May 2013

Competing Bills Target Patent Troll Business Model

Congress has gotten the patent troll memo in a big way. The political stage is being set for a summer of legislative festivities. Like any good summer festival, Congress is separately establishing main and side stage legislative spectacles. The side stage spectacles, the more alternative acts, such as the Shield Act; Patent Abuse Reduction Act of 2013; and the Patent Quality Improvement Act will occupy many until the main stage effort takes shape. Last Friday the main stage act was announced.

House Judiciary Committee Chair Bob Goodlatte (R-VA), a key participant in the legislative effort behind the America Invents Act (AIA) released a draft bill that seeks to sweep in many of the concepts of the competing bills, while introducing fixes to the AIA. (here). The bill puts a new spin on the competing legislative proposals that address discovery controls, loser pay mechanisms, and the revision to notice pleading (brief overview here). Certainly these “troll” specific proposals will get the bulk of the attention from Congress and the public. As to the proposed “improvements and technical fixes” to the AIA, the draft post grant proposals are a mixed bag.
Continue Reading Patent Reform Palooza Hits Congress Summer 2013

Congress Proposes Yet Another Anti Patent Troll Bill

Fresh on the heels of the Patent Quality Improvement Act (S.866) comes the Patent Abuse Reduction Act of 2013 (here) introduced yesterday by Senator John Cornyn (R-Tx). The newest Senate bill, like the one from earlier this month, also is designed to target patent trolls. While the earlier bill sought a way to short circuit high cost litigation through a more cost effective USPTO post grant review procedure, the newest bill seeks to create a loser pays system and completely revamps patent litigation pleading and discovery practices.

On the pleading side, the Bill proposes that simplistic Form 18 of the Federal Rules of Civil procedure (FRCP) be abandoned in favor of very detailed allegations that identify specific claims, infringing products/methods by name and model #, detailed claim mappings to each product, and a host of other information. The Bill also proposes a “pay to play” discovery system in which certain types of discovery are financed by the requesting party, and a loser pays outcome in certain situations.

The Bill is essentially a wish list of every company that has ever been sued by a troll, but does it throw out the baby with the bath water?
Continue Reading Congress Proposes to Rewrite FRCP for All Patent Cases

After Final USPTO Initiative Retooled

Some pre- grant news of note this week. Last Friday the USPTO announced the After Final Consideration Pilot Program 2.0 (Federal Register Notice here). The revised pilot program modifies the initial concept by introducing a patent examiner feedback component.

Recall that the USPTO launched version 1.0 as the  “After Final Consideration Pilot” (AFCP) to foster compact prosecution and to slow the growing RCE backlog. The pilot program allotted additional productivity time to patent examiners in exchange for their consideration of after final amendments that might result in allowance of the application. Prior to the pilot program even amendments requiring nominal further consideration were routinely denied under 37 C.F.R. § 1.116.

Under the terms of the first version of the pilot, examiners decided whether the after final amendment could be fully considered, including any additional search required, within the three hour time limit provided for by the program. (i.e., fully considered and allowed). There was no need to file any special request in the previous version of the program.

Recognizing that some examiners were treating such submissions inconsistently, and that unsuccessful amendments proceeded along the normal course without any additional added value (e.g., acknowledgment/feedback from the examiner), the USPTO has provided for examiner further communication in version 2.0.
Continue Reading After Final Rejection Pilot Program Revamped by USPTO

Requests for Rehearing May Backfire on Patentees

As detailed earlier this week, a patentee’s decision to file a preliminary response in an IPR/CBM preliminary proceeding is not as straightforward as one would expect. Where such a preliminary response is imprudently pursued by a patentee this misstep can be further compounded by other optional filings post-Trial Order.

Subsequent to the filing of a preliminary response by a patentee the Patent Trial & Appeal Board (PTAB) will issue its decision. If unsatisfied with the Trial Order either party may file a Request for Rehearing as a matter of right within 14 days.

As is the case with the optional patentee preliminary response, just because you can request rehearing doesn’t mean you should.
Continue Reading Should you Request a Rehearing of Your PTAB Trial Order?

