Posts Tagged: "Article III"

Those who practice in the field of patents tend to focus almost exclusively upon developments in patent law and pay less attention to developments in other areas of law. This is to be expected; patent cases don’t usually overlap with issues such as employment law or criminal law; so why bother reading up on those subjects? And yet, it can actually be useful to keep abreast of Supreme Court decisions that on their faces do not pertain to patent law. A few days ago, IPWatchdog Founder and CEO Gene Quinn discussed one such case. Though that case was not patent-related, he felt the decision may be of interest to patent practitioners, especially those dealing with patent eligibility under section 101. In that same vein, following is a discussion of a (less recent) decision from the United States Supreme Court, Elgin v. Department of the Treasury, 567 U.S. 1 (2012), that patent practitioners may have overlooked. On its face, the case deals with employment law, but it includes aspects of federal administrative practice that can affect patent practitioners.

Earlier this month, the Federal Circuit dismissed an appeal from the Patent Trial and Appeal Board (Board) where the Board upheld the patentability of a biologics patent. After Momenta Pharmaceuticals petitioned the Board for an inter partes review (IPR) of the patentability of Orencia® (abatacept), the Board sustained patentability and Momenta appealed. During the course of the appeal, Momenta ceased development of an abatacept biosimilar. The Federal Circuit held that the cessation of potential infringement mooted the injury and removed Momenta’s standing to maintain the appeal. Momenta Pharm., Inc. v. Bristol-Myers Squibb Co., No. 2017-1694, 2019 U.S. App. LEXIS 3786 (Fed. Cir. Feb. 7, 2019) (Before Newman, Dyk, and Chen, Circuit Judges) (Opinion for the Court, Newman, Circuit Judge).

Japanese manufacturer JTEKT Corporation recently filed a petition for writ of certiorari with the U.S. Supreme Court asking he nation’s highest court to determine whether federal statutes governing appeals from the Patent Trial and Appeal Board (PTAB) create a right for PTAB petitioners to have an appellate court review adverse final written decisions. If the case is taken by the Supreme Court the question will be whether the AIA creates standing for any dissatisfied party to appeal a PTAB final decision. The Court of Appeals for the Federal Circuit’s had decided JTEKT did not prove an injury in fact for the purposes of determining the existence of Article III standing in its appeal.

On Tuesday, November 20th, the Court of Appeals for the Federal Circuit issued a nonprecedential decision in Google LLC v. Conversant Wireless Licensing, which vacated a decision by the Patent Trial and Appeal Board (PTAB) to uphold the validity of patent claims owned by Conversant after conducting an inter partes review (IPR) proceeding petitioned by Google and LG Electronics… It is hard to reconcile decisions where the Federal Circuit bends over backwards to give more process and procedural rights to petitioners when for so long patent owners have been railroaded at the PTAB and then had those summary execution proceedings rubber stamped by the Federal Circuit. If increased scrutiny on the PTAB is a two-way street I welcome it.

On Friday, August 3rd, the Court of Appeals for the Federal Circuit issued a precedential decision in JTEKT Corporation v. GKN Automotive, which dismissed an appeal stemming from a trial conducted at the Patent Trial and Appeal Board (PTAB) where two of seven challenged claims were upheld as not unpatentable. The Federal Circuit panel of Chief Judge Sharon Prost and Circuit Judges Timothy Dyk and Kathleen O’Malley found that appellant JTEKT lacked the standing required to appeal the case because it couldn’t prove an injury-in-fact required for standing.

In 2011, as part of the American Invents Act (“AIA”), Congress significantly restructured the way in which previously issued patents could be challenged.   In some cases, existing post-issuance proceedings, like ex parte reexamination and reissue proceedings, were kept intact as such proceedings existed prior to the AIA.  In other cases, existing post-issuance proceedings, like inter partes reexamination, were replaced with new proceedings, such as the inter partes review proceedings (“IPRs”).    In addition, brand new proceedings were created, such as post-grant review proceedings (“PGRs”), covered business method patent review proceedings (“CBMs”), and supplemental examination proceedings.  In each instance, Congress made policy choices as to who could (or could not) bring and/or participate in such proceedings, and who could (or could not) raise challenges to decisions made by the government in such proceedings. 

found it disturbing that the Director Iancu would circumvent the prerogative of Congress with recently announced proposed PTAB claim construction changes, though she admitted the decision wasn’t unlawful. She expounded for several minutes on issues of res judicata, which could tie the hands of the PTAB in light of district court or U.S. International Trade Commission (ITC) decisions regarding patent validity. “[This] would completely blow up what we were trying to do as a Congress,” Lofgren said. “It looks to me that the people who disagreed with [the AIA] and lost in the Congress, they went to the Supreme Court, they lost in the Supreme Court, and now they’re going to you, and you are reversing what the Congress decided to do and what the Court said was permissible to do.”

