PTAB Death Squads: Are All Commercially Viable Patents Invalid?

As was predicted in Patent Office Litigation, much is going on in the world of contested proceedings at the United States Patent and Trademark Office.  What no one could have predicted, however, was how broadly and rapidly the new challenges to the patentability of issued U.S. patents would become the standard defense tactic in U.S. patent litigation in all areas of technology.  Indeed, 74% of the new contested proceedings are in the electronics/communications/method of doing business technology space, while 13% are in the mechanical space, and 13% are in the biotechnology, chemical, pharmaceutical space.

Brand name pharmaceutical giants are starting to realize that administrative patent trials at the Patent Trial and Appeal Board (PTAB) will present an unanticipated avenue for generic drug manufacturers to challenge blockbuster drugs. No commercially viable patent is safe it seems.

Approximately 80% of the claims challenged in petitions are instituted for trial on at least one proposed ground of unpatentability, but the dire statistics from the patent owner perspective do not stop there. As of the beginning of March, the Board had issued Final Written Decisions after the completion of the trial process in 19 proceedings – 11 IPRs and 8 CBMs.  In all but three of these proceedings, the Board cancelled ALL claims for which trial was instituted!  The Board cancelled 95.2% of all claims for which trial was instituted, and cancelled 82.9% of all claims that were initially challenged by the petitioner.  These are draconian statistics for patent owners!

These bleak statistics have lead Federal Circuit Chief Judge Randall Rader to at the AIPLA annual meeting in October 2013 call the PTAB “death squads killing property rights.” Then again on Friday, March 21, 2014, at a conference hosted by the George Mason University School of Law, Chief Judge Rader said he was “troubled” by the many differences between proceedings at the PTAB and in the district courts, particularly pointing to the disparities in the treatment of the same evidence concerning the same claims. Rader mentioned that his recent comments about the Board being a “death squad” for patents in contested proceedings may be more accurate than some originally thought, considering the dismal track record for survivability of challenged claims in the first wave of final written decisions.

Ultimately, if the PTAB continues on this path, the raison d’etre of the Patent Office and the entire patent system will be called into question, as a former top USPTO official recently told us while discussing these statistics about the low success rate for patent owners in contested proceedings.  He characterized the current situation in this way: We have an enterprise (i.e., the USPTO) that has 8,000 employees creating a product (i.e., patents) and has 300 employees destroying the same product in contested proceedings.  His question: “How long can this “business model” last?” If a private sector company were engaged in the same behavior they would quickly be out of business. The stakes are very high.

While we can debate what the future will hold for the patent system, patent owners really need to start to pay particular attention to post grant challenges because they are extremely popular, and really should start to engage in strategies during patent prosecution to strengthen patents and provide a bit of post grant challenge insurance if you will. See How to Protect Your Patent from Post Grant Challenges. The popularity of these new patent challenges demands such action.

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As of March 20, 2014, there are 954 petitions for IPR filed and 136 petitions for CBM filed.  There are no public derivation proceedings yet, but we are aware of several derivation proceedings that remain confidential.  The Office has not set a limit on the number of IPRs and CBMs for the current fiscal year, and although they have the ability to do that under the explicit terms of the America Invents Act (AIA), they have announced that they will not enforce a cap. This is significant because so far in fiscal year 2014 we are already nearing 500 proceedings and the statutory cap was set at a mere 281 proceedings. See Patent Litigation Declines, PTO Administrative Trials Increase.

Furthermore, Inter partes review, for example, has been offers a set of rules that are severely tilted in favor of the challenger, at least compared with patent litigation in the district courts. Recently Scott McKeown who is a partner at Oblon Spivak and co-chair of the Oblon post grant practice group wrote on his blog that the Patent Trial and Appeals Board (PTAB) “offers unprecedented speed with none of the patentee safeguards of the district court.” The biggest safeguard that a patentee enjoys at the district court is a presumption of validity, which is not present to protect the patentee in proceedings before the PTAB.

Whenever the Patent Office considers an issued patent the presumption of validity vanishes and the challenger need only meet a preponderance of the evidence standard, which is a substantially lower threshold to than a defendant would face in district court. In fact, in a patent litigation in district court the challenger would have to prove invalidity by clear and convincing evidence. Thus, validity determinations are stacked in favor of the patent owner during litigation, but are stacked in favor of the challenger in an administrative trial at the USPTO. Administrative trials at the USPTO have substantial shift in the play field.

The differing standard to challenge a patent claim is not the only advantage offered challengers. Many patent defendants prefer to fight a war of attrition and engage in multiple forums in serial fashion. This strategy is facilitated with the filing of an post grant patent challenge, particularly where the stay motion is filed before discovery begins, the contested proceeding has been instituted for PTAB trial on all of the overlapping claims, and the patent owner is not a direct competitor. In fact, if these conditions are met the chances of the stay being granted is very high. Even without these conditions being satisfied a district court is still quite likely to stay a patent litigation if a parallel contested proceeding has been filed.  While the court has broad discretion in granting a stay, the percentage of stay grants is over 50% nationally.

