Posts Tagged: "PTAB"

Case Challenging Constitutionality of Inter Partes Review Continues to 4th Circuit

Inter partes review proceedings unconstitutionally assign to an Article I executive branch tribunal matters reserved for Article III Judges that make up the Federal Judiciary. This is in violation of Separation of Powers principles, which is particularly problematic given that we are talking about property rights being stripped from patent owners by administrative law judges in a proceeding designed to be a district court alternative. These administrative tribunals also adjudicate patent validity without a jury, in violation of patentees’ Seventh Amendment rights.

Patent Quality: Is PTAB up to the Challenge?

There has been tremendous growth in the post-grant review system. But that growth is perhaps disproportionately driven by top filers. In both 2013 and 2014 almost a quarter of all IPRs were filed by the top ten petitioners that year. Among those top petitioners are many names you would expect to see including Apple, Samsung, Google, and Microsoft. However, having the system driven by a few major players is not necessarily beneficial, as it can leave behind smaller but still important actors.

On the Road in March 2015

I will be criss-crossing the country again in March 2015, with stops in Washington, DC, Chicago, Michigan, and San Fransisco. What follows is my schedule for the month. If you are in the area come out to say hello.

CAFC Affirms PTAB in First Inter Partes Review Appeal

Writing for the panel majority, Judge Dyk, who was joined by Judge Clevenger, explained that regardless of whether the USPTO properly should have instituted an IPR, the decision of the USPTO could not be reviewed or challenged even after a completed IPR proceeding. Further, the CAFC found that the broadest reasonable interpretation standard is appropriate in IPR. Judge Newman dissented.

Is the Patent Market Poised for Rebound in 2015?

While timing a bottom is never a good investment strategy, recognizing a bottom does present real opportunity. As the 18th century British nobleman Baron Rothschild is famously quoted as saying: “The time to buy is when there’s blood in the streets.” This contrarian philosophy is based on the realization that when things hit bottom they can’t get any worse, and can only get better. In the patent/innovation sector there are some recent signs that things may have hit the bottom and be trending up. The Supreme Court did not say software is patent ineligible, and we know from previous decisions that at least some business methods are in fact patent eligible. The Federal Circuit finally found software patent claims patent eligible and Senator Dick Durbin (D-IL) seems to have no appetite for patent reform.

USPTO Considering Changes to PTAB Rules

At the end of July, the Patent Trial and Appeal Board (PTAB) hosted a press conference to discuss ongoing progress with patent trials which have been or are being conducted under the terms of the America Invents Act (AIA). Scott Boalick, Acting Vice Chief Judge of the PTAB and head of the PTAB’s Trial Section, answered questions from the audience on various aspects of the AIA trials, as well as offer questions for public comments being sought by the U.S. Patent and Trademark Office in its attempts to determine how and if the AIA patent proceedings can be improved.

How to Protect Your Patent from Post Grant Proceedings

Patent owners must modify their strategies during prosecution to make their patents and portfolios less susceptible to post grant challenges. This strategy must take into account the cost of filing a petition by a challenger. Patent owners must obtain enough claims and enough patents to make it extremely expensive for a challenger to go down the path toward an administrative patent trial where the deck is stacked against the patentee. This will require patent owners to obtain patent claims with numerous dependent claims that cover as many variations as possible, but also to ensure that the dependent claims build on one another little by little so as to create a claim set that refers back to as many previous claims as possible. Such a claim mosaic will raise the filing fee that must be paid to institute a post grant challenge.

The Past, Present and Future of Post Grant Administrative Trials

Between September 16, 2012, and August 7, 2014, there were 1793 post grant challenges instituted. See USPTO PTAB Update, slide 5. Of those challenges 1,585 (or just over 88%) were inter partes reviews. There have been 201 covered business method challenges, 6 derivation proceedings and only a single post grant review… Prior to enactment of the AIA it was believed that bio/pharma would largely be spared from post grant challenges. Biotech and pharmaceutical companies tend to have fewer patents and do not collect patents in the same way that electronics and software companies do. Furthermore, biotech and pharma patents tend to be more detailed and overall of a higher quality than your average patent. Given the relatively few patents that these companies hold that cover core assets even 5.2% of post grant challenges coming from the bio/pharma space is surprising. No patents are safe from post grant challenge it seems.

