A Rollercoaster Year for the Patent Trial and Appeal Board in 2016

RollercoasterFew topics in the industry evince such passion, even emotion, as does the Patent Trial and Appeal Board (PTAB or “Board”) at the United States Patent and Trademark Office (USPTO). Ushered into being by the America Invents Act (AIA) with the intent on providing an administrative process for getting rid of bad patents, the Board has been called a death squad by some and celebrated by others. The truth probably lies somewhere in the middle, but it is extremely difficult to tell. The USPTO provides extremely misleading statistics that seem to have the clear intent to make the Board seem less of a threat than patent owners know it to be.

Further complicating the true story behind the Board is a relatively new problem associated with harassing patent challenges. I’m not talking about the challenges being filed against biotech and pharmaceutical patents, although those respective industry organizations believe filings against their Orange Book patents are frivolous. I have little sympathy for biotech and pharmaceutical companies because they supported the Board as a part of the AIA when they could have stopped those provisions, so if they were good for other people’s patents then they are good for biotech and pharmaceutical patents.

The harassing challenges of which I speak relate to serial challenges against the same patent. We are starting to see a phenomena emerge whereby challenge after challenge is filed against a patent only to be denied institution by the Board. Then mysteriously, without explanation as to what changed, an identical challenge is filed and suddenly the Board institutes the proceeding on the same prior art that was previously seen as unpersuasive. And what’s worse, the way the statistics are calculated these serial, harassing challenges make it look like the Board has a lower institution rate.

For example, if 4 inter partes review (IPR) challenges are filed against a patent and all denied, but a fifth identical IPR is instituted that means that out of those 5 challenges the institution rate was only 20%, which is hardly anything to get upset about. But that is complete nonsense. After being harassed the Board finally without explanation allowed a challenge so the patent owner had to respond to 5 challenges and still has to fight the proceeding. From the patent owner’s perspective it might as well be 100% institution rate.

The arbitrary and capricious nature of what goes on at the Board started to come to light in 2016 with several decisions from the Federal Circuit, after being carefully hidden from the public and excused by both the Patent Office and the courts for years. This awakening to the lawlessness of the Board accounts for the rollercoaster nature of the year for the Board. At the beginning of the year the Board was riding high on a wave of complete power with courts deferring time and time again to whatever they wanted to do, and whatever procedural unfairness befell a patent owner.

The high water mark for the Board came in June 2016 when the United States Supreme Court issued its ruling in Cuozzo Speed Technologies v. Lee, which ruled that the broadest reasonable interpretations (BRI) standard was acceptable, and that IPR institution decisions were not appealable. After that, however, the tide turned decidedly with the Federal Circuit finding the Board acted arbitrarily and capriciously, and that they were blatantly using the wrong definition of a covered business method (CBM) patent to institute challenges on patents that were not financial business methods. The year ends with the Federal Circuit considering whether the Board’s refusal to allow motions to amend, despite the statute saying they are allowed, is within their discretion. The writing seems to be on the wall and 2016 seems to be ending with the Board in a very different place than it was at the start of the year.


What follows are the highlights of 2016 for the Board, starting with a case decided on the very last day of 2015, which found that the Board actually does not need to consider timely submitted evidence that a party has a right to submit.