As Sherkow’s Twitter critique notes, however, this hesitation to extend sovereign immunity to tribes in proceedings at the PTAB without precedent for doing so presumes that such an immunity defense would be denied by default, a presumption Sherkow called “painfully, absolutely wrong.” The abrogation of tribal sovereign immunity can be legislated by Congress, (which, as has been noted, was already attempted by Sen. Claire McCaskill [D-MO]) but without Congressional action specific to this abrogation, the default presumption would be that tribes have sovereign immunity to assert. “Hesitancy extending the immunity where immunity is unclearly presented is one thing,” Sherkow wrote. “But upending the Constitutional scheme on Kiowa’s dicta is another.”

What’s abundantly clear – and disastrous for both the patent system and the public – is that the PTAB’s Kafkaesque rules for complaining about anything outside of what an expert stated in a submitted declaration, including allegations of judicial misconduct, is undermining the public’s already marginal confidence in the entire IPR process. Even Franz Kafka himself would be bewildered by a process which requires one to seek permission to complain – from the very body about whom a litigant is complaining.

Patents that have withstood scrutiny in Article III federal courts are not bad patents, they are good patents, and they ought not to be struck down by an Article I administrative tribunal. The procedures of the AIA are working in a way to subjugate Article III federal courts to the arbitrary, capricious and egregiously overactive whims of an administrative tribunal in search of work to satisfy the several hundred newly hired “judges.”… Why is the PTAB spending precious resources re-litigating and ultimately killing good patents? The PTAB was created by Congress to review dubious patents and revoke bad patents. So why is the PTAB diverting its attention and re-litigating issues already addressed by federal judges and juries? Is it really likely that claims confirmed valid in federal court are invalid? In any rational world it would be per se unlikely that patent claims previously adjudicated as valid in federal court are invalid.

Supporters of the Patent Trial and Appeal Board (PTAB) continue to claim that the facts and figures showing the PTAB is overruling Article III federal district court adjudication on patent validity is fictitious. Ignoring the truth doesn’t make the truth any less correct. Still, in some circles the fiction spewed by those who champion the patent killing fields of the PTAB continues to be persuasive… More alarming, in many of the cases where the PTAB has overruled district court adjudication of the patents there were findings of willful infringement, meaning the defendants (and ulitmately the IPR petitioners) knowingly and intentionally infringed the patents adjudicated to contain valid claims. Notwithstanding, the PTAB, dutifully complied with their role as executioner of patents.

69% of cases reaching a final decision by the PTAB have all claims invalidated. 82.5% of patents reviewed by PTAB in a final decision are found defective… As the facts laid out in this article show, the PTAB is substantially more likely to find patents to be defective than a Federal District Court. This reality is a significant problem for patent owners, and should be a serious concern for anyone at all concerned with separation of powers. Even after prevailing in Federal District Court, and even after prevailing at the Federal Circuit as VirnetX had done, the PTAB can still invalidate claims already adjudicated as valid by an Article III tribunal. If patents are to be considered any kind of property right (as the statute says) title must at some point quiet, and an Article I administrative tribunal simply cannot have the power to overrule an Article III tribunal. If patent owners cannot have full faith and confidence in the patent granted by the Federal Government, and they similarly cannot have full faith and confidence in a final adjudication by the federal courts, how can they be expected to invest the millions, and sometimes billions, required to bring technology to the marketplace?

When going through the list of patents that have been deemed valid in district court and then invalidated through PTAB proceedings, there are 58 cases where the patent is invalidated at the PTAB on the same statutory grounds asserted at district court and which did not lead to invalidity. So, contrary to any notion that any data we’ve published fails to pass muster, there is plenty of evidence that the activities of the PTAB present an unfair playing ground for patent owners who are dragged before it, often after those patent owners have already been victorious in district court in proceedings where Article III federal judges have confirmed the validity of those patents.

There have been 220 patents upheld as valid in real courts and also subject to a final written decision in the PTAB. The PTAB only agreed with the real courts on 52 patents, while disagreeing with them on 168 patents. If the U.S. legal system is the gold-standard, that means the PTAB is erroneously invalidating patents 76% of the time… In the PTAB, generally only two grounds of attack are available – 35 U.S.C. §102 for novelty and 35 U.S.C. §103 for non-obviousness. But in the real court four grounds are available as a defense – along with §102, §103, accused infringers are also afforded validity challenges under 35 U.S.C. §101 for basic patentability and 35 U.S.C. §112 for specification. So how is it that the PTAB invalidates three times as many patents with only half as many grounds available? The only answer is because it is specifically designed to help infringers by bypassing due process protections afforded to inventors in real courts. Apologists will go on to argue that the PTAB had better evidence, better prior art, better experts, better judges – nonsense! The real courts have rules and procedures which are tremendously more thorough, developed, proven, and fair. The PTAB has not and cannot measure up.