Posts Tagged: "inter partes review"

The respondent immediately takes issue with the argument that patents are not public rights, summarily citing MCM Portfolio LLC v. Hewlett-Packard Co., 812 F.3d 1284 (Fed. Cir. 2015), cert. denied, 137 S. Ct. 292, which held that that neither Article III nor the Seventh Amendment bars IPRs, a holding that, according to the respondent, does not conflict with any decision of the Court or any other court of appeals, rendering further review unwarranted.

Idemitsu Kosan Co. v. SFC Co., the Federal Circuit affirmed the Board’s decision to invalidate as obvious certain patent claims directed to a device that emits light when electric current is passed through a particular organic medium… During inter partes review, it is possible for claims to be invalidated for reasons first articulated in rebuttal to a Patent Owner’s arguments. Patent owners should anticipate a petitioner’s counterarguments to its positions, including those made in Patent Owner’s Reply. Further, features of the invention that are alleged to distinguish over the prior art may not carry sufficient weight if they are not recited in the claims.

In arguing that inter partes review (IPR) violates the U.S. Constitution, the petitioner in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC advances two theories. The first is that patents are private rights, not public rights, and therefore suits to invalidate patents must be tried before a jury under the Seventh Amendment. Second, even if the Seventh Amendment is not violated by IPRs, suits for invalidity must be tried in an Article III forum, not in an agency proceeding. The petitioner also takes issue with claim interpretation and claim amendment limitations during IPR, which are beyond the scope of this post.

Earlier today the Saint Regis Mohawk Tribe filed a Motion to Dismiss in six separate inter partes review (IPR) proceedings relating to the Allergan drug RESTASIS®. The RESTASIS® patents were recently all assigned by Allergan to the Tribe, with the Tribe granting back to Allergan an exclusive license… As the Motion to Dismiss points out, the petitioners can have an opportunity to challenge these RESTASIS® patents in federal district court. “The Tribe will not assert sovereign immunity in the Eastern District of Texas case,” the Motion to Dismiss reads. ” So dismissing this case does not deprive the Petitioners of an adequate remedy; it only deprives them of multiple bites at the same apple.”

Those now familiar with IPR proceedings will already have recognized how little resemblance current IPR proceedings have to what most supporters of the AIA envisioned upon its passage. In current practice, the role of the Director as an independent IPR gatekeeper never materialized because the USPTO’s implementing rules bypass the Director altogether, assigning the institution function to the PTAB, which in turn routinely assigns both the institution and final decisions to the same three judge panel. As a result, most of the safeguards against patent owner harassment were lost…. By failing to adopt the implementing rules needed to carry out the intent of the AIA, and by adopting other rules and procedures that are plainly skewed towards petitioners, the PTAB has intentionally tilted its IPR proceedings against patent owners. While this has been good for the PTAB, which has quadrupled in size, it was neither Congress’s intent nor that of most of AIA’s supporters to create an unfair IPR patent “killing field.”

I want to believe Congress ultimately sought to strengthen the U.S. patent system with the AIA by providing a mechanism to more easily remove a small percentage of granted patents that were being inappropriately used in litigation. Specifically, patents that were being asserted with claim constructions not contemplated when the patent was examined. After all, Congress had been heavily lobbied with the narrative that NPE’s had been stretching patents well beyond the four corners of the granted patent and hurting the integrity of the patent system.

The PTO has increased the number of Board decisions as being precedential (so as to serve as a binding authority) by 36% within the last two years. With respect to the increase in precedential decisions: while a 36% increase is substantial, that translates into only an additional 10 precedential decisions – 2 ex parte appeals and 8 IPRs. The current total number of precedential decisions is 38, broken down into 27 ex parte appeals, 2 interferences, 8 IPRs and 1 CBM. Compare these numbers to the number of ex parte appeals and AIA petitions received in 2017 alone (10165 ex parte appeals, 1853 IPR petitions, 54 CBM petitions, and 40 post-grant review petitions).

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.

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.

The tribe is raising a sovereign immunity defense in the case as the tribe is a sovereign entity which is not amenable to a suit unless it consents or Congress abrogates its immunity. Shore argued that the sovereign immunity defense is based on binding Supreme Court precedent. “It would frankly be unprecedented for the board to deny the tribe the right to seek a dismissal before conducting the hearing on the merits,” Shore said… On seven occasions during the call, Torczon called the sale of the patents to the St. Regis tribe a “sham” transaction, arguing that the tribe didn’t purchase the patents but rather were paid to take them. Torczon drew parallels between the patent sale and racketeering cases in the context of lending fraud. “So facially this transaction is a sham.

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.

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.

According to 35 U.S.C. § 316(a)(11), the PTAB is required to issue a final determination in an inter partes review not later than 1-year after the date of a decision to institute review is made… That the PTAB has not extended a single case for cause should not be confused with the PTAB following the mandates of § 316(a)(11). Indeed, the parties have been waiting for a decision in IPR2016-00237 for more than 14 months… It seems that the PTAB is here, and presumably in other joinder cases, giving itself more than 1-year without a showing of cause. If that is the case the PTAB is intentionally misreading § 316(a)(11) in order to construe it to give themselves 1-year from the last joinder Order rather than 1-year from the date of institution as the statute requires.

Several of the briefs address the absurdity currently being advanced, claiming patents are so-called “public rights.” This novel notion — more in line with Karl Marx than John Locke — is a direct assault upon the very essence of private property rights… The Cato-ACUF brief reasons “public rights” into a sniveling lump: “Ultimately, the implications of the argument that merely because a right to particular property flows from a statutory scheme, such rights are ‘public rights’ and that disputes over them can be withdrawn from Article III courts are staggering. Such a conclusion would mean that anyone who derives his land title from the Homestead Act can be forced to have any disputes over that property be resolved by a bureaucrat in the Bureau of Land Management. Under this view, Congress could require that a dispute between an individual and a private financial institution over a mortgage or a student loan be heard before an official in the Treasure Department on the theory that the relevant loans were made pursuant to a federal statutory scheme. The government enacts statutes affecting property rights all the time, but that does not convert the rights that trace their roots to such statutes into ‘public rights.’”