More problematic for patent owners, the Board is completely focused on meeting the statutory deadlines for completion of the IPRs and CBMs, which seems like a very good thing from an administrative standpoint.  As a practical matter, however, there are no extensions of time.  Counsel new to this world often do not appreciate this rigidity, which can unfortunately translate to the patent owner being ill prepared for the speed of the fight. The challenger was able to take their time and methodically prepare a petition and set up a strategy for the proceedings. For that reason it is absolutely essential that patent owners come up to speed as quickly as possible once a post grant patent challenge is filed. Effective representation in these contested proceedings requires a total commitment to meeting these rigid time deadlines. Planning accordingly it critical, as is getting out of the gate to a fast start.

Against this backdrop, on March 27, 2014, the Practising Law Institute will hold a one-day conference in New York titled PLI’s USPTO Post-Grant Patent Trials 2014.  This is the only conference dedicated to addressing the new contested proceedings and their impact on the overall patent environment.  The faculty is truly outstanding and includes a former top USPTO official, federal judges, savvy in-house counsel, and leading practitioners in contested proceedings. Speaking at the event will be Federal Circuit Judge Raymond Chen, former Acting Director of the USPTO Teresa Rea, Scott McKeown from Oblon, Rob Sterne from Sterne Kessler and many others. See here for full conference details.  With contested proceedings so enormously challenging to patent rights in the United States, and their practical impact is profound and expanding, anyone involved in the enforcement, licensing, sale, or monetization of U.S. patents should consider attending. The event will also be held on April 28, 2014, in San Francisco, and the program will be webcast from the San Francisco location for those unable to attend.

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35 comments so far.

  • [Avatar for Joren De Wachter]
    Joren De Wachter
    April 4, 2014 03:52 am

    Hi Anon,

    Are you suggesting that policies are adopted for the greater good, rather than on the basis of lobbying and special interests (made possible by the rents of monopolies)?

    That would be news indeed.

    Notwithstanding, I do observe two things. 1) I still have faith the in the power of ideas – and exposing the IP system as the mercantilist tax on innovation it is is important; 2) I do see that in those areas where IP and non-IP systems compete on a level playing field (i.e. where the non-IP commons is protected from monopolistic land grab by IP), the non-IP systems seem to win pretty much hands down. (it’s Open Source in software).

    For many years I have asked my audiences: show me a market where Open Source loses market share. None have answered – so far.

    So, yes, there is empirical evidence. Not enough, though.

  • [Avatar for Anon]
    Anon
    March 30, 2014 12:58 pm

    Joren,

    Your pleas for empirical evidence reminds me of the call from lower case anon to skeptics such as yourself.

    Where is an example of any modern advanced countries that have seen the light you wish to shine and have abandoned all IP laws? As noted recently, if your view was as compelling as you wish it to be, there should be a slew of such advanced modern societies, and it would be those societies that would be leading the global community as opposed to the global community partaking in agreements seeking to respect each nation’s grant of IP.

    Tell me more of the track that you are on, my friend.

  • [Avatar for Joren De Wachter]
    Joren De Wachter
    March 30, 2014 11:32 am

    At school, my teacher taught me that when your arguments are met with insults rather than counter-arguments (or, indeed, facts), it’s a sure sign you’re on the right track.

    Thanks for confirming, “step back” (indeed).

    MaxDrei – thanks for the content feedback. Ask yourself the question: if the patent system is “a positive” but the way it is implemented is pretty much always “a scandal and disgrace” (a point we certainly agree on) – surely there must be a logical conclusion to be drawn from that?

    After all, theories can be nice, but empirical evidence that consistently contradicts them should carry the day, no?

  • [Avatar for Anon]
    Anon
    March 29, 2014 02:19 pm

    Gene: this appears to be stuck in the filter, please post only one – thanks

    I would note an underlying theme and a rebuke to the Court that might well be served with an explicit point being made:

    One might be tempted to think that something more than the sum of the parts is needed for an inventive gist, or spark, to earn for any particular invention the legal grant of patent. The point to be made is that the Court has been down this road before. Prior to the 1952 Act, the Court reflected on this concept with its Flash of Genius rhetoric. Flash of Genius may be thought of as the inspirational gist that lies beyond a mere collection of prior art items with each item doing what that particular item in known to do.

    But here lies a double problem.

    The first problem is that Congress removed from the question of patent eligibility this explicit type of legal wrangling. Congress directly rebuked the Court on these grounds by separating from any sense of the patent eligibility question (101) by creating anew the notion of obviousness (103) and told the Court “No Mas – we do not want you meddling with the subject of patent eligibility any longer.”

