Posts Tagged: "aia"

In 2012, the American Invents Act established three new administrative procedures: post grant review (PGR), inter-partes review (IPR), and covered business method patent (CBM) review. In each of these proceedings, anyone may file a petition challenging the validity of an issued patent. Patent practitioners have long been trained to draft patents that survive litigation. It is no secret that most asserted patents now end up before the PTAB, and the PTAB tends to use different rules that favor the challenger. As we approach the five year anniversary of the PTAB, patent practitioners should reconsider long-held strategies. BRI and evidence standards adopted by the PTAB make surviving post-grant proceedings especially challenging. Pursue a narrowly-focused patent with clear and unambiguous terms, to avoid post-grant proceedings or survive them when instituted. A robust prosecution that addresses a range of issues, corrects Examiner’s errors, and places evidence on the record helps achieve the same goals.

As the challenge proceedings and the Patent Trial and Appeal Board mark their fifth anniversary, we should reflect on whether they have achieved their intended purpose. About a year ago I explained how inter partes review proceedings are no more a true alternative for litigation than the inter partes reexamination proceeding which they replaced and supposedly improved upon – nothing has happened since to change that view. Furthermore, a buffet of other meaty issues remains with respect to the post-grant challenge proceedings… I continue to support the original goals of the challenge proceedings and while changes in some areas are required, a wholesale restructuring of the procedures is not necessarily required. But I do look forward to changes that improve the balance between patentees and challengers.

A few dozen amici briefs have been filed in the case, including one filed on August 30th by 39 patent owners affected by PTAB activities in support of the petitioner Oil States. These patent owners have either already or are currently faced PTAB validity trials challenging their patents through inter partes review (IPR) or other post grant review (PGR) proceedings. The amici argue that the affected patent owners are in a unique position to provide perspective to the Supreme Court on the question of extinguishing patent rights through a non-Article III forum.

Post grant procedures can be an effective and efficient way of promoting patent quality by invalidating weak, inappropriately granted patents. What we need now is thoughtful review and assessment, based upon five years of experience about what is working and what needs to be done to improve the system. The above issues need to be watched and analyzed, and, if appropriate, modifications need to be suggested and tried. Many improvements can be made by the USPTO itself through transparent rule-making. Some may need legislative intervention. But there is no need to throw out the entire process. We should learn from what has happened before and be willing to improve the system for the benefit of innovation in our country and the continued growth of our economy.

As we mark the fifth anniversary of the effective date of Patent Trial and Appeal Board trials on September 16, we find that the early years of the practice have been a learning experience both for the PTAB and for PTAB practitioners.  Reflecting on the past five years, three key lessons emerge for practitioners, from practice and directly from the APJs presiding over these cases when they have spoken on topic: Follow the rules, including those that are explicit and those that are unspoken, know your audience, and focus on the facts.  

Hiring senior associates to be Administrative Patent Judges was a mistake, hiring so many senior associates from the same firm was an even bigger mistake. Making it clear that their job was to kill patents at all costs was inexcusable. Interpreting the rules at every turn to be disadvantageous to patent owners is un-American, violates fundamental notions of fairness of procedure, and tilts the balance so heavily toward challengers that it has become more feared by patent owners than any government agency or body. In short, the PTAB has destroyed the U.S. patent system and the value of U.S. patents. In my opinion, the only solution for the very serious transgressions of the PTAB is to disband this runaway tribunal.

“We began noticing that key appointments in the Trump Administration were going to Republicans who were very anti-patent,” Caputo noted. These appointments include Vishal Amin, who Trump selected to serve as Intellectual Property Enforcement Coordinator (IPEC) within the office of the President. Amin had an important role in drafting the America Invents Act of 2011, especially those provisions regarding the PTAB which was just targeted by US Inventor’s protest. Caputo also raised concerns over the potential patent views of Joseph Matal, who is currently the acting Director of the USPTO. Many inventors believe Matal is lobbying to remain the Director and not just serve in the interim after Michelle Lee’s resignation.

In a New Hampshire State Superior Court, this so-called ‘patent troll’ has decided to fight back. Automated Transactions and Dave Barcelou have filed a defamation complaint against the crème de la crème of those deemed “too big to fail” and who many might consider to be too big to defeat… The minute Barcelou was able to enforce his patented technologies in court, winning a sizable settlement from the biggest bank in his hometown of Buffalo, NY, a veritable “Who’s Who” of the financial services leaders joined forces to destroy both Barcelou and his company economically. Besides encouraging one another to ignore Automated Transaction’s demand letters, false and misleading statements started to appear in prominent business publications, which went so far as to say the company had purchased its patents, or alternatively, that the patents were invalid. Over time a unified battle cry arose from the ‘poor little community banks’ he allegedly targeted; “He’s nothing but a patent troll.”

