American Innovators Express Support for Recent and Proposed Changes in Patent System

Yesterday, a group of 324 American innovators sent a letter to the bipartisan leadership of the Senate and House Judiciary Committees to express support for several improvements in the patent system implemented by U.S. Patent and Trademark Office (USPTO) Director, Andrei Iancu, over the last several years. The letter also expressed support for recently proposed rulemaking concerning the USPTO’s discretion in instituting inter partes review Proceedings (IPR). The group of innovators included universities, nonprofit foundations, individual inventors, startups, small businesses, manufacturing, technology and life sciences companies.

Raising the Bar at the PTAB

The letter specifically expressed support for the changes Iancu has brought to the operations of the Patent Trial and Appeal Board (PTAB). For example, the recent changes that were implemented “to harmonize the standards used in PTAB trials with those used in patent infringement trials in federal district courts” made sense, said the innovators, because Congress intended PTAB trials to be a cost-effective alternative to district court litigation. One such change noted in the letter was the PTAB’s adoption of the standard of claim construction set forth in Phillips v. AWH Corp.  The USPTO published a final rule in the Federal Register changing the claim construction standard applied during IPR proceedings from the broadest reasonable interpretation standard to the Phillips standard, which is the same claim construction standard used to construe patent claims in patent infringement litigation in federal district courts and requires the PTAB to “interpret issued patent claims according to their ordinary meaning as understood by a person of ordinary skill in the field covered by the patent.”

Cementing Discretionary Denial Rules

The letter also expressed strong support for the Office’s proposed rulemaking concerning the factors PTAB panels can use to deny institution of a panel when there is parallel litigation in district court, noting that it appears to be clear that the USPTO director has the authority “to set regulations for the exercise of discretionary authority to deny institution in these instances.” The innovators opined that “[r]ecent letters to Congress opposing the USPTO rulemaking incorrectly suggest that it would upset congressional intent in passing the AIA by foreclosing an additional proceeding to challenge patents.” Noting that Congress clearly intended IPR to provide a cheaper and faster alternative, rather than an addition to, district court litigation, the letter expressed that it is logical to allow the Director the discretion to deny institution of an IPR “when a dispute can be more efficiently resolved by a district court, or an ongoing litigation is likely to resolve the dispute in a reasonable period of time.”

The innovators said that any suggestion that the Director is not in the position to determine which forum is best suited to resolve issues is inconsistent with the congressional record and the recent Supreme Court decisions in Cuozzo v. Lee and Thryv v. Click-to-Call, both of which “affirm the Director’s broad discretion on instituting an IPR.”

Diversity and COVID-19 Assistance

The letter concluded with support for Iancu’s “renewed commitment to much-needed administrative regularity at the USPTO” and his “commendable focus on ways to expand American innovation by tapping into the strength of our nation’s diversity and increasing the opportunities for all Americans to participate in innovation.”

In addition, the innovators praised Iancu for the steps taken to assist patent stakeholders during the COVID-19 crisis, such as deferred fee payments and the extension of certain statutory deadlines.

 

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