The Finale: Steve Kunin Interview Part 3

On May 6, 2013, I interviewed Steve Kunin, who is the head of Oblon Spivak’s Post Grant Practice Group. In Part 1 of the interview we discussed the new post grant procedures for challenging issued patents, and started discussing the estoppel provisions. In Part 2 of the interview we concluded our discussion of estoppel and move into discussing secret prior art, the Economic Espionage Act, the algorithm line of cases from the Federal Circuit and the erosion of patent rights that started with eBay v. MercExchange. In this final segment of the interview we talk more about post grant procedures at the USPTO, whether the patent system is broken and then the important stuff — baseball and Sci Fi movies!

QUINN: So it strikes me that the more of these decisions you get from the Supreme Court and the more you get from the Federal Circuit on the disclosure the more you put into it and the more that feeds the problem that some in Congress are seeing so it’s almost like we’re pulling the string and the whole system might end up unraveling. And I know that’s a Chicken Little kind of a problem running around complaining but I don’t like the trajectory we’re on.

KUNIN: There’ve been many commentators with respect to the number of patents issued annually, the quality of those patents and the continuing trend with respect to the number of applications filed. To some degree what we’re seeing is the notion that these new post grant proceedings are at least Congress’ answer to the patent quality conundrum.

If the patent is an important patent and may be if only three present to five percent of granted patents are important patents then those are the ones that are commercially important and worthy of the scrutiny post-grant proceedings . Now, you asked me a question earlier with respect to our representing patent owners in these proceedings and our success record. One has to look at post-grant proceedings to some degree as a patent correction mechanism that may result in the strengthening of the patent through its surviving the scrutiny of these proceedings. Claims can be amended or substituted, if needed. The patent owner has a right to obtain discovery from the third party and its declarants. Evidence in favor of patentabilty of the challenged claims may be brought to bear by the patent owner.

[Interviews]

QUINN: Yes.

KUNIN: Some have stated that a patent that survives post-grant proceedings is gold-plated making it more difficult to challenge in litigation. The opportunity to introduce objective evidence of non-obviousness may be also used by the patent owner to strengthen the patent. The patent system operates as a pendulum. Sometimes it goes in a very pro-patent direction and then swings back to an anti-patent mode. It is just a fact of life in a 200+ year old system, and we’re going to see this phenomenon continue in the future. Whether the administrative trial is the correction mechanism of choice for the important patents we’ll have to see. It’s definitely looked at as a way to deal with the issue of the quality of the number of patents issued and the increase in the number of suits filed in district courts and their appeals to the Federal Circuit. These administrative trials may serve to stay the concurrent litigation and take some of the burden off the Article III judges’ shoulders.

[Interviews]

QUINN: Yeah. Let me throw this out of you. The patent system is broken. Now when you hear that what do you think?

KUNIN: I think that’s a sound bite that is politically motivated. As soon as you hear that rhetoric you know that there is a political agenda associated with it.

QUINN: I would agree. This is something that I’ve said and I just said earlier — the patent system is working as it’s designed. We can say that it shouldn’t have been designed that way, but it is not broken. You know, they – they’ve had discussions in Congress about getting rid of Metallizing Engineering. Ss that good, is it bad? We can have that discussion, but the fact that secret sales aren’t prior art doesn’t mean the patent system is broken. That is what Congress wanted. Similarly, take the joinder provisions of the AIA, what did Congress think? Did they think that these people who were making money suing other people weren’t going to continue sue? No, rather than suing 100 people in one case now they’re going to sue two people or companies in 50 cases, so it increases the number litigations, but that was by design. It is just historically undeniable that sometimes the law is pro-patent and sometimes it’s not pro-patent, but to say that the system is broken seems extraordinarily naïve. The system, by any objective standard, seems to be working exactly as it’s designed. So I have trouble saying that it’s broken.

I wanted to get to this and I know we’ve been going for a while, but if I can get to one more topic I’d like to. I went down the Supreme Court path before we wrapped up what I wanted to get to on the post grant stuff.

So when a post grant client comes to you have they already decided that this is what they want to do? Do they come to you for help?  Do you help them work through whether or not this is the right thing to do? What kind of advice do you give them without getting into confidential matters? And there’s a lot there, so you can go in any direction. I don’t want to get into confidential stuff, but looking more for the big picture.

KUNIN: The decision to go forward with one of these proceedings is mainly a business decision that requires intensive client counseling. You have to look at the client’s objectives from strategic and tactful prospectives. A very large number of these patents that are being challenged in IPR and CBM proceedings are involved in concurrent litigation. This creates a dynamic of the balance of considerations driven by in-house counsel, litigation counsel and post grant counsel. Litigation counsel, post grant counsel may be from the same firm, or they may be from different firms. The purpose of the interaction is to assess the value of using the post-grant proceedings to enhance your chances of success with respect to the patent validity issues in the associated litigation. What is it that you will successfully accomplish in the post grant proceeding? Will the proceedings facilitate a favorable settlement of the dispute? So the bottom line with all of this is you have to assess the business case of the risks and the benefits of proceeding with a post-grant proceeding where there exists a concurrent litigation.

