Posts Tagged: "AIA 5th Anniversary"

To investigate whether applicants have been adopting a strategy of filing more provisional applications, we determined a ratio of the number of provisional filings (with a first-named inventor identified as being a resident of the U.S.) relative to the number of utility filings (with a first-named inventor identified as being a resident of the U.S.). As shown in Figure 2, this ratio also exhibited an uptick in fiscal year 2013, but the ratio has since returned to Fiscal-Year-2012 levels. Thus, this data suggests that applicants have generally not changed their filing strategies to file more provisional applications in view of the AIA’s change to define prior art based on applications’ filing dates.

Although what qualifies as art under the AIA can be distilled to disclosures before a patent application, both pre-AIA and AIA created exceptions for intervening disclosures in Section 102(a)(2). Intervening disclosures are defined by an earlier filing date, but a later publication date and are sometimes referred to as secret prior art. Intervening disclosures apply only to US patents, US publications, and PCT applications. Other types of disclosures, such as disclosures at a Beijing conference in Chinese would need to be considered under Section 102(a)(1). Where is this expansion for intervening disclosures going to come from? Mainly from two primary sources: 1) US patents or publications that have foreign priority claims; and 2) PCT applications published in a language other than English, regardless of foreign priority claim… The potential doubling of available intervening disclosures would create significantly more prior art.

PTAB procedures have rendered worthless around 90% of the patents they see by either invalidating the patent altogether or invalidating the most critical claims. The infringer lobby and the PTO would have us believe that is not the case, but they measure total claims in all challenged patents against total claims invalidated. They ignore that a petitioner selects specific claims and those selected claims are the most critical to the defense of the patent right. This means there is a deliberate, thoughtful and strong selection bias on which claims are challenged and only the most critical are challenged. The strength of most patents hinges on only a couple of the claims so patents with dozens of claims can be rendered worthless by invalidating only one or two claims. Thus invalidating only one claim can doom the entire case and set the infringer free. The PTO’s numbers are either produced with no knowledge of patent litigation or are deliberately misleading.

If Congress, nevertheless, is unmoved by the constitutional arguments for reforming the IPR process, it should weigh the strong economic policy arguments supporting IPR reform, which are outlined in various amicus curiae briefs supporting certiorari. As pointed out in a brief filed on behalf of the Houston Inventors Association, the IPR system “has a great attraction to ‘patent pirates’, companies who [sic] infringe patents and then deny liability, because the IPR has a high rate of success for ‘patent pirates’ to invalidate patents.” In other words, the IPR system facilitates infringers who want to free ride on the fruits of patentees’ labors, thereby ineluctably diminishing marginal incentives for investment in patentable innovations. As a brief filed on behalf of the University of New Mexico explains, the threat of IPR (in particular its anti-patent “death star” reputation), and inconsistencies between PTAB and federal district court patent validity standards, devalue and harm university patents.

Patent investors are no different than investors in any other asset class. They abhor uncertainty and charge a stiff premium for risk. In the wake of the AIA, the cloud of uncertainty hanging over patents is dark indeed. This uncertainty has depressed the value of patents and the returns to research and development, and may have broader ramifications that are yet to be seen… Like so much well-intended regulation, the AIA may have undermined the very system it was aimed at improving. While well capitalized players may be able to ride out the current storm—or even take advantage of it—many others have been irrevocably harmed by these changes.

The America Invents Act (AIA) was the single worst disaster in the 226 year history of the U.S. patent system. The AIA did very real damage – enough to put many inventors out of business and discourage many others. Prior to the AIA, a patent was a highly valuable asset capable of attracting capital to startup new technology companies. The deck was rearranged by the AIA to radically favor infringers to the point that today, a patent is a liability. Both inventors and investors now associate a patent with high cost and high risk of even higher cost.

While the PTAB statistics demonstrate the profound effect that the AIA trials have had on issued patents, it seems to have the greatest impact on non-manufacturing patent assertion entities (PAE). With the increased tendency of district courts showing a willingness to grant stays of the concurrent litigation, the AIA trials have become an effective weapon against PAE. However, nevertheless, it is not surprising that with any dynamic system we have seen a settling process where institution rates have been dropping and the information provided by the PTAB in its publication of informational and precedential decisions has served to provide clarity to those practicing before the PTAB in administrative trials.

The enumerated problems with the post grant procedures could be bettered by both the courts and the USPTO. The courts have had an opportunity to change the standard for claim construction in the post grant procedures but have declined. However, the USPTO can ameliorate the problem itself by providing for more liberal leave to amend. The rationale for BRI at the USPTO is that patentee can amend at the Office but not in court. The Office can more easily allow for claims that are further limiting and this would greatly reduce the problem.

IPRs offer many improvements compared to inter partes reexamination[12]. However, the statistics reveal that IPRs are no more of a true alternative for litigation than the challenge proceeding which they replaced and supposedly improved upon – at least not yet, but with all of the publicity about the high rate of invalidation it is hard to imagine that patent challengers just need more time to gain confidence in IPRs. These statistics combined with the relationship between IPR behavior and the increasing phenomenon of efficient infringement suggest that the post grant challenge proceedings as currently implemented are not a substitute for litigation and may, unfortunately, instead actually promote litigation.

While the Patent Office likes to tout statistics that assert most patent claims challenged in IPR are not invalidated, those statistics are simply not credible. When reporting its statistics the Patent Office ignores the reality that once an IPR is actually instituted few claims are actually adjudicated to be patentable. The Office is also grossly misleads when they characterize claims not subject to a final written decision as “remaining patentable.”… Recently I’ve heard a story from a former PTAB judge who explained that institution of IPR challenges is far more likely when there are multiple petitions filed against the same patent because it makes it easier for PTAB judges to meet their production quota. If that is not proof that the PTAB is hopelessly broken I don’t know what is.

At exactly 11:42am on September 16, 2011, President Barak Obama signed the America Invents Act into law. As President Obama put his pen down he said: “All right guys, congratulations, the bill is signed.” It was at this precise moment that U.S. patent laws dramatically changed forever. With this in mind, over the next two weeks we will be examining the AIA in great detail in a special AIA 5th Anniversary series. I’ve invited a number of guests to comment, discuss and/or editorialize about the AIA. Below is a sneak peak of some of the contributions already received. As articles are published this preview article will be updated with links to the entire series.