    The second problem is that Congress also explicitly removed the Flash of Genius doctrine from the newly created replacement of “inventive gist” with the last line of the paragraph of 103. The Court in the Graham case (in dicta) debated what this meant, but it should be recognized that such dicta is by no means controlling.

    Of course, there are more problems and the mere recognition of the two problems above may not yield a straight forward answer. What did Congress mean when it used the word ‘obvious?’ Clearly, the first sentence of 103 and the second sentence of 103 must be read together and cannot be read to wipe each other out.

    One problem that I see with the Court’s jurisprudence stems from a view that the Court has not only messed up the jurisprudence of 101, but they have also messed up the jurisprudence of 103.

    As I was taught to understand the 102 and 103 analysis, the world of prior art that is used for a 102 analysis was to be considered different than the world of prior art used for a 103 analysis. The world of prior art for a 102 analysis was the full world of prior art. Strict novelty in that world of prior art was a fairly tight scoped question in a very very wide world. If that bar was passed, then the next type of examination was meant to be radically different.

    The next step (103) was to take a very selective subset of the wide world of prior art and within that very limited world, evaluate what to a person having ordinary skill in that highly selective world would consider as things so well known that that worker would not need the item (or combination of items) to be explicitly known in one piece of prior art. Key drivers here were that the art field itself could be easily identified and the combinations so readily apparently known that the claimed invention would virtually already be in the art and would not represent any type of ‘advance’**. The Court messed this up with its KSR decision. In that decision, the world of prior art for 103 was too greatly expanded, and so expanded because the Justices may not have realized the difference in the two sets of ‘prior art.’ The Court took the opportunity to in essence redefine what Congress intended as the person of ordinary skill in the art and broadened that person to include the ability of any art that may impinge on the solution. By so doing, the Court necessarily voided out the phrase “in the art to which the claimed invention pertains.” Is should be understood that a historical source of innovation is cross-art tinkering. Looking at other art fields to gain new perspectives. The Court seemed to want to eliminate this source of innovation as a mere obvious path. However, such was not their right to do. By expanding what a PHOSITA means and augmenting PHOSITA with a certain level of creativity, the Court has attempted to sneak back into patent law the necessity of having a flash of genius to invoke some inventive gist (in 103). Not only should the Court be rebuked for this action, but the obvious [pardon the pun] next step of the Court in attempting to move this from 103 to the open front gate of 101 is even more appalling.

    These actions have not been without their consequences. Part of the current debate on the breadth of claims stems from the traditional notion that an applicant need not attempt to capture what is known in the art. By augmenting the power of PHOSITA, the Court necessarily also lessened what must be shared by applicants. As I have commented before, the KSR decision has a particular line that often escapes critical evaluation. One reason given by the Court for expanding the notion of what should be considered obvious was to provide increased protection to those inventions already made: “deprive prior inventions of their value or utility.” KSR Slip Op at page 5. While the Court in dicta strove to make it clear that it thought that the 1952 Act was not lessening the level of ‘inventiveness’ that merits any invention the legal rights of a patent, one necessary aspect of their language was to expand what a patent would then cover. OF course, this is easier to be slipped by in passing and more difficult to recognize in practice. In fact, the popular press seems bound and determined to cry out against patents that would seem to cover ‘obvious’ advances, and breadth of claims has become a demonizing aspect.

    The Court is seemingly caught in a conundrum. In seeking to weaken the ability to obtain a new patent, they must make existing patents stronger, but they do not want that either. The non-intuitive answer is to make existing patents stronger directly – bringing more clarity and greater reward now will have the countervailing effect of an increased body of stronger prior art that will necessarily serve as a tougher future hurdle to obtaining a patent. One may even make the correlation that weaker patents means more patents, and that stronger patents would mean less patents. Yes, I admit this is counter-intuitive. But other counter-intuitive notions also exist today (a notable one being that if court costs are reduced, we would likely see increases in litigation).

    **keeping in mind the historical notion that “advance” does not mean a linear advance in technology or even a result that works better than results already known. I want to make sure that it is recognized that innovation is not always so geared, and in fact, disruptive innovation is usually thought of as first going backwards in the state of the art – see the writings of Christensen.

  • [Avatar for Anon]
    Anon
    March 29, 2014 11:31 am

    Benny,

    jodi has admitted to not being an attorney, and her views on prior art should take that into account, as she is not quite putting the argument forth correctly.

    If I may be so bold as to restate what I think she is attempting to say, the fact that building blocks to a claim may be in the prior art does not mean that the legal finding of obviousness is necessarily reached. I think what she is trying to say runs along the line recently expounded on this blog that “Only God works from scratch.”

