Looming Leahy Bill Would End Fintiv Practice at PTAB

By IPWatchdog
September 23, 2021

Senator Patrick Leahy

Senator Patrick Leahy

IPWatchdog has obtained a draft summary of the “Restoring the America Invents Act” bill that Senate IP Subcommittee Chair, Senator Patrick Leahy (D-VT), is purportedly expected to introduce shortly. Several other outlets have reported that either Leahy himself or sources on the Hill confirmed such a bill is in the works and will address discretionary denial practice at the Patent Trial and Appeal Board (PTAB) under the PTAB’s precedential Apple Inc. v. Fintiv, Inc. decision, which sets out a list of factors that the Board will evaluate in deciding whether to discretionarily deny instituting a petition due to parallel district court litigation. The draft explains that the bill would require the USPTO to institute a proceeding if it meets the statutory standards, “with discretion to deny institution based on statutory considerations, so only one action goes forward at once.”

The imminent bill will also address the Supreme Court’s Arthrex v. Smith & Nephew decision, which the summary claims has diminished public trust in PTAB decisions by allowing USPTO Directors to “non-transparently meddle in PTAB decisions.” The bill would thus require any decision by the Director to be issued in a separate written opinion. “The public will therefore be aware which decisions are being made by PTAB judges and which are being made by a politically appointed and accountable Director,” explains the draft.

Next, the bill would clarify the bases for inter partes review (IPR) by ensuring that the PTAB can institute review in a number of scenarios, including: 1) when the patentee is trying to extend patent term under a double patenting doctrine; 2) when a patent admits that someone else originally came up with the invention; 3) clarifying that government entities may file IPRs; and 4) that a party who voluntarily dismisses a suit in district court will not be barred from filing an IPR based on that suit.

The bill also promises to clarify the bases for estoppel and the timelines for rehearing decisions by either the PTAB or Director, as well as the petitioner’s right to appeal even when not currently infringing a patent; instructs that amended claims must be proven patentable and the claims must be substantively examined; prevents the Office from issuing new patent claims that are not patentably distinct from canceled claims; and requires the USPTO to issue a scheduling plan in the case of multiple proceedings on the same patent to avoid conflict.

According to the draft summary’s introduction, “over five years, the changes made in the America Invents Act resulted in an increase of $2.95 billion in gross domestic product, with more than $1 billion more in added personal income for Americans.” The bill is intended to “restore post-issuance proceedings to make them fair and accessible.”

Scott McKeown of Ropes & Gray, who told Managing IP Magazine that he provided language for the bill, predicted that the end of Fintiv practices, while eliciting some pushback from bio/pharma, smaller plaintiffs and licensing entities, would survive the bill’s passage—which is not likely to be a possibility before spring of 2022. He also makes predictions on the other proposals on the Patents Post Grant blog.

No doubt this will solidify Leahy’s position as an anti-patent figure for some, and confirm fears many in the patent bar had when he was appointed Chair of the Senate IP Subcommittee earlier this year.

 

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IPWatchdog

IPWatchdog

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Discuss this

There are currently 15 Comments comments. Join the discussion.

  1. anonymous September 23, 2021 10:08 am

    Can you please link to a copy of the draft bill?

  2. BeamMeUpScotty September 23, 2021 10:55 am

    Scott McKeown, patent attorney who directly benefits from the AIA PTAB and IPR system, provided language for this proposed bill, which seeks to codify against the Fintiv practices put in place by Former USPTO Director Iancu. Those practices provided a more fair and balanced patent system for small businesses and inventors.

    “To hell with inventors! I’ve got suits and cars to buy.”
    — Scott McKeown

    (Nevermind, the patent system is supposed to be for them in the first place.)

  3. Pro Say September 23, 2021 11:58 am

    Shame on you Patrick.

    Shame on you Scott.

    Money over morals.

    Money. Over. Morals.

  4. Randy Landreneau September 23, 2021 12:07 pm

    Since transparency in desired, here are some suggestions for additional things the public should be made aware of for any PTAB decision:

    To what degree do any of the PTAB judges have conflicts of interest, such as having previously defended the alleged infringer against infringement, like Matt Clements and others?

    How much actual technical experience in the technology of the particular invalidated patent do the PTAB judges have?

    For findings of obviousness, was any new, significant prior art found, or did the PTAB judges simply look at the same or substantially same prior art and overrule the patent examiners?

    Did the PTAB judges interpret the claims of the patent in ways neither written nor intended by the inventor?

    What bonus pay did the PTAB judges get for making the decision?

    How many PTAB cases did the alleged infringer bring against the inventor before succeeding in invalidating the patent?

    Did the alleged infringer bring additional cases, at the same time, against other patents of the inventor unrelated to the lawsuit in an effort to render the inventor penniless and defenseless?

  5. Scott McKeown September 23, 2021 12:17 pm

    I participated (along with a number of others, including licensing entities and small innovators) in numerous discussions on potential legislative changes. Leahy has made it clear from the start that Fintiv was repugnant to the original intent of the AIA. My input focused on smaller issues as it was clear Fintiv was always on the chopping block.

    And, my need for suits has fallen off precipitously as of late. 😉

  6. NewLawschoolGrad September 23, 2021 3:37 pm

    Sen. Leahy – How are the PTAB judges any less “politically appointed” than the director(s) that hired them?

    This bill calls out that a politically nominated director should not be able to influence discretionary denials – but somehow the PTAB judges are immune from this?

    Shame on you for being a patent killing troll for big tech.

