Vidal’s Solution to OpenSky Abuse Encourages PTAB Extortion

“Obviously, principles of equity do not apply at the USPTO when it comes to the PTAB, and neither does common sense.”

extortionThere is a reason many stakeholders believe the Patent Trial and Appeal Board (PTAB) has been weaponized against patent owners. From the very outset, the first Chief Judge of the PTAB famously, or infamously, stated that if the tribunal was not doing some “death squadding” they were not doing their jobs; a rebuke to then Federal Circuit Chief Judge Randall Rader’s observation that the PTAB was nothing more than a death squad for patents. But from those early days where patent owners were not even allowed to submit evidence to rebut a petition at the institution stage, to the unbelievable lapse in ethical judgment of one former PTAB judge, there have been numerous reasons to question the tribunal.

Extortion Pays

As of Tuesday, October 4, we have yet another in a long line of reasons why the PTAB is hopelessly broken and, in its present form, incapable of being fixed. Straight from the “you have to be kidding me” department, U.S. Patent and Trademark Office (USPTO) Director Kathi Vidal yesterday found that OpenSky engaged in extortion, but has decided to continue to allow them to participate as a “silent understudy” in the inter partes review that they filed. Moreover, Intel, the beneficiary of the extortion perpetrated by OpenSky, could not have filed an inter partes review (IPR) themselves due to the statute of limitations. Nevertheless, the IPR against VLSI continues, with Intel now elevated to lead petitioner. The moral of the story: extortion pays.

Legal interpretations that ignore the statute of limitations should be viewed with inherent skepticism. A statutory bar exists for a reason, yet in the PTAB world, the prohibition against bringing a challenge more than one year after a lawsuit has been filed is far more akin to a manufacturer’s suggested retail price than anything that truly resembles a legal bar or statute of limitations. And those who champion the PTAB wonder why it is that right minded people question the integrity and very foundation upon which the tribunal is built? They are obviously feigning indignation; they know the unfairness even as it is a strategic advantage to them and their clients.

As already mentioned, in the inter partes review context, petitioners have one year to file a challenge after a lawsuit, but as a matter of course the USPTO ignores this requirement by allowing a party otherwise prevented from bringing a challenge to bring a challenge as what is called a joining party. The theory, I guess, is that there will be no harm in allowing the party legally barred from challenging to challenge because someone else is already challenging. Forget the obvious potential for strawman abuses, what is particularly offensive is when then unbarred party settles or otherwise drops the challenge and then the barred party is allowed to continue. So, the barred party couldn’t have started the case themselves but somehow, they are the ones that are left as the challenger. That is precisely what Director Vidal ordered in the OpenSky / VLSI fiasco, with OpenSky allowed to remain a nominal party but not to file any papers or direct the challenge, and Intel being moved to the position of primary challenger.

So, as the result of her Director review decision, we now know that even when the Director finds that a challenge has been filed by a party purely for the purpose of extortion— her finding, not merely hyperbole— a party that couldn’t have brought an IPR is allowed to continue in place of the extortionist even when that party could not have filed a petition themselves because of the statute of limitations. Obviously, principles of equity do not apply at the USPTO when it comes to the PTAB, and neither does common sense.

Wrong—Miserably Wrong

Director Vidal’s decision is wrong, we all know that, and I’m sure she does as well. She even foreshadows her own criticism by acknowledging that some will be upset with the decision, but she doesn’t believe Intel did anything wrong. But that isn’t the question. Intel was statutorily barred from bringing a challenge, and the predicate underlying the challenge VLSI is now facing was an act of extortion. Whether Intel did anything wrong is irrelevant or should be.

By focusing on Intel and not the patent owner, Vidal shows her bias. Her decision makes a farce out of fundamental legal process, fairness and it violates any notions of equity. To allow Intel to benefit from the misdeeds of OpenSky, which may well be criminal (or should be), is beyond comprehension and defies any reasonable explanation. Of course, the unreasonable (or at least unspoken) explanation can only be that despite Intel not being able to file their own independent challenge they need some way to challenge the $2 billion infringement verdict they lost to VLSI.

There was a right answer here. It was easy. Director Vidal got it wrong— miserably wrong. Wrong to the point where there is really no deterrent for the next petition who may want to try to extort a patent owner for the benefit of a large multinational corporation facing a mega verdict.

