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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

Innovation Act Heads to Floor Debate for Last Push in 2013

Now that the Goodlatte Bill, also knows as the Innovation Act (H.R. 3309), has been reported out of the Judiciary Committee there will be a second round of amendment opportunities. The new amendments will be collected from house lawmakers on Monday December 2nd, and…

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…

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

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Hearing to Consider Issues for Mark-up

Although the Innovation Act (H.R.. 3309) was only introduced last week, as expected, Congress is wasting no time pushing the “patent reform” issue forward. Today at 10AM the House Judiciary Committee will hold a hearing on the content of the Bill entitled: Improving the Patent System to Promote American Innovation and Competitiveness. The hearing will alert the committee of specific concerns prior to mark-up. One notable topic is the Bill’s proposed shift from the broadest reasonable interpretation (BRI) at the USPTO’s Patent Trial & Appeal Board (PTAB) to a district court style claim construction. The initial draft of the Goodlatte Bill referenced the entirety of 35 U.S.C. § 282, and along with it, a presumption that patent claims are valid (§ 282 (a)). This would have been an absolute boon to patent trolls. Fortunately, and as I predicted, the claim construction proposal no longer requires the application of the presumption of validity.

In the second draft, and now H.R. 3309, the general reference to § 282 has been changed to a contextual reference to § 282(b). In essence, the proposal would change little at the USPTO (plain and ordinary meaning is a component of BRI) other than perhaps an increased emphasis on prosecution history consistent with Philipps v. AWH. That said, the proposal still lacks consistency and leaves a possible opening for patent troll mischief.

Continue Reading Congress Debates USPTO Use of District Court Claim Construction Practices

Japanese Embrace New Patent Challenge Mechanisms

Generally speaking, inter partes patent reexamination was pursued relatively infrequently by foreign based entities. Unlike their U.S. based counterparts, foreign based companies rarely employed patent reexamination as a tool to resolve patent disputes in a more cost effective manner, and/or to pressure opponents in a parallel litigation. This phenomena was especially odd for Japanese innovators. This is because many of the top ten patent filers are Japanese companies. Clearly these companies were familiar with USPTO proceedings, but remained uncomfortable with the USPTO as a source of potential resolution for patent validity disputes.

Since the passage of the new patentability challenges of the America Invents Act (AIA), the public has overwhelmingly embraced Inter Partes Review (IPR) and Covered Business Method (CBM) proceedings as a viable option to traditional patent limitation—and, unlike inter partes patent reexamination, Japanese innovators are not far behind.…

Continue Reading Japanese Innovators Begin to Embrace PTAB Challenges for Patent Dispute Resolution

New USPTO Rules of Professional Conduct in Effect

Non-registered practitioners may, in limited circumstances, be permitted to appear before the Patent Trial & Appeal Board (PTAB) on a pro hac vice basis. 37 C.F.R § 42.10(c). Previously, in IPR (IPR2013-00010) (order here), the requirements for the motion and accompanying declaration were outlined.

As…

Recalibrating Indemnification Notice & Control Post AIA

Patent indemnification provisions are a fixture of modern contractual agreements for the exchange of technological goods. The indemnification clause, whether express or introduced by default via the Uniform Commercial Code (UCC), essentially warrants that the contracted goods are free from claims of patent infringement. In the event of a claim of patent infringement, the indemnity clause obligates the Seller/Supplier to defend against the claim in some manner, typically funding the defense, or taking over responsibility for the defense effort.

While the body of law pertaining to contractual interpretation has remained largely unchanged in recent years, the passage of the America Invents Act (AIA) has altered the landscape as to patent defense practices. In particular, the battle against the dreaded patent troll has shifted more toward the post grant patent challenge proceedings of the Patent Trial & Appeal Board (PTAB). Since many multi-defendant disputes are shifting to the PTAB for resolution it is imperative that indemnitors account for this eventuality in their contractual agreements.…

Continue Reading Recalibrating Indemnity Obligations To Account for New Post Grant Patent Realities