  • Redline Detection, LLC v. Star Envirotech, Inc. – Timely filed supplemental information does not need to be considered by PTAB in IPR proceeding (CAFC, Dec. 31, 2015). Read more.
  • Ethicon Endo-Surgery, Inv. V. Covidien LP – The same PTAB panel can decide both IPR institution and merits (CAFC, Jan. 13, 2016). Read more.
  • Tradestation Group v. Trading Technologies Int’l – The PTAB institutes a CBM proceeding on a graphical user interface (GUI), which is covered by multiple patents in Europe despite. This is despite the AIA legislative history clearly and unambiguously saying GUIs are not business method patents subject to CBM, and despite the fact that GUIs are not a business method and offer a technological solution. (PTAB, Jan. 27, 2016). Read more.
  • Synopsys, Inc. v. Mentor Graphics Corp. – The PTAB has discretion to institute an IPR and issue a written decision on a subset of challenged claims (CAFC, Feb. 10, 2016). Read more.
  • Patent Office Amends PTAB Trial Practice Rules (April 1, 2016). Read more (here and here).
  • The Patent Office defends the PTAB continually denying motions to amend in a Director’s Forum blog by Acting Chief APJ Nathan Kelley (May 9, 2016). Read more.
  • USPTO announces David Ruschke (formerly of Medtronic) as the next Chief APJ effective on May 23, 2016. Read more.
  • Cuozzo Speed Technologies v. Lee – The PTAB can apply the broadest reasonable interpretation (BRI) of patent claims in an IPR;  decisions to institute an IPR are not appealable to Federal courts. (SCOTUS, June 20, 2016). Read more (here, here and here).
  • In re Magnum Oil Tools Int’l – The PTAB Improperly shifted the burden of proof on obviousness to the patent owner in IPR (Fed. Cir. July 25, 2016). Read more .
  • Arendi S.A.R.L. v. Apple, Inc. – The Federal Circuit rules that common sense is not a substitute for reasoned analysis and evidentiary support (CAFC, August, 10, 2016). Read more.
  • Veritas Technologies, LLC v. Veeam Software Corp. – PTAB arbitrary, capricious in denying motion to amend in IPR (CAFC, Aug. 30, 2016). Read more.
  • Mylan v. Yeda Research & Dev. Co. – PTAB invalidates three patents covering Teva’s Copaxone, opens door for Mylan’s generic version (PTAB, Sept. 1, 2016). Read more.
  • SAS Institute, Inc. v. Complementsoft, LLC – Federal Circuit denies en banc rehearing, IPR proceedings can be instituted for less than all of the challenged claims (CAFC, Nov. 7, 2016). Read more.
  • Click-to-Call Technologies, LP v. Oracle Corp. – In concurring opinions two CAFC Judges invite en banc review of a holding that PTAB decisions to initiate IPRs are unreviewable (CAFC, Nov. 17, 2016). Read more.
  • Unwired Planet v. Google – Federal Circuit slams PTAB for using the wrong definition of CBM patent, which would make virtually every patent a covered business method (CAFC, Nov. 21, 2016). Read more.
  • In re Aqua Products – On December 9, 2016, the Federal Circuit sat en banc to hear argument in In re Aqua Products, Inc. on the burden of proof applicable to motions to amend patent claims during an inter partes review (“IPR”). Read more (here and here).


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Join the Discussion

4 comments so far.

  • [Avatar for EG]
    December 30, 2016 05:30 pm

    One Eric to Another,

    Your assessment of the current state of the U.S. patent system is also (sadly) on target.

  • [Avatar for Eric Berend]
    Eric Berend
    December 30, 2016 10:26 am

    To individual inventors, for whom the patent system is supposed to incent contributions to society of our genius and inventive efforts, this legalistic fumbling about amounts to little more than ‘re-arranging deck chairs on a Titanic’ of impending economic disaster – disaster already imposed upon us individually and en masse, as a class; and soon to be experienced in a declining GDP near you (if you are residing in the United States).

  • [Avatar for EG]
    December 30, 2016 08:53 am

    Hey Paul,

    Sadly, a very astute comment about the U.S. patent system in this politically turbulent day and age.

  • [Avatar for Paul Morinville]
    Paul Morinville
    December 29, 2016 01:00 pm

    Trump will undoubtedly change some of this. Then there will be an election and another president will change it again. Unfortunately, this roller coaster will never stop and patent values will always be dependent on who is president. How can Americans, as reasonable people who understand that property rights drive much of our economy and wealth, accept such a system.

    Thinking that the PTAB can be adjusted under Trump to be fair again and we are therefore OK again is not rational. It’s pie in the sky thinking. Anyone investing in patents will know that the strength of a patent right can and will change with the next president in four years. That inability to project the value of a patent will no doubt harm funding startups as much as it is now under Obama. It is the PTAB system that is fatally flawed and must be eliminated.

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