Pre-Suit Opinion of Counsel/PTAB Challenge Critical to Avoiding Enhanced Damages

Section 284 of the Patent Act provides that, upon a finding of patent infringement, courts “may increase the damages up to three times the amount found or assessed.” Up until this past Monday, the Federal Circuit’s en banc decision in In re Seagate Technology, LLC controlled  this determination, requiring patentees to show that an accused infringer’s actions were both objectively and subjectively reckless—both by clear and convincing evidence.

Needless to say, patentees rarely met these exacting burdens of proof.  

In most cases, accused infringers would raise ex post infringement defenses that raised “a substantial question as to the validity or non-infringement of the patent” to negate a finding of objective recklessness. In other words, even if the infringer was unaware of the colorable defense when infringement began, Seagate’s-objective prong could provide a get-out-of-jail free card if a colorable defense was later developed during trial. The ability to wait for a lawsuit was an especially cost effective tool for in-house counsel that hoped to avoid costly, proactive strategies such as procuring an opinion of counsel, or openly challenging the patent on at the PTAB.  That is, pre-suit, smoking gun evidence of infringement was readily negated by a proficient trial defense. 

The game has now changed—significantly—with the Supreme Court’s decision this week in Halo Elecs. v. Pulse Elecs (here)…
Continue Reading How The PTAB Can Maintain Your Willfulness Halo

Impact of Concluded PTAB Proceedings on Litigation

Patent challenge proceedings of the USPTO’s Patent Trial & Appeal Board (PTAB) are designed to provide a low cost, expedited option to district court litigation. Of course, if a patent challenger is unsuccessful at the PTAB, the district court is left to make the ultimate resolution on validity.  Now several years into the PTAB’s existence, closed AIA trial records are being leveraged by the courts to resolve disputed issues of fact.  

…
Continue Reading PTAB Trial Records Leveraged for Summary Judgement Wins

Vast Majority of Amendments Denied on the Merits

Yesterday the Patent Trial & Appeal Board (PTAB) released a study on motions to amend. Contrary to popular belief, the majority of these motions are not denied on strict procedural grounds, but instead, on the merits.

The study points out that:

• In the 1539 trials that have gone to completion or settled (where joined or consolidated trials were counted as a single trial), motions to amend were sought in a little over 10% of cases, 192 in all. (34 more motions to amend are pending in currently open cases.)
• Of those 192, not all ultimately required the PTAB to pass on the merits of the motion. This is because, often, motions to amend are filed as “contingent” motions—if the PTAB upholds the patentability of the original claims, such motions never get decided. Several other cases settle before motions to amend are decided. Additionally, some motions to “amend” only request the cancellation of claims, and those are routinely granted.  
• 94 of the 118 remaining petitions were denied on merit based deficiencies, only 22 were bounced on procedural grounds.

…
Continue Reading PTAB Releases Eye Opening Amendment Stats

New Evidentiary Opportunity Dissolves Patentee Criticism

Patentees have lamented the inability to submit new, testimonial evidence via preliminary response since the inception of the Patent Trial & Appeal Board (PTAB). It was argued that since AIA trial petitions almost always included testimonial evidence, the inability to respond in kind was procedurally lopsided in favor of challengers.  Because of this perceived imbalance, patentees insisted that trial institution was a foregone conclusion.  Of course, if this patentee criticism were valid, far more trials would conclude favorably to patentees once such evidence is entered (it is permitted later, during trial).

…
Continue Reading Patentees Beware: New PTAB Evidentiary Option Might Not Help

New Trial Practice Rules Effective May 1st

The USPTO has issued new final rules today to make targeted modifications for AIA trial practice before the Patent Trial and Appeal Board (PTAB). (here) These amendments to the rules were initially proposed to the public in August 2015.  The rule changes apply to all …

TTAB Vacates Precedential Decision By Court Order….PTAB Decisions Next?

in 2013 the Trademark Trial & Appeal Board (TTAB) issued  a precedential decision in a trademark opposition between the Board of Trustees of the University of Alabama et al v. William Pitts, Jr. & Christopher Blackburn. In the decision, the TTAB dismissed the opposition of the University against a mark for a logo with a houndstooth pattern with the words “Houndstooth Mafia” for use on T-shirts and hats. (The logo was seemingly inspired by the houndstooth fedora worn by the late Alabama football coach Paul “Bear” Bryant).  The opposition was dismissed as the TTAB determined that the University had no common law rights to a houndstooth pattern. (here)

Rather than appeal the TTAB decision to the Federal Circuit, the University opted to challenge the TTAB decision in a civil action under 15 U.S.C. 1071(b)(1) — in the Northern District of Alabama.  Before that action progressed very far the parties settled, and via consent decree of the Court, agreed that the TTAB decision should be vacated.  More importantly, the consent decree made statements of fact that the houndstooth pattern had become distinctive, which could impact other ongoing TTAB oppositions of the University on the same issue.  The University motioned to vacate the TTAB decision based upon the consent decree (here).  In an expanded panel decision that included the Chief Judge of the TTAB, the motion was unanimously denied. The TTAB determined that a settlement of private parties should not impact a decision of the TTAB absent extraordinary circumstances; especially where precedential.

The Alabama judge strongly disagreed.  In a stinging memorandum, he ordered the TTAB to vacate its Order within 14 days. (here)…
Continue Reading PTAB Vacatur By Court Order?

PPC Broadband Decision Volunteers Philips Claim Read in IPR Decision

The Patent Trial & Appeal Board’s (PTAB) use of the Broadest Reasonable Interpretation (BRI) standard is now slated for review by the Supreme Court in Cuozzo Speed v. Lee.  Opponents of the BRI standard, such as Cuozzo, argue that a “Philips” style claim construction is most appropriate for the PTAB because issued claims should be construed consistent with district court.  More importantly, Philips is considered to be a more patent friendly (i.e., narrower) interpretation. Yet, as I have pointed out before, the BRI and Philips frameworks are largely the same.  While the question posed to the Supreme Court in Cuozzo alleges a difference in the application of “plain and ordinary meaning,” this difference is readily disproven.

To the extent a difference can be delineated between PTAB and district court claim interpretation practices it is the perspective of the decision makers.  When applying Philips, courts will attempt to identify a “most reasonable” scope rather than the “broadest reasonable” scope.  While both selections require a reasonable outcome, and the constructions may lead to the same result in many cases, the “most reasonable” interpretation could include a selection between competing, reasonable constructions.  This selection is all too often driven by invalidity concerns. (despite the caution against such in the Philips decision itself)

Given that the PTAB has consistently maintained earlier BRI interpretations for patents that expired during review (requiring a switch to Philips) it is difficult to even identify a case where the PTAB’s proper application of Philips would move the needle.  Yesterday, the CAFC set out to provide such an example in PPC Broadband Inc., v. Corning Optical Communications RF, L.L.C.…
Continue Reading CAFC May Have Amplified Need for BRI at PTAB