate the same patents?
Lawyer: In its inter partes review petition, RPX stated that it was the only party of interest, the only party involved in preparing and presenting its inter partes review petition, and that PRX was not representing anyone else in its petition. Nonetheless, there is quite a bit of evidence that RPX was motivated to rescue Salesforce.com from its embroilment as an accused infringer. To wit:
- com was the only entity that Applications in Internet Time accused of infringing its patent in-suit; no other company had any immediate stakes in seeing the subject patents invalidated.
- com was an RPX client; Salesforce.com made substantial and increasingly large payments to RPX.
- RPX’s advertising materials stated that its interests were “100% aligned” with those of its clients, that it provided patent infringement “insurance” services to its clients, and that it served as an adjunct to its clients’ in-house legal departments.
- RPX was aware of the Applications in Internet Time lawsuit and the denied CBM petitions as evidenced by numerous communications between RPX and Salesforce.com leading up to the filing of its inter partes review
- The two companies had a mutual director on their boards.
- RPX and Salesforce.com were located in the same building.
Whatever the degree of coordination or water carrying on RPX’s part for the benefit of Salesforce.com, Applications in Internet Time must have felt that it was at the epicenter of a full-on pincer movement. In the district court, Salesforce.com argued that the claims it was accused of infringing should be construed very narrowly, so narrowly that Salesforce.com could not possibly be infringing them. When RPX took a whack at Applications in Internet Time’s patents, that San Francisco-based company argued the claims of Applications in Internet Time’s patents were extremely broad, making the mission of producing patent invalidating prior art much easier. (To be fair to RPX, Unified Patents has also been accused of helping infringers circumvent the one-year state of limitations that kicks in after an alleged infringer has been sued in district court.)
Inocencia: So, what you are telling me is that anyone can move to invalidate any patent at any time for any reason through a government tribunal that former Federal Circuit Chief Judge Randall Rader depicted as “death squads killing property rights” as long as the attackers disclose who is really behind the invalidity attempt; but even if a patent attacker fails to meet that minimum requirement, the attack is still allowed to proceed?
Lawyer: That is not how the system is supposed to work. Judges and Administrative Patent Judges have days where they make bad decisions. It can happen to the best of them.
Inocencia: For every day that a judge or Administrative Patent Judge makes a bad decision, there is an inventor who just realizes that he had a bad decade in terms of investing in patent worthy inventions. Just for clarity, as long as a person has money, he can attempt to invalidate any patent at any time?
Lawyer: According to the U.S. government, the petitioner doesn’t even need to be a person in the sense that you and I think of the term “person.” On October 26, 2018, the U.S. Supreme Court granted a writ of certiorari to take up Return Mail Inc. v. United States Postal Service. In this case, the federal government is arguing that it is a person who may petition the Patent Trial and Appeal Board to institute patent validity review proceedings.
Inocencia: Why in the world would the federal government want to be an active participant in invalidating patents that the USPTO grants? Does the federal government believe that an insufficient number of patents are challenged through inter partes reviews, that there is insufficient gang tackling (which occurs when another petitioner requests joinder using a near-photocopy of the original petition), or that there are insufficient serial attacks on the same patents? To put the last issue in other words, does the federal government really believe that nine attacks against some patents are needed? Anyway, at least there is still the requirement to pony up some money to launch inter partes review.
Lawyer: That is true but a bit of qualification might be in order. First, assuming that the U.S. government wins the Return Mail case, I don’t know if the federal government would have to pay fees to the PTAB. Second, petitioners for inter partes review are eligible to receive a partial refund of their filing fees if they elect to halt their IPR proceedings before a decision is reached. Third, Unified Patents has supported the training of law students in “identifying prior art and properly making arguments which could be used at the PTAB to invalidate such patents.” In supporting such training in conjunction with the University of Detroit – Mercy School of Law and Berkeley Law, Unified Patents can reduce the cost of putting IPR petitions together.
Inocencia: As to your second qualification, does the patent office refund patentees for any of the expenses they bear in defending their patents in IPR proceedings? Does the patent office refund patentees for the maintenance fees they have paid when their patents are invalidated? Do patentees receive extended terms on their patents to compensate for the time their cases are stayed while going through IPR proceedings?
Lawyer: Of course not. On the contrary, the USPTO’s position has long been that patentees should pay the expenses the patent office incurs when the patentee appeals a PTAB decision before the Federal Circuit Court.
Let me say something before you ask me about Unified Patents supporting the training of law students in attempting to invalidate patents. Training law students is a good thing. Purging bad patents also has merit. So, I don’t have a problem with Unified Patents supporting the training of new cadres in the methods of invalidating patents.
Inocencia: Then, there shouldn’t be a problem with someone sponsoring scholarships directed to training aspiring real estate lawyers in the best ways of dispossessing people of their homes because chains of title problems exist or because of misrepresentations on mortgage applications. Maybe law students studying employment law should receive similar support in learning how to conduct rigorous employment law compliance audits. It would be incongruent for the principals of Unified Patents to object if such subsidized scrutiny were directed to their residences or business.
Lawyer: I haven’t thought about that. But I can’t argue with the logic.
 Did you catch the double entendre? The heroine’s name means “innocent inventor” in Spanish and German, respectively.