“Until an investigation is properly conducted, the newly established PTAB Pro Bono Program will likely function as little better than an extra chance to obtain patent rights that will be completely annihilated at the PTAB as soon as those rights become commercially valuable.”
On June 7, the U.S. Patent and Trademark Office’s (USPTO’s) Director’s Blog published a post authored by USPTO Director Kathi Vidal announcing that the agency is now receiving applications from inventors seeking free legal assistance to bring ex parte appeals of patent examiner rejections to the Patent Trial and Appeal Board (PTAB). While Vidal’s announcement is certainly welcome news to many inventors who are in financial need, it fails to address larger issues faced by inventors at the PTAB that have been voiced by members of Congress and the inventor community alike in recent months.
The PTAB Pro Bono Program was launched this March by the USPTO in collaboration with the PTAB Bar Association. At that time, the PTAB Bar Association began soliciting for volunteer patent practitioners to provide free legal services to qualified applicants. Since the establishment of the PTAB Pro Bono Program, the USPTO has indicated that, although the program will only be available for ex parte appeals initially, there are plans to expand the pro bono program’s resources to inventors seeking assistance with America Invents Act (AIA) patent validity trials.
Eligibility for inventors seeking assistance through the PTAB Pro Bono Program is limited to inventors who are domiciled within the United States and have a gross household income that is less than three times the federal poverty guidelines. Further, the inventor must have established micro entity status in the patent application subject to the appeal and viewed required training resources about the PTAB Pro Bono Program and the ex parte appeal process. Inventors seeking pro bono assistance must file their application with the PTAB Bar Association within one month of receiving an office action that includes an examiner’s final rejection of patent claims.
Inventor Community Wants Action on PTAB Abuses Destroying Their Business Prospects
Vidal’s recent announcement acknowledges that “navigating the patent system can be difficult at times,” and reiterates her commitment “to ensuring that our intellectual property system remains the dynamic engine of economic growth and national prosperity the framers of our Constitution envisioned.” Many stakeholders in the U.S. patent system, however, are desperately awaiting stronger action from Vidal on other aspects of the PTAB that are essentially holding the property rights of inventors hostage both through the abusive manipulation of legal proceedings and the exorbitant cost of defending patent rights through several AIA trials.
Many of these concerns were recently voiced on IPWatchdog in a post by jump rope system inventor Molly Metz, Founder and Owner of JumpNrope. Metz’s post described a nightmare that has been faced by many independent inventors trying to leverage their patent rights against well-resourced corporate giants infringing on their patents. At the moment that these inventors start to see business success based on their innovative products, efficient infringers move into their market, copying a patented invention and refusing to license the invention with the inventor. Metz wrote that hundreds of companies are infringing on her jump rope system patents, but it only took a pair of petitions for inter partes review (IPR) by major fitness equipment distributor Rogue Fitness to invalidate her patent claims in final written decisions affirmed by the Federal Circuit in a one-word Rule 36 judgment.
Metz virtually attended a USPTO webinar with Vidal in late May and offered the following exhortation to the USPTO Director:
“I want to focus on Ms. Vidal’s words during the webinar. She stated that she wants to encourage innovation and resolve abuse in the PTAB. I challenge her and the rest of the USPTO to look deeper into the abuse by listening and asking inventors what they have experienced at the PTAB. They will find that the PTAB is giving false hope to inventors. Their false hope sounds good out loud, but it is just words and not workable solutions for us… I want Ms. Vidal to work with me, and other inventors. To take a walk in our shoes. To open our cases, review them, and see the struggles we have experienced.”
Blatant Manipulation of IPR Process Needs to Be Addressed
It’s difficult enough for inventors to defend their patent rights against corporate infringers who can file numerous petitions against patent owners. In Metz’s case, her patent claims were invalidated after two IPRs, but there are many other inventors who face several IPR petitions challenging claims from the same patent, often from multiple petitioners who are alleged infringers defending patent cases in U.S. district court. Other patent owners, like VLSI Technologies, have blown the whistle on attempts by PTAB petitioner OpenSky Industries to game the IPR system by making false representations to the PTAB in order to get a petition dismissed in exchange for cash payment from VLSI.
