Posts Tagged: "RPX"

As I noted in part one of my talk at the IPWatchdog Patent Masters Symposium, the validity statistics for SEPs do not look very good at first glance. Thus, according to a 2017 PricewaterhouseCoopers study, plaintiffs in U.S. courts (ignoring patent type) have on average a 33% chance of success—only a 27% chance in the case of telecommunications patents. This chance of success is probably overstated for Standard Essential Patents (SEPs), based on the easy availability of prior art. Indeed, according to RPX’s 2014 study, in the United States, SEPs are likely to be less than half as successful as non-SEPs.In my talk, I pointed to the high invalidation rates in Europe to buttress my point that, at first glance, SEPs seem particularly vulnerable to validity challenges. Thus, in Germany, a supposed nirvana for patent assertion, the authors of the study “Patent Paper Tigers” reviewed the case law of the German Federal Patent Court and the German Federal Court of Justice in nullity matters in the period from 2010 to 2013 and found that: The nullification rate of all Senates of the German Federal Patent Court is 79.08% in total; and the nullification rate at the German Federal Patent Court regarding Software and Telecom patents which are (currently) of particular relevance from an economic point of view is 88.11%. Returning to the point made in the first part of my talk, having noted that most SEP nullification comes from obviousness, and not novelty, there should be no public interest exception to my argument that: unprovoked—that is, without first having made a FRAND offer or counteroffer—serial nullification of SEPs is contrary to the duty to negotiate in good faith and should remove a party’s defense against an injunction to SEPs.

Now, there is a flaw in this theory, and that is that, in the past few years, third parties have emerged that will—for their members or other contracted entities—kill patents.

Before proceeding it is worth noting two things. First, that my list focuses on specific and identifiable events. Second, there are a number of stories worth mentioning, but which just missed the cut for one reason or another. The two that will probably be most glaring omissions are the Federal Circuit’s decision in Vanda Pharmaceuticals v. Westward Pharmaceuticals, 887 F.3d 1117 (Fed. Cir. 2018), and the final rules implementing the Phillips claim construction standard. With respect to Vanda, while it is a pro-patent decision, the claims found eligible are virtually indistinguishable from those held ineligible in Mayo, so it seems virtually certain a different panel of the Federal Circuit would have ruled differently. Thus, all Vanda did was seem to create uncertainty, which may be good for settlements, but likely not a repeatable decision. As for the Phillips standard, while it makes perfect sense for the PTAB to be using the same claim construction standard as used in federal district courts, many have questioned whether it will make any real difference in outcomes. Still, it is a big event and would have been 11th on my list. Had a chance to Phillips been accompanied by patent claims being presumed valid and requiring clear and convincing evidence to be declared invalid at the PTAB, that would certainly be worthy of top 10 inclusion. Alas, that would require an amendment to the statute and beyond the powers of Director Iancu. Thus, the banishment of BRI, while important, finds itself on the outside looking just in at this year’s top 10.

On Tuesday, November 27th, the Patent Trial and Appeal Board (PTAB) issued a redacted version of a decision to institute an inter partes review (IPR) proceeding petitioned by Unified Patents to challenge the validity of patent claims that have been asserted in district court against at least one of Unified’s subscribing members. The PTAB panel of administrative patent judges (APJs) decided to institute the IPR despite the patent owners’ assertion that the petition should be denied because Unified didn’t identify all real parties in interest (RPIs) including members of Unified’s Content Zone. The charade that Unified is the only real party in interest and simply acts in uncoordinated ways and not at the behest of those who pay for them to challenge patents continues, at least at the PTAB.

Why in the world would the federal government want to be an active participant in invalidating patents that the USPTO grants? Does the federal government believe that an insufficient number of patents are challenged through inter partes reviews, that there is insufficient gang tackling (which occurs when another petitioner requests joinder using a near-photocopy of the original petition), or that there are insufficient serial attacks on the same patents? To put the last issue in other words, does the federal government really believe that nine attacks against some patents are needed?

The Alliance of U.S. Startups and Inventors for Jobs (USIJ) recently released a report detailing the organization’s research into serial attacks on high quality patents at the Patent Trial and Appeal Board (PTAB). The USIJ’s research shows that, far from being a cheaper alternative venue for small businesses to challenge the validity of weak patents being asserted against them as was originally intended, the administrative tribunal has instead become a tool for rich, sophisticated companies who are able to harass owners of valuable patents with duplicative petitions filed either by themselves or by profiteering entities which weren’t envisioned when the Leahy-Smith America Invents Act (AIA) of 2011 was passed into law.

Rather than frustrate innovation, Maurer and Haber found that patent assertion entities have research and development expenditures which, on average, are twice that of U.S. high tech firms… Public PAEs do not appear to operate in a manner consistent with the hypothesis on patent trolls, which includes the view that PAEs own patents which have no value and that they file frivolous lawsuits that amounts to a tax on innovation.

Why is it that innovators such as Universities and independent inventors are caricatured as patent trolls while entities such as Unified Patents and RPX, who exist for the sole purpose of destroying property, are somehow let off the hook or even celebrated? In a different era, about 100 years ago, those large corporations and their allies who ganged up on smaller companies and individuals were characterized as ‘robber barons’ and caricatured as ‘fat cats’… The AIA makes clear that patent owners should not have to endure repeated attacks on their patent claims at the PTAB.

As Jaime Siegel, OIN’s Global Director of Licensing, notes, OIN is able to grant free membership to companies joining the consortium thanks to the efforts of eight full-funding member companies which have each funded $20 million to support OIN’s operations through an endowment. These companies include the first six companies to form OIN: Sony, Phillips, IBM, Red Hat, NEC and SUSE; joining those companies are Google and Toyota. OIN’s board consists of representatives from each of these full funding members. Every new member of OIN signs the same licensing agreement as the full-funding members, giving all members in the organization equal standing in terms of the cross-license agreement.

The Federal Circuit found that the PTAB didn’t meaningfully examine Salesforce’s relationship with RPX and the nature of RPX as an entity that helps its clients extricate themselves from patent litigation. Both of those factors are ones which are contemplated by the PTAB’s Trial Practice Guide.

Patent risk solutions provider RPX yesterday released its 2015 NPE Activity: Highlights report, which offers a first look at trends in patent litigation activity for 2015. According to RPX, NPE litigation activity rebounded in 2015 following what now appears to have been a slowdown in the latter half of 2014. The Eastern District of Texas also continues to dominate as the venue of choice for NPEs, with NPEs suing more defendants there in 2015 than in any year since 2009.