Posts Tagged: "estoppel"

In this Part III, we will discuss the Covered Business Methods (CBM) expansion and the proposed elimination of post grant review estoppel. If these provisions are enacted it will provide greater incentive to challenge granted patents, making serial challenges the new norm. This will substantially and negatively impact small business innovators who will be forced to continually fight to keep the patents they have obtained after having already spent many years during patent prosecution to obtain the rights. This means patent rights will never be more than an expectation and not a true property right. Therefore, if these provisions are enacted it will mean no patent is every truly safe, no title is every quieted, and this will substantially, and negatively, impact investment opportunity and ultimately the commercialization of innovations.

“Today, Congress is under another call to weaken patent protection. This time the alleged culprit is a so-called “patent troll” who, according to some reports, hijacks inventions and while providing no product and therefore no societal value, extorts billions of dollars from the economy. This story could not be further from the truth. The argument is based on highly questionable data. Some of the claims are that patents asserted by so-called “patent trolls” are much weaker than patents asserted by others, that these entities cause billions of dollars of unnecessary cost, and that the number of patent infringement lawsuits has risen dramatically due to the so-called “patent trolls.” All of these assertions are highly disputed.”

When a patent is challenged by an IPR the challenge must be taken very seriously. Patent Office statistics for FY 2013 and FY 2014 through January 31, 2014, show that there have been a total of 361 decisions on IPR petitions, with 288 trials instituted. There have been 11 cases that have been joined and only 62 petitions denied, which corresponds with an 82.8% IPR petition grant rate. Having said this, the IPR grant rate during FY 2013 was 87.2%, while so far during FY 2014 the IPR grate rate has been 77.2%. This drop in IPR granting rate, while statistically relevant, should not lull patent owners into a false sense of security.

In part 1 of the interview we discussed why he choose McDermott, what it was like working for David Kappos and working with Federal Circuit Judge Ray Chen when he was Solicitor at the USPTO, and the appointment of Michelle Lee to be Deputy Director of the USPTO. In part 2 of the interview, which appears below, we discuss the new ethics rules adopted by the USPTO, the future of the USPTO, patent reform legislation, abusive patent litigation, and what the AIA was attempting to achieve relative to post grant patent challenges.

A goal of nearly every defendant is to lower the total cost of resolution of any legal issue. As counsel for the defendant, you have to weigh the settlement and licensing costs of a patent dispute against the total defense cost and how long it takes to resolve the dispute with certainty. Today, CBM, IPR, and PGR are the lowest possible cost options. Speed is one of the biggest benefits. The statute requires that a PGC proceeding must be completed in 12 months after institution, and in rare cases this extends to 18 months if the PTAB exercises a good cause exception. APJs are motivated to stay on deadline.

A brake-down of the major provisions, the Amendments that passed and some key Amendments that failed… On Thursday, December 5, 2013, the United States House of Representatives passed the Innovation Act by a vote of 325-91. Surprisingly, the Innovation Act (HR 3309) had only been introduced on October 23, 2013, and was marked-up on November 20, 2013. “This schedule suggests the fix was in,” said Congressman Dana Rohrabacher (R-CA) on December 3, 2013, “The clear message to little inventors: give thanks for your intellectual property rights, because you may not have them by this time next year.”

In order for one to file a statement of the patent owner in Federal court the submissions must: (1) Identify the forum and proceeding in which patent owner filed each statement, and the specific papers and portions of the papers submitted that contain the statements; and (2) explain how each statement is a statement in which patent owner took a position on the scope of any claim in the patent. See Section 1.501(a)(3). The required explanation must include discussion of the pertinence and manner of applying any prior art submitted to at least one claim of the patent. See Section 1.501(a)(b)(1). The explanation may also include discussion of how the claims differ from any prior art submitted or any written statements and accompanying information submitted under paragraph.

The troubling news starts with the fact that a technical amendments bill to the America Invents Act (AIA) that is working its way around Capitol Hill, and in true government by ambush fashion it could work its way into a bill at any time! What is the big deal about technical amendments? The problem is that not all of the amendments will be “technical.” For example, there is a plot afoot to change the estoppel provisions in the AIA relative to post-grant review and inter partes review. In my opinion there would have been absolutely no chance that the America Invents Act would have passed if the estoppel provisions for post-grant review only applied to issues actually raised.

While this patent statute of limitations is an extraordinarily long statute of limitations by legal standards there is another very important piece to the puzzle that needs to be appreciated by those who would choose not to pursue infringers; namely the doctrine of laches, which can prevent recovery against a defendant even if infringement is conclusively proven. So those who are patent owners don’t usually have to worry too much about the statute of limitations, but they should be mindful of the 6 year limitation period. Now one also needs to be mindful of estoppel, but don’t forget laches either. Laches and estoppel are both equitable remedies, which are related, but at least somewhat different.

After first “threatening,” then being “silent” for over three years, the patentee in Aspex Eyewear was barred by the defense of equitable estoppel from getting any relief for patent infringement. What’s even worse, after the initial “threat” of infringement the patentee in Aspex Eyewear created this ticking estoppel time bomb by failing to mention (in follow up exchanges) the two patents for which suit was filed, while mentioning three other patents which were not involved in the suit that was filed.