That kind of outright manipulation of a process meant to fairly adjudicate patent rights piqued the interest of Congress just as it was completing the process of vetting President Biden’s nomination of Kathi Vidal to serve as the USPTO Director. A few weeks after her April confirmation, Senators Thom Tillis (R-NC) and Mazie Hirono (D-HI) sent Vidal a letter voicing concerns about OpenSky’s attempt at manipulating PTAB proceedings, noting that OpenSky, a company that sells no products, was seemingly formed in response to VLSI’s massive infringement verdict against Intel in U.S. district court for the purpose of challenging VLSI’s patent claims.
Vidal’s late May response to the Tillis-Hirono letter indicated that more time is needed to investigate the problem of PTAB manipulation and possible solutions.
“A misuse of [the IPR] process conflicts with both the framers’ original intent and the America Invents Act. The USPTO is revisiting its related practices and procedures to make clear that abuses of the IPR process will not be tolerated. I intend to ensure our system works for its intended purpose and to discourage any behavior that works at cross-purposes.”
One can completely understand a public servant’s need for more time to gain a better understanding of a deeply systemic problem that could be affecting operations across an entire federal agency. Indeed, Vidal has recently granted Director review of PTAB decisions to institute IPRs against VLSI patents, giving her a chance to directly address concerns regarding the petitioners in those cases. In written responses delivered to U.S. Senators last December during her nomination process, Vidal stated that PTAB abuses stacking the deck against small businesses and independent inventors “need to be investigated.”
For the Molly Metzes of the world, that investigation is long overdue. Until such an investigation is properly conducted, the newly established PTAB Pro Bono Program will likely function as little better than an extra chance to obtain patent rights that will be completely annihilated at the PTAB as soon as those rights become commercially valuable.
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9 comments so far.
BennyJune 20, 2022 01:27 pm
I would hazard a guess that given the willingness to invest the time and patience, you could build a watertight case to invalidate about 80 per cent of patents granted in the last 2 decades. Patent examiners only spend a few hours on prior art searches. They aren’t going to get official translations of Chinese applications, or track down research papers presented at Italian technical seminars (first hand experience). If it can be shown that the invention was disclosed before your priority date, well, not much defence against that, is there?
Stephen KeyJune 17, 2022 06:58 pm
I’m surprised to see that no one has decided to answer these very basic questions about how many inventors are truly being affected by PTAB.
AnonymousJune 9, 2022 05:48 pm
The PTAB Pro Bono Program is yet another ill-conceived government program that demonstrates that those in powerful federal government positions are often clueless about what happens outside the beltway.
Most of the patent applications that make it into this program will have been drafted by the inventors themselves, or on-the-cheap by attorneys or agents lacking the allotted time and/or or the experience to draft a proper US patent application. In many cases, the specifications of these applications will fail to provide sufficient written description and/or enablement for claims that might otherwise have been drafted to focus on the commercially valuable and patentable aspects of the invention. No matter how skillful the assigned prop bono attorney might be, he or she cannot cure a defective specification due to the strict prohibition against the introduction of new matter.
All too often, even a comprehensive patent application drafted by a registered patent attorney with decades of patent prosecution and litigation experience cannot not successfully navigate the USPTO’s gauntlet of corruption and incompetence. See my detailed post earlier today explaining the gory details of one example.
However, since corruption is deeply rooted in the USPTO, and its hierarchy is on a PR mission, I would not be surprised to see the PTAB exhibit clear bias in favor of applications admitted to this program.