    In other words, any claim can be broken down into its building blocks, and those building blocks can be found individually in the prior art. To depend on that type of thinking would indeed eviscerate the patent system. I believe it is that concern that jodi wishes to emphasize.

  • [Avatar for Benny]
    Benny
    March 29, 2014 09:04 am

    Jodi,
    You are telling me that if I find prior art it does not mean that the applicant didn’t invent something. ? Actually, it means precisely that. That is the definition of prior art.
    Perhaps you would like to explain the term “paid anti-patent gang”. I am paid a salary for R & D, no one is paying me to comment on this site, I am doing it on my own time.

  • [Avatar for jodi]
    jodi
    March 28, 2014 02:56 pm

    Benny, it appears you have not read my recent comments. Just because a you find a prior art does not mean the patent applicant did not invent something that was infringed. Like the rest of your paid anti-patent gang, you are overly focused on finding ways to get off on technicalities.

  • [Avatar for Benny]
    Benny
    March 28, 2014 12:31 pm

    Jodi,
    You appear to be confusing “novelty” with “inventive step”. Even I know the difference. By “prior art” I meant novelty-destroying prior art.
    By “industry” I mean manufacturers. Whether they are small or large entities is immaterial. By “cost” I mean post grant review fees, attorneys’ fees, and north of that.
    You seem to believe that the USPTO is infallible, and never grants patent rights to those who do not meet the requirements for such rights as set down in law. I have evidence to the contrary.

  • [Avatar for Anon]
    Anon
    March 28, 2014 09:39 am

    Gene, A post from my mobile device may be caught in the filter – if so please release and eliminate this post.

    Thanks

  • [Avatar for step back]
    step back
    March 28, 2014 07:25 am

    Max @ comment #18

    Thank you for pointing out Joren’s TEDx video:
    http://www.youtube.com/watch?v=E5BOBs3Nmbw#t=10

    I agree with you that he is a most charming snake oil salesman.
    Take for example his conjured up cocktail party where all the good and honorable business executives meet up to “trust” each other and to share truthful “information” with one another and to promote “innovation” because they are all so connected with the goodness in their “hearts” and with the honesty in their guts rather than with the jingle of silver coins in their pockets. I am truly moved.

    One would imagine that every creative and rational person, whether alive or dead, would be dying to jump into such a pit full of snake charmers for the purpose of freely “sharing” with them all his or her life’s blood and work product because, after all, that is what these business executives are all about, namely, honesty and goodness and sharing and giving to each his/her just due and selflessly promoting the welfare of not themselves but of society as a whole. Oh the cockles of my incorporated heart are simply toasted warm and fuzzy by the beauty of this imaginary world that Joren paints in his most charming of snake oil presentations. 😉

    (The wink means /end of sarcasm –on the internet some people fail to note the sarcastic fluid permeating through all that has been said above.)

  • [Avatar for jodi]
    jodi
    March 27, 2014 08:46 pm

    Gene, Anon:

    Regarding a registration type system, I don’t see it providing any advantages for small entities. The costs would be the same (if not more) – while the certainty would be less (zero?) until the very end of a patent infringement trial.

    Given all of the various mechanisms that enable infringers to freely infringe, I wonder if a 2-phase hybrid wouldn’t be better:
    Phase 1: Examination and prosecution happens as today, and patent issues.
    Phase 2: A limited time (1 year?) for 3rd parties to submit additional prior art and/or comments. Basically, the public acts as an additional Examination.

    After the 2nd phase, that’s it. Absolutely final. Nothing else. No post grant or any kind of review. No PTAB. No stalling. No weaseling out by large tech corporations. Both the PTO and the public had their chance. The boundaries established are definitive and concrete.

    If/when a patent infringement suit is brought to trial, the only thing looked at is whether the accused infringer infringes. No external proceedings, nothing else.

    This would provide absolute certainty as to 1) definitive boundaries, 2) clearly encourage innovation over copying – while balancing the supposed claims by large tech corporations that not enough examination takes place. Additionally, this would be swifter than anything today. Imagine, filing a software patent and after 7-10 years having that patent mean something!

    Also, the additional costs would not be on the PTO or taxpayers but instead on typically the large tech corporations. Yet, I would think these costs (finding and submitting additional prior art) would be significantly less than defending themselves in patent infringement trials.

    To be clear – a drastic change from today’s system – however less drastic change than moving to a registration system. In software, we call this “refactoring” – and done right, it works 🙂 Secondly, the best software refactoring is when code is deleted – and deletion of all the after-patent-issuance-shenanigans would be a good start.

  • [Avatar for jodi]
    jodi
    March 27, 2014 08:17 pm

    Benny,

    >>> ” Patent examiners make mistakes, and grant patents despite prior art proving the application is not novel. To believe otherwise is naive.”

