Yesterday we published an article explaining that over 90 percent of patents subject to an inter partes review challenge at the Patent Trial and Appeal Board (PTAB) are in one way or another defective or result in an unfavorable outcome to the patent owner. See Are more than 90 percent of patents challenged at the PTAB defective?
As the article explains, the data shows that at least 84 percent of patents reaching a final written decision in a PTAB validity challenge are adjudicated to have at least one invalid claim (usually many more than one claim), with 69 percent having all claims invalid. Add settlements, which are virtually certain to be unfavorable to patent owners (especially post-institution, when the petitioner has much more leverage), and at least 92 percent of patents challenged are defective. The data also shows that only 4 percent of all PTAB petitions for review proceedings end with a final written decision in which all claims are upheld as patentable.
Shawn Ambwani, Co-Founder and Chief Operating Officer of Unified Patents, joined the comments in the aforementioned article in an attempt to cast doubt on the article and the statistics. His chief complaint seems to be that Lex Machina characterizes a settlement of an inter partes review (IPR) proceeding as a win for the patent owner. While it is true that Lex Machina does seem to characterize settlements as a win for the patent owner, a settlement in an IPR proceeding is no win for a patent. The petitioner holds all leverage in an IPR proceeding, with the patent owner playing the role of a target without any leverage whatsoever. Patent owners settle on unfavorable terms – that is the reality of IPR practice.
Ambwani’s comments eventually lead to him saying that he doesn’t personally view settlements as a win or a loss for patent owners, but are presumably somehow neutral. The interesting thing about Ambwani’s claims, however, is that they are entirely inconsistent with what the Unified Patents website says.
Unified Patents challenges patents by filing inter partes review proceedings. They tout on their website that they are “the only entity that challenges bad patents and never pays.” They also explain that they do settle post grant challenges provided the settlement will remain confidential and further provided the patent owner agrees to provide a no-cost license.
The Unified Patents website explains:
Should Unified determine that its goals can be better served by settling a post-grant challenge (or agreeing to never file any challenges), Unified will consider settling in exchange for an NPE license, though never for money. As with all aspects of its challenges, Unified acts independently when settling, and never provides members with advance notice of negotiations, draft settlement agreements, or actual settlement. For this reason, Unified will not negotiate unless a nondisclosure agreement is in place. Unified’s practice of settling disputes springs from its long-term NPE deterrence goals, as it saves legal fees, which can be reallocated for other future deterrence activities.
How is a no-cost license given to an IPR petitioner anything other than complete and total capitulation? Complete and total capitulation in the real world is not a victory for the patent owner; it is an unequivocal loss.
It is difficult to understand how Ambwani can say that the capitulation settlements Unified Patents describes on its website are anything other than unfavorable to the patent owner. And clearly, based on Unified Patent’s own explanation, they enter into settlements as part of its deterrence efforts. Based on this it seems to me that Ambwani is not only directly contradicting the reality of IPR practice, but he is contradicting what Unified Patents says on its own website.
If we are to take Ambwani’s comments here at IPWatchdog.com at face value that seems to mean we must believe that Unified is settling IPRs on terms that are not unfavorable to patent owners. But how exactly is that consistent with what is said on the Unified Patents website? Is Unified Patents misrepresenting what they are doing in explanations on their website, or does Ambwani really believe that a capitulation settlement is something other than a loss by the patent owner? And how can a capitulation settlement be anything other than a loss?
Ambwani’s shifting positions may be understandable when you realize the business Unified Patents has created seems completely dependent upon the continued existence of a horribly one-sided and fundamentally unfair post grant process implemented by a PTAB that refuses to consider evidence timely submitted, that refuses to allow amendments despite the statute saying there is a right to amend, that refuses to issue final decisions on all the claims challenged, a PTAB that makes up their own standards rather than follow statutory tests, a PTAB governed by no judicial rules of ethical conduct for PTAB judges, and a PTAB with certain judges who decide issues where there are serious conflicts of interest. Nevertheless, in my opinion, you need to take what Ambwani says with a healthy grain of salt.
Join the Discussion
40 comments so far.
AnonJune 18, 2017 08:42 am
Sorry – hit “return” too quickly.
