Posts Tagged: "sanctions"

On March 11, U.S. Patent and Trademark Office (USPTO) Director Kathi Vidal issued an order on rehearing that upheld the attorney’s fee award levied against petitioner OpenSky Industries over its abuse of process during inter partes review (IPR) proceedings at the Patent Trial and Appeal Board (PTAB). Although Director Vidal’s order delayed the date by which OpenSky must pay, the ruling nixed OpenSky’s challenges to the more than $400,000 attorney’s fee award in favor of patent owner VLSI.

For better or worse, anyone can be sued for any reason—even reasons that are completely fictitious and based on allegations that are entirely false. Several cases have recently caused me to ask a simple question: Can something actually be evidence if it is false? I’ve had a few people respond, some thoughtful and others intentionally dense. “Of course, something that is false is evidence,” one person recently told me. “It is up to the trier of fact to determine what is false, and that which is false is clearly evidence to be considered.”

On November 8, a Central California jury entered a verdict awarding $3.9 million in punitive damages against Internet financial platform ConsumerDirect. The verdict comes weeks after U.S. District Judge James Selna granted a motion for sanctions  after finding that ConsumerDirect fraudulently represented its ownership of unregistered trademarks while obtaining a preliminary injunction in U.S. district court against Array.

U.S. Patent and Trademark Office (USPTO) Director Kathi Vidal issued an Order last week in a sua sponte Director Review proceeding asking the parties to Spectrum Solutions LLC v. Longhorn Vaccines & Diagnostics, LLC and any interested amici to weigh in on the appropriate sanctions remedy when a party withholds evidence in an America Invents Act (AIA) proceeding.

In Sur-Replies filed late last week in inter partes review (IPR) proceedings, Urban Intel, Inc. told the Patent Trial and Appeal Board (PTAB) that threats made by ASSA ABLOY Global Solutions “to file IPR petitions and a declaratory judgment action unless granted a free license to three valuable patents,” among other allegations, “runs directly counter to the purpose and goals of the post-grant administrative challenge system.” The sur-replies are in response to petitioner’s replies filed earlier this month by hotel security company ASSA, addressing abuse of PTAB process allegations by Urban Intel. ASSA argued that the U.S. Patent and Trademark Office (USPTO) cannot enter sanctions against it because ASSA did not seek payment from Urban Intel’s exclusive licensee when it threatened to “rain down an avalanche of IPRs” if ASSA didn’t obtain a cost-free license to Urban Intel’s patents, according to the patent owner’s preliminary response.

If a sanctions order is the stuff of a Patent Trial and Appeal Board (PTAB) practitioner’s bad dreams, then the issuance of sanctions outright cancelling a client’s patent(s) qualifies as their worst nightmare. That nightmare happened to Longhorn Vaccine (“Longhorn”) in April of this year, when the PTAB canceled five  of its patents as sanctions for Longhorn’s violation of the duty of candor relating to withholding test data that the PTAB deemed relevant to the patentability of the challenged claims. A month later, U.S. Patent and Trademark Office (USPTO) Director Kathi Vidal sua sponte ordered Director Review of PTAB’s sanctions order. We now await her decision. This article examines the PTAB’s unprecedented sanctions order in the context of Director Vidal’s recent crackdown on inter partes review (IPR) abuses and provides guidance as to what practitioners can do now to avoid accusations of misconduct before the PTAB.

Months after invalidating patent claims undergirding one of the largest infringement verdicts ever entered in U.S. district court, the Patent Trial and Appeal Board (PTAB) recently received a round of briefing regarding potential sanctions against petitioner Patent Quality Assurance (PQA). Once accused by the U.S. Patent and Trademark Office (USPTO) of using the America Invents Act (AIA) process to extort money, PQA argues that its failure to respond to mandated discovery and its alleged misrepresentations regarding exclusive retainer of an expert witness should not result in an attorneys’ fees award as compensatory damages to patent owner VLSI.

On Wednesday, June 21, the U.S. Court of Appeals for the Federal Circuit (CAFC) ruled in a nonprecedential opinion that a Florida district court correctly dismissed a UK-based patent owner’s infringement case after he willfully disobeyed the court and disrupted the enforcement of a court order. The ruling is the second time that the UK resident, Yoldas Askan, lost a patent infringement lawsuit against FARO Technologies. Askan first sued FARO, alleging that the firm’s 3D scanner product infringed on claims in three of his U.S. patents. In the first case, Askan was sanctioned twice by the court and failed to respond to a court order demanding that he show cause.