    You will always be able to find a prior art to invalidate ANY patent ever – its really just a question of resources. One can show that both wooden frames and cloth existed before Wright Brothers – but that doesn’t mean they didn’t invent a flying machine. Prime numbers and factoring existed before RSA but that doesn’t mean they didn’t invent public key cryptography. Backlinks/href’s and sorting database rows by weight existed before Google but that doesn’t mean they didn’t invent new way to provide search results.

    Finding prior art does not mean invention did not take place. Invalidating a patent using prior art is just one of many procedures large corporations employ to fight the small entity. The PTAB kangaroo court is another arrow in the large corporations quiver. Large corporations get off on technicalities with get-out-of-jail-free cards while small innovative entities have no recourse.

    Large tech corporations with their much larger resources will always be able to out-gun a small entity and find prior art that “proves” or “disproves” a patent application. This isn’t a university math class with formal math proofs. No, we’re talking about small entities in the fight of their lives against large corporations who are motivated by maximizing profits regardless of any detriment to any external entity. Paying external innovators is deemed as an unnecessary cost. You are naive if you don’t think large tech corporations weigh the cost of something like PTAB vs licensing the invention covered by the patent.

    To be fair, the small entity is also thinking about profits or some kind of reward. However, without a strong patent system, the small entity would rarely bother with pursuing any wild and crazy idea that may/may-not lead to commercializing an innovation. Patents can provide balance. Letting large corporations get off on technicalities like submitting numerous prior art after a patent issues – or PTAB kangaroo court completely defeats the whole purpose of the patent system. Doesn’t the small entity deserve some form of certainty after a patent issues? I suggest that in today’s climate it simply doesn’t happen. A small software entity typically waits 5-10 years for a patent to finally issue – after which the technological and competitive landscape has already altered signficantly, then the uncertainty continues where who knows what post grant review, further prior art, PTAB, or whatever other sneaky trick the large corporation is waiting in the shadows to attack with. Nowadays, getting a patent means very little for the small entity – about the only certainty are maintenance fees to be paid.

    How many more arrows do we give these large tech corporations? How many more patents do we invalidate for their sake? How does this encourage small entities to invest in costly R&D with the potential threat of large tech company waiting to steal their IP and push it out in their next service pack or website update?

    >>> “I do not have an agenda against patents, software or others.”

    Anyone who is able to recognize the benefits of patents would not make the comments you make.

    Someone who does not have an agenda against patents would instead focus on determining WHAT the small entity invented and HOW a better patent application could have been written or how to tweak the patent system to better protect the small entity from ravenous large corporation hell bent on finding a way to get off on a technicality. That way the small entity could move on to further innovating instead of getting stuck fighting the large corporation in court.

    >>> ” The industry also bears the not inconsiderable cost of correcting these errors. ”

    Right, by “industry” you mean “large incumbent tech corporations who prefer bullying smaller entities” and by “inconsiderable cost” you mean “patent licensing fees” and by “correcting these errors” you mean “correcting large tech corporations previous mistake of thinking they could recklessly copy and get away with it”. Right, got it.

  • [Avatar for EG]
    EG
    March 27, 2014 11:56 am

    Gene,

    That the PTAB has yet to uphold the validity of any patent in any of the IPR proceedings is a statistical impossibility and a clear indication that these IPR proceedings, due to the language of the AIA statutes, how the USPTO (through the PTAB) interprets them or both, most likely violate the Due Process Clause (as well as the Taking Clause) of the 5th Amendment, as well as the APA.

  • [Avatar for Anon]
    Anon
    March 27, 2014 06:41 am

    MaxDrei,

    I did not indicate that my questioning was whether or not marginal material was getting to issue. Why would you attempt to put those words into my mouth?

    What I did indicate with my questioning was your belief that the overall direction of patent coverage was expanding.

    These are clearly two different ‘viewpoints.’

    Your point again about someone like Jacob is agreed upon. Cherrio to that. It is the next point in your expressed view that was questioned. The view that without those like Jacob, the scope of patent coverage has been expanding. Such an expansion serves the nature of innovation to be disruptive (see the writings of Christensen if you are unfamiliar with disruptive innovation). Large Corporations are naturally averse to disruptions and generally speaking would rather compete on those aspects of market size and spending capability that a weak or non-existent patent system threaten less. It seems that your comment at 18 has the dynamics of the world backwards. That somehow the tail that is Little David has been wagging the dog that is the moneyed lobbied powers of Goliath Large Corporation. That just does not make any sense. From any perspective.

  • [Avatar for Benny]
    Benny
    March 27, 2014 03:13 am

    Jodi (at 16) –
    Patent examiners make mistakes, and grant patents despite prior art proving the application is not novel. To believe otherwise is naive. I could provide examples, too.
    The industry also bears the not inconsiderable cost of correcting these errors.
    I do not have an agenda against patents, software or others. I do have an issue with the shoddy work sometimes turned out by the USPTO in granting patents that do not meet the legal requirements of novelty or non-obviousness.