High novelty, high non-obviousness standard, inconvenient court venue for patent owners, and limited availability of injunction remedies, reduced damages, threaten liabilities will hurt all classes of inventors except that it has less impact on corporate inventors. The invalidation procedure will discourage inventive activities of all classes with most serious impacts on independent inventors and accidental inventors. This is one biggest class of inventors who often come up with game-changing and surprising inventions. When would-be-inventors run into problems or solutions, why would they spend time and money to make inventions, spend more money to get patents, and get the business to defend patents in endless invalidation actions? High patent quality standard forces existing professional inventors to leave their invention business and discourage young people from becoming future inventors. In this highly uncertain time with a large number of dormant epidemic diseases, one or a few inventions may save population life when vaccine is unavailable.

The U.S. inventor pool is now limited to corporate inventors and a very few resilient professional inventors. The number of professional inventors will rapidly decrease with fewer and fewer of young people joining the inventor population… U.S. patent applications are predominately filed by foreign corporations, while for all other national patent offices the domestic applications comprise a super majority. In 2016, the Chinese patent office received totally 3,465,000 applications for three kinds of patents, making an increase of 23.8% year on year. The number for invention, utility model and design are respectively 1,339,000 (increase by 21.5%), 1,476,000 (increase by 30.9%) and 650,000 (increase by 14.2%). China has a high share of domestic applications (which means that inventive activities take place inside the country). The total application number in 2016 is 1,339,000+1,476,000=2,815,000. Patent applications filed with China patent office in 2016 is almost ten times of the U.S.-originated applications filed with the U.S. patent office. The number of patent applications filed with Japanese patent office is close to the U.S.-origin applications filed with the U.S. patent office. South Korea will surpass the U.S. in application filing number.

IPRs introduced an asymmetric component which particularly burdens the patent holder by requiring a very expensive ten-fold higher cost to defend the patent in the PTAB relative to the alleged infringer(s) cost of initiating an IPR. In sum, then, by writing the AIA for self-benefit, the big tech industry did an end run around i4i, breached the presumption of patent validity and pushed patent validity determinations back to the PTO with the objective to deny patent holders critical due process rights. The main impetus to persuade Congress to initiate this after grant review process lied in the false narrative of the big tech cartel that patents issued by the PTO are of a poor quality.

Patent reformers argue that too many patents can hurt business, and low-quality patents cause problems. Their lobby activities have successfully persuaded the Congress to pass the AIA, with the primary purpose to raise patent quality…. The patent office uses all patent rules in an even-handed manner to all applicants. So, it treats corporate applicants and U.S. individual applicants in the same way: entering frivolous rejections, using one-way bias high patent quality standard, giving the same opportunity to demand inter-party review (by paying $23,000), and affording the same opportunity to defend a challenge to patents (which would consume hundreds of thousands of dollars of attorney fees). Nobody can question those rules.  However, this money-can-buy fairness practices have distorted technological landscape. Frivolous rejections can force individual inventors to abandon their applications, but do not affect giant foreign corporations; outrageous fees and maintenance fees can discourage individual inventors, but will not affect foreign corporations; and the right of harassment can be used by all corporations but not U.S. independent inventors.

The U.S. patent system is the primary contributor for the U.S. economy. Since the foundering of the nation, the patent system has fostered an innovation culture that is directly responsible for making inventions that are more than all inventions accumulated in all major civilized regions in several thousands of years. However, the U.S. has inherent disadvantages in the political system and court systems… After the irreparable damages of public trust in the patent system, overhauling the patent system is no longer a feasible option. To continue existing as a powerful nation in the world, the U.S. must put its population back to the inventing business and create a renewed innovation culture, which could reach the entire population. It cannot count on the “miserable system” known in Thomas Edison’s time. Due to intensified competition and critical roles of technologies in competition, America must do far more than what is necessary to turn the dead patent system back to the same “miserable system”. One more thing that the Congress should do is to revive all invalidated patents under the AIA.

At least $17 million. That is what my Bunch O Balloons patent has cost so far. It could grow to $50 million. Yes, we are talking about water balloons, not smartphones. How can this be? Because the patent grant issued by the U.S. Patent and Trademark Office means nothing to infringers like Telebrands and Walmart. They simply ignore the patent and rush to take over the market with their knock-offs (Balloon Bonanza in 2015, Battle Balloons in 2016, and Easy Einstein Balloons in 2017). Then they use those revenues to hire attorneys and experts to say the patent is invalid. If the patent owner lacks deep pockets or good lawyers, his patent will not survive. If he does have access to infinite funds, he has about a 5 percent chance of survival thanks to the America Invents Act (AIA) and the USPTO’s implementation of the Patent Trial and Appeal Board (PTAB).

For the first 220 years of United States black letter law and precedent based directly on the U.S. Constitution, patents are property rights. Even the Republican Party Platform states that patents are property rights. Issa disagrees with all of that. Issa seems to believe that patents are instead some sort of public entitlement like food stamps as is evident in his bill, the America Invents Act, and his continuing actions even last week. Issa’s hypocrisy is so blatant, so obvious and so up front that I’m not sure he even understands what he just said, which is a very dangerous problem. So long as Darrell Issa remains in key lawmaking position in the Republican leadership in Congress, venture capital, patenting, new technologies, startups and jobs will continue to flee from the U.S. to China.