Time to patent invalidity decisions on Rocket Docket calls value of PTAB into question

Businessman race On February 9th, Judge Liam O’Grady of the U.S. District Court of the Eastern District of Virginia (E.D. Va.) entered an order granting a motion that invalidated a series of eight patents, which had been asserted by Virginia Innovation Sciences, Inc. against e-commerce giant Amazon.com Inc. (NASDAQ:AMZN). The motion for judgment was filed pursuant to Federal Rule of Civil Procedure 54(b) regarding judgments on multiple claims. This comes just more than one month after another eight patents asserted by Virginia Innovation against both Amazon and Taiwanese consumer electronics firm HTC Corporation (TPE:2498), which were also similarly invalidated in the Eastern District of Virginia under the standard set by the U.S. Supreme Court’s decision in Alice Corp. v. CLS Bank International.

This series of motions for invalidating Virginia Innovation’s patents come within a year of Virginia Innovation filing suit against Amazon in the Eastern District. Patent risk management firm RPX Corporation published information online indicating that Virginia Innovation first filed its patent suit against Amazon last July asserting a total of 16 patents in the consumer electronics and personal computer sector. In an amended complaint filed by Virginia Innovation this January, the number of patents asserted were reduced to the eight, which were just invalidated by order of Judge O’Grady. Virginia Innovation had alleged that Amazon’s sale of the Kindle Fire HD 8.9, the Amazon Fire HDX 8.9 and “all reasonably similar products of Amazon” infringed upon the patents asserted.

Also on February 9th, Judge Henry E. Hudson entered a memorandum opinion in a different case before the Eastern District of Virginia, which granted a motion to dismiss a count of patent infringement alleged by a subsidiary of wireless communications firm CalAmp Corporation (NASDAQ:CAMP) against mobile network provider ORBCOMM Inc. (NASDAQ:ORBC). The Eastern District of Virginia memorandum opinion invalidated one of the two patents asserted by CalAmp, again under the standard set by the Supreme Court’s decision in Alice.

It’s interesting to note that the CalAmp case against ORBCOMM is another instance where it only took a few months for a determination of patent invalidity. CalAmp first filed two suits asserting the same two patents, including the recently invalidated patent, against ORBCOMM last October. One of those suits filed by CalAmp was dismissed in early November and the other suit resulted in the recent motion to invalidate one of the asserted patents.

In both of these cases, Eastern District of Virginia was able to come to a determination of patent invalidity within a year. Given this case timing, it seems reasonable to question at least one aspect of the Patent Trial and Appeal Board (PTAB), which is often touted as a valuable aspect of PTAB proceedings. Under the terms of the America Invents Act, which established PTAB, the appeals board is required to issue a final written decision on the patentability of challenged claims within one year, although six-month extensions may be filed in some cases. Yet there are multiple cases, at least within Eastern District of Virginia, which are able to issue decisions on patent eligibility well within that time frame.

The primary vehicle used to challenge patent post grant is an inter partes review (IPR) challenge. With IPRs the petitioner is not allowed to challenge patent eligibility, or the sufficiency of the written description. With an IPR only matters of novelty (under 35 U.S.C. 102) and obviousness (under 35 U.S.C. 103). So this is not a strict apples to apples comparison, but it is still nonetheless informative. This type of speed is hardly out of the ordinary for the Eastern District of Virginia, which is known throughout the legal community as the “Rocket Docket” because the judges move cases from inception to completion with tremendous speed.

One major criticism of the PTAB has been whether it is appropriate for an Article II tribunal to strip a vested property right of constitutional importance away from owners. Historically, prior to the AIA, challenges to patents were only able to be brought in the form of a reexamination (which is an examination proceeding where the patent owner can avail themselves of the full gamut of amendment options, including adding claims as can be done to any application) or in an Article III tribunal. The AIA upset this delicate balance, and for the large part of the PTAB’s existence the Federal Circuit, which is an Article III tribunal, has simply rubber stamped PTAB decisions — even agreeing with the PTAB that they did not have to consider timely submitted evidence filed as a matter of right. What this means is there has been little or no serious oversight of the PTAB, something that has changed in the past few months as the PTAB has continued to ignore basic statutory requirements.

So the question presented is this: If the Eastern District of Virginia can dispatch patent cases in less time than the PTAB, why should we suffer the indignity of the lack of due process and constitutional infirmity of an Article II tribunal striping vested property rights without much, if any, real oversight by an independent judiciary?

