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Failure to Consider AIA Patentability Challenges May Be Costly Mistake for Law Firms

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?

Low Demand To Date for Specialized PTAB Review Proceeding

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?

PTAB Selective on Trial Grounds

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.  …

Continue Reading PTAB Closely Scrutinizes Petition Grounds

Stay Calculus to Encourage Multi-Defendant Attacks

As the new patentability trials of the America Invents Act (AIA) have only been available for 7 months their impact is only now beginning to be felt in the district courts. The new USPTO Patent Trial & Appeal Board (PTAB) proceedings permit suspect patents of any vintage to be reconsidered in a far more speedier, cost effective, and challenger friendly manner relative to that of the federal district courts. Not surprisingly, there has been a robust demand for these proceedings with over 200 such petitions filed since September 16th—many of which target the patents of non-practicing entities (NPEs).

The impact of these new PTAB proceedings are beginning to be felt in the district courts as motions to stay the costlier court proceedings pending PTAB review are being considered almost daily. And, many courts are staying the parallel litigation in favor of the speedier USPTO proceedings. Interestingly with the argument of multi-year USPTO reexamination delays now eliminated by the faster PTAB proceedings, Patentees (NPEs in particular) are now emphasizing to the courts that estoppel only applies to the petitioner or real party in interest—not necessarily every defendant in a multi-defendant suit. As such, NPEs argue that a concluded PTAB proceeding will not simplify issues for trial because defendants that did not join in the petition filing would be free to raise the very same issues decided in the PTAB proceeding upon lifting of the stay.

The solution for non-petitioning defendants facing such an argument is really quite simple…..just pile on.…

Continue Reading NPEs Unwittingly Invite Lopsided Battles at PTAB

Suit Takes Aim at “Business Method” Definition & Propriety of 101 Grounds

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…

Liberal Stay Policy Thwarts Patent Suits in New Jersey

Non-practicing entities or “patent trolls” are generally those plaintiffs that seek to enforce patent rights against an industry in which they themselves do not compete. Stated another way, an NPE’s only business is patent litigation.

Often times the patents an NPE is enforcing were purchased from a traditional technology company for the sole purpose of exacting royalties from the relevant industry. In the hands of an NPE, which has no technological industry subject to a patent counter suit by their industry targets, the NPE patents become especially powerful weapons of economic coercion.

Over the last decade, law firms have recognized the efficacy of NPE litigation campaigns and have signed on in great numbers to get a piece of the action. Typically, an NPE will team up with a law firm that will conduct the campaign on their behalf in exchange for a contingent fee arrangement. (i.e., percentage of the collected settlements). This profiteerring business model has lead to a significant proliferation of patent infringement suits.

Just not in New Jersey.
Continue Reading New Jersey Solves Patent Troll Problem