This whole episode exemplifies precisely why innovators believe the PTAB has been weaponized against patent owners. Credibility and sanity be damned, patent owners must lose, even if that means excusing, even rewarding, the filing of an IPR petition by an extortionist.

Image Source: Deposit Photos
Image ID: 20121639
Author: 72soul


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Join the Discussion

16 comments so far.

  • [Avatar for George]
    October 12, 2022 04:21 pm

    @ Chris Israel

    We’ve been arguing that since passage of the AIA! We now just have European patent law – not American patent law, which was much better & much more equitable. Big corporations & monopolies didn’t like that, that’s why they lobbied for, PAID FOR & WROTE the AIA, to ‘help eliminate’ future competition.

    Without good & enforceable patents, investors will never back startups, much less independent inventors. There will never again be any Teslas, Edisons, Bells, Wrights & others. Those days are long gone! Aren’t they, USPTO & Congress? Tell the truth for a change!

    Also tell us more about your earlier, ‘super-secret & ‘unconstitutional’, SAWS program. How much did that ‘cynical’ & ‘corrupt’ program COST American inventors? We still don’t know. Why not? Release that ‘blacklist’ so everyone can find out!

  • [Avatar for Pro Se]
    Pro Se
    October 7, 2022 06:06 pm

    Pro Say my IPW brother: LOL

  • [Avatar for Pro Say]
    Pro Say
    October 7, 2022 11:43 am

    . . . or you can e-mail me your IPR(s) / PGR(s) to:

    [email protected]

    Fees payable to: NoMoreTimeBars, LLC.

    Thanks Kathi! You’re the best!

    All my new friends and I couldn’t have done this without you!

    Legalized extortion! Is American a great country, or what!

  • [Avatar for Chris Israel, Alliance for Startups and Inventors for Jobs]
    Chris Israel, Alliance for Startups and Inventors for Jobs
    October 7, 2022 10:19 am

    Only one modification to Gene’s very precise assessment is that PTAB has been weaponized against disruptors, not simply patent owners. Big Tech and Chinese companies file nearly all the IPRs today. They aggressively target valuable patents held by smaller competitors that may disrupt their market share. PTAB is empowering the biggest companies in the world to systematically and in a coordinated fashion eliminate the IP held by any disruptive competitor. PTO seems to have no idea what actions like this OpenSky decision, rolling back Fintiv, allowing serial IPRs, etc is doing to American breakthrough invention. IF VCs will invest in a real technology startup (not a gaming app or scooter company) they now know that they are not actually investing in a disruptive company that may displace an incumbent, they are investing in litigation, because that startup will have to defend its IP for years against multiple Big Tech companies with unlimited resources. PTAB is the main reason for that change.

  • [Avatar for Pro Se]
    Pro Se
    October 6, 2022 11:19 pm

    *Excuse iPad typos on previous posts.

  • [Avatar for Pro Se]
    Pro Se
    October 6, 2022 11:18 pm

    I’m going to be selfish and say I believe this “precedential” decision was made this way so situations like mine (I’m the lucky inventor who hold the Zelle patents) can keep an open door to endless reviews.

    What’s going to be interesting about the PGR currently days away:

    1) I sent BIG BANK a proposal to purchase a design patent in 2016
    2) In 2017, BIG BANK engineers file a utility patent using the art of my 2016 proposed design and created figured of my 2016 design being “scanned” by a device.
    3) 2021, I file and win a new design patent, as a career professional inventor and product developer, relying on my “chain of work” under 102 exceptions.
    4) BIG BANK pays desert mice to file endless PTAB attacks on all of my IP.
    5) BIG BANK’s utility patent deriving from my 2016 proposal’s patented IP was distributed among a Joint-Defense team.. inclusive of (guess who).
    6) BIG BANK and buddies “wait” until the leadership change.
    7) 2 identical PGR using (guess what) the BIG BANK adaptation of my earlier work…

    Is now the lead Prior Art assertion… with 102 “shields” ignored.

    Petition attacks Embodiment 1 of a 2 Embodiment design patent.

    Statutory Disclaimer filed donating Embodiment 1 to the public domain…

    Under CAFC Sanofi-Aventis precedent, the PGRs should be over instantly… but…

    There’s nothing I can do to stop them from doing what they’ve already determined they were going to do.

    So this PTAB precedential decision now says Unified Patents has a new lease on life.

    Perhaps a “scanner” disclosure that derives from the patent owner’s own prior art, highjacked by a celebrity “stake holder”, substitutes all the case law under RE; SurgiSil.