Gene Quinn Gene Quinn is a patent attorney and a leading commentator on patent law and innovation policy. Mr. Quinn has twice been named one of the top 50 most influential people [...see more]

Steve Brachmann Steve Brachmann is a graduate of the University at Buffalo School of Law, having earned his Juris Doctor in May 2022 and served as the President of the Intellectual Property [...see more]

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Join the Discussion

8 comments so far.

Paul F. Morgan
February 22, 2017 02:11 pm
It would indeed be nice if more D.C. judges, like this one, would quickly rule on invalidity or other dispositive motions before the delay and great expense of the preparation and conduct of entire trial on that plus every other arguable issue. Unfortunately, this is actually quite rare. E.g., count the number of granted S.J.s like that coming out of E.D.TX. as compared to the thousands of patent suits filed there.
Tim
February 22, 2017 07:03 am
Why doe’s it matter? Even when a 12-man jury sit’s in Judge Jackson’s Norfolk Court, and find’s Google, AOL, Gannett and Target guilty on all 14 charges in an infringement case, “Vringo vs IP Internet”, it goes to a corrupt Appeals Court for the “turnover”, and two judges, “Mayer&Wallach” will not see the findings of the jury and toss the case! And shareholders will lose their life savings, believing in our patents/protection. Judge Chen was the only qualified of the 3, and highly dissented. And our “wonderful” Supreme Court wouldn’t even see the case! Corruption all the way up! Google backed government.
Anon
February 21, 2017 11:12 am
David,

You do realize that the mechanisms of consent were changed for existing after-grant actions in the AIA, correct?
David
February 21, 2017 10:43 am
Gene – reexamination is unconstitutional for the same reasons IPR is.

Consent likely fixes the constitutional problem.
Gene Quinn
February 21, 2017 10:08 am
Bemused-

Hard to argue with your point.

There was much that could have been done at the time of the AIA, and still can be done, to make the patent system operate much better. Streamlining dispute resolution would have been a wonderful goal to achieve. Instead, as predicted, all that was accomplished was the addition of another entity that will be second guessed and who is given no deference by the district courts and gives no deference to district courts (or the Federal Circuit). On to of that, this particular entity was created with the most egregious set of rules that clearly lack basic procedural protections all because there is a fictitious 1 year deadline, which actually does not exist.

Who could have predicted this would have happened? Well, we all did even if we couldn’t have predicted that it would become so openly hostile and unfair.

-Gene
Bemused
February 21, 2017 08:25 am
Gene: So the question presented is this: If the Eastern District of Virginia can dispatch patent cases in less time than the PTAB, why should we suffer the indignity of the lack of due process and constitutional infirmity of an Article II tribunal striping vested property rights without much, if any, real oversight by an independent judiciary?

My Take: Because the efficient infringer lobby wasn’t really interested in creating speedy but fair process to legitimately adjudicate validity issues as it was about stacking the deck against inventors and patent holders.
Invention Rights
February 21, 2017 08:24 am
There is no question that IPR has increased the duration and expense of patent litigation. These results from the EDVA reinforce that. So what benefit remains? Serial attacks on a patent stripped of any real defense. This is an illegitimate purpose.

There is only one conceivable legitimate purpose remaining, to provide a panel of “experts” to review a patent on subject matter too complex for the district court. In this instance, the district court should should weigh any PTAB decision and analysis to see if it holds up as a defense to infringement under §282. This is the only way IPR can be salvaged to serve a legitimate purpose and uphold due process, separation of powers, etc.
Ken
February 21, 2017 07:06 am
I agree, but failing that, even a couple basic reforms in IPR would go a long way to easing the pain for inventors/entrepreneurs: 1) a STANDING requirement so it’s not a free-for-all against the patentee but rather a true alternative to litigation, as advertised (and as I understand it this could even be implemented administratively, per PTO Director “discretion” policy); 2) a presumption of validity higher than preponderance, at least sufficient to make it pretty tough to invalidate using the same damn prior art that the original examiner considered and was persuaded over; and 3) some sort of explicit res judicata or “gold-plating” in the sense that patent claims upheld in IPR are truly immune from any further challenge in any venue by anyone on those same grounds (other than the PTAB being reviewable by the SAME standard of deference that patentees get when they lose). After all, if it’s being touted as an “alternative to litigation” then it should work BOTH ways – but now it’s like a one way alternative because if the patentee loses his patent is gone altogether but if he wins then he has to fight others again and again whether at the PTAB or in court.