One suggestion for the last graph on that page: flip the “Not instituted – Merits” and “Not instituted – Procedural” data in the last graph and resort.
I would rather see the descending order of firms by success on the merits rather than success on mere procedural “wins.” Winning on procedure is less an indicator of capability of the defending firm and more an indicator merely of the sloppiness of the attacking firm.
AnonJune 18, 2017 08:38 am
That being said, I do enjoy at least the visuals and the data available on other sections of his web site (such as https://portal.unifiedpatents.com/ptab/analytics/case-level/by-counsel/patent-owner )
AnonJune 18, 2017 08:35 am
Returning (perhaps only somewhat) to the topic of this thread, I do wonder what Mr. Ambwani would have to say with the “tone” of his website page: ” https://www.unifiedpatents.com/faq/ ,” and the apparent disdain for non practicing entities.
He is just not aware of the history and purpose of the US patent system in that the property right that which is a patent was purposefully designed to be freely and fully alienable?
Does he have anything beside “Tr011” rhetoric to justify the jihad-like nature of the singlemindedness against a class of entities fully protected under US laws (and by fully protected, I mean the mere presence and interactions of entities to be non-practicing, and enjoy – without harassment or disdain – property rights that are not only fully enabled to be obtained vis a vis the free market and the transfers of property, but that are fully encouraged by the US patent system, from its very inception)?
I do not begrudge anyone like Mr. Ambwani from setting up a business because the US legislature (in the AIA) set the ground rules as they did, but the level of smugness is out of place from someone who appears to not understand the basic philosophical principles of the system with which his business interacts.
I have a feeling that Mr. Ambwani is incorrectly “taking pride in” the blowback he is receiving for his views, thinking that such blowback validates his business model, when the blowback is more along the lines of his seemingly boundless hubris and lack of understanding.
He seems to relish playing the part of the pig wrestling in mud, when he does not realized that that is not mud that he is wallowing in.
Tesia ThomasJune 17, 2017 04:46 pm
Exactly! That’s why people think the “garage researchers and inventors” have ended.
We’re being killed before we can move out of the garage. And, the thieves claim our tech as their own, completely removing us from history.
MarkJune 17, 2017 04:31 pm
Summary of US IP 2017
US Patent laws for 200 + years did everything they could do to put you in business. Now US Patent laws do everything they can to put you out of business and put the theives into business with your idea. Hard to believe the theives (big companies) have been armed with new tools to attack the patent holders.
Paul MorinvilleJune 17, 2017 02:44 pm
Unfortunately, I had to block him from my LinkedIn. Never had to block someone before so it took me a while to figure it out. Not only is he a sarcastic and immature mommy’s boy, but he trolls regular people online as much as he does inventors. At the PTAB It is really quite pathetic.
Gene QuinnJune 17, 2017 12:35 pm
Agreed. YOU haven’t seen anything yet. Stay tuned! You will find it harder and harder to misrepresent the truth. And what you’ve said here and on LinkedIn with such arrogance is about to be exposed.
Patent DefenderJune 16, 2017 06:32 pm
Can anyone confirm that Unified requests a money payment in their settlement offers in addition to the 0% license for subscribers? I am just curious.
What is ironic about UP is that they advertise themselves as performing a public good, but only clear the path for their subscribers, not the “public.”
Also ironic is that UP’s entire business is reverse monetization. They are trolls themselves. Their entire business is to extract value by devaluing assets.
AnonJune 16, 2017 05:31 pm
..and one more point: I may have been the first in the blogosphere to point out the Constitutional weakness that inures because of the lack of ANY actual affirmative right to amend.
Please do not take my position on the reading of what Congress actually wrote to be ANY type of defense of this atrocity from ANY Constitutional infirmities.
AnonJune 16, 2017 05:29 pm
“In the meantime, I’ve obviously missed the language in the statute that you see that grants the PTAB the permission to deny the motion to amend.”
You’ve quoted it, Gene.
It is inherent is what it means for one body to be given the right to ask.
The right to ask is merely that: the right to ask.
That is all.
If it were more than a right to ask, then Congress would have used different words.
“Also, while you are at it, I’d love for you to also point out all the other types of motions that patent owners have a right to file that are specifically mentioned in the statute.”