    But don’t cry for me…

    Remember, I am an American Inventor…

    And the best way to beat infringers is to out-innovate them…

    So I’ve invented the world’s biggest bank.. built on crypto…

    44,000 crypto ATM locations.. almost 4x bigger than BIG BANK…

    Welcome to PocktBank…

    And when Jay Powell needs an answer for CBDC to meet China’s rush to licensed their solution to nations first.

    I will be sitting in a park in NYC… enjoying the world’s most advanced CBDC application:

    All by my lonely.

    Again, good luck to the “engineer degree” having lawyers.

    America, you have no “willing” human inventive engineers left.

    You need to revisit AI patenting, America’s future IP warchest has to continue somewhere no?

  • [Avatar for Pro Se]
    Pro Se
    October 6, 2022 10:55 pm

    I’ve had 6 design patent applications hit final rejections with the most outrageous prior art assertions I’ve ever seen.

    Before the Director change… No issue…

    I guess the fact the Director was lead counsel for my banking infringers before being sworn in has nothing to do with it.

    I told you… and there’s more “known” here about observations to my issues than there’s a willingness to out…

    But that’s cool, I have a book coming…

    America, enjoy your P2P payments fraud…

    I can fix it all in 2 days…

    Go ask the lawyers to fix it.

  • [Avatar for Pro Se]
    Pro Se
    October 6, 2022 09:31 pm

    Library of Congress is still in tact.

    Copyrights (if you have a valid claim) is stronger and more valuable than all patents.

    Corporations missed 17 USC 101.

  • [Avatar for B]
    October 6, 2022 04:10 pm

    Gene, I was unsure which side of the fence Vidal would land on once she was appointed. Vidal is too competent for this to be just a stupid mistake.

  • [Avatar for Peter Corcoran]
    Peter Corcoran
    October 6, 2022 02:08 pm

    Wondering if Vidal ever represented Intel…

  • [Avatar for Privy]
    October 6, 2022 11:52 am

    Agree with everything you say here, Gene. How likely is it that the Fed Circuit will overturn any FWD by the PTAB based on the time bar?

  • [Avatar for Pro Say]
    Pro Say
    October 6, 2022 11:15 am

    Time-barred from filing an IPR or PGR?

    Not anymore you aren’t! I stand ready, willing, and able to file it (or them!) for you!

    That’s right! Simply give me your challenge . . . plus the filing fee . . . plus a modest $100,000 for my time and trouble . . . join me at the Death Squad . . . and I’ll drop out in a month or so . . .

    Bam! You’re in!

    Come one! Come all!

    First come, first served!

    Give me a call at (800) 555-1212 . . . and let’s get started!

    I’m here for you!

  • [Avatar for Anonymous]
    October 6, 2022 09:11 am

    This week Intel became the owner of 2 shiny new IPRs against patents that a district court found were valid and they had infringed. Had Intel walked in the front door of the PTO and filed these petitions they would have been automatically denied by statute. Intel needs these patents invalidated to avoid a large infringement ruling. OpenSky provide the vehicle and Director Vidal handed Intel the keys. Big Tech is watching and this process will be repeated.

  • [Avatar for Model 101]
    Model 101
    October 5, 2022 09:38 pm

    Gene ….. you are too kind and too bow tie.

    Get rid of Vidal and put her in jail with other common criminals.

    She’s just another crook.

    The whole patent system is as crooked as the back leg of a dog.

    This makes me sick.

  • [Avatar for Robert P Taylor]
    Robert P Taylor
    October 5, 2022 07:30 pm

    This decision reflects yet another form of abuse of the entire PTAB process wrought by the mindless decision of Congress to allow challenges to patents by petitioners without any interest of their own in the patent. Standing is a fundamental requirement for all other types of inter partes litigation, and its absence allows the very type of abuse of the IPR process we see in this case. This precedent now having been established, any infringer in the future facing a large verdict need only pick up the telephone and ask a friend or colleague to file an IPR petition that the infringer could not file and then join the proceeding. Few things could do more to further erode confidence and belief in the U.S. patent system, which has been at an all-time low for the last decade.

  • [Avatar for Anonymous]
    October 5, 2022 03:40 pm

    Excellent analysis, Gene. I completely agree.

    The PTAB is a farce and the Director is now undermining our national security by overtly diminishing public confidence in our patent system.