The post-grant proceeding at the USPTO may provide substantial advantages in the area of claim construction that maybe outcome determinative in both the administrative trial and the litigation affecting infringement as well as validity determinations.

You’re going to get a claim construction early from the PTAB. In fact, one of the interesting results with the respect to a review of the decisions to initiate inter parted review or covered business method challenges is that the PTAB lays out for you its claim construction findings and its reasons. This may have a tremendous influence on the concurrent litigation and its claim construction. Obviously, the patent owner’s going to say certain things with respect to how the claims should be construed in its patent owner response, but nevertheless such statements may result in a clear disavowel of claim scope. Such admissions will have an impact on the concurrent litigation. Conceptually there are many strategic and tactical issues that are of general applicability to both the litigation and administrative trial.

QUINN: Okay. Well, great, thanks. I think that was a very comprehensive answer. I think that probably brings us to the end except for maybe a couple of fun things if you’re up for it.

KUNIN: Sure.

QUINN: Good. Iron Man just opened this weekend and I – I like the Iron Man series. I personally think Tony Stark is maybe the best fictional inventor of all time. If you can invent your way to be a super hero you’ve done something right. But there’s a number of for us – well, let me speak for myself — I’m a nerdy kind of guy when it comes to this sort of thing. There’s a bunch of us in our industry that like these kinds of movies. You have Iron Man and you have a new Star Trek coming out and, I think, we have another Superman later on in the summer. Are any of these capturing your attention, or are they “must see” for you?  Why or why not?

KUNIN: Oh, I’m a big Sci Fi genre guy so I always put Star Trek, Superman and Ironman movies on my list of must sees at the movie theater rather than just wait until they come out on DVD.

QUINN: So if you had to only see one which one is it that you’re – or maybe you say the one you’re looking the most forward to?

KUNIN: Well, I’ve always been a Star Trek aficionado so the new Star Trek movie would be the one of first choice, but to be honest with you I’ll go see all three of them with my wife.

QUINN: Yeah, me, too, me, too. And then you’re a baseball guy, too, right?

KUNIN: I do have an interest in baseball.

QUINN: So Nats, stock up, stock down? Strasberg, what’s the deal? They babied his arm last year and now he may have problems anyway.

KUNIN: Well, first of all I have to issue my disclaimer… I was born and raised in St. Louis. I’ve been a St. Louis Cardinals fan all of my life. When I go to the Nationals games Gerry Mossingoff, who’s also a former St. Louisan, he and I sit together rooting for the Redbirds while our wives sit together cheeing for the Nationals. Right now the Nationals are struggling, they don’t have all their engines working in a finely-tuned manner. I think the Strasberg controversy is just a bunch of malarky. I don’t think there is anything wrong with Strasberg’s arm. I think if there’s something wrong with Strasberg it’s his mechanics. That can be corrected by the pitching coach.

QUINN: Yes. His mechanics are really not all right.

KUNIN: The pitching coach will work with Strasberg, and he’ll start coming around. I think at this particular point too much has been dumped on the Nationals in terms of their woes in the pitching realm. We’ll see what things look like after the All Star break and find out how good the Nationals will be.

QUINN: Okay, so last question, now, I know you’re a Cardinals fan. You have to probably be ecstatic that they did not resign Albert Pujols.

KUNIN: Well, let me put it this way –

QUINN: Mixed feelings?

KUNIN: I have mixed feelings because when I was growing up, my guy was Stan Musial, and he was a Cardinal through and through. And I was hoping thatPujols would have been a Cardinal from day one to the time that he retired from baseball. But I think the real point that you’re making is that when you take a smaller market team like the Cardinals and if they’re forced to pay a hundred – two hundred million dollars for one player it really restricts their ability to be able to retain or obtain the kind of additional players that they would need to have a pennant run each year, and if you look at their lineup in terms of the team that they have on the field they still have what I would call a first class team at a less than a budget busting price –

QUINN: Yes.

KUNIN: – they have some stars who produce but they’re not in the Angels’ price range and so be it.

QUINN: Right, but whether they’re going to be able to absorb that contract for the production it seems like he’s going to be able to give them — I just don’t know. It is very early to be talking about whether that may be the worst contract of all time, but he is off to a very slow start with the Angels.

KUNIN: But what about Hamilton, he’s doing worse that Pujols in California, isn’t he?

QUINN: I suppose but, I mean, not to get into this too deep, but would you have given a guy with his history that kind of money, Hamilton?

KUNIN: No.

QUINN: No, I wouldn’t have either. I think the term “buyer beware” applies. But I do wish we had patent attorney guaranteed contracts like they do in baseball. That would be kind of nice, I suppose. Most patent attornyes would probably like that.

KUNIN: That’s right. That’s right.

QUINN: Well thank you very much, Steve, I appreciate you taking the time.

KUNIN: Okay, you’re welcome.