  • [Avatar for MaxDrei]
    MaxDrei
    March 27, 2014 02:10 am

    Yes anon, I do understand the imperative, to “question” any suggestion that marginal matter is getting to issue.

    Posit away to your heart’s content. That’s OK with me if it gives me a further opening, to get my viewpoint across to readers..

    I don’t know which patents are the ones that constitute a “playing field leveler” but it hardly need be said that any large established corporation is going to be very much “against” any patent that happens one day to be asserted against it. Jacob’s point is that when the owner is Little David and the accused infringer is a corporate Goliath a spotlight is shone on the quality of the prevailing patent litigation regime . Can it deliver, for Little David, as effectively as it serves corporate Goliath? Jacob really does care that it should, as we saw from him in his judging days. In England today, good claims get enforced in short order, and bad ones get revoked in equally short order.

  • [Avatar for Anon]
    Anon
    March 26, 2014 09:05 pm

    MaxDrei,

    I have to question why you think that the direction from the lack of those like Jacob must “ The absence of such people doing the judging results in “creep” and ever more marginal subject matter being patented and enforced.

    I would posit that the opposite is true, especially given that the power of large established corporations would naturally be against patents which are more of a playing field leveler.

  • [Avatar for MaxDrei]
    MaxDrei
    March 26, 2014 05:53 pm

    Hallo Joren de Wachter and thanks for the Link at #15 above. I watched your TEDx presentation. you are a charming fellow.

    But I am not convinced by your arguments for abolishing the patent system.

    I am much more persuaded by the arguments of the likes of Robin Jacob, a retired English patents judge, now an IP academic.

    Like nearly all English patent judges, Jacob had a career as a patents barrister before stepping up to judging. As a barrister he is a “cab for hire” by patent owners and those accused by patent owners of infringing their patents. After 20 years or so, of plotting with Big Corp, either to get the other side condemned for infringement, or to get the judge to find the asserted patent not infringed and not valid, Jacob knows all the tricks that corporate litigants get up to. On becoming a judge, people like Jacob are driven to enforce deserving patents and swiftly to revoke any patent that is asserted but bad. He travels extensively, with ideas how to get the patent system working better.

    Unfortunately England is about the only country in the world that has such people judging patent actions. The absence of such people doing the judging results in “creep” and ever more marginal subject matter being patented and enforced. If only the rest of the world could install judges with such experience that they don’t have the wool pulled over their eyes, much of what is bad in the patent law of today (what you find iniquitous) would be swept away. Yes we can, if we want it enough, have a patent sytem that does promote the progress of the useful arts.

    A patent system in itself is a positive. But how it is implemented is, in nearly all countries, a scandal and a disgrace. It doesn’t have to be like that.

  • [Avatar for jodi]
    jodi
    March 26, 2014 02:59 pm

    I view this PTAB kangaroo court as one more arrow in large tech corporations to get off on a technicality. Instead of focusing on how we can better determine how to protect innovators by figuring out what exactly their invention really is and how to best define their property boundaries, the focus is instead on increasing the diversity and number of arrows/technicalities that large tech can reach into when needed.

    On patent battles, the media will report that a “patent was declared invalid” etc… Yet I wonder how often what really happened is that the Claims or specification were simply inadequate. Just because a patent is declared invalid or an infringer was deemed as not infringing doesn’t mean the patent applicant didn’t invent exactly what the infringer is doing. Just as all software has bugs, patent applications do too. Things like this PTAB kangaroo court let infringers get off on a technicalities.

    The patent system in place rewards the copier instead of the innovator.

  • [Avatar for jodi]
    jodi
    March 26, 2014 02:14 pm

    Benny writes: “There has to be a system in place which protects the industry from errors in the patent system. Obviously that system, too, can be abused, but it’s only the abuse that should be addressed, not the method as a whole.”

    There is exactly such a system in place – it’s called patent examination and it happens before any patent issues. You see, patent applications are rigorously examined before being issued.

    Benny, yourself, like the rest of the anti-patent gang, believe that far too many software patent applications should never have been issued – which clearly shows you simply do not understand innovation. Otherwise you would be fighting FOR software patents – not continually looking for ways to harm small software innovators that without patents do not stand a chance against large tech companies in bringing their software innovations to market.

    BTW – the fact that you did not understand Gene’s comment speaks volumes.

  • [Avatar for Joren De Wachter]
    Joren De Wachter
    March 26, 2014 01:17 pm

    MaxDrei,

    Have a look at my blog : http://jorendewachter.com/2013/11/big-data-ip-business-strategy/
    and let me know what you think.

    One of the key aspects is that the patent databases as a relevant source of prior art are becoming irrelevant very quickly.

