Vidal Drills into Data on PTAB Use of Sanctions Since AIA in Response to Senators

“Since the start of AIA proceedings, the PTAB addressed sanctions in 59 cases. Petitioners requested sanctions in 19, patent owners in 25, both parties in two cases and the PTAB sua sponte raised the issue of sanctions in 13.”

sanctions - June of this year, United States Patent and Trademark Office (USPTO) Director Kathi Vidal replied to a late April request by Senators Thom Tillis (R-NC) and Mazie Hirono (D-HI) for answers to a number of questions surrounding abuse of the inter partes review (IPR) system, explaining that she was working on the problem. Now, Vidal has sent a follow-up letter providing more detail on two of the questions raised in the letter, specifically with respect to the USTPO’s authority to issue sanctions for bad faith petitions.

In addition to providing statistics on the Patent Trial and Appeal Board’s use of sanctions since the America Invents Act (AIA) was passed, Vidal also said she plans to seek stakeholder input to explore further options for addressing misconduct.

Vidal explained that, following the AIA, the USPTO issued Rule 37 CFR § 42.12, providing that the PTAB may impose sanctions against a party for misconduct. The rule outlines seven types of misconduct and eight types of sanctions, and the U.S. Court of Appeals for the Federal Circuit (CAFC) has held that the rule “provides the PTAB with discretion to issue sanctions and does not limit the PTAB to the eight sanctions listed in that section, but rather ‘allows the Board to issue sanctions not explicitly provided in the regulation.’ Apple Inc. v., Inc., 976 F.3d 1316, 1323 (Fed. Cir. 2020).” The USPTO can also sanction attorney misconduct through the Office of Enrollment and Discipline (OED).

As part of the USPTO’s investigation into the matter for purposes of responding to Tillis and Hirono, Vidal said the Office tracked PTAB data on sanctions since the AIA. The data showed that, since the start of AIA proceedings, the PTAB addressed sanctions in 59 cases. Of those, petitioners requested sanctions in 19, patent owners in 25, both parties in two cases and the PTAB sua sponte raised the issue of sanctions in 13.

In most of the 59 cases, sanctions issues stemmed from parties’ failure to comply with a rule or order rather than abuse of process allegations, Vidal’s letter said. And sanctions were ultimately imposed by the PTAB in 31 of the 59 cases.

In terms of the types of sanctions the PTAB imposed, they included “terminating proceedings, expunging documents from the record, repaneling cases, denying motions, ordering parties to abide by a protective order, and, in three related matters, awarding attorneys’ fees to the movant,” according to the letter.

Vidal concluded by noting the cited statistics demonstrate that the USPTO has a number of ways to address misconduct, but she agreed that the question raised by the senators of whether the Office “needs any additional authorities to ensure that parties do not file IPR petitions in bad faith and for reasons outside the intent of the AIA…warrants further exploration.” To determine precisely what additional authorities that may entail, Vidal said she plans to seek stakeholder input.

The topic of how to address sanctions for bad faith behavior at the PTAB was recently addressed by at least one amicus in the pending OpenSky Industries, LLC v. VLSI Technology LLC, IPR2021-01064 and Patent Quality Assurance [PQA], LLC v. VLSI Technology LLC, IPR2021-01229. Inventor Ramzi Khalil Maalouf’s amicus brief suggested that Vidal change the language of Rule 37 CFR 42.12(a)(6)) to indicate that the Patent Trial and Appeal Board (PTAB) “shall” rather than “may” sanction abuse of the post grant process.


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