  7. Dmitry Karshtedt September 23, 2021 4:38 pm

    I don’t understand how discretionary denials can be repugnant to the “original intent” of the AIA because nothing in the actual language of the AIA compels the director to institute IPR or PGR proceedings – the statute leaves that decision to the director’s discretion. Yes, Fintiv put some bounds on that exercise of discretion, but that seems to be a good thing. “Discretion is not whim.” Halo v. Pilse, 136 S. Ct. 1923, 1931 (2016).

  8. Pro Say September 23, 2021 6:12 pm

    “Fintiv was repugnant to the original intent of the AIA.”

    As Dmitry points out, this is incorrect.

    Discretion is discretion is discretion.

    If Leahy didn’t want the Director to have such discretion, he shouldn’t have put — or allowed it — in the AIA in the first place.

    But. He. Did.

    What’s repugnant is this joker’s continued attacks on the very country which has provided him a lifetime of having a safe and comfortable pillow to lay his head on at night.

    Shame on you Patrick.

    Shame. On. You.

  9. Night Writer September 23, 2021 7:05 pm

    @7 Dmitry

    Good comment. I think the answer is that he wants the IPRs instituted based on it being more likely than not that the claims are invalid. He would like to ignore the discretionary part.

  10. Bob Weber September 24, 2021 8:11 am

    Follow the money. here’s a start:

    https://www.opensecrets.org/members-of-congress/patrick-leahy/summary?cid=N00009918

  11. BlutoBlutarsky September 24, 2021 10:13 am

    “Leahy has made it clear from the start that Fintiv was repugnant to the original intent of the AIA.”

    You mean like how AIA is repugnant to the original intent of the patent system established in our Constitution?

  12. mike September 25, 2021 3:31 am

    “Leahy has made it clear from the start that Fintiv was repugnant to the original intent of the AIA.”

    Well, Senator Leahy then has a problem. The very words of Congress go against him on the intent of the AIA, and the Supreme Court’s interpretation of the statute regarding the Director’s broad discretion also holds against Leahy’s position.

    Let’s look at the “Sense of Congress” of the AIA to discover the bill’s original intent:

    It is the sense of Congress that the patent system should promote industries to continue to develop new technologies that spur growth and create jobs across the country which includes protecting the rights of small businesses and inventors from predatory behavior that could result in the cutting off of innovation.
    Reference: Section 30. Sense of Congress. H.R.1249 – Leahy-Smith America Invents Act
    Link: https://www.congress.gov/bill/112th-congress/house-bill/1249/text

    I don’t see any mention that the Director cannot include conditions pursuant to his discretion to institute here. Rather, I see the intent to promote industry and protect the rights of small businesses and inventors. Here, the Fintiv factors help.

    Now, the PTAB purportedly provides these benefits over Article III courts: lower barriers to standing, lower cost, lower delay, and lower rates of error. In the instance the PTAB is being used against a small entity or inventor (98% of IPRs), these “benefits” are immediately absent. But if one disagrees with that view, it remains true that court litigation can reach an advanced enough stage where these “benefits” have already dissipated. Thus, the PTAB then represents duplicative review and wastes not only USPTO resources, but comes at the expense of both parties in the patent challenge. So, if duplicating review, wasting USPTO resources, and increasing expenses for parties goes against “protecting the rights of small businesses and inventors from predatory behavior”, then Leahy has either lost his mind, or his selfishness at the expense of small businesses and inventors is on full display. In this instance, I think “repugnance” turns on its head and points straight at Leahy.

    Let’s now turn now to what the Supreme Court has to say:

    The principle that 35 U.S.C. § 314(a) gives the Director broad discretion to deny otherwise meritorious petitions is well established in Federal Circuit and Supreme Court case law. The Supreme Court in Cuozzo v. Lee (2016) held explicitly that “the agency’s decision to deny a petition is a matter committed to the Patent Office’s discretion”, and they cited § 314(a) with an explanatory parenthetical that there is “no mandate to institute review.” Moveover, the Court in Thryv v. Click-to-Call (2020) expanded the scope of that unreviewable discretion to include conditions on institution as well. Thus, per SCOTUS, the Director has broad discretion to deny petitions and may include conditions pursuant to his discretion to institute.

    What is hypocritical here is that companies like Apple and Intel want to have their cake and eat it too. In Cuozzo, Apple submitted a brief as amicus curiae and supported the USPTO Director’s assertion of unreviewable discretion in matters of institution. But later, in Apple v. Fintiv, they magically changed course and desired to torpedo the Director’s institution-related discretion. Intel also argued against the Fintiv factors after the fact, because once upon a time, they argued in their amicus brief in Thryv that a “decision not to institute review is committed to agency discretion.” It’s funny how things can change when it affects them directly.

    Now that the Fintiv factors directly affect the pockets of Senator Leahy’s donors, it is apparent that Leahy wants to have his cake and eat it too, just like his hypocritical friends.

    Sorry Leahy. But you’ve been called out and caught. I mean, your name is on the bill. If you didn’t originally intend for the USPTO Director to have discretion in the Leahy-Smith America Invents Act of 2011, then you shouldn’t have originally given him discretion in the Leahy-Smith America Invents Act of 2011.

  13. Model 101 September 27, 2021 5:14 pm

    This shows how corrupt the patent system is.

    Because there was no consensus on 101 the reform the bill died.

    There is no consensus on this nonsense either. Yet these bozos are proposing it.

    Fix 101 you idiots.

    This other stuff is nonsense.

  14. Model 101 September 27, 2021 5:16 pm

    Leahy is a crook.

    No more no less.

    Anything he does is crooked.

  15. Dmitry Karshtedt September 29, 2021 11:08 am

    Seems like enough is enough.

    http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/20-1992.OPINION.9-29-2021_1841724.pdf

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