Non-sequitur to the point we are discussing. Let’s not try to cloud what IS a clear point of law.
The power of the PTAB to set controls is what is provided in 35 U.S.C. 316(a)(4). Such includes the additional items that you are trying to obfuscate with.
It should be abundantly clear that Congress felt differently about the affirmative power to amend by right and did not include that power to applicants.
“Clearly, the statute is phrased the way it is and doesn’t give the patent owner an absolute and unbounded right to amend because Congress only wanted 2 scenarios to apply”
That is also a plainly incorrect reading. Again, if Congress wanted to give an affirmative right, they know how to write such language – even if that affirmative right were to be constrained to ONLY those two situations (and still be an affirmative right).
There is no way around this Gene: Congress simply gave applicants something other than what you are claiming here. My statement is absolutely correct: there is no affirmative right to make an amendment in the IPR process.
Let’s take a closer look at that last quote (and I apologize a priori if I parse it incorrectly):
“Clearly, the statute is phrased the way it is and doesn’t give the patent owner an absolute and unbounded right to amend because Congress…”
“the statute doesn’t give the patent owner a right to amend because”
“the statute does not give the right to amend”
Did I err in any fundamental way as I climb a rung in a ladder of each of these progressive generalizations?
Now let’s take your original question of me, and turn the table and ask you: where are the actual words of Congress that state: “So the PTAB has a right to deny a motion to amend if the patent owner is not canceling claims or not substituting claims.”
Those words are NOT there.
Shawn AmbwaniJune 16, 2017 05:27 pm
Thanks so much for the shout out Gene. I couldn’t have done it without you. I feel like the post speaks for itself. All the best! You haven’t seen anything yet. We are just getting started. Q3 will be tons of fun. Peace out!
Gene QuinnJune 16, 2017 04:36 pm
Obviously we do not agree, and when the Federal Circuit rules we will find out.
In the meantime, I’ve obviously missed the language in the statute that you see that grants the PTAB the permission to deny the motion to amend. Can you please provide the citation to that section of the statute? All I see is a statute that says the patent owner may file a single motion to amend for two reasons. I do not see any statute that says that the PTAB has the discretion to deny that motion to amend. Obviously, I’ve missed that in the statute since it is such an easy case and I am so clearly wrong.
Also, while you are at it, I’d love for you to also point out all the other types of motions that patent owners have a right to file that are specifically mentioned in the statute. Clearly, under your reading of the statute without 316(d) the patent owner wouldn’t even be able to file a motion to amend at all. And again, I must be wrong, but I’m pretty sure that there are many types of motions that are filed in post grant proceedings that are not explicitly mentioned in the statute. But of course, that has to be wrong because how could that possibly be true? You obviously can’t file a motion that the statute doesn’t give you permission to file. Silly me.
As for this not being a close call, I do agree with you on that point. You are wrong on your other points. Clearly, the statute is phrased the way it is and doesn’t give the patent owner an absolute and unbounded right to amend because Congress only wanted 2 scenarios to apply. So the PTAB has a right to deny a motion to amend if the patent owner is not canceling claims or not substituting claims.
We will see. And frankly, I hope I’m wrong. Without a right to an amendment it is even more clear that IPR is unconstitutional because it will have absolutely nothing in common with reissue and reexamination.
AnonJune 16, 2017 03:33 pm
Oops – my apologies, as I missed a “close-bold” tag in the previous post.
AnonJune 16, 2017 03:30 pm
As to your response at 25, you misunderstand my use of “coy,” in that I was saying that MY position is the coy-sounding one.
Whether or not what Congress told “the people” about estoppel being real making it into the actual words of the bill that became the AIA may quite well be two (disparate) things. Again, I blame this on the ultra-poor drafting of the AIA itself.
My coyness then is that the presence of clear frustration of what Congress may have said to quiet those bringing up concerns and what Congress actually did in the AIA may not match (and may not match on purpose – THAT ‘on purpose’ aspect is the point of coyness).
I think that we can both agree that the overall writing quality of the AIA makes normal applications of statutory canons perhaps a bit dicey.
AnonJune 16, 2017 03:23 pm
Your rephrasing is too much.