  • [Avatar for Paul Cole]
    Paul Cole
    March 26, 2014 08:36 am

    It occurs to me that in the absence of any analysis of what is going wrong legallyh and/or in terms of fact finding the statistical analysis is merely anecdotal.

  • [Avatar for Paul Cole]
    Paul Cole
    March 26, 2014 08:34 am

    GENE: Can you advise whether there is a collection of these decisions on the USPTO website. I have found some links and they are far from user friendly.

    Without studying a sample of the decisions it is impossible to form a view whether this is an unfairly weighted system or, as Max Drei has suggested, we are dealing with low hanging fruit.

    Early decisions will be of great interest and publication of a list and links to them would be a great service, especially if they were grouped into cases where the patent was upheld in its entirety, some claims were ruled unpatentable and all claims were ruled unpatentable.

    Indications of the state of play as regards any appeals would be very helpful.

  • [Avatar for MaxDrei]
    MaxDrei
    March 26, 2014 04:07 am

    Joren, it is true that the prior art is expanding very rapidly and that patentability requires novelty over that prior art. The main component of the prior art is published patent applications.

    The wonder of human creativity is how many genuinely inventive contributions to the art are stimulated by that very prior art. Clever engineers are curious. They read these disclosures and immediately see a new and ingenious way to solve the technical Problem. In other words, they invent something patentable. Bravo!

    So, unlike you, I do not see Big Data throttling the flow of new patent issuances. To the contrary: all that lovely data just increases the flow of good quality patentable invention. Hooray!

    But perhaps you were only joshing us?

  • [Avatar for Benny]
    Benny
    March 26, 2014 03:23 am

    Gene,
    You say, “Throw whatever up on the wall, get whatever you can, then file frivolous lawsuits and seek $25K to $50K from hundreds or thousands of people who vaguely do what your patent describes. That seems to be the best business model” . I’m not quite sure from your tone of writing whether that was meant to be satire. That, financially, might seem to be the best business model, but it might also seem to be dishonest – morally, even if not legally. If I, as a patent applicant where to receive such advice from my attorney, I might consider seeking counsel elsewhere.
    There has to be a system in place which protects the industry from errors in the patent system. Obviously that system, too, can be abused, but it’s only the abuse that should be addressed, not the method as a whole.

  • [Avatar for Joren De Wachter]
    Joren De Wachter
    March 26, 2014 02:40 am

    As is often the case, what is omitted is more relevant than what is said.

    There seems to be no concern for patent quality in here whatsoever.

    If patents are bogus, because they do not fulfill the criteria, they should be removed. Such patents are a tax on innovation, actively damaging the economy.

    It is the first sign of how Big Data will wipe away the patent system, which, with its novelty requirement, will become unsustainable. To the uninitiated: Big Data is the doubling of data, and of information, every year. All that information is Prior Art. Hence, rejection rates must necessarily go to 100%. Logic.

  • [Avatar for MaxDrei]
    MaxDrei
    March 25, 2014 07:52 pm

    Gene writes: “a weak patent that is obviously invalid is better than a strong patent that is obviously infringed.”

    For my part I’m mystified by the word “better”. All issued patents, whether invalid or not, are intrinsically a restraint on free trade, tolerable only if they give more than they take. So, “better” in what sense? For Gene? For the economy of the USA? I simply don’t follow.

    Any reader care to back him up, with an explanation why?

  • [Avatar for Gene Quinn]
    Gene Quinn
    March 25, 2014 02:42 pm

    Anon-

    For the record, I don’t support a registration system. Nevertheless, if the PTAB is going to be a death squad and the Federal Circuit remains in love with de novo review and will find patents invalid that have continually been confirmed as valid in every other forum, what is the point of spending the many tens of thousands of dollars and 5 to 10 years to get a patent? If commercially viable patents are going to be declared invalid then we have to have a registration system.

    One might also start to question whether getting a good, strong, valid set of claims is worthwhile. Throw whatever up on the wall, get whatever you can, then file frivolous lawsuits and seek $25K to $50K from hundreds or thousands of people who vaguely do what your patent describes. That seems to be the best business model. Even if current patent reforms move forward that won’t change the fact that giant companies settle frivolous cases and fight strong cases.

    -Gene

  • [Avatar for Gene Quinn]
    Gene Quinn
    March 25, 2014 02:39 pm

    MaxDrei-

    Whoever told you that there is no real difference between preponderance and clear and convincing evidence standard is simply incorrect. Despite the fact that the law certainly recognizes an enormous difference, I believe we saw it come up in the Microsoft/i4i battle.

    I don’t know whether any of this is encouraging really. The odd thing is that a weak patent that is obviously invalid is better than a strong patent that is obviously infringed. The tech giants pay tens of thousands of dollars to settle extortion-like cases brought on weak, obviously invalid patents where there is not likely infringement. With strong, valid patents that are obviously infringed they fight until the patent is declared invalid. Curious that a system would tolerate that outcome.

