PTAB Rulemaking: Past, Present, and Future

By Josh Malone
June 16, 2020

“The America Invents Act left it to the USPTO to establish the rules and procedure of the PTAB. The rules of practice under David Kappos and Michelle Lee were radically skewed to help infringers and hurt inventors. Director Iancu has begun to fix the most egregious of these biased rules. However, we are very far from leveling the playing field.”

https://depositphotos.com/6496641/stock-photo-looking-at-the-opinion-section.htmlRecently, the USPTO published a Notice of Proposed Rulemaking (NPRM) to change the “Trial Practice at the Patent Trial and Appeal Board,” which is contained in Part 42 of Title 37 of the Code of Federal Regulations. This is the fifth rule change since the Patent Trial and Appeal Board (PTAB) was created and the second of Director Iancu’s tenure.

Through the Years

The first rules were issued on September 16, 2012, the one year anniversary of the America Invents Act. David Kappos was Director at the time. The first rules were controversial and heavily biased against inventors. For instance:

  • claims were construed under the broadest reasonable interpretation;
  • patent owners were denied the right to present testimony in a preliminary response;
  • user fees subsidized discounts and rebates to petitioners;
  • unlimited petitions were permitted;
  • previously considered prior art and arguments were permitted;
  • interfering and overruling with district courts was permitted;
  • discovery was effectively prohibited;
  • the institution decision was delegated to the PTAB.

It is stunning how lopsided the rules were written. It was arguably deliberately implemented by the USPTO to be a death squad. David Kappos resigned a few weeks following the rule implementation and President Barack Obama’s reelection. The office was officially vacant from Feb 1, 2013 until Michelle Lee was confirmed on March 9, 2015.

The second rules were implemented May 19, 2015, with Michelle Lee as Director. This was a trivial change that increased the page limits for certain filings.

The third rules went into effect May 2, 2016 under Michelle Lee. This change allowed inventors to provide testimonial evidence in a preliminary reply, but astoundingly required that the PTAB (which continued to decide which patents to review on behalf of the Director) view the evidence in the light most favorable to the petitioner. So much for patents being presumed valid. The deck was stacked against the inventors at every opportunity.

By 2017, the corruption and abuse had provoked inventors like me and Roman Chistyakov, who was hit with 125 inter partes reviews (IPRs) by a gang of giant corporations, to burn our patents in protest in front of the USPTO. Michelle Lee resigned, leaving the office vacant again from June 6, 2017, until Andrei Iancu was confirmed on February 6, 2018.

The fourth rules were implemented November 13, 2018 under Andrei Iancu. This was a teeny, eminently reasonable rolling back of the ridiculous broadest reasonable interpretation (BRI) rule – the one where the PTAB stretched the meaning of the words to read on prior art to accuse the inventor of claiming they invented something old. For instance, Chistyakov was accused of claiming to have invented plasma vapor deposition that was discovered in the 1800s, while in reality he had invented a system for depositing a near perfect layer of metal only a few atoms thick. He claimed a plasma “without arcing” which the PTAB construed to mean “a little arcing” to encompass the 1800s technology. Iancu’s common sense baby step to balancing the PTAB was met with a firestorm of opposition from the big tech lobby and their supporters in Congress and the deep state. The resistance was so unhinged that Rep. Zoe Lofgren (D-CA) read talking points criticizing elimination of BRI in direct contradiction of her support for BRI in the prior Congress. Iancu met the irrational resistance with resolve, delivering his fairy tale rebuke in the week following publication of the final claim construction rule.

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Rearranging Deck Chairs

That brings us to the current rule change. Another baby step. Honestly, it really seems that we are rearranging deck chairs on the Titanic. I suppose the passengers had some hope of survival, but it doesn’t seem plausible to have expected the ship to be saved. The radical infringers have blown the hull of the patent system to smithereens. Another bilge pump is not going to save it.

Nevertheless, Director Iancu should be supported and encouraged for doing the right thing. This change codifies the SAS decision that requires the PTAB to institute all claims or none. SAS does not require that all grounds be instituted (only all claims), but that still seems like a good policy for inventors. It really doesn’t matter if all claims/grounds or some claims/grounds are instituted, most inventors are going to lose in a trial due to built-in bias and lack of competent representation.

