Planned Silicon Valley Office in Limbo
Seems Congress is currently winning the never ending fee diversion battle with the USPTO. As a result, efforts to expand USPTO satellite office to Dallas, Denver and Silicon Valley have been significantly slowed. While permanenet office locations in Dallas and Denver have been identified, the search for a permanent Silicon Valley office was recently halted as a result of the sequestration of USPTO funds (you know, the ones they collect from the public in self supporting fees).
The Detroit office remains open.
It seems unlikely that the planned satellite office will be anything but ceremonial outposts in the near term. Indeed, absent consistent funding, one or more satellite offices could be shelved indefinitely.
Key CBM Revision Unpopular with Bar Assoc’s
One of the more intriguing mechanisms of the America Invents Act (AIA) is the Transitional Program for Covered Business Method (CBM) Patents. To date, these speciailized post grant patent challenges have been pursued in relatively limited numbers as compared to the more generic Inter Partes Review (IPR) proceedings. The reason for the disparity between CBM and IPR filing rates is quite simple — IPR is available for any technology not just “business method patents.” Yet, the CBM proceding is far superior to IPR in many strategic respects.
Recognizing the potential of CBM filings to have a greater impact on the patent litigation landscape, Congress is actively considering alterations to the existing statutory framework that would encourage greater use of this powerful AIA mechanism. Read the rest of this entry »
Congress & USPTO Prepare for Busy Fall Season
As Congress turns back to patent reform efforts in the Fall there will also be a fair amount of activity at the USPTO. The ”executive actions” released by the White House months ago were aimed primarily at the USPTO. In response, several proposed rule making packages and changes to examination practice are expected in the coming months.
1. The USPTO is expected to issue strict guidelines requiring the identification of the real-party-in-interest for issued patents. Read the rest of this entry »
Congress Winds Down to August Recess
It is highly likely that a new patent reform bill will be passed into law this fall given the intense congressional interest in the topic. Over the past few weeks, there has been an unprecedented flurry in the number of initiatives, executive actions, and bills proposed. Whether this political attention is truly responsive to the outcry of technology innovators being shaken down by “patent trolls” is unclear. Certainly there are some in Washington that simply recognize the existence of bipartisan support for legislation that can be spun during an election season as helping small businesses….needed or not. Whatever the motivation, something will almost certainly be passed into law…..but what?
Rather than go through the details of each proposal being floated, there are concepts common to all. I provide an assessment of the likelihood of each to exit Congress as law in the coming months.
Read the rest of this entry »
Trolls Face Expensive Legal Battle To Prove Inapplicability of State Laws
When a patent troll asserts a patent claim of questionable merit against a defendant, the defendant is faced with two options: 1) fight a very expensive and time consuming legal battle to prove the correctness of their invalidity/non-infringement position; or 2) fold up tents and go home— minus a significant license fee. In a case of poetic justice, state attorney general’s (AGs) are now playing the same game to stop this business model. That is, state AGs are suing trolls, or initiating investigation of their business practices under state consumer protection statutes. In doing so, the AGs are daring the trolls to wage an expensive legal battle against them to prove them wrong, or pay fines and go home.
While there would seem to be some question as to the propriety of these state law actions in matters of exclusive federal law jurisdiction, interest is growing around the country as to this new anti-troll tactic. See the new Vermont statute (here) and Nebraska investigation of a Texas plaintiff firm (here).
Congress Tinkers with Further Patent Reforms
It seems Congress has chosen to ignore the significant impact the America Invents Act (AIA) has had on pure patent enforcement entities. There is simply no other rationale to explain why a new patent reform bill is contemplated by Congress near every week. While there will always be fringe organizations clamoring to simply outlaw patent suits altogether, or make them impossibly difficult, Congress needs to balance the interests of legitimate innovators with the fanatical anti-patent lobby (i.e., those bellyaching the most have yet to file a single, patent reexamination, IPR or CBM).
In order to properly balance the needs of technology companies and the targets of abusive litigation practices, Congress might want to take a look at the significant impact of the AIA has had on the dreaded “patent troll.” The Patent Trial & Appeal Board (PTAB) proceedings of the AIA have not even been available for a full year. Given a bit more time, these post grant options will significantly degrade the non-practicing entity (NPE) contingency model.
