Posts Tagged: "post grant review"

“The results from the Patent Trial and Appeal Board reflect the procedures it applies, and in my judgment the procedures are wildly off base,” Judge Michel explained… “We’ve had PTAB final results… whatever the intentions were we don’t have to speculate… we have ample evidence of how it worked in practice. We know it doesn’t work satisfactorily.” *** “I don’t think things are really getting much better,” Kappos said. “We are in what I refer to as the leaky life raft.” When you are stranded and a leaky life raft comes along it looks great, but it doesn’t change the fact that it is still a leaky life raft. “The best you can say about 101 is that it has stabilized in a terrible space.”

For more than two centuries, the U.S. Constitution, black letter law and precedent construed a patent as a property right. This is important because it is the nature of property rights that enables investment in early stage startup companies, especially those with cutting edge technologies in highly competitive fields like pharmaceuticals, biotech, smart phones, enterprise software, internet, semiconductors and other technologies critical to our infrastructure, military and much more… The same agency that takes inventor money to grant patents takes infringer money to destroy them. This creates an appearance of double dealing, and inventor belief that the USPTO is breaching the “grand bargain” of the patent system. Inventor confidence is at an all-time low because inventors are lured away from using trade secrecy protection, but then given nothing in return for disclosure. The effect of PTAB on inventors is devastating. Since institution of PTAB, over 50% of inventors simply quit rather than suffer the financial and stressful indignation of post grant invalidation.

Concerns over software and biotechnological innovations being patent eligible, the omnipresent threat of patent reform that could make it even more difficult to enforce the patent property right, and no clear path to a philosophical or ideological turning point make for little to celebrate this World IP Day in America… If Congress wants to resurrect the U.S. patent system these three decisions would be overturned. As long as these decisions remain in force the U.S. patent system will continue to suffer and will undoubtedly be looking up in the rankings to the likes of Hungary when the Chamber releases its 2018 world IP rankings.

The old arguments that patents inhibit innovation, and non-exclusivity with compulsory licensing leads to a brave new world are now in vogue. We’ve stood at this fork in the road before. It requires courage to reject the easy path downward and restore the system which created our prosperity. If we lack the will, we have no one else to blame as we plunge deeper into the mire. That’s the last place anyone wanting to drain the swamp while growing the economy should go.

Activist Supreme Court decisions in the last decade have been principally responsible for these changes, stimulated by aggressive technology company incumbent lobbying. The combination of these decisions has had a far greater effect on the patent system and the economy than the Court originally intended. The U.S. is now in a compulsory licensing regime in which large technology incumbents that control at least 80% of collective market share employ an “efficient infringement” model of ignoring patents and forcing patent holders to enforce patent rights in the courts.

When the America Invents Act (AIA) was being formulated, from about 2005 – 2011, nothing was more subject to change bill-to-bill than the proposed “1st look” and “2nd look” procedures for issued US patents. Should the U.S. have a regular opposition procedure, or should existing inter partes reexam just be tweaked? The AIA final result is the universally dis-liked post grant troika known as PGR, IPR, and CBM… For today I will confine my remarks (and associated fixes) to three truly bad ideas that in practice have played out as particularly egregious. More specifically: (1) the lack of standing required for inter partes review (IPR) challenges; (2) the lack of any real ability to amend claims during a post grant proceeding; and (3) the trivially low threshold (i.e., reasonable likelihood) that initiates an IPR.

The way Lee talks about the PTAB makes me wonder whether she is referring to the same entity that I commonly refer to as the PTAB. Indeed, Lee’s remarks come across as if leprechauns are dancing across a magical rainbow in search of unicorns being ridden by fairies. It is a fiction that I am just not familiar with; a fiction that patent owners simply do not recognize to be true… To then say that innovation isn’t served if patents are only issued after many years of examination reeks of being hopelessly out of touch. In certain areas of the Patent Office it is not at all unusual for applicants to be awarded 10 years of additional patent term; term that is awarded as the result of Patent Office delay. Getting any patent takes years, getting a worthwhile patent in a commercially viable market segment takes many years, if not a decade or longer. NEWSFLASH: Innovation is already not being served because many innovators do not obtain a patent for extraordinary and unreasonable lengths of time. It is almost as if patent examiners fight a war of attrition against applicants, who are treated like the enemy.

