The Honeymoon is Over: Time for Iancu to Take Action on PTAB Harassment of Patent Owners

“Director Iancu has done much good in many aspects, but enough time has now passed to conclude that his efforts relative to the PTAB have been too few and extremely disappointing. PTAB harassment of patent owner continues, and must end.”

Time for Iancu to Take Action on PTAB Harassment of Patent Owners - over 18 months ago, Andrei Iancu assumed control of the United States Patent and Trademark Office (USPTO). As the Director of the USPTO, Iancu has changed the tone of the conversation over patents in America. During President Obama’s second term the USPTO became aggressively anti-patent and anti-innovator. The speeches, policies and inaction of Director Michelle Lee led innovators and observers to correctly claim that the Obama Administration had come to champion the viewpoints of infringers, not the technology innovators. Director Iancu changed that almost overnight.

Almost immediately, Director Iancu began speaking of the important role patents play for innovators. He also spoke in glowing terms of historically revered innovators like the Wright Brothers, who during the Obama years at the height of the patent troll narratives, had become vilified as examples of those who did nothing particularly important or useful, but demanded a tax or toll be paid merely because they held a piece of paper. As asinine as that sounds, the inventors of controlled, manned flight were becoming public enemy No. 1 with history being rewritten. Iancu changed that as he, in speech after speech, spoke of them and other champions of innovation from the past in laudatory terms as the inspiration and example of what is possible because of a strong and functioning patent system.

At times, Director Iancu has been criticized for doing too much; things that are not within the province of the Director of the USPTO. For example, is it the prerogative of the USPTO to issue guidance on what the proper test is for patent eligibility, or should the USPTO merely follow the Article III courts? Well, when the Article III courts have made a mockery of the law to the point where the cases are entirely inconsistent and wholly irreconcilable, someone needs to step in and figure out how to make sense of the mess so that 8,000+ patent examiners, most of whom are not attorneys, can objectively (or as nearly objectively as possible) apply a repeatable and fair test that fits within the jurisprudence of the Article III courts. Iancu did this by pointing out the obvious: Alice and Mayo are very narrow decisions and, if you strictly follow exactly what the Supreme Court said, that does not render software or biotech innovations patent-ineligible regardless of what the random, inconsistent panels of the Federal Circuit say. And since the Supreme Court is supposed to be the final word, the USPTO following the Supreme Court very strictly just makes sense both politically and within our system of jurisprudence and justice.


The PTAB Problem

Where Director Iancu has failed, however, is with respect to the Patent Trial and Appeal Board (PTAB). With great fanfare, Director Iancu created a Precedential Opinion Panel (POP) that we were told would result in more decisions of the PTAB being declared precedential on the entire PTAB. There was hope that the POP would address the most important issues, such as serial challenges to the same patent over and over again, the use of the same prior art over and over again, and once and for all require the PTAB to apply the Federal Circuit view of what it means to be a real party and interest. Unfortunately, real reform of the PTAB has not happened despite tinkering with the Trial Guide. In important ways, the PTAB is worse, and the efforts that have been undertaken incorrectly form the appearance of reform. Sure, it is nice that the same party may have a more difficult time of getting serial petitions challenged, but why should any patent ever be subjected to the drip, drip, drip of multiple challenges that can be brought throughout the entire lifetime of the patent?

While it is true that the PTAB institution rate has decreased, that statistic is entirely misleading. For example, Apple recently filed six challenges on the same patent. The PTAB denied five and instituted one. As far as the PTAB is concerned, that corresponds to an institution rate of 1 for 6. As far as the patent owner is concerned the institution rate is worse than 1 for 1. The patent owner had to respond to six separate petitions on the same patent, which was ultimately instituted anyway. Under the current system, the patent owner has to win every single time and the fight is not over until the patent owner loses. Worse yet, those claims not instituted can and no doubt will be challenged again, and again, and again until they ultimately are instituted. Because, while the USPTO claims serial institution is not a problem, it is.

Look at Finjan. They have a portfolio of approximately 30 patents and have already fought and won 80+ times at the PTAB, not including the petitions they have fought off that were not instituted. All total they have lost just a few claims, with every other claim either never being instituted or withstanding challenge. Yet, their patents—about eight of the most important ones to be exact—are challenged repeatedly. Where is Director Iancu? He has the power to stop this from happening but does nothing to exercise this power.

The power to stop harassing petitions was specifically given to the USPTO Director as part of the America Invents Act. Why isn’t Director Iancu using that power? How many times does a company like Finjan need to win before the USPTO says enough is enough? They have won multiple dozens of times at the PTAB, they have won in every district court litigation they have fought, and they have won at the Federal Circuit. If the Finjan portfolio can be challenged over and over and over again, obviously the power to stop harassing challenges is one that will never be used by any USPTO Director. The Finjan portfolio is as thoroughly litigated as anyone can possibly imagine, yet challenges continue to be instituted. Why? It looks like they are being persecuted.