Sideways and Backwards: A Broken Patent Process

When reading patents it is not at all unusual for a patent to be issued a number of years after the original patent application was filed, but it isn’t every day that you see a patent issue more than 12 years after it was originally filed. Yet, that was exactly what happened with respect to the ‘327 patent application to HP. Worse yet, after HP successfully prevailed on claims in an appeal to the Board the case goes back to an examiner who for the first time raises a rejection never before made, while still continuing to make additional obviousness rejections. In short, this reads like the story of an application that examiners never wanted to issue in the first place… What if this applicant were a small business or individual? Had this applicant not been HP and instead a small company, would any patent be obtained despite the fact that the Board twice reviewed the claims and twice disagreed with the patent examiner? Of course not. Had this application been filed by an individual or entity with few resources the application would have been abandoned. Buried by a patent process that couldn’t care enough to administer justice in any kind of a timely fashion. That is rather pathetic. Getting a patent issued should not have taken 12 years, and resolving the application should not have taken more than 5 years after the first appeal was successful!

The PTAB Kiss of Death to University of Illinois Patents

What seems to be happening is that the PTAB is literally applying KSR v. Teleflex in a way that many initially feared it would be applied, but in a way it has never been interpreted by the Federal Circuit. Under a literal reading of KSR nothing is patent eligible… If you are a defendant in a patent infringement litigation and you haven’t filed an inter partes review, what are you waiting for? The Patent Office giveth with the examiners allowance and taketh away with a PTAB decision. As long as the PTAB is killing patents can you blame defendants and their lawyers? It would be practically malpractice for a defense attorney in a patent infringement case to fail to recommend seriously considering inter partes review.

PTAB Death Squads: Are All Commercially Viable Patents Invalid?

The Board cancelled 95.2% of all claims for which trial was instituted, and cancelled 82.9% of all claims that were initially challenged by the petitioner… These bleak statistics have lead Federal Circuit Chief Judge Randall Rader to at the AIPLA annual meeting in October 2013 call the PTAB “death squads killing property rights.” Then again on Friday, March 21, 2014, at a conference hosted by the George Mason University School of Law, Chief Judge Rader said he was “troubled” by the many differences between proceedings at the PTAB and in the district courts, particularly pointing to the disparities in the treatment of the same evidence concerning the same claims. Rader mentioned that his recent comments about the Board being a “death squad” for patents in contested proceedings may be more accurate than some originally thought, considering the dismal track record for survivability of challenged claims in the first wave of final written decisions.

The PTAB and Patent Office Administrative Trials

KUNIN: ”But what is the one thing that can be a break the bank issue? What if the patent owner asserts eight patents against you in a litigation. Can you pick and choose which are the best patents among the eight to challenge? Or are you going to have to file and pay for eight IPRs? At what particular point does it actually become a financial burden for you to go after every asserted patent against you in that litigation in separate IPRs? Either you can try to strategically determine which are the patents which are most harmful to you and most vulnerable and go after them in IPRs, or try to go after all of them in IPRs. But if you go after all of them, you already explained how expensive it is, all right? So let’s assume for argument sake it’s a fairly complex proceeding and it’s costing $300,000 per IPR. So $300,000 times eight is the total cost. What’s the cost of the litigation in defending against all the asserted patents?”

Is More Patent Reform Really Necessary? Patent Litigation Declines, PTO Administrative Trials Increase

All of this has to make you wonder whether any new patent legislation is necessary at this time. The House of Representatives has already passed new patent legislation that focuses on patent litigation and the perceived abuses. Reasonable minds can perhaps differ about whether the measures being discussed are good, bad or would do anything to address the manipulation of the judicial process by nefarious actors. The facts suggest, however, that patent litigation is declining and the administrative trials are increasing beyond expectations. This is significant because the administrative trials were created in order to offer defendants a better, cheaper avenue to challenge patents outside of litigation. So why not allow the reforms of the AIA time to work before once again tinkering with the patent laws and potentially upsetting the incentive to innovate?

Inter Partes Review: Overview and Statistics

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.

The PTAB Roadblock to Patent Monetization

The “new normal” created by the PTAB has drastically altered the patent assertion landscape. Simply stated, when a patent owner is notified that a patent they own is being brought into a post grant proceeding the statistics, if not the gravity of the threat, suggest that it must be taken seriously immediately and competent representation must be obtained quickly. The burdens are different at the PTAB than they would be in the Federal District Court. Specifically, the PTAB will employ the standard USPTO technique of giving patent claims their broadest reasonable interpretation, which will make it easier for a claim to be determined to overlap with the prior art. Furthermore, in litigation patent claims are presumed valid and the defendant must prove by clear and convincing evidence that a claim is invalid for one or more reasons.