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PTAB Begins Front Loading IPR & CBM Schedules

The new patent challenge proceedings of the USPTO’s Patent Trial & Appeal Board (PTAB) are instantly distinguishable from the previous examiner-based, patent reexamination—perhaps most notably in speed. That is, an Inter Partes Review (IPR), Post Grant Review (PGR) or Covered Business Method (CBM) must conclude, by statute, within 12 months of institution. This turnaround is a dramatic improvement over the 3-5 year pendencies that plagued patent reexamination. For this reason, the PTAB has been a major disruption to the business of patent licensing and assertion in the U.S; especially to that of the dreaded “patent troll.”

For patentees faced with a PTAB post grant challenge it’s only getting worse. As of mid-December, the PTAB has accelerated trial schedules so that oral argument is scheduled a mere 7 months from trial institution. This is a full two months earlier than the previous default schedule.…

Continue Reading PTAB Accelerates Post Grant Trial Schedules by Two Months

Are NPE Judgments Under Attack?

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 the most disruptive to the patent litigation landscape.

As was made very recently apparent in Fresenius USA v. Baxter Int’l. (Fed. Cir. 2013), a damage judgment is not necessarily safe from collateral attack unless and until it is actually satisfied by the putative infringer.

Since Fresenius, most patentees have taken solace in the fact that such a patent reexamination based fact pattern is exceedingly rare. Yet, if you are one of the many plaintiffs sitting on a large verdict, you will have a new worry in the months ahead—the PTAB troll.…

Continue Reading The Rise of the PTAB Troll

CAFC Considers Article III Injury Requirement for Dissatisfied Patent Challengers

Earlier this week, the CAFC heard oral arguments in Consumer Watchdog v. Wisconsin Alumni Research Foundation (Warf). Although seemingly a routine appeal from an inter partes patent reexamination, the Court took interest in the unique procedural posture of this case a few weeks before argument on the merits. Here, the challenged claims of the patent were confirmed as patentable by the USPTO and appealed by the challenger, Consumer Watchdog, to the CAFC. The CAFC ordered late briefing on the question of Article III standing for CW’s appeal. CW brief (here), WARF brief (here)

For simple folk like me, the question of standing would seem to have a relatively straight forward response. That is, appeal from a PTAB decision is provided, by statute (old 35 U.S.C. § 315 (b)(1), to any party dissatisfied with a decision of the PTAB. This appeal right was actually added in 2002 as the original inter partes reexamination passed in 1999 had no such right. Section 13106 of Public Law 107-273, 116 Stat. 1758, 1899-1906 (2002). So, not only was standing conveyed by Congress, it was conveyed only after denying it in the first legislative go-round. (fact pattern seems rather persuasive to me)

While the CAFC was well aware of the statute, they seemed to be seeking more of an “injury” from the appellant to convey Article II standing, or some kind of indication in the legislative history that Congress intended to convey Article III standing.…

Continue Reading CAFC Requests USPTO/Gov’t Weigh In On Third Party Standing for Appeals From PTAB

Patentees Squeezed Between Competing PTAB Rules

The rules of the new patentability trials of the America Invents Act (AIA) are designed to ensure timely resolution of patentability disputes within the statutorily mandated 12 month time frame. In particular, the Patent Trial & Appeal Board (PTAB) fashioned their new rules to prevent the notorious delays and complications of the previous inter partes patent reexamination system. One way in which the new AIA post grant proceedings are vastly different from the previous inter partes patent reexamination model is the manner in which claim amendments may be proposed.

In the previous inter partes reexamination system, any number of amended claims could be added or submitted prior to the close of prosecution before the examiner. There was no numerical limit on the number of claims that could be submitted. In fact, it was not uncommon practice for patentees to submit hundreds of new claims. By doing so, patentees made it more difficult for the third party to respond to all issues within their 30 day period, and within page limits. Likewise, the addition of such extensive amendments made examiner/APJ processing all the more tedious and time consuming.

In the new AIA proceedings, Inter Partes Review (IPR) and Post Grant Review, the PTAB provides for a reasonable number of substitute claims. 37 C.F.R. § 42.121/221. The “reasonable” aspect has been explained as a one-to-one correspondence in the typical case. Further restricting the ability to amend is the requirement that amendments be presented within the bounds of a 15 page motion to amend. The combination of these controls strictly limits the ability of patentees to amend in any significant regard, which greatly aids the agency in completing the proceedings in a timely manner.

Yet, patentees argue that these strictly enforced procedural controls are inconsistent with the patentee estoppel that attaches to a failed PTAB proceeding.…

Continue Reading Are Strict PTAB Amendment Practices Inconsistent with Patentee Estoppel?

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Texas Court Stuns Patent Troll Business Model

Texas has become well known, some would say infamous, for their patent friendly federal district courts. Over the years, “patent trolls” have increasingly flocked to Texas District Courts such as the eastern district (Marshall) to leverage these pro-patentee forums.