“certainly not to refuse all amendments based on the statute saying the patent owner may, at their discretion amend,”
Providing the right to petition simply is not the same thing as providing the applicant the positive right to amend at the applicant’s discretion.
One is the right (or ability) to ask permission of the PTAB to make an amendment and the other would be (and quite frankly in the AIA is absent) the ability TO make the amendment without asking leave of the PTAB.
That amendments may be further constrained or limited simply does not change what the plain words that Congress choose mean; and they just do not mean that applicants have as a matter of right the ability to make an amendment.
This is not even a close call.
Gene QuinnJune 16, 2017 02:53 pm
Perhaps it isn’t a slam dunk on either side, but it is as close to a slam dunk in support of my position as any disputed issue really ever could be. As we know, the Supreme Court only takes cases to overrule the Federal Circuit. Further, my argument about the Federal Circuit interpretation in support of the PTAB frustrating the system is most certainly not a coy response as you characterize it — it is perfectly accurate. Look at the legislative history and contemporaneous public statements of every Member of Congress that spoke on these issues. They all said that patent owners and inventors were overreacting because serial challenges were not going to happen because there was estoppel that was meaningful. There are estoppel provisions specifically and explicitly in the statute. Those estoppel provisions have been absolutely gutted from the patent owners perspective. There is no estoppel when claims are not instituted, which is why they can be repeatedly challenged until instituted. There is no estoppel if the PTAB simply chooses not to include claims in a final written decision at their arbitrary determination. The PTAB is preventing estoppel from attaching for the benefit of patent owners. That clearly frustrates the statute and the intended purpose of those provisions. Basic canons of statutory construction require the Supreme Court to interpret the requirement so as to give the statutory scheme its intended meaning, not in a way that frustrates the express terms of the statute and express intent of the legislative history.
Gene QuinnJune 16, 2017 02:46 pm
You said: “There is no reason to weaken your position with an obvious over-reach of a desired (but not present) state of law.”
My comment contained no such over reach.
Frankly, your argument strikes me as particularly absurd. The presence of “may” versus some mandatory language is really and truly to miss the forest for the trees. What was Congress supposed to do? Were they to say that the patent owner “must file one motion…” And obviously, giving one a right to file an amendment without a right for that amendment to be entered is no right at all. Further still, the statute goes on to provide two conditions for the amendment. The amendment can either cancel claims or it can substitute a reasonable number of claims. To the extent the PTAB has any discretion it is to refuse amendments that do not do either 1 or 2, but certainly not to refuse all amendments based on the statute saying the patent owner may, at their discretion amend, versus requiring the patent owner to amend.
AnonJune 16, 2017 01:47 pm
As for the “any” must equal “all” issue, I am not convinced by either your nor Mr. Chisums views. I believe that the writIng of that section to be simply poor writing and as I have commented previously (I am sure that my comments are still on that previous thread), the level of ambiguity and multiple meanings of the word “any” along with the very large amount of discretion afforded the PTAB throughout the entirety of the IPR section provides a colorable argument not only for “any” may mean ONE or more, but at a minimum that Chevron defference would be in play.
I understand full well the pros and cons and the arguments for both sides on the “any” must equal “all” issue, and merely point out that the poor writing certainly does not make the issue a “slam dunk” for either side.
As for “frustrating the system,” I would addd the admittedly coy response: the whole of the AIA frustrates the system (and further add that some have convincingly theorized that such “frustration” was deliberate).
AnonJune 16, 2017 01:31 pm
“may file one motion” is abundantly clear.
You get to file a motion.
Congress knows how to give one amendment as a matter of right.
They simply did not do so.
There is no reason to weaken your position with an obvious over-reach of a desired (but not present) state of law.
Gene QuinnJune 16, 2017 01:20 pm
35 USC 316(d) say: “During an inter partes review instituted under this chapter, the patent owner may file 1 motion to amend the patent…” That meaning is pretty clear. I realize the PTAB interprets this to mean there is no right to amend and only a right to file a motion to amend, but that is obviously not what the statute means. Basic canons of statutory construction demand that 316(d) includes a right to amend. If the Federal Circuit were going to affirm their prior rulings it would not take 6+ months since the arguing of Aqua Products to issue a ruling. Figuring out how to mandate that the PTAB actually do what the statute requires is what is taking the time to decision.