To date, there have been over 400 post grant proceedings inititated with the Patent Trial & Appeal Board (PTAB). A significant number of these procedings have been initated against non-practicing entities.
For more discussion on the current options and an update and forecast on pending legislative inititaives, check out Wednesday’s webinar on July 31st: Battling Patent Trolls: Leveraging New Executive Orders, AIA and Other Tools.
AIA Alternatives to Patent Litigation Prove Wildly Popular
It’s hard to believe that it has only been 10 months since September 16, 2012. On that date, the new patent challenge proceedings of the America Invents Act (AIA) first became available. Since that day 400+ petions for trial (IPR and CBM) have been filed with the USPTO Patent Trial & Appeal Board (PTAB) as an alternative to more costly district court litigation. As the current filing rate is expected to continue, if not accelerate, roughly 500 requests will be pursued within the first year (USPTO fiscal year 2013). With 80-90% of these filings proceeding through to a written decision (i.e., complete trial), the PTAB will be conducting as many as 400 trials per year. This is roughly 4 times that of the most popular patent jusisdiction in the U.S., the now infamous Eastern District of Texas (EDTX).
Indeed, when accounting for the fact that many district court filings are split amongst multiple defendants (as a result of the AIA joinder provision), the PTAB has been the busiest patent court in the U.S. for some time.
With the time to trial in the EDTX now approaching 3 years, and the time to decision in the PTAB roughly 17 months from petition filing, it seems that an antidote to the abusive patent litigation already exists. Still Congress is clamoring to pass additional patent reforms, while at the same time sequestering USPTO funding. Seems to me the most effective patent reform legislation would be to provide full funding to the solution already in place, and working.
Multitude of Anti Patent Troll Bills Before Congress
Yet another patent reform bill, H.R. 2639, was introduced last week by Rep. Hakeem Jeffries (D-NY). Like many of the bills introduced over the past few months, H.R. 2639 seeks to mandate more particuarity for pleading patent infringment, and seeks to stem the tide of infringment suits against “secondary parties” such as retailers, hotels, etc. The bill also proposes staying discovery until after the Markman Order.
While there is a tremendous amount of interest in patent reform on Capitol Hill, the multitude of competing bills (with more rumored to be on the way) may only serve to bog down the legislative process so that nothing is accomplished this year.
For those interested in a more in-depth analysis of current patent troll landscape, and the expected impact of the ongoing legislative effort, please join me on July 31st: Battling Patent Trolls: Leveraging New Executive Orders, AIA and Other Tools
Not All of the New Patent Reform Ideas are Good Ones
A few weeks back House Judiciary Committee Chair Bob Goodlatte (R-VA), released a “discussion draft” of further patent reform ideas. The Draft is a collection of adjustments to the U.S. patent system designed to encourage a dialogue on these important reform issues. In particular the abusive litigation tactics of so called “patent trolls” are the driving force behind the legislative effort. For this reason, the bulk of the proposals of the Goodlatte Draft are squarely aimed at preventing the abusive behaviors and practices of patent trolls. Yet, there is one proposal of the Draft that stands out as a glaring exception. This troll-friendly provision, if enacted into law, would virtually ensure the continued success of the patent troll business model. Read the rest of this entry »
PTAB Delivers on Congressional Mandate
As discussed previously, the very first petition for a Covered Business Method Patent Challenge (CBM) was filed on September 16th by SAP (CBM2012-00001). The petition (here) challenged U.S. Patent 6,553,350 of Versata Development Group. In May of 2011, Versata secured a $391 million dollar verdict in the Eastern District of Texas against SAP. The verdict was upheld by the CAFC some weeks ago.
The PTAB expedited the parallel CBM proceeding to oral argument as the issues were narrowed to 101 grounds only. Yesterday, the PTAB cancelled the challenged claims. (here)
The PTAB’s 9 month turnaround in this matter is an impressive feat that should not be lost on Congress as they deliberate further patent reforms. The patentability challenges of the America Invents Act (AIA) are significantly impacting the patent litigation landscape, and it is expected that the second round of proposed reforms will increasingly focus on enhancing these valued litigation alternatives.