Four Years of PTAB Trials

I’ve read quite a few AIA retrospectives over the last week in the run up to Friday’s AIA anniversary. Almost all pose the rhetorical question: “who could have predicted the PTAB would become so impactful?” Well, for starters anyone up to their armpits in NPE lawsuits with the only available USPTO solution being patent reexamination, that’s who.  Prior to the AIA the pent up rage/demand for a more effective USPTO post-grant challenge solution was palpable. For that reason, back in July of 2012, I thought that PTAB trials might break the NPE business model, especially for smaller NPEs.  

In 2016, NPEs still exist.  But, there are far fewer small fish.  Even large patent aggregators yearn for the go-go days before the AIA.  It is clear that the AIA trials ended the golden era of seven figure, cost of defense settlements.  Congress did it—it actually provided a workable USPTO post-grant solution that is cost effective, and fast enough to make a difference.  The PTAB levels the playing field.  No longer are businesses helpless to settle cases of dubious merit because of the lopsided discovery costs of an NPE suit, or risks of outlandish jury verdicts.  

That said, four years into AIA trials the PTAB is not without its critics.   

Since day one, critics have sought to unravel the PTAB or lessen its perceived anti-patent impact.  First came the legal challenges: district court suits, mandamus filings, Cuozzo, and even the very same constitutional challenges that were flung at patent reexamination in the 1980s.  Not surprisingly, all failed (I give the pending cert petitions zero chance). Yet, that is not to say that the PTAB is perfect, or that an adjustment in practices is unwarranted. Indeed, the PTAB has evolved to a significant degree in its few short years of operation.

One of the more controversial aspects of PTAB practice to date has been the ability (or inability as some would argue) to amend.  Since opening its doors, the PTAB has loosened amendment requirements repeatedly.   That is, the PTAB has expanded page limits, added available claim appendices, clarified the Idle Free requirements, and provided guidance that most motions to amend fail to meet patentability burdens.  On this last point, the Federal Circuit is likely to shift the burden of patentability away from the patentee and back to the challenger in Aqua Products. This change may not lead to a drastic uptick in accepted amendments, but it would at least shift the blame away from stringent agency requirements to the evidence of the patent challenger.

Other patentee friendly changes to PTAB practice include the ability to submit witness testimony in preliminary responses.  This change enables a patentee to stand on equal footing with a petitioner prior to the Board’s Institution Decision. Further Board practices have evolved to protect patentees from harassment via serial filings of a same petitioner.  Lastly, the Board is certainly aware of its perceived bias, and in many cases will go out of its way to ensure fairness to the patentee in procedural skirmishes.

All in all, the PTAB will always cancel more patent claims than the courts.  But this truism is more a consequence of the Board’s technical decision makers, and the lower standard of evidence.  Neither of these aspects can be changed absent a radical legislative overhual. 

Critics will certainly try their best to lobby Congress to align agency practices with the courts in the years ahead, or even eliminate AIA trials altogether.  Yet, such extreme views would seem unlikely to resonate with lawmakers given the value provided by the PTAB to various stakeholders.  That’s not to say that targeted legislation will never occur, just that any such changes are likely to be incremental, and directed to ancillary practice issues.  

In the short term, the Trial Practice Guide is expected to be revised to conform to present PTAB practice, and there is always the possibility of new rules, or guidance from the CAFC.  It is the Federal Circuit that is likely to drive practice changes going forward. Stay tuned.

Like it or not, PTAB trials are here to stay.  Happy Birthday!