Why is PTAB spending precious resources killing good patents?

To date, critics of the Patent Trial and Appeal Board (PTAB) have mainly focused on issues of patent law.  Airing grievances, particularly the wisdom of Congress passing the America Invents Act (AIA), has become commonplace. There is much that can and should be made about what Congress did, and what the PTAB is doing. But there are also important questions of separation of powers and good government that demand attention. Why is the PTAB killing good patents previously adjudicated as valid in Article III federal courts?

We have recently detailed — at length — how the PTAB is engaged in a zealous, and overactive, campaign against commercially important, infringed and valid patents (see here, here, here and here). Dozens of patents the PTAB has unceremoniously killed were thoroughly litigated and confirmed valid by Article III federal courts. Why is the agency re-litigating the propriety of patents already found valid by Article III federal judges and juries? After all, this is the same agency that constantly complains about funding (see here, here, and here) — and is constantly raising fees because they need more revenue (see here, here, and here) — and year after year submits requests for an increased budget (see here and here).

If the USPTO is so starved for resources wouldn’t it make sense to stop re-litigating issues already decided?

Far more telling than any statistics are the specific instances where the PTAB has effectively overruled Article III federal district courts after re-litigating issues already decided. Indeed, there are numerous examples of good patents that had challenged claims confirmed valid in federal district court only to have the PTAB find those same claims invalid on the very same grounds litigated in the Article III federal courts (see here and here). In some cases claims were confirmed valid by the Federal Circuit only to be struck down by the PTAB, as happened with VirnetX.

Why is the PTAB spending precious resources re-litigating and ultimately killing good patents? The PTAB was created by Congress to review dubious patents and revoke bad patents. So why is the PTAB diverting its attention and re-litigating issues already addressed by federal judges and juries? Is it really likely that claims confirmed valid in federal court are invalid? It should be per se unlikely that patent claims previously adjudicated as valid in federal court are invalid.

The U.S. Supreme Court has repeatedly said patents are a property right, even comparing patents to ownership interests in real property (see here and here). The Patent Act similarly confirms in explicit terms that patents are imbued with property rights (see 35 U.S.C. 262). Yet the PTAB strikes down these property rights after a federal judge and jury has confirmed validity of the right?

Something has gone terribly awry with how the PTAB selects cases, re-litigates and operates. While reasonable minds may differ on many things relating to the PTAB, it is utterly astonishing that there is no Code of Judicial Conduct applicable to PTAB “judges” and the USPTO allowed judges to sit on and decide cases involving former clients (here, here, here and here).

In some cases the PTAB has struck down patents litigated for years, continually having claims adjudicated valid. Why is the PTAB is spending its time and limited resources on good patents that Article III federal courts and juries have confirmed valid? Is there some vendetta against patent owners and commercially important innovations? How can it be likely that these patents are invalid when they’ve been adjudicated as valid over and over again?

Patents that have withstood scrutiny in Article III federal courts are not bad patents. These good patents shouldn’t be struck down by an Article I administrative tribunal. The procedures of the AIA are working in a way to subjugate Article III federal courts to the arbitrary, capricious and egregiously overactive whims of an administrative tribunal in search of work to satisfy the several hundred newly hired “judges.” The U.S. Constitution simply does not envision Article III federal courts being inferior to administrative tribunals. To the contrary, at least since Marbury v. Madison the Article III federal courts have been tasked under the Constitution to be the final arbiters of the meaning of the law.

Current Supreme Court Chief Justice John Roberts even recently quipped during oral argument in Oil States that when the Supreme Court refers to “judges” they mean something different than an administrative judge of the PTAB, which he characterized as an executive branch employee. Still, these “judges” have managed to interpret the AIA in such a way as to allow them to re-litigate matters already decided in federal court. Is that what the AIA intended? Doesn’t it seem reasonable to assume that the PTAB would not spend its precious resources re-litigating validity? Isn’t it reasonable to assume the PTAB would spend its energy, and resources, reviewing questionable patents that Congress instructed them to review? Isn’t it reasonable to assume the PTAB would focus on patents not tested in an adversarial system and confirmed valid?

We operate under the legal fiction that Congress specifically intended whatever happens as the result of its actions. But this chaos simply can’t be what Congress intended. No rational person would have designed or sanctioned the operation of such a tribunal in 21st century America.

An aggressively overactive PTAB has managed to make Article III federal courts report to the superiority of the administrative tribunal made up of executive branch employees. This was, of course, foreseen as a problem with the drafting of the AIA, but in all honesty no one could have ever predicted it would become such a blatant power grab. This is what you get when Congress enacts what is supposed to be an alternative to district court litigation and then creates different burdens and evidentiary standards. It is also what you get when you triple the size of the Board and hire employees who are told by the Chief Judge that if they are not a “death squad” they are not doing their jobs.

An overly aggressive PTAB is also what you get when executive branch employees have no real independence. After all, if a panel is unlikely to reach the desired outcome of the agency the panel is simply stacked in order to ensure an outcome favored by the Office. Never mind that such stacking eliminates the independence the Administrative Procedures Act (APA) is supposed to guarantee.

Still, all of this begs a critically important question. If the PTAB is killing patents that have for many years been repeatedly confirmed as valid (i.e., good patents), what is the PTAB doing with the other patents that have yet to be independently reviewed in federal district court?

It would seem naive to believe that the PTAB is somehow less zealous in their efforts to kill patents when there has been no independent review of the integrity of the right granted. Indeed, if the PTAB is willing to strike down continually confirmed, good patents, it stands to reason that they are acting at least as aggressively with respect to patents not that have not been independently reviewed by an independent judiciary.

And then there is the pesky question about patent examination quality. If 82.5% of patents reaching a final written decision iat the PTAB are defective, what does that say about patent examination quality? The patent office would have you believe examination quality is 95% or higher. They would also have you believe the PTAB is always correct. These statistics are incongruous in a nearly Monty Phythonesque way.

At a minimum, what the PTAB is doing with respect to good patents previously adjudicated as valid raises very serious questions about an overactive, even rogue tribunal that seems to have a vendetta against patent owners and patents, regardless of whether those patents are good or bad. It is well past time for the USPTO to take an honest look at the PTAB. It is similarly well past time for Congress to step in and fix a hopelessly broken system that is destroying America’s patent system.