As I pointed out last week, Congress is considering fixes to the U.S patent system are designed to combat the patent troll problem. Yesterday, S.866 or the “Patent Quality Improvement Act” was introduced by Senator Charles Schumer (D-NY) to amend Sec. 18 of the
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
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
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
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— but it is the speed and effectiveness that is changing the perspective of the judiciary on staying litigation pending USPTO proceedings.
As most are aware, the old patent reexamination system, at least on the inter partes side, has been replaced by IPR. IPR must be concluded by statute within 12-18 months, a marked improvement over the (roughly speaking) previous 6+year path through the Central Reexamination Unit (CRU), Board of Patent Appeals & Interferences (BPAI) and Court of Appeals for the Federal Circuit (CAFC). These changes are being quickly recognized by courts, several of which have agreed to halt litigation proceedings upon the mere filing of an IPR (months in advance of an Order to grant the IPR petitions).
Previously, when an inter partes patent reexamination was the basis for the motion to stay the court proceeding, the strongest plaintiff arguments in opposition were that the significant USPTO delay would prove prejudicial to the plaintiff. Indeed, some of the cases stayed in the early days of inter partes reexamination are only now being reopened, 8 years later.
Continue Reading Stays Pending USPTO Review to Increase as a Result of Speedier AIA Options
The face of patent litigation in the U.S. was forever changed on September 16, 2012. This was the date the post grant patentability trials of the America Invent’s Act first became available to patent challengers. The emergence of the new low cost alternatives to patent litigation creates opportunities for patent challengers to pursue a lower cost resolution to patent disputes on far more favorable terms relative to the district court.
If not adequately considered as an alternative to patent litigation, ignorance of the new AIA proceedings may create malpractice opportunities for unsuccessful litigants against their former law firms.
Continue Reading Is it Malpractice to File a Declaratory Judgment of Invalidity After the AIA?
The new post grant patentability trials of the America Invents Act (AIA) are designed to serve as alternatives to costly patent litigation. One of the new post grant options is the very specialized, Transitional Program for Covered Business Method Patents, or “CBM” proceeding. This proceeding, like Inter Partes Review (IPR), is conducted before the administrative patent judges of the USPTO’s Patent Trial & Appeal Board.
As the name implies, a CBM proceeding is limited in scope to “business method” patents. Assuming a subject patent qualifies as a business method, and is asserted against a petitioner in a litigation (or a petitioner is otherwise charged with infringement), a CBM filing is available as an alternative to the litigation. Indeed, Congress devised CBM proceedings to virtually guarantee the stay of the higher cost litigation proceeding. The CBM provision was added to the AIA as a compromise between those that did not want a “second window” for Post Grant Review (PGR) (bio/pharma lobby) and those (financial/software) that felt the change in 101 case law (Bilski) should be applied to the multitude of patents that resulted from the State Street Bank decision.
CBM is an especially powerful tool to combat business method patent assertions, yet only 17 have been pursued to date. Why?
Continue Reading Where Are All the Business Method Patent Challenges?
Having now completed the multi-city tour for the Practicing Law Institute’s USPTO Post Grant Patent Trials 2013 (on demand program here), I am still struck by the degree of doom and gloom expressed by the patent monetization crowd. Throughout the program stops in Chicago, New York City and earlier this week, San Francisco, many attendees expressed the concern that the new post grant PTAB proceedings were “patent killers.” Specifically, the institution rate of the trial orders issued to date was considered high (only two being denied). This, coupled with the more favorable challenger standards of the PTAB, has more than a few patentees quite worried.
While it is certainly true that the PTAB is a more favorable venue for patent challengers (no presumption of patent validity, no clear and convincing evidentiary requirements, etc), the trial orders issued to date show an intent on behalf of the PTAB to simplify and focus the dispute for trial. This simplification vastly reduces the workload of patentees relative to the old inter partes patent reexamination system. And with the addition of discovery before the PTAB, ultimate success for patentees seems far more likely before the PTAB relative to the old, never-ending, patent reexamination timelines.
As discussed last week, 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
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