Business Method Patent Challenge

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Texas Courts See Influx of Cases Against Retailers & Banks

Prior to the sun setting on the Covered Business Method (CBM) patent challenges this past September, the filings of such challenges with the PTAB had tailed off significantly. This led many to believe that the proceeding had outlived its usefulness.  However, a recent uptick in business method assertions (as I predicted would occur) seems to demonstrate that the mere existence of the CBM proceeding had a prophylactic impact on the assertion of business method patents.
Continue Reading Business Method Patent Assertions Increase Without PTAB CBM Option

Octane Fitness To Spur Senate Patent Reform Bill?

Judiciary Simplifies Patent Reform Debate.....Again


Although promised on Monday, the world still awaits the highly anticipated Senate patent reform bill. As pointed out previously, a major sticking point is the "fee shifting" (a.k.a. loser pays) aspect of the bill. The Senate has seemingly struggled to balance the needs of innovators that enforce patents with the need to rein in patent troll profiteering. That struggle may have been mooted today by the Supreme Court's decision in Octane Fitness LLC v. Icon Health & Fitness, Inc. (here)
Transitional CBM Challenge Program Sunsets Today

The America Invents Act (AIA) placed an expiration date on Covered Business Method (CBM) challenges.  That is, CBM review proceedings were designed as a “transitional program” that would sunset 8 years from enactment of the AIA – today is that day.

The legislative rationale behind setting an expiration for CBM was to target specific patents, namely, those  business method patents that issued between the State Street Bank, and Bilski decisions.  These patents were considered to be largely invalid under 35 U.S.C. § 101 having been issued under the more liberal 101 standard of State Street, and, providing a USPTO option for such 101 challenges was argued by the financial industry as the most efficient and cost effective path to resolution (as compared to the litigation of such issues by non-traditional patent defendants).

But, has the CBM program succeeded in neutralizing this alleged blip of invalid business method patents? If not, what is being done to potentially extend the program?
Continue Reading CBM Sunsets at the PTAB….For Now

Court Takes Offense to Tactics Geared to PTAB Alone

Litigants beware; Judge Rodney Gilstrap (E.D. Texas) warned litigants considered to be using the district court proceedings to posture positions in co-pending CBM proceedings that ‘[t]he Court does not countenance—in fact this Court is offended by—the strategic use of an Article III Court to gain a tactical advantage in any parallel proceeding.”

But, this dispute may be a preview of things to come as the Patent Trial & Appeal Board (PTAB) aligns itself with the Phillips construction of the courts.Continue Reading Judge Gilstrap Cautions on Tactics Directed Solely to PTAB Interests

Aqua Products Hoists PTAB Critics by Their Own Petard

Leveraging PTAB 101 Determinations in Parallel Litigation

Covered Business Method (CBM) challenges have fallen out of favor with petitioners. This is due to a number of factors, not the least of which is the narrowing of CBM jurisdiction after Unwired Planet. Of course, this 101 challenge option will go away shortly as CBM will sunset in 2020. But, as more patents become eligible for Post Grant Review (PGR), the ability to challenge patent eligibility under 35 U.S.C. § 101 is slowly expanding to all patents.

Given the expanding option to file a PGR to challenge patent eligibility under 101 alongside art-based challenges, is it better to do so (if possible within the 9-month PGR window), or to simply wait out the 9-month window for Inter Partes Review (IPR)?

While 101 challenges can be especially lethal post-Alice, parallel tracking your 101 case at the Patent Trial & Appeal Board (PTAB) is not without its risks.
Continue Reading 101 PTAB Challenges Might Come Back to Haunt Your Parallel Litigation

Phillips Claim Construction Rule Imminent

Back in May, the USPTO issued a Notice of Proposed Rulemaking to switch from the Broadest Reasonable Interpretation (BRI) standard to a Phillips claim construction for AIA Trial Proceedings (here).  Thereafter the agency collected comments from the public, most of which favored the change, and submitted the issue to the Office of Management & Budget (OMB) for final regulatory approval. On Wednesday October 3rd the regulatory approval was given by OMB’s Office of Information & Regulatory Affairs (OIRA).  Thus, the USPTO may now publish a Final Rule Package to make the proposed switch to Phillips.

The Final Rule Package, which I expect will publish in the Federal Register next week does not take effect immediately. Rather, there will be an effective date 30-60 days after the date of publishing. Assuming publication next week, that would provide an effective date as early as the first full week of November, or as late as December. (There have been discussions that this change would be retroactive, but that is not my expectation. Too much re-work for existing proceedings, and on the heels of SAS, I just don’t see it.)  I expect that any petition filed on or after the effective date will be subject to the Phillips standard.