Since September 16, 2012, new USPTO post grant patent proceedings have been increasingly leveraged as the first true alternative to patent litigation. Here again, Texas courts offered patentees a benefit over many other districts in the U.S. That is, historically, Texas judges have been reluctant to stay litigation pending USPTO reexamination proceedings. To date, most presumed that this historical bias against staying litigation pending USPTO reexamination would continue despite the increase in speed in the new patent challenge proceedings of the America Invents Act (AIA). Yet, as made clear last week, the heightened standard necessary to institute an Inter Partes Review at the USPTO’s Patent Trial & Appeal Board (PTAB), coupled with the recent outcome in Fresenius USA v. Baxter Int’l. (CAFC 2013), has Texas courts rethinking the wisdom of their previous anti-stay stance.
Continue Reading Texas Court Explains PTAB Roadblock to Patent Litigation

Proposed Change to USPTO Claim Construction Practice Will Moot Markman Debates

One of the issues being debated in the current round of patent reform efforts is the current use of the broadest reasonable claim interpretation (BRI) in USPTO post grant patent proceedings. The rationale for this “broadest” interpretation practice of the USPTO has long been the ability to amend patent claims before the agency. That is — patent claims should be interpreted broadly in a forum where claim scope can be freely adjusted by the patentee (intervening rights aside).

Since the passage of the America Invents Act (AIA), a small, but vocal minority of bar association honchos (primarily those employed by large patent filers) have been shortsightedly advancing the notion that BRI should not be employed in the patent challenge proceedings of the AIA (Inter Partes Review (IPR) and Post Grant Review (PGR)). Instead, they argue that BRI claim construction should be replaced with the claim construction practices of the district court (i.e., Philips v. AWH). Their premise is that the new AIA proceedings are more “adjudicative in nature” as compared to examiner based patent prosecution/reexamination practices. Currently, the proposed legislation is adopting these changes for IPR and PGR proceedings (CBM is excluded).

As can be appreciated, large patent filers believe a narrower claim construction at the USPTO will help preserve the patentability of their patents that become subject to post grant patent challenges. Yet, in practice, if this change is implemented, it will have little impact on post grant proceedings. In fact, insisting that the USPTO perform the same analysis as district courts may help invalidate more patents.
Continue Reading Changing USPTO Claim Construction Practices to Short Circuit Patent Litigation

Statistics Demonstrate Robust Demand for PTAB Patent Challenge Proceedings

Last week, the USPTO issued the official tallies/progress statistics for Inter Partes Review (IPR), Post Grant Review (PGR) and the Covered Business Method (CBM) proceedings. As of November 7, 2013 the Patent Trial & Appeal Board (PTAB) has received 627 IPR petitions and 78 CBM petitions…

Early Statistics Show NPEs Seeking Escape Hatch from PTAB

The Patent Trial & Appeal Board (PTAB) has the power to terminate an Inter Partes Review (IPR), Post Grant Review (PGR), or Transitional Proceeding for Covered Business Method Patents (CBM) upon request of the parties. This discretionary power to terminate a patentability challenge by agreement (37 C.F.R. § 42.74) is a new concept for the USPTO. Historically reexamination proceedings could not be terminated by agreement. In reexaminations (inter partes) where the contesting parties settled their dispute, the challenging party would simply drop out of the inter partes reexamination, but the Office would continue with the reexamination in the interests of public policy.  (cf. terminating an inter partes patent reexamination by operation of estoppel).

Many wondered if patentees would find value in the ability to walk away from such a public proclamations of patent weakness by agreement. For example, where a PTAB trial is ordered for IPR, three (3) technically trained judges of the PTAB will have found at least one claim reasonably likely to be unpatentable. This public record undoubtedly places a considerable “cloud” over the challenged patent.

If 2013 statistics are any indication, non-practicing entities (“trolls” to lazy typists like me) are thankful to keep their suspect patents intact as long as possible.…

Continue Reading Settlement Stats Show Trolls Fleeing PTAB Patent Challenges

Dominion Dealer Solutions Confuses District Court Practices with PTAB

On March 28, 2013, Dominion Dealer Solutions filed 5 petitions for Inter Partes Review (IPR) against the patents of Auto Alert Inc. Dominion was sued by Auto Alert on October 1, 2012 in Central District of California for infringing 3 of the patents subject to the IPR filings (the other two IPR filings being directed to patents expected to be added to the suit).

On August 15, 2013 the Patent Trial & Appeal Board (PTAB) uncharacteristically denied all five petitions. The PTAB explained that the “real time” features of the claims had not been adequately addressed by the petitioner, or petitioner’s declarant, and that the obviousness analysis was lacking in requisite detail. In essence, the Board found that the mixing and matching of references in the claim charts (common in preliminary invalidity style charts of the district courts) was lacking in explanation as to reference interchangeability. Further the Board found the supporting declaration devoid of a developed rationale for combining the references (i.e., written in a notice style format of the district courts). Dominion sought rehearing arguing that since their declarant provided evidence that was not rebutted by the patentee, that the PTAB could not deny the petition. On October 10th the PTAB denied rehearing explaining that the declaration was indeed considered, but was found lacking in technical reasoning and substance. As the denial of an IPR petition cannot be appealed, the battle was over at the USPTO.

Days later, on October 15th, Dominion filed suit against the USPTO under the Administrative Procedure Act (APA). In their complaint (here) Dominion argues that where an IPR petition includes declaration evidence that stands unrebutted, it is arbitrary and capricious for the USPTO to deny such petitions. Yet, this evidentiary imbalance is present in virtually every PTAB preliminary proceeding by design.…

Continue Reading Suit Against USPTO Urges Defacto IPR Trial Orders