Both petitioners’ and patent owners’ reliance on blog articles in the course of post grant proceedings has been approximately equal. However, the manner in which the blog articles were used did vary widely based on the litigator’s position during the proceeding. For petitioners, blog articles were most often cited to construe the claims (Apotex Inc. v. Amgen Inc., IPR2016-01542, Paper 2, p.69), were introduced as previous publications of an expert witness in order to help prove their qualifications (Samsung Electronics Co., v. Papst Licensing, IPR2016-01733, Ex. 1014, p. 99), or were used to bolster the credentials of one or more of the representing attorneys (Google, Inc. et al v. Smartflash, CBM2015-00132, Paper 17, p. 2). For patent owners, blog articles were most often referenced to provide support to summarize and clarify certain legal standards such as claim construction standards (Uniloc USA, Inc. et al v. Allscripts Healthcare Solutions, Inc., IPR2015-01615, Paper 12, p. 8), to clarify legislative history and identify Congressional intent (Coalition for Affordable Drugs VII v. Pozen, IPR2015-01241, Paper 13, p. 47), and to rebut the petitioner’s expert testimony by attacking the expert’s credibility (Coalition for Affordable Drugs VII v. Pharmacyclics, IPR2015-01076, Paper 20, p. 13).

Perhaps the most challenging to accept is the notion that a tribunal created with a specific purpose of invalidation can be impartial to both the petitioners and the defendants. The AIA tribunal stands in contrast to the Court system, as their inherent mission is not to evaluate, but to challenge, contest, and invalidate. In addition, a “winners and losers” system, allowing one party to outspend the other, or to create joinders to outnumber the other, remains very damaging to the inventors, investors and small businesses.

As the above cases illustrate, PTAB decisions have affected district court cases in different ways. Determining whether the use of a PTAB decision is likely to be permitted or will have any effect requires a multifactorial analysis that considers at least the nature of the PTAB outcome (e.g., final or preliminary), factors contributing to that outcome (e.g., whether they were based on the merits of the case), and potential drawbacks attached to the requested use (e.g., jury confusion). Additional considerations might include, for example, the level of sophistication of the technology already being considered by the jury, which might factor into a court’s analysis of the likelihood of jury confusion. Parties seeking to rely on PTAB decisions in district court should consider these factors. The AIA has only been in place for five years and the law in this area will continue to develop over the next several years.

All of the post grant challenges ushered in by the America Invents Act (AIA) were a bad idea. They never should have been created in the first place. All the post grant proceedings have done is make infringing patents a more economical choice, while making it more costly for innovators to obtain and keep the protection they need to make innovating a worthwhile endeavor. It was all too predictable that a new tribunal would over assert its own jurisdiction, but the breadth of just how arbitrary, capricious and fundamentally unfair the process would be was simply not predictable.

Unfortunately, Mr. President, after five years I cannot report back that the AIA has yet ”improve[d] patent quality and help[ed] give entrepreneurs the protection and the confidence they need to attract investment, to grow their businesses, and to hire more workers.” The current implementation of PTO post issuance proceedings is undermining confidence in our patent system, chilling innovation at its roots, and, in eyes of some, giving the AIA a bad name.

The enumerated problems with the post grant procedures could be bettered by both the courts and the USPTO. The courts have had an opportunity to change the standard for claim construction in the post grant procedures but have declined. However, the USPTO can ameliorate the problem itself by providing for more liberal leave to amend. The rationale for BRI at the USPTO is that patentee can amend at the Office but not in court. The Office can more easily allow for claims that are further limiting and this would greatly reduce the problem.

While the Patent Office likes to tout statistics that assert most patent claims challenged in IPR are not invalidated, those statistics are simply not credible. When reporting its statistics the Patent Office ignores the reality that once an IPR is actually instituted few claims are actually adjudicated to be patentable. The Office is also grossly misleads when they characterize claims not subject to a final written decision as “remaining patentable.”… Recently I’ve heard a story from a former PTAB judge who explained that institution of IPR challenges is far more likely when there are multiple petitions filed against the same patent because it makes it easier for PTAB judges to meet their production quota. If that is not proof that the PTAB is hopelessly broken I don’t know what is.

At exactly 11:42am on September 16, 2011, President Barak Obama signed the America Invents Act into law. As President Obama put his pen down he said: “All right guys, congratulations, the bill is signed.” It was at this precise moment that U.S. patent laws dramatically changed forever. With this in mind, over the next two weeks we will be examining the AIA in great detail in a special AIA 5th Anniversary series. I’ve invited a number of guests to comment, discuss and/or editorialize about the AIA. Below is a sneak peak of some of the contributions already received. As articles are published this preview article will be updated with links to the entire series.