‘Sacrifices’: PTAB Reform Act Would Limit Fintiv Denials

This article was updated on 6-16 to correct an error regarding the standing provision of the bill.

Senators Patrick Leahy (D-VT), John Cornyn (R-TX) and Thom Tillis (R-NC) today introduced the Patent Trial and Appeal Board (PTAB) Reform Act of 2022, which is meant to tackle gamesmanship at the PTAB.

In April, Senators Leahy and Tillis penned an op-ed that announced such a bill would be introduced “in the coming days”, but it never materialized.

The bill makes a number of key changes to PTAB procedures, including explaining that “the right to appeal shall extend at least to any dissatisfied party that reasonably expects that another person will assert estoppel against the party under section 325(e) as a result of the decision.” This would seemingly expand petitioners’ ability to appeal adverse decisions from the PTAB.

The bill also:

• Mandates that PTAB judges follow the same code of conduct as United States judges;
• requires that any subsequent changes made to the constitution of a three-judge panel of administrative patent judges must be noted in the record;
• curbs serial petitions by prohibiting the Director from authorizing an IPR if there was previously an IPR from the same party that challenged the same patent claims;
• clarifies some aspects of the process for Director Review under the Arthrex decision and prescribes a timeline for the U.S. Patent and Trademark Office to promulgate rules on other aspects;
• covers expenses for small and micro entities at the PTAB in certain circumstances; and
• stipulates that: “In deciding whether to institute an inter partes review proceeding, the Director shall not in any respect consider an ongoing civil action or a proceeding before the International Trade Commission under section 337 of the Tariff Act of 1930 (19 U.S.C.15 1337).”

Leahy also proposed limits on discretionary denial in his Restoring the America invents Act bill, introduced last year. Many in the IP community have condemned this approach.

In the press release about the bill today, Tillis hinted that such provisions are necessary to give the bill a chance. He said:

“[P]rior to the Trump Administration, the PTAB was a forum for gamesmanship by big tech and they actively weaponized it as a way to bankrupt competitors, small businesses, and independent inventors. The Trump Administration’s reforms ended this abuse. This bill, which is a carefully crafted compromise requiring sacrifices from both sides of the issues, permanently ends through the use of legislation some of these practices – all while preserving the vital role of the PTAB in furthering innovation and U.S. economic growth, prosperity, and global dominance.

Another provision would address the issues raised by OpenSky Industries, LLC v. VLSI Technology LLC and Patent Quality Assurance, LLC v. VLSI Technology LLC by imposing sanctions for abuse of the IPR process, ‘‘including a petitioner deliberately delaying or losing, or offering to deliberately delay or lose, an instituted proceeding in exchange for consideration.’’

Today’s press release added that the bill “restores the benefits and fairness of PTAB review by removing any incentives for gamesmanship, removing opportunities for a challenger to continually harass a patent owner, ensuring parties have one opportunity to bring a meritorious challenge, and shedding light on internal Patent Office decisions.”

Cornyn called the bill “the product of hard, bipartisan work to achieve the right balance,” while Leahy said it “represents the Senate at its best – different sides coming together to achieve a thoughtful compromise that is greater than what either side could achieve alone.”

The announcement also included a description of the bill, myth vs. fact document, and section-by-section summary.

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