Preliminary Responses: Just Because You Can Doesn’t Mean You Should

The new post grant patentability challenges of the America Invents Act (AIA) have been warmly embraced by the public as a cost effective patent dispute resolution tool. Patent challengers have quickly leveraged these new proceedings of the USPTO’s Patent Trial & Appeal Board (PTAB) to circumvent the high cost of patent litigation and to accelerate opportunities for settlement. Patentees, on the other hand, have been largely caught unaware of the significant threat presented by these new road blocks to patent monetization.

While many of the new PTAB proceedings are only now getting underway a significant number of preliminary proceedings have been concluded. It is during these preliminary proceedings, and shortly thereafter, that many patentees have been committing significant strategic errors.…

Continue Reading Common Patentee Missteps in Inter Partes Review

Tactical Advantage Found in IPR Timing

The primary business distinctions between the USPTO Patent Trial & Appeal Board (PTAB) proceedings and traditional court based patent invalidity proceedings are the vast improvements in cost, predictability, effectiveness, and speed of PTAB proceedings— to date, the speed has been changing the perspective of the judiciary on staying litigation pending USPTO proceedings. However, while the PTAB proceedings are far faster than the previous inter partes USPTO option (i.e., inter partes patent reexamination) that doesn’t mean that courts will look past a perceived tactical delay in pursuing IPR.…

Continue Reading Post Markman IPR Filing Displeases Court

Patentee Challenges PTAB Decision to Institute IPR Proceeding

Every time Congress has tasked the USPTO with conducting a new post grant patent proceeding the agency finds itself fending off legal challenges to their new authority. For ex parte patent reexamination, Ethicon v. Quigg explored whether or not the USPTO had authority to conduct such a …

Senator Schumer Readies Second Round of Patent Reform

Although many of the more significant changes to U.S. patent law provided by the America Invents Act (AIA) are only months old, Congress is already considering a re-calibration of these changes. Over the past few months the patent troll dilemma has been given significant attention by Congress and politicians are now clamoring to fashion legislation to address the problem. While the “SHIELD Act” has been discussed for the better part of the last year, and rewritten in that time frame, lawmakers are well aware that this “loser pays” proposal is significantly flawed and a non-starter in a political sense. As a result a new legislative solution is rumored for consideration by Congress next week. The new bill will propose an expansion of the patentability trial mechanisms of the AIA.

While the legislation is not yet public, Senator Charles Schumer (D-NY) will introduce legislation that will force trolls to the USPTO before they can file a lawsuit. (Senator Schumer was the force behind the Transitional Program for Covered Business Method (CBM) Patents) It is unclear exactly how this “PTO first” control will be mandated. The new legislation is rumored to remove the “transitional” nature of the CBM program and to expand the standing required for a CBM proceeding to include any patent asserted by a patent troll.

One might argue that the legislation is unnecessary since any defendant can already seek review at the USPTO via CBM or Inter Partes Review (IPR). In fact upward of 50% of such filings already relate to troll suits. Yet, the intent here seems to be…
Continue Reading Congress Poised To Force All Patent Trolls to PTAB

District Court Discovery Plans Fall Flat

Parties to an Inter Parties Review (IPR) proceeding may obtain “limited discovery” at the USPTO’s Patent Trial & Appeal Board (PTAB). Such discovery is limited as it must fall in an accepted class of discovery, namely, “routine discovery” or “additional discovery.”See Rule § 42.51. Routine discovery is generally categorized as: (1) any exhibit not otherwise publicly available or served, (2) cross examination of a declarant, and (3) non-cumulative information that is inconsistent with a position taken by the party before the PTAB.

“Additional discovery” defines everything outside of the above noted categories. To seek such additional discovery in an IPR an “interest of justice” showing is required. Since patent challengers in IPR rely on patent and printed publications filed with their IPR petition, they need only routine discovery (i.e., the ability to cross examine the patentees’ declarant).

Patentees on the other hand have been seeking additional discovery at  the PTAB on a variety of topics, typically issues of standing and secondary indicia. However, the interest of justice showing is proving quite difficult to meet for patentees. In fact, to date, there has not been any additional discovery authorized at the PTAB. For plaintiff attorneys more accustomed to the liberal relevance standard of F.R.E. Rule 401, the PTAB’s high hurdle for additional discovery is a sobering reality check.…

Continue Reading Limited PTAB Discovery Frustrates District Court Litigators