Sadly, Finjan is not the only such company to be harassed, but because their portfolio is so strong, and they have the funds to fight, they have become the posterchild for IPR abuse. Most patent owners don’t have the funding to fight and win 80+ times like Finjan has. They are forced to give up, which means technology implementers get to use innovations they did not create without paying for them. It is no wonder early stage funding and Venture Capital is moving to Europe and China.

Sources have also confirmed that some PTAB judges are gaming their quota. The reason you see so many large companies file multiple challenges is because when they do, they are more likely to have cases instituted, and they know that to be true. This is because some judges are more likely to institute when multiple challenges are filed on the same patent because they are able to review a single patent and handle two or more challenges relatively quickly based on the same patent and much of the same prior art. So, in order to game the system and make it easier for them to reach their work production quota, those Administrative Patent Judges that game the system institute multiple cases for their own benefit. This is precisely why there needs to be a bifurcation between those deciding to institute and those deciding a case on the merits.

Director Iancu has done much good in many aspects, but enough time has now passed to conclude that his efforts relative to the PTAB have been too few and extremely disappointing. PTAB harassment of patent owner continues, and must end.

A “D” for Doing Nothing

While Iancu probably doesn’t deserve an F for his PTAB efforts, but given that Congress delegated the Director all the authority and discretion in the world necessary to institute petitions and run the PTAB, he easily deserves a D, with a downward sloping track heading toward a failing grade. The buck stops with him and him alone on the PTAB. There are things he could do later today by decree to fix the PTAB. He knows what they are. Why isn’t he doing those things?

The honeymoon needs to be over and it is time to acknowledge that, while Director Iancu has been on the front lines with respect to patent eligibility, he has failed to live up to the promise of his hype with respect to the PTAB.


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Join the Discussion

12 comments so far.

  • [Avatar for C. R.]
    C. R.
    November 1, 2019 01:35 pm

    I think Senator Tillis got this one right at the Senate Judiciary IP subcommittee. He said, “It’s wrong to put patent applicants through the rigorous examination process only to grant them a patent that has defects and flaws.”

    The PTAB is one of the important checks in the system to address those defects and flaws. I think it’s time to focus on the source of the defects and not on the portion of the system that checks and corrects those defects. In other words, we need to focus our reform efforts on the root of the problem.

    The PTAB needs teeth to ensure that the patents we have out there should be enforceable for millions of dollars. On the other hand, the Patent Examining Corps needs to get their act together and issue quality patents. If the USPTO can achieve that, I am sure that patent-owner harassment would decrease as petitions become less successful. However, it’s important to distinguish between unsuccessful petitions based on administrative grounds (like some bogus discretionary denial) and an unsuccessful petition based on the merits. Right now, I see USPTO policy focus on bogus discretionary denials.

    Patent-owner harassment is only a symptom of bad patent quality. The USPTO needs to focus on increasing patent quality. Perhaps give patent examiners more time to work on a given case. Did you know that some primary examiners only have 8 hours to research, draft, and issue an office action? He has 8 hours to basically adjudicate whether an invention is patentable… that’s too little and solving this time constraint should be part of the solution.

  • [Avatar for Davi Wanetick]
    Davi Wanetick
    August 18, 2019 03:07 pm

    Two and a Half Good Men

    The inventor community is privileged to have Director Iancu at the helm. He is doing a lot to elevate the status of inventors and patentees as well as to make much-needed reforms throughout the USPTO. We also need people like Gene to keep the pressure on officials to further strengthen the patent system.

    @ghostndragon You are right, supporting inventors and patentees reflects a political bent. But what’s wrong with that? Articulating one’s political bent and making cogent arguments are not mutually exclusive. Standing up for any oppressed group of people can be said to be espousing a political bent. And inventors and patentees are definitely an oppressed group of people.

  • [Avatar for Paul F. Morgan]
    Paul F. Morgan
    August 16, 2019 11:06 am

    Re: “serial [IPR] challenges to the same patent over and over again, the use of the same prior art over and over again,.”
    Not to deny that plural challenges to the same patent has been a problem in a few widely reported cases, but the actual statistics on the number of such IPRs are available, and it has occurred for only a small number of patents, in a small % of all IPRs, and usually where the patent owner has sued more than one defendant. Furthermore, the PTAB has now been increasingly denying or requiring joinder of further IPR petitions against the same patent, especially with the same prior art. Director Iancu has clearly been making changes but he has no authority to change the statutes or deprive defendants of their use of IPRs by IPRs by other defendants. The issue of motions for expanded IPR discovery to discover the real party in interest was just addressed by the Fed. Cir., and it is also up to the Fed. Cir. to define real party in interest. Since most IPR decisions are appealed to the Fed. Cir. the PTABs RPI definition should have have already been challenged if that is really a frequent issue.