With respect to any vs. all, I’ll observe that I found it interesting that when I wrote that the question was pretty open and shut there were a lot of people who took issue with me and thought I was being ridiculous. Then when Chisum said the same thing after me it became… oh… well Chisum said it so it must be right. Funny.
The requirement that the PTAB issue a final written decision is mandatory. It is nonsensical to read a mandatory requirement that then gives the PTAB absolute discretion to decide what they address in that mandatory decision. Writing a decision that covers any claim that is challenged seems very clear to me, and since we all know that the Supreme Court does not take cases to affirm the Federal Circuit it should be rather obvious to everyone what is going to happen here. Additionally, under the PTAB’s ridiculous interpretation (which allows them to pick whatever claims to write a decision on that they want and ignore whatever others they want) the estoppel provisions of the Act are meaningless. That is why there are serial challenges. The PTAB interpretation is completely inconsistent with the entirety of the legislative history which said estoppel would be real and serial challenges couldn’t happen. The PTAB interpretation is completely inconsistent with the express statutory scheme. There is absolutely no doubt that the Supreme Court will overrule the Federal Circuit and require the PTAB to issue a final written decision that covers all of the challenged claims. Interpreting that section of the statute any other way frustrates the entire system.
AnonJune 16, 2017 12:49 pm
Regardless of any other issue tied in here (and there are several), I cannot see the basis of your (now repeated) statement of:
“The Federal Circuit will soon rule that there is a right to amend a claim in IPR as the statute says,”
The statute simply does not state what you are saying that the statute states.
I may pick a nit with the “any” must equal “all” lack of discretion take on PTAB reporting (but that is something that I am less emotionally “tied” to, and as I posted previously: there are problems with BOTH readings of “any” must equal “all” and “any” may be ONE or more).
Other issues – I have posted my thoughts on those as well.
Final thought though is that I will try to impress upon you that aiming at behavior of the PTAB (vis a vis any sense of ‘procedural fairness’) is aiming at the wrong entity. It is Congress that needs to be aimed at – not the PTAB.
The courts have repeatedly answered those questions thrust at the PTAB by referencing the extremely broad discretion afforded to the PTAB by Congress. They will avoid (if not directly asked) the more direct (and hard) questions, and will merely reply that the questioned action falls within the parameters as set by Congress.
Gene QuinnJune 16, 2017 11:44 am
He can troll all he wants on LinkedIn. He has to feel the walls closing in as we all see that they are. The Federal Circuit will soon rule that there is a right to amend a claim in IPR as the statute says, and the Supreme Court will at a minimum rule within the next year that the PTAB must issue a final written decision with respect to all challenged claims. They may also rule IPRs unconstitutional. Then there is the anticipated rules changes whenever a Director is announced.
My prediction is the Unified business model won’t survive much longer. With the real facts of IPR getting out, and debunking pretty much everything he says as either wrong or hypocritical only helps expose what really is happening at the PTAB.
Frankly, once you know that judges of the PTAB have decided cases dealing with former defense clients I don’t know how anyone can defend the PTAB. All the other procedural unfairness really comes into focus with that realization.
Gene QuinnJune 16, 2017 11:35 am
Agreed. It is particularly peculiar with Unified Patents. It almost seems as if they say one thing in one context to make people think IPRs are fair and balanced, and then an entirely different thing on their website in order to attract clients. What a shame that the media doesn’t engage in even a first level investigation to identify the hypocrisy.
AnonJune 16, 2017 10:45 am
Playing the devil’s advocate, that cuts both ways.
Those who are pro-patent (and rest assured, I am in that group) see both sets in the light most advantageous to our belief system.
Those who are anti-patent (and rest assured, there is more than one philosophy/mind set that is anti-patent, vis a vis as I have framed it: Attacks from the Left and Attacks from the Right), ALSO see both sets in the light most advantageous to their belief system.
AnonJune 16, 2017 10:42 am
Can someone please point out the irony of his LinkedIn trolling…
BemusedJune 16, 2017 09:26 am
[email protected]: Excellent (and sadly accurate) comment
Invention RightsJune 16, 2017 09:21 am
Good observation Moocow.
