Posts Tagged: "patent owners"

A new study of proceedings before the Patent Trial and Appeal Board (PTAB) shows that, despite the initial reputation of Inter Partes Review (IPR) proceedings being that of patent killers, patent owners are winning more cases than ever. The study, conducted by law firm Fitzpatrick, Cella, Harper & Scinto, shows that the rate at which patent claims were found unpatentable by the PTAB fell significantly in 2016, while the volume of claims in dispute rose dramatically. The study found that in every quarter of 2016, the reviewed final written decisions resulted in more than half of the claims originally challenged in IPR proceedings surviving. By contrast, in the previous two years, the survival rate of such claims exceeded 50 percent only once. In the first quarter of 2014, in fact, less than 20 percent of such claims survived challenge.

The TC Heartland decision follows the trend of eroding patent holder rights due to the potential for infringers to more easily move the lawsuit to a more favorable forum and in some cases have the issues of infringement and discovery for same stayed for a year or more.  As patents and mechanisms to enforce patents become weaker, the high-tech economy of Northern California will begin to diminish as foreign companies encounter fewer obstacles in their way to compete against companies with weaker IP rights… Because so much hinges on a stay motion in modern patent litigation cases, this predominant statistic influences where plaintiffs should consider filing their patent complaint.

The industry reaction to Aqua Products v. Matal has been swift. In IPWatchdog’s Industry Roundup blog post, there was broad acclaim. However, for those involved with post-grant proceedings before the AIA, however, Aqua Products at most means a return to the amending regime allowed under the previous inter partes post-grant procedure, inter partes reexaminations. Given that IPRs were explicitly designed to extend and amend the previous inter partes reexamination procedures, a comparison of amendment practice under the two procedures makes a number of lessons clear.

The effects of proposed Rule 11 on the patent system will be like putting an additional bullet to a dying man. As far as patent litigation is concerned, the pending rule is intended to deliver what was missed in the AIA: shifting fees from infringers to patent owners.

Congressman Lamar Smith (R-TX), has sponsored a bill to amend Rule 11 — H.R. 720. The changes are made to remove the safe harbor provision and make sanctions mandatory. This bill has passed the House. A companion bill — S. 237 — has been introduced in the Senate with no action yet being taken… The proposed changes to Rule 11, if enacted, will have an impact of keeping unrepresented parties out of courts, and make the U.S. courts even more inefficient. It will have an adverse impact on patent owners in patent cases… Given the nature of patent litigation, experience teaches that it is inevitable that whenever a case is disposed of the winner will almost certainly try to shift litigation fees by any means possible, including by invoking Rule 11 sanctions. The parties with strong financial powers will have better chances to get sanction awards.

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.

Based on this Unified Patents definition of an NPE, any patent owner that seeks to enforce a patent, whether through licensing or litigation, is a patent troll. Therefore, according to Unified Patents and Shawn Ambwani, any patent owner that seeks a licensing fee, seeks to resolve ongoing infringement, or resorts to the judicial process to seek redress for those who are violating rights granted by the federal government are patent trolls. In other words, all patent owners are patent trolls in the view of Unified Patents and Shawn Ambwani. Only those patent owners that go through the extraordinary time and expense of inventing and obtaining a patent and then do absolutely nothing are legitimate patent owners — everyone else is a patent troll. Talk about completely and utterly asinine! But I suppose that is how they come up with the ridiculous and obviously phony “statistics” about more than 95% of patent infringement cases being filed by patent trolls. The only way that is possible is because to Unified Patents all patent owners are patent trolls!

IP departments are often forced to spend their limited budget defending patent troll lawsuits targeted at the base computing and service layers instead of where it should be spent – protecting application layer innovation. There has been no shortage of such litigation due to the glut of vague and ambiguous software patents directed to basic computing technologies. These broad, vague patents have become glaring targets for trolls, who are eagerly buying them up and asserting them wherever they can. As a result, companies are being sued for patent infringement for things that aren’t directly related to their end products and services.

According to Bloomberg and AIPLA, the survey suggests that complaints from patent owners and other stakeholders in the U.S. patent system surrounding high patent invalidation rates at the Patent Trial and Appeal Board (PTAB) “have largely subsided,” arguing that patent owners find value in PTAB trials and that inter partes review (IPR) challenges are beneficial. Simply stated, the conclusions reached defy common sense, do not comport with the experience of patent owners, and the survey does not hold up to even cursory scrutiny… Those pointing to the prospect of a gold platted patent might as well be pointing to a pot of gold left by a Leprechaun at the end of a rainbow; gold plated patents and Leprechauns seem equally real based on the real life experiences of actual patent owners with the PTAB. Indeed, the PTAB is simply not a hospitable forum for patent owners, period.

Congressman Pence worked mostly on patent reform bills via the Republican Study Committee, a well-known group of House Republicans focused on inserting conservative views into public policy including respect for the Constitution and private property rights… During the time Pence served as Governor of Indiana, Purdue University soared to a record numbers of new patents, record numbers of technology licenses and record numbers of start ups based on Purdue University innovations… In July, Governor Pence signed an Executive Order establishing the Indiana Economic Development Corporation as the entity that will coordinate all efforts on behalf of the State of Indiana to accelerate innovation and entrepreneurship. Perhaps most interesting, the Order specifically acknowledges that increased innovation helps make communities more vibrant and spurs economic growth, higher wages and job creation.

Use of this phrase strikes me as indefensible because by its very nature it implies picking winners and losers after the Patent Office has already issued a patent and taken money from the inventor. Or worse, it reinforces the two-class patent system that we increasingly see today, between those that “have” the resources to attack or defend patents and the “have nots” (everyone else). Once a patent issues it is a private property right. Period. By definition a patent is legitimate because it exists!

Would you consider a business owner who prevented someone from breaking into their store and stealing a tangible product to be a bully? Of course not! They would be taking reasonable steps to protect themselves, and their property, from the thug who was stealing. But if that is the case, why then would you consider a patent owner who protects and defends their rights to be a bully? The truth is you could only consider a patent owner to be a bully if you do not believe patents are a property right. While everyone is entitled to hope and dream, we do have a definitively correct answer. The Patent Act unambiguously says: “patents shall have the attributes of personal property.” See 35 U.S.C. 261. Thus, if a shop owner defending a tangible item against a thief is not bullying then neither is a patent owner defending rights against an infringer.

We have all heard it. We all know it happens. Large company takes a look at what small company is working on, refuses to do a deal and then miraculously thereafter starts to infringe. In this, as in many cases, there was a confidentiality agreement, but what good is such an agreement without the means to enforce it? Even worse, it appears as if in this case the larger company had the audacity to file a patent application of their own after being granted access to what was supposed to be confidential information. Unfortunately, Congress and the Courts seem singularly focused on protecting helpless large multinational corporations who, as the story goes, are getting bullied by patent owners. That just isn’t the reality I see.

It should go without saying that a good team is a necessary ingredient toward building a successful patent operation. Unfortunately, many companies think they can check the “IP team box” once an in-house IP lawyer has been hired, and/or outside prosecution or litigation counsel has been retained. While those are often necessary ingredients for executing on the patent front, they are by no means the only ingredients. More is required, particularly in today’s patent market, which not only requires an understanding of patent prosecution, but a keen understanding of the business, strategic and financial aspects of patents.