The more significant change this time around is the reversal of the outrageous provision of the May 2, 2016 rules under Michelle Lee that “testimonial evidence will be viewed in the light most favorable to the petitioner…”. It defies belief that five years after the AIA the infringer forces were still advancing a radical attack on patent rights at “America’s Innovation Agency”. This new rule requires instead that the evidence be viewed neutrally. This rule change should be supported. Comments are due by June 26 and can be submitted via the link on the Federal Register website or by email to PTABNPRM2020@uspto.gov.

In summary, the America Invents Act left it to the USPTO to establish the rules and procedure of the PTAB. The rules of practice under David Kappos and Michelle Lee were radically skewed to help infringers and hurt inventors. Director Iancu has begun to fix the most egregious of these biased rules. However, we are very far from leveling the playing field. We should encourage Director Iancu to channel that passion and resolve from that October evening in Dallas when he had put down the crazed revolt against his first rulemaking and threw down the gauntlet to the storytellers.

Restore Equity

Above I list eight inequities that were promulgated in the first rulemaking for PTAB practice. The first three have now been addressed. The remaining five all deal with institution. Attempts to fix this through informal guidance and opinions have failed, because they are not binding. For instance, multiple petitions, including serial petitions, continue to occur and drive high rates of institution.

The institution decision is a greenfield for rulemaking. Congress gave complete discretion to the Director (see § 314(a)), along with explicit rulemaking authority (see § 316(b)). It is time for a comprehensive rulemaking to roll back the radical rules of the prior administration and restore balance and equity. Director Iancu was appointed to lead the national innovation policy. We may not be able to save the patent system, but we can try. I for one will have his back if he makes the attempt.

 

The Author

Josh Malone

Josh Malone quit his corporate job in 2006 to take his shot at the American (Inventor’s) Dream. Eight years later, savings depleted and orthodontics and college unfunded, he took one last swing before trudging back to the corporate world. And hit the homerun with Bunch O Balloons. His solution to the 63 year old problem of filling and tying water balloons instantly became the number one selling spring/summer toy. It was just as quickly knocked off resulting in a patent litigation now totaling 6 patents, 5 patent suits, 5 PTAB petitions/trials, 4 preliminary injunctions, and 8 appeals at the Federal Circuit. He is currently a Fellow with US Inventor working to restore the patent system.

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 6 Comments comments. Join the discussion.

  1. Paul Cole June 16, 2020 2:20 pm

    Broadest, most unreasonable interpretation?

  2. jacek June 17, 2020 10:37 am

    I dare to say that no genuine change is possible due to corruption in our politics. As long as members of Congress depend on big-money donation for reelection, the Big Tech will have influence. We have already Trojan horses in Congress pretending to play on the inventor’s side but doing it, to have better control and to steer any attempts to reform into a ditch. Their activity in broader light is not short of simple treason since they serve the interest of Big Money and benefit foreign adversary – China. As long as the “Electronic Frontier Foundation” is not going be dismantled in smaller pieces not only the patent system’s future but the entire country’s future is in doubt.

  3. Ternary June 18, 2020 11:36 am

    Thanks Josh, for continuing to follow and disclose the ongoing shenanigans to deny inventors a patent of value. Ironically you are living proof why the establishment is trying to wipe out patent holders (and especially independent inventors) at the earliest possible state.

    Because once you are making money with your inventions you have a war fund that you can use to (successfully and expensively) defend yourself. That is clearly a very undesirable situation for infringers.

    Keep up the good work. You are an inspiration NOT TO GIVE UP.

  4. Jeff's WaterWorks June 18, 2020 12:20 pm

    Thank you Josh for carrying on the good fight when so many are giving lip-service to or are disappearing!!

  5. Pro Say June 18, 2020 1:12 pm

    Ternary @ 3: Here! Here!

    Thanks Josh for being a bulwark against the anti-patentists.

    America needs more folks like you who are willing to call things as they really are and fight the good fight.

  6. Randy Landreneau June 18, 2020 6:09 pm

    Thank you again, Josh, for stellar work. Real patent rights have been at the core of the success of America and a key difference between America and the rest of the world. Without them, huge monopolies will only get stronger, China will take the lead in key future technologies, and the once bright, shining hope of the world will diminish. Inventors across America will have Director Iancu’s back if he really decides to fight the good fight to level the playing field.

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