As a managing partner in a large law firm, I would not allow attorneys in my firm to participate in the PTAB Pro Bono Program. Individual inventors and micro entities are far more likely to sue for legal malpractice than mid-size and large-size corporations. A jury would be sympathetic to claims that millions of dollars were lost because the pro bono attorney didn’t get the inventor the needed patent coverage. A defense based on the deficiencies of the inherited specification would be countered with the argument that the specification was accepted by the defendant when the attorney-client relationship was established. The plaintiff’s attorney would justifiably argue that the egg-shell plaintiff doctrine applies to all areas of tort law.
Any attempts to avoid malpractice liability with waivers or informed consent would likely be doomed to fail. The jury would decide the malpractice case, after hearing conflicting testimony from expert witnesses.
David LewisJune 9, 2022 01:04 pm
It seems to me that Open Source was attempting to negotiate a settlement. It is unclear to me how that can be considered abusive. The fact that Open Source does not have a product should not be considered relevant – isn’t the point of a patent system to encourage those that cannot make their own product to share their inventive-ideas, so that others can benefit.
Josh MaloneJune 9, 2022 12:01 pm
F22strike, that is a compelling testimony. If you are not already involved in US Inventor, we would love to have you.
mikeJune 9, 2022 11:55 am
What percentage of patents that end up in the PTAB due to success in the market end up with having claims cancelled? (84%)
What percentage of inventors agree with the idea of IPRs and how it can take their patent away post grant, even after they have already invested in a rigorous examination by an expert examiner and invested in their business based of the reliability of the patent being issued? (0%)
What percentage of knowledgeable underrepresented inventors identified these things — difficulty with enforcing patents, risk of PTAB invalidations, and efficient infringement presents — as obstacles to participating in the patent system? (100%)
What percentage of inventors holding out on patenting would participate in the patent system if the patent grant was presumed valid by all branches of government upon issuance, and the PTAB couldn’t take their patent away? (100%)
What percentage of real inventors had their voice considered when the America Invents Act was being debated? (0%)
F22strikeJune 9, 2022 11:19 am
The PTAB Pro Bono Program will not stop the widespread abuses perpetrated by US patent examiners and the PTAB. A significant percentage of micro entities will merely receive a discount on the ultimate cost of their disappointment and frustration.
Let me give you a real-world example of why this is true.
For the past five years, I represented a start-up company that was effectively destroyed by the USPTO before it ever had a chance to succeed. I cannot reveal the identities of the inventors, their company, or the patent number, nor my own identity, for fear of blowback by the USPTO. Nevertheless, I doubt that any fair-minded experienced US patent practitioner will doubt the veracity of the facts and opinions set forth hereafter.
The US inventors who formed the small entity I represented conceived of a novel, inexpensive standalone electronic device for household use. It provided significant advantages to consumers which were confirmed with lengthy beta testing of prototypes. Extensive prior art searches for US and International prior art were conducted that confirmed the patentability of the device. A provisional patent application disclosing the invention was filed in the USPTO in 2017 and a non-provisional application claiming priority from the same was filed in 2018.
Four years of tedious and time-consuming prosecution ensued involving a series of implausible obviousness rejections. Just imagine the cost of such a battle for a small entity to absorb. Each time these rejections were overcome, the examiner made new obviousness rejections based on combinations of newly cited references – no less than three different times. None of the newly cited references was more material to the patentability of the pending claims than the closest references uncovered in the privately conducted prior art searches, all of which were made of record via IDS documents filed before the first Office Action was mailed. Moving target rejections are discouraged in the MPEP but tolerated by SPEs, enabling examiners to game the USPTO’s quota system and substantially increase the USPTO’s collection of RCE filing fees. Adding insult to injury, in a second appeal, the PTAB reversed nearly all of the examiner’s rejections but then made its own new obviousness rejections.
