Ending Opensky IPR Participation Underwhelming

Back in March, I explained that the Opensky mess needed to be immediately checked by the USPTO. The legitimacy of the PTAB is at stake when when profiteers are actively conspiring to abuse the IPR process by offering to deliberately file papers for an improper purposes. The situation called for swift and decisive correction…..but this is the federal government. So, we waited for a new Director to be appointed, and then, largely unnecessary amicus briefing for such a unique fact pattern.

Six months later (IPR is effectively done except for the Final Written Decision), we finally have a determination out of the Director. But, the outcome is far from satisfying for anyone that is hoping for the PTAB to start policing bad actors akin to an Article III Court.

First, the facts in Opensky are exceptional. Preventing Opensky from moving forward in the IPR (the ultimate determination today) was a given. So much so, that Opensky decided not to even bother providing much of the Director’s requested discovery on its formation, officers, etc.

Today’s determination (here) of shutting down Opensky and asking it to show cause why it shouldn’t be monetarily sanctioned is simply dragging out the inevitable. Of course there will be monetary sanctions…but why the show cause dance? The decision today makes clear that the conduct was unethical to the point that state bar associations should take notice. When given an opportunity to provide information, Opensky didn’t. Negative inferences should have also been found for monetary sanctions as well, why drag it out?

OpenSky was effectively caught red-handed, then thumbed its nose at the Director when called on the carpet. No sane attorney would have even attempted such a thing in an Article III Court, let alone telling the chief judge (i.e., Director) that their request for information was inconsistent with the law. Why? Because there would be immediate and severe consequences for such conduct. And that attorney/firm’s reputation with that judge/district would be forever stained.

The timing and severity of today’s outcome may seem like a trivial gripe to those not appearing before the PTAB — especially given a set of circumstances that is unlikely to repeat. But the Director’s response here is emblematic of the agency’s attitude toward bad actors at all levels.

In my experience, the PTAB’s rules and practices are ignored almost on a daily basis. While putting argument in emails, filing unauthorized papers, and making frivolous requests are nowhere near as egregious as the conduct in Opensky, there is no real downside to doing any of this. And this is why it has become so commonplace. Attorneys wouldn’t dare take such liberties with the rules of any Article III Judge. The consequences are too severe, and more importantly, even the appearance of improper conduct might doom a career. At the PTAB, there is no such concern. At worse, you will get an email/order to the effect of “the parties are reminded not to do X.” Indeed, given the number of PTAB judges, most of those ignoring the rules have little concern about ever seeing any individual judge again (assuming that judge would even remember them given the trial is primarily on paper).

With disputes before the PTAB involving millions, if not hundreds of millions of dollars, it is critical for the agency to diligently and consistently police its rules and regulations in the same manner as an Article III judge. While individual PTAB judges may not have much of an appetite for such matters, preferring to instead focus on the merits, this attitude informs bad actors that they have nothing to lose.

Opensky was an extreme case that should’ve gotten an immediate, and extreme rebuke. While the end result may ultimately punish Opensky appropriately, the “kinder gentler” PTAB routine has gone on long enough.