    -Gene

  • [Avatar for Anon]
    Anon
    March 25, 2014 12:39 pm

    Gene,

    I have already seen your point about the registration system come up in private discussions. Personally I am against such systems even though I would like greatly benefit from them.

    If we continue on the track of denigrating the results of examination (as it seems to be a one way trip well underway), and remove the provided legal benefit of the standard of Clear and Convincing, then it only makes sense to question why we would have a Five Billion Dollar annual hit aimed at those who are opting to share their Quo for a promised (and ever more shaky) Quid.

    I have yet to see any reasonable analysis that would make economic sense for such a drain on innovation. For easily 1/20th the cost, an indexed registration system could be built – with far less required on an ongoing annual basis.

    But exactly like litigation reform, one must be careful of what one asks for, as the (un)intended consequences may be more than what is desired.

    As I have posted previously, litigation reform will likely induce more, not less litigation. At far less than 2% of active patents currently litigated, one must wonder how many of those other patents in the 98+% arena are not litigated because the break-even point of bringing litigation is too high?

    Likewise, a registration system, even one that removes the C&C standard, may result in a boondoggle for lawyers across the patent landscape. I see prosecution costs increasing rather than decreasing as any application would need to be written in the first instance in a litigation-prep mode, as litigation and not the patent office would be the vetting ground. Coupled with some of the proffered ‘fixes’ in the patent-litigation legislation (i.e. the loser-pay provisions), I see a winner-take-all, bet-the-farm, no expense spared because we can outspend the other side, mindset coming into play.

    Playing on puns, admittedly mixed, Gift horses must be looked in the mouth. Especially large wooden ones left outside the city gates.

  • [Avatar for MaxDrei]
    MaxDrei
    March 25, 2014 12:31 pm

    As you say Gene, “If”, and “If ” again. Frankly, I expect that we will have to wait a long time before all that you prophesy comes to pass.

    How interesting, that you maintain that C&C is “much, much” higher than a preponderance. At other times, in relation to other cases, on other patent law blogs, I have been assured with just as much vehemence, by American commentators just as expert and experienced in patent litigation as you, that the difference is not as great as I suppose it to be!

    I have to say, I’m much encouraged, by what you felt impelled to tell me, in reply to my points. Many thanks.

  • [Avatar for Gene Quinn]
    Gene Quinn
    March 25, 2014 12:01 pm

    MaxDrei-

    You ask: “I do not understand, Chicken Little, why a requirement that the challenger’s evidence has to get as far as “a preponderance” can be said to render the scales “stacked” in favour of the challenger.”

    Because in litigation the standard is clear and convincing evidence, which is much, much higher.

    You say: “so many claims are being found unfit to uphold indicates no more than that they are the lowest hanging fruit, shamelesly offering themselves to be summarily plucked.”

    Not really. What is shows is a fundamental misapplication of the law of obviousness. It also shows a complete and total lack of understanding of patent eligible subject matter. Unfortunately, the PTAB has taken their direction from several historically wrong Supreme Court decisions, but instead of moderating those overbroad proclamations given the facts they go further.

    You say: “When challengers go after them at the USPTO, in inter partes proceedings, it won’t be a moment too soon.”

    You better be careful what you wish for! If this continues to happen the US will move to a registration system. There simply won’t be any justification for an examined patent if every commerically viable patent is killed. That will substantially raise the costs for those who are challengers now.

  • [Avatar for Anon]
    Anon
    March 25, 2014 11:24 am

    Look at the eBay decision without the ‘traditional’ blinders of thinking that injunctions are a ‘harsh’ form of remedy and instead look at the broader underlying goal of remedy to make the transgressed whole.

  • [Avatar for ip guy]
    ip guy
    March 25, 2014 10:27 am

    Reverse the KSR decision.

  • [Avatar for MaxDrei]
    MaxDrei
    March 24, 2014 05:21 pm

    I do not understand, Chicken Little, why a requirement that the challenger’s evidence has to get as far as “a preponderance” can be said to render the scales “stacked” in favour of the challenger. An Opponent at the EPO likewise has to get beyond the “balance” of probability but nobody has ever dreamed of suggesting that this amounts to weighting the scales of justice in favour of the challenger.

    That in this initial period of contested proceedings at the USPTO so many claims are being found unfit to uphold indicates no more than that they are the lowest hanging fruit, shamelesly offering themselves to be summarily plucked. Dodgy, covetous and over-broad pharmaceutical claims are particularly problematic for despatch in ex parte proceedings, because of the inherent assymetry of adducing evidence of efficacy (or not). When challengers go after them at the USPTO, in inter partes proceedings, it won’t be a moment too soon.