As I have pointed out previously, while I don’t expect this change will impact trials in a significant regard, it will impact filing strategies. That is, there will be an avalanche of petitions coming into the PTAB before the effective date.
Continue Reading PTAB Rule Package Dropping BRI Clears Final Hurdle

No Duty to Discuss Closest Prior Art…But you Probably Should Anyway

In implementing the Federal Circuit’s In Re Aqua Products’ holding, the Patent Trial & Appeal Board (PTAB) explains that “practice and procedure before the Board will not change.” And that, “[t]he Board will continue its current briefing practice as to the types, timing, and page limits of briefs.”

As pointed out previously, removing the burden from the Patent Owner Motion to Amend will aid the PTAB in granting far more motions, but ultimately, amendments are not expected to be any more attractive, or common.
Continue Reading PTAB: Practice & Procedure Unchanged after Aqua Products

Long Delayed Fee Increase Hits January 16th

Section 10 of the Leahy‐Smith America Invents Act (AIA) authorizes the United States Patent and Trademark Office (USPTO) to, in part, “set or adjust by rule any fee established, authorized, or charged” under Title 35 of the United States Code. At the close of 2016, a Notice of Proposed Rule Making (NPRM) issued requesting comments from the public on proposed fee increases for post-grant patent proceedings, including AIA trials. A Final Rule Notice issued today setting significant increases to take effect on January 16th 2018 for AIA Trial Proceedings.
Continue Reading PTAB Trial Fees Set to Increase in January

Aqua Products Decision Deemed “Good Cause”

Earlier this month the Patent Trial & Appeal Board (PTAB) determined, for the first time, that good cause existed to extend a trial beyond the mandated 12 months of 35 U.S.C. § 316(a)(11). While the Board has had trials extend beyond 12 months in cases of joinder — an existing exception to its 12 month mandate — this is the first time that the USPTO Director exercised his discretion to extend a trial schedule for “good cause.”
Continue Reading First AIA Trial Extended Beyond 12 Months for Good Cause

Octane Fitness To Spur Senate Patent Reform Bill?

Judiciary Simplifies Patent Reform Debate.....Again


Although promised on Monday, the world still awaits the highly anticipated Senate patent reform bill. As pointed out previously, a major sticking point is the "fee shifting" (a.k.a. loser pays) aspect of the bill. The Senate has seemingly struggled to balance the needs of innovators that enforce patents with the need to rein in patent troll profiteering. That struggle may have been mooted today by the Supreme Court's decision in Octane Fitness LLC v. Icon Health & Fitness, Inc. (here)

Oil States/CAFC to Unravel “Litigation” Premise

Sovereign immunity from proceedings of the Patent Trial & Appeal Board (PTAB) has become inextricably linked with the Oil States debate now before the Supreme Court. That is, the 7th amendment argument in Oil States and the 11th amendment argument for sovereign immunity at the PTAB are both tied to the same basic, threshold premise — IPR is a trial proceeding akin to an Article III lawsuit.

In Oil States, the “trial argument” is made to distinguish IPR proceedings from patent reexamination. It is argued that because an IPR is more trial-like compared to the earlier, examination based system, a jury trial is now required, consistent with the 7th Amendment.

In the sovereign immunity context, immunity applies if an administrative proceeding is similar to civil litigation. Fed. Mar. Comm’n v. S.C. State Ports Auth., 535 U.S. 743 (2002). But, some judges of the CAFC have already signaled a willingness to unravel this “IPR is a trial” premise, and it is my expectation that Oil States will follow suit.
Continue Reading Sovereign Immunity at the PTAB a Temporary Phenomena?

Failure to Argue Differing Claim Language of Similar Claims Haunts Appellant

PTAB practitioners must always be mindful of the Board’s longstanding practice to treat grouped claims as standing or falling together. That is, claims should be argued separately where the claims are phrased similarly, but with some deliberate grammatical or additional term difference to distinguish scope.  In those cases, it is important to discuss the implications of the grammatical differences. Simply reciting a claim limitation, and asserting that the limitation is/is not found in the prior art, is not taken by the Board as a separate argument for patentability.

That said, such layered arguments may fall prey to the tight space constraints in AIA trial proceedings where more pressing arguments are necessary.  

For example, one of the more particularly tricky aspects of AIA trial practice prior to May of 2016— at least for petitioners— was fitting all of petitioners arguments within the fifteen pages allocated for a Petitioner Reply by the PTAB.  As a result of the limited real estate, some petitioner arguments that might have been otherwise made were often cut for space constraints. Fortunately, in May of 2016, the fifteen page limit was increased to twenty-five pages.

Yesterday’s decision of the Federal Circuit emphasized the risks of claim grouping; perhaps a reflection of the earlier AIA trial briefing constraints.

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Continue Reading CAFC Finds Forfeit of Half-Win Before PTAB