Patent Law Reform

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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

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

USPTO AIA Implementation Report Explains Progress, Recommends Changes

Two weeks back, the USPTO provided a report to Congress on the implementation of the America Invents Act (AIA) (as required by the legislation). The 65 page report (here) explains the administrative effort to implement the mechanisms of the AIA, as well as four years of statistics. Of particular interest to me are the recommendations to Congress on adjusting IPR/PGR mechanisms, as well as some of the statistics on such procedures as third party submissions and (the all but forgotten) supplemental examination. …
Continue Reading USPTO Recommends PTAB Changes to Congress in AIA Report

PTAB Proposals on Senate Side

With Congress headed toward a summer recess in a few weeks, it is expected that the pending patent reform bills will be front and center for July. Below is a high level overview of the PTAB proposals currently embodied in the Senate’s Patent Act” (S.1137).  As previously pointed out, many of these proposals are expected to be mooted in a matter of weeks by the PTAB’s July rule package.  Perhaps PTAB movement will cool the legislative appetite for these proposals, time will tell.

1.      Preliminary Response – IPR
§ 313 is modified to add subsection (b), which enables a preliminary response to include affidavits/declarations of supporting evidence and opinions.  In addition, a petitioner may seek leave to file a response to respond to new issues raised in the preliminary response.

(PTAB expected to propose a similar modification)

2.      Institution Decision – IPR
§ 314 is modified to permit non-institution if it “would not serve the interest of justice.”  Factors considered in making this decision include whether the grounds or arguments are the same or substantially the same as those considered and decided in a prior judicial or PTO proceeding and whether there is another proceeding or matter involving the same patent before the PTO.

(appears to target hedge fund filings, but PTAB is likely to take care of that problem on its own)

§ 314 is also modified to state that an IPR shall not be instituted on the basis that the evidentiary standard at the PTO differs from the one used in a court proceeding to adjudicate the claims in the petition.

(Also appears directed to hedgies/PTAB trolls that seek to re-purpose art of a litigation)…
Continue Reading PTAB Cheat Sheet for Senate Bill

Bio/Pharma’s Favorite Target Serves a Critical Role

Both Houses of Congress now have bills moving to their respective floors on further patent reform thanks in large part to Kyle Bass. Of course Congress had been toying with the idea of further reform long before everyone’s favorite boogeyman came along. But now, thanks to Mr. Bass, Congress has a story to sell otherwise mind numbing legislation to the masses. Keep in mind that America Invents Act (AIA) wasn’t about patents, but job creation. Remember that? The new patent reform story, at least for the significant Bio/Pharma lobby, is this: Hedge funds are devaluing drug patents to the point that and there may not be any future, ground breaking medications —unless Congress comes to the rescue. Silly, yes, but effective for advancing otherwise stagnant legislative agendas?…you betcha.

The fact of the matter is Kyle Bass has been a boon to Bio/Pharma lobbyists. His stunts (and that’s exactly what they are) allow the debate to turn away from patent quality to one of simple gamesmanship. Everyone can rally around a perceived abuse of legal process, especially when perpetrated by a vilified outsider. But the changes contemplated in the name of stopping Mr. Bass go well beyond that which is necessary. 
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Continue Reading Kyle Bass: The Inconvenient Truth

Patent Act Rewritten to Appease Bio/Pharma Lobby

In a surprising change of course, the Senate bill known as the ‘The Patent Act” (S.1137) has morphed into a PTAB reform bill. The initial version of the Bill hardly touched the patentability trials of the USPTO’s Patent Trial & Appeal Board (PTAB). A competing bill, known as the “Strong Act,” — on the other hand— proposed gutting these highly effective patent challenge mechanisms.  After the Manager’s Amendment to the Patent Act on Tuesday (here), at least with respect to the PTAB, both bills now propose significant alterations to the PTAB’s patent challenge mechanisms.

As a reminder, the impetus behind the AIA of 2011 was to thwart abusive litigation fueled by weak patents. It was argued pre-AIA that patents were issuing from the USPTO of overly broad scope and on questionable technology. These patents were then used as tools by extortionists (patent trolls) to extract large settlements from the domestic tech industry. This cottage industry was spawned from an over abundance of such patents. And, since defeating these patents in a district court was quite difficult (due to the deferential treatment of U.S. patents) and expensive, settlement was the only option. The AIA provided relief from these practices by introducing a low-cost, expedited “opposition” to such patents at the PTAB known as Inter Partes Review (IPR) and Post-Grant Review (PGR). That is, the PTAB challenge proceedings of the AIA were designed to weed out weak patents, quickly and cost effectively. These proceedings have been very effective to the delight of some of America’s largest tech companies (i.e., serial defendants).  

Since enactment of the AIA, however, many have realized that when presented with appropriate evidence, the PTAB does not discriminate.  It is not just weak troll patents that are being cancelled, and this has a bunch of folks, especially the Bio/Pharma lobby, up in arms.

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Continue Reading Senate Moves to Derail Gains of America Invents Act

New Senate Bill, Patent Act of 2015 Introduced

Today, key drafters of the America Invents Act introduced their own bipartisan patent reform bill in the Senate.  (Senators, Grassley (R – Iowa), Leahy (D- Vt.);  Coryn (R – Tx), Schumer (D -NY), Lee (R- UT), Hatch (R- UT), and Klobuchar (D – Minn.)). The bill entitled: Protecting American…