MoocowJune 16, 2017 07:39 am
It’s almost funny, how the same people describe settlements in different forums. If the settlement is in an IPR, they use words like “win for the patent owner,” a rational party choice, fair cheap proceeding, it’s all good. If the settlement is in infringement litigation, they talk about nuisance, “forced,” illegitimate shakedowns, biased expensive proceedings, perfectly awful. Come on.
Pro SeJune 15, 2017 11:58 pm
@gene (10) – I’ve been thinking about when is the right time to express my last 4 years of IP experience, they tactics I used as a defense against IPRs and how I’m using it as a tool in my district court situations… tactics lawyers have used like serving a subpoena to my wife…
When I’m ready to tell my story (and trust me it’s a doozy) IPW will be the place I submit it.
Gene QuinnJune 15, 2017 11:46 pm
I don’t know that you would want any publicity for your situation, and I understand that. But if you want to tell your story, or you want someone to tell your story re: your experiences, please contact us.
Tesia ThomasJune 15, 2017 11:43 pm
You’re awesome Pro Se.
…and we really should make you the poster child of who the patent trolls really are, especially since you ended up with your IP.
Pro SeJune 15, 2017 11:33 pm
One last thing guys, I’m a practicing entity.. never been a NPE.. I always built my patented claims within several products.. but when UP filed their IPs and posted their press release about it, my kids came home from school and said other kids parents told them I was a “patent troll”…
I am a career product developer, who’s IP the PTO used to deny a key Apple patent application 3X under 102 and 103.. I build my products and UP clients want it.. so they hired UP to attempt to strip my IP away from the foundation of my product offering.
So when UP say they go after NPEs only, they are not being truthful.
They go after whoever their corporate clients tell them to.. even the so-called “little guy”.
Look up their docket, its the only individual named.. and further.. the only IP in the docket with a AA rating in their APIX.
Thanks for the IP strength.
Pro SeJune 15, 2017 11:10 pm
At least RPX offers money.. will contact you before making a move.. operates with some honor..
BenJune 15, 2017 11:07 pm
I’m going to get a patent on filling an IPR. Then I’m going to “wait in the weeds” for a few years as I build up my patent portfolio based on that initial patent. When my patent portfolio totals 500 patents on filing an IPR, I’m going to sue Unified Patents into the stone age for patent infringement.
Pro SeJune 15, 2017 10:44 pm
Unified Patents hit me with 3 IPRs, an independent Inventor, not an LLC.. a Pro Se..
For several of their so-called “industry” coverage areas whereas they expected me to give them a 0% license to their hundreds of signed up clients… where they make subscription fees yearly on using the IPR process to scare patent holders to deal. I prevailed convincingly, but personally, the careers of those involved are on constant watch…
Business is a long-tail path and the pendulum swings… Both ways.
JPMJune 15, 2017 10:42 pm
@2 Bemused, Unified Patents is a collusion ring; Cosa Nostra would be proud.
Paul MorinvilleJune 15, 2017 08:24 pm
When it does go down the tubes, do you think anyone will hire him? I’m not certain where his skills would be needed. Any ideas for him? Poor guy. It would suck to be without employment and no real skills.
RickJune 15, 2017 08:17 pm
Let’s hope the S. Ct. reigns in this ridiculous process. The Unified guys are really full of themselves. If IPRs survive, targets should cut out the middle man (Unified) and crowd fund IPRs. If Unified is really looking to eliminate bad patents and hurt trolls, it would never settle. And let me guess, part of the confidential settlement is that Unified is reimbursed for its attorneys, experts and overhead.
If they weren’t so obnoxious, I wouldn’t even care about their attempt to collect fees from clients in the name of “protection”.
BemusedJune 15, 2017 07:02 pm
Unified Patents is nothing more than a front for the efficient infringer lobby. They are yet another reason to hope the AIA gets blown up by SCOTUS: So their garbage business model goes down the tubes.
Patent InvestorJune 15, 2017 04:43 pm
Well, it needed to be said, but I’m sure this will stroke his already massive ego and he’ll be here to crow about it soon.