An appeal to the CAFC, after another inevitably unsuccessful round with the examiner and a third appeal to the PTAB, would have likely have resulted in a Rule 36 affirmance. Therefore, in 2022, after a five-year odyssey at the USPTO, the inventors finally succumbed and settled for a vanity patent with narrow claims. The USPTO essentially threw the inventors a bone banking on receiving ridiculously high maintenance fees which will never be paid in regard to this vanity patent. As its final act of incompetence during the examination process, after receiving over $3,000 in small entity fees, the USPTO issued the inventors’ patent for their novel electronic device with informal patent drawings (sketches) instead of the formal patent drawings that were timely filed and are in the electronic file history.
Lacking adequate US patent protection, the start-up company had little chance of obtaining additional funding sufficient to commercialize the invention on a mass production basis. Therefore, the company was liquidated. In the bigger scheme of things, all of the potential benefits to US society of the growth of a new onshore business (like Fitbit) and the availability of a novel and useful consumer electronic device were effectively blocked by the USPTO. The patent that was ultimately granted is a graphic tombstone for the inventors’ modern attempt at small-tech entrepreneurship in the US.
In retrospect, perhaps the USPTO unintentionally did the inventors and their potential investors a huge favor. Assume for sake of argument that the inventors had obtained a US patent with claims having sufficient breadth to provide a reasonable degree of protection in the marketplace. If, against formidable odds, their invention later turned out to be a commercial success after spending millions of dollars and countless hours of effort, there would be a 90% chance that its claims would subsequently be canceled in an IPR proceeding. Even more distressing, there would be a good chance that the PTAB would facilitate this cancellation in response to an IPR petition filed by an anonymous shell company having no standing, no risk of estoppel, and created for the sole purpose of eviscerating the start-up company’s patent.
The SCOTUS decisions in eBay, Mayo, Alice, and Oil States, coupled with big-tech’s successful lobbying for the inclusion of IPR proceedings in the AIA, have decimated the US patent system. Given the current sad state of US patent law and the USPTO’s draconian examination practices, query, is it even ethical for a registered US patent attorney to file and prosecute US patent applications for micro entities and small entities? Large entities should seriously consider early defensive, non-patent publication of the bulk of the results of their R &D not deemed to be essential trade secrets, as a far less expensive alternative to filing US patent applications. It is now extremely rare for the exclusive rights supposedly afforded by a US patent to be successfully enforced, especially against big-tech. Congress, the SCOTUS, and the CAFC have sanctioned the efficient infringer model of doing business in the US. As a result, innovation and job creation in the US have been severely dis-incentivized. The big-tech monopoly rules in the US and much of what they don’t want to capitalize on is made by Chinese companies.
One final comment is in order. The IPR process has been weaponized. Very few entities have the money to withstand a seemingly never-ending series of IPR petitions and years of litigation even with regard to inventions that truly changed the world. See Caltech v. Broadcom, Avago and Apple et al. as an example. You are likely using Caltech’s ground-breaking error correction inventions if you are using WiFi right now. After Caltech’s patents survived at least ten IPR petitions the defendants still tried to wiggle out of estoppel. That legal battle drags on, courtesy of the widespread adoption of the efficient infringer theory of doing business in the US. Under that theory it is better to pay tens of millions of dollars in legal fees rather than one cent for patent royalties. Even if you lose, the next patent owner will be deterred from ever attempting to enforce its patents.
CuriousJune 9, 2022 09:29 am
USPTO Director Kathi Vidal announcing that the agency is now receiving applications from inventors seeking free legal assistance to bring ex parte appeals of patent examiner rejections to the Patent Trial and Appeal Board (PTAB).
The problem with this is that appealing lousy claims is usually a bad idea, and inventors with limited financial means typically have bad specifications and lousy claims.
Stephen KeyJune 9, 2022 08:45 am
Thank you very much for this article.
We definitely have a problem here.
I have a couple questions hopefully someone can help answer. What percent of independent inventors file patents? What percent of independent inventors end up in PTAB? And how large is this “inventing community” objecting to PTAB? And how many patents have been completely invalidated in the last two years from independent inventors?
Thank you so much.