Scott McKeown

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Privilege Expanded to Cover Communications with Foreign Agents

Tomorrow’s Federal Register will include a NPRM to amend the rules of practice before the Patent Trial and Appeal Board (PTAB). The proposed rule recognizes that, in connection with discovery conducted in certain proceedings at the United States Patent and Trademark Office, communications between U.S. patent agents or foreign patent practitioners and their clients are privileged to the same extent as communications between clients and U.S. attorneys. (advanced copy here)

The rule would apply to Inter Partes Review (IPR), Post-Grant Review (PGR), the transitional program for Covered Business Method (CBM) patents, and derivation proceedings. This rule would clarify the protection afforded to such communications, which is currently not addressed in the rules governing Board proceedings at the USPTO.

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Continue Reading PTAB to Adjust Attorney Client Privilege Rule

Preliminary Responses Accompanied by Declaration Evidence: Early Results 

Back on May 1st, the Patent Trial & Appeal Board (PTAB) began to accept new testimonial evidence with patentee preliminary responses.  The PTAB implemented this change to address complaints that patentees were disadvantaged by previous rules precluding such evidence from accompanying a preliminary response to the petition. It was argued that the previous rules were especially imbalanced as almost all petitions were accompanied by petitioner declaration evidence.  I had my doubts.

Now that we are some 5 months removed from the rule modification, early results are in.  

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Continue Reading New PTAB Evidence Option Not Moving the Needle So Far

Jury Trial/Article III Challenges to PTAB Expectedly Fail at High Court

Yesterday, the Supreme Court of the United States denied certiorari in two cases challenging the constitutionality of AIA trial proceedings. MCM Portfolio LLC v. Hewlett-Packard Co. et al., and Cooper et al. v Lee et al.  These cases largely presented the same constitutional challenge as that lodged against the USPTO’s patent reexamination system in the 1980s, in Patlex Corp. v. Mossinghoff, 758 F.2d 594 (Fed. Cir. 1985).  Since that time, patent validity has been found to fall within the “public rights exception,” permitting adjudication before non-Article III tribunals.

These more recent cases hoped to distinguish reexamination from AIA trials on the ground that reexamination was not adjudicative, but examinational.  Of course, after Cuozzo, it has been clear that this line of reasoning was certain to fail.
Continue Reading Constitutional Challenges to PTAB Fail

Long Awaited FTC Study Offers Little In Terms of New Ideas

Yesterday, the Federal Trade Commission released an extensive study on Patent Assertion Entities (PAEs) (here). Interestingly, the report segmented PAEs into two classes, Portfolio PAEs (100s of patents) and Litigation PEAs (10 patents or less).  

The study pointed out that Litigation PAEs filed 96% of the cases in the study and accounted for 91% of the reported licenses, but only 20% of the reported revenue. On the other hand, 93% of reported Litigation PAE licenses followed a lawsuit against the eventual licensee and 77% were valued at less than the estimated cost of defending a patent lawsuit through the end of discovery—a threshold below which litigation settlements might be considered nuisance value.  

To combat this behavior the FTC proposed familiar ideas.
Continue Reading FTC Study Recommends Changes to Patent Litigation

Common USPTO Debate Clarified by New Precedential Decision Ex parte Schulhauser

A common debate at the PTO in recent years at both the examination and Board level has been the appropriate treatment of a claimed condition precedent.  That is, if a claim recites that certain functionality only occurs on certain conditions, does that alternate functionality constrain the broadest reasonable scope of the claim?  

In Ex parte Schulhauser (here) the Board makes clear that the answer to this question may depend on whether or not the claim is presented in a method or apparatus claim format.
Continue Reading PTAB Clarifies Weight of Claimed Condition Precedent

Fee Setting Authority to be Exercised for FY 2017 

The USPTO discussed its first ever fee increase under the fee setting authority of the America Invents Act (AIA) in November of 2015.  At the time, an initial proposal was provided to the Public Patent Advisory Committee (PPAC) for review.  While the initial hope was to have the proposed fee adjustments take effect on October 1st (start of FY 2017), significant stakeholder feedback and considerations have, understandably, slowed the rule making process.  At long last, the Notice of Proposed Rule Making (NPRM) issued today.  Since a Final Rule Notice must follow the NPRM, the proposed fee adjustments will not go into effect until calendar year 2017.

Notable Patent Trial & Appeal Board (PTAB) fee increases include:

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Continue Reading PTAB Trial Fees Slated for Significant Increase in 2017

PTAB Boot Camp & More

For those seeking some PTAB related discussion/CLE in the weeks ahead, there are a number of upcoming programs.

First up, next Friday October 7th, the George Washington University Law School will host an IPR-CBM Roundtable Discussion (here) from 12-6PM in the Faculty Conference Center; Fifth Floor, Burns Building Washington, DC 20052.

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315(e) Estoppel as an Affirmative Defense

As most are aware, completed AIA trial proceedings have estoppel consequences for failed petitioners.  For example, an unsuccessful Inter Partes Review (IPR) petitioner of a given patent claim, real party in interest, or privy of the petitioner, is estopped from asserting that the same claim is invalid in a civil or ITC action on any ground that the petitioner raised or reasonably could have raised during the failed IPR. (35 U.S.C. § 315 (e)(2)). The same estoppel applies to requesting or maintaining a proceeding before the USPTO with respect to such a claim (35 U.S.C. § 315(e)(2)).  As can be appreciated from this statutory framework, whether before the courts or the Patent Trial & Appeal Board (PTAB), Congress was clearly interested in preventing patent challengers from getting the proverbial second bite at the apple.

Occasionally, however, a petitioner will uncover new prior art that could not have reasonably have been raised in the earlier PTAB proceeding  Petitioners seeking to overcome the affirmative defense of statutory estoppel may find that the courts are far more receptive in this regard than the PTAB.
Continue Reading Forum Selection & PTAB Estoppel Burden

30 Years Since the Formation of the Last National IP Bar Association

What better day to launch the new Patent Trial & Appeal Board (PTAB) Bar Association than on the 5th year anniversary of the enactment of the America Invents Act (AIA). I am honored to have been involved with the creation of the only bar…

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.   

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Continue Reading The Evolution of PTAB Trials