The U.S. Patent and Trademark Office’s (USPTO’s) Patent Trial and Appeal Board (PTAB) yesterday made public a Sanctions Order against a patent owner that resulted in the cancellation of all 183 claims of five patents challenged in separate inter partes review (IPR) proceedings. The PTAB order said that Longhorn Vaccines & Diagnostics “committed an egregious abuse of the PTAB process” by “selectively and improperly” withholding “material results that were inconsistent with its arguments and the patentability of both original and proposed substitute claims.”

Last week, cyber threat intelligence firm Centripetal Networks filed a petition  with the U.S. Court of Appeals for the Federal Circuit seeking mandamus relief from the Patent Trial and Appeal Board’s (PTAB) “extraordinary departure from basic elements of due process” during inter partes review (IPR) proceedings challenging Centripetal’s patent claims. If left unremedied, Centripetal argues to the Federal Circuit that its own treatment at the hands of the PTAB “sen[ds] a message to the entire patent bar: Any attempt to hold APJs to standards comparable to those of Article III judges [will] be met with sanctions.”

The Patent Trial and Appeal Board (PTAB) has a well-earned and perfectly appropriate problem with perception, and U.S. Patent and Trademark Office (USPTO) Director Kathi Vidal seems to be doing her level best to make that problem of perception even worse. It isn’t bad enough that petitioners do not owe the PTAB or the Office itself a duty of candor, but now they can stay in a case as a petitioner even if they are found to have engaged in extortion. There has long been a systemic bias against patent owners, who have for many years suffered through lengthy examinations of their innovations. But ever since former PTAB Chief Judge James Smith embraced the moniker of “patent death squad” as a badge of honor, the PTAB has suffered from a perception problem, and really now lacks all credibility.

On Friday, February 3, U.S. Patent and Trademark Office (USPTO) Director Kathi Vidal issued an order in the ongoing Director Review of OpenSky v. VLSI, restoring OpenSky as a party to the inter partes review (IPR) and awarding reasonable attorney fees to VLSI as sanctions against OpenSky. Vidal had dismissed OpenSky from the proceedings in December after first merely relegating OpenSky to be a “silent understudy” to the proceedings. In Friday’s order, following briefing from OpenSky and VLSI on her order to show cause as to why OpenSky shouldn’t have to pay compensatory damages to VLSI, Vidal held that VLSI was entitled to attorney fees for the time it spent addressing OpenSky’s abusive behavior, “including the Director Review process in its entirety.”

Following United States Patent and Trademark Office (USPTO) Director Kathi Vidal’s December 2022 precedential decision that Patent Quality Assurance (PQA) abused the inter partes review (IPR) process in its case against VLSI Technology, PQA has filed a petition seeking mandamus relief in the matter with the U.S. Court of Appeals for the Federal Circuit (CAFC). Vidal ruled in December that PQA abused the IPR process by filing an IPR and threatening to join a separate IPR against VLSI in order to receive a payout from the technology firm. Vidal also found that PQA misrepresented an “exclusive engagement” with a witness, Dr. Adit Singh, who was involved in another IPR petition against VLSI from OpenSky. She wrote in the decision dismissing PQA from the IPR that, “though the behavior here may not be as egregious as that of OpenSky… I find that PQA’s behavior, nonetheless, amounts to an abuse of process.”

On November 17, patent owner VLSI Technology and petitioner OpenSky Industries each filed briefs at the U.S. Patent and Trademark Office (USPTO) in response to Director Kathi Vidal’s order for OpenSky to show cause as to why it should not be required to pay attorney’s fees to compensate for its abuse of inter partes review (IPR) proceedings at the Patent Trial and Appeal Board (PTAB). While VLSI argues that OpenSky should be ordered to compensate all attorney’s fees and costs incurred from each IPR petition encouraged by OpenSky’s own petition filing activities, OpenSky argues that Director Vidal’s order to show cause fails to identify any compensable harm stemming from OpenSky’s IPR conduct.