  • [Avatar for ghostndragon]
    August 16, 2019 10:57 am

    Dear Mr. Quinn, Your political bent gets in the way of a good argument. Like, a lot. I wanted to read this article, but my brain started going “blah blah blah” after about the 8th political attack or praise, which is about the 2nd paragraph. It would be nice to stick to substance.
    All the best,

  • [Avatar for Joachim Martillo]
    Joachim Martillo
    August 15, 2019 01:38 pm

    Iancu is an executive appointee. In the service of the president, he must carry out the president’s duty to “take Care that the Laws be faithfully executed.” [US Constitution, Article II, Section 3]

    Iancu has no discretion with respect to execution of the laws.

    For this reason I argue that it is necessary to amend the Constitution so the crap like the post grant review proceedings be ended permanently and so that Congress cannot ever again legislate such crap in the future.

  • [Avatar for Jonathan]
    August 15, 2019 09:46 am

    When’s your next interview with him?

  • [Avatar for Mark Syman]
    Mark Syman
    August 15, 2019 08:37 am

    Myself and other patent attorneys agree, it’s time that Iancu implement major reform of the PTAB.

  • [Avatar for concerned]
    August 15, 2019 07:40 am

    JAM: Amen!

    My USPTO rejection was a lazy “cut and paste” per an international patent author who reached out to me for his upcoming book.

    The examiner wrote that my claims were the abstract process of collecting and analyzing data. Yet the Social Security Administration has the best social security data in the world. The working professionals and experts at the SSA could not solve this problem in 63 years with their world class data. Clearly the solution to the problem my claims solve is beyond merely collecting and analyzing data.

    It is also impossible to pin the examiner down as my examiner did not address the hard evidence submitted on the record, he just kept repeating routine, conventional and well understood. The evidence submitted on the official record proved nobody uses my claims, individually or in combination, by any possible end user (the Medicaid authorities in all 50 states or the Social Security Administration). No 102 or 103 rejections, just the 101.

    The first causalities of the “cut and paste” is truth, logic and hard evidence. The process should be held accountable. Interestingly, my examiner just switched for reasons unknown, but immediately prior to the PTAB response to our appeal belief.

    Concrete steps that solve real problems beyond the reach of experts have been held patentable, even Alice held as much. I am hoping the new examiner wants to bring this matter to a proper conclusion.

  • [Avatar for Paul Cole]
    Paul Cole
    August 15, 2019 05:31 am

    Somewhere or other there is res judicata.

    If a patent has been held valid over a group of references that is res judicata and it is an embarrassment for lack of novelty/inventive step to be re-opened over the same references. That is not rocket science.

    And if a party files six petitions against the same patent, that is self-evidently an abuse and a breach of the normal requirement in any legal dispute that each of the parties should put forward their whole case as far as possible in a single document and at the earliest possible stage.

  • [Avatar for Wake Up!!!]
    Wake Up!!!
    August 14, 2019 09:01 pm

    Gene you seem to think the rules apply to the elites, Big Tech owns the game Mr. Iancu can not do anything the judges are ignoring his requests. And let me just add that the new patent bill being drafted by the Subcommittee on Intellectual Property Rights will have a nice carve out for Big Tech. Democracy is not at play here, the true colours of Corporatocracy are no longer hiding behind the curtain. They are now front and centre and no one has the balls to call out the emperor for not wearing clothing, not even you Gene. AIA Act PTAB The Alice,EBay, Mayo, TC Heartland and the Oils case have all been puppeterd by Big Tech. Game over.

  • [Avatar for Pro Say]
    Pro Say
    August 14, 2019 08:15 pm

    All your patents are (still) belong to us.

    The PTAB

  • [Avatar for Jam]
    August 14, 2019 07:52 pm

    Something I’d like to see is the examiners being held accountable for identifying the specific limitations that recite an abstract idea in a claim. Too often the rejection does a copy and paste of the claim (minus the preamble) and calls that the abstract idea. (Swallowing all of patent law indeed.)

    This violates the spirit if not the letter of the 2019 guidance where it states “Identify the specific limitation(s) in the claim under examination (individually or in combination) that the examiner believes recites an abstract idea.” As can be seen by the training examples which analyze the steps individually (and even break out the phrases within the steps, e.g., slide 178 discussing example 42 for transmission of notifications when medical records are updated) as to whether an abstract idea is in the claim.

    If I have a computer system, the step of “collecting data” is not an abstract idea (see slides training 115 and 116, which plainly show that the step of “collecting a set of digital facial images from a database” is NOT an abstract idea). Even if they are not significantly more at Step 2B, they still should not be lazily identified as abstract ideas at Step 2A Prong 1.