Another Director Review Request Demonstrates Extent of PTAB Hubris

Last week, yet another request for Director Review shined a light on what has become the seedy underbelly of the Patent Trial and Appeal Board (PTAB). In Innoscience Technology Co. LTD., v. Efficient Power Conversion Corp. (IPR2023-01381), not only did the PTAB institute a challenge brought by a China-based infringer (Innoscience) against a U.S.-based patent owner (Efficient Power Conversion), but the challenge was instituted after completion of a week-long trial at the International Trade Commission (ITC) and during the process of post-trial briefing.

While the PTAB was still just a concept, during the debates over the America Invents Act (AIA) we were repeatedly told that the tribunal would be a faster, cheaper alternative to expensive patent litigation. What has come to pass, however, is a PTAB that is not just slow and expensive, but a PTAB that unnecessarily adds cost and process to cases that are already complete. Indeed, the PTAB has become center stage for the war of attrition patent owners must fight, over and over defending the same patent, the same claims, against the same prior art. This PTAB process goes well beyond being arbitrary and capricious, because that would suggest a thoughtless recklessness is at play. Instead, the mischief that occurs at the PTAB is by design and intentional. The Administrative Patent Judges (APJs) believe they know better, and they couldn’t care less whether some other judge or decision-maker has already finally decided. It is as if the PTAB collectively channels Judge Dredd played by Sylvester Stallone, who confidently proclaimed “I am the Law!”

Simply said, at the time the AIA passed in 2011 no one thought we were getting a PTAB that would add years and many hundreds of thousands of dollars of unnecessary expense to patent infringement disputes that were already finally decided. But that is precisely what the PTAB has become—a nearly impassable toll that acts more like a brick wall than a speed bump. Oh, what irony that patent owners are portrayed as trolls. The real trolls are the PTAB, jumping out to practically mug patent owners even after they have successfully defended their patent in a proceeding and at a tribunal that by all rights should receive at least a modicum of comity.

Discretionary Denial Flip-Flops

Of course, those familiar with the on-again-off-again nature of the policy behind PTAB institution know how this type of lunacy has been allowed to happen. In June 2022, then U.S. Patent and Trademark Office (USPTO) Director Kathi Vidal sent a memo to the PTAB instructing them to not deny institution of an inter partes review (IPR) or post grant review (PGR) under Fintiv when the request for denial was based on a parallel ITC proceeding. Fast-forward to February 2025, and Acting USPTO Director Coke Stewart rescinded that June 2022 Vidal memo, which means under current policy the IPR filed by Innoscience should be denied in deference to the work already completed by the ITC.

Why would anyone move forward with a challenge that has been already decided by or is about to be finally decided by another tribunal? The obvious answer is the PTAB believes they know better, and the 2022 Vidal memo specifically takes the position that the PTAB certainly knows better than Administrative Law Judges (ALJs) from the ITC and ITC Commissioners, who are appointed by the President and confirmed by the Senate. Talk about the height of self-importance. Such conceit is precisely why virtually everyone in the industry has come to accept as a truism that the PTAB has simply gone too far.

If the PTAB is supposed to be a faster, cheaper alternative to expensive patent infringement litigation then it needs to be an alternative, period. When a federal district court has gone first, or the ITC has gone first, or when the Federal Circuit has itself already affirmed patent claims, it is inappropriate for the APJs of the PTAB to take any action, let alone invalidate patent claims that others, including Senate confirmed judges and Commissioners, have affirmed to be valid.

And under what rationale could it possibly make sense to allow the PTAB to interfere with trade policy and trade law by collaterally attacking a final ITC decision? It is a thorough and complete waste of resources to allow identical parties, patents and issues to litigate to different conclusions. You couldn’t create a more ludicrous outcome than two administrative agencies coming to entirely different conclusions on the exact same issue even drunk on a bet.

This case is the poster child for the evils of refusing to provide comity to others who are similarly tasked with making the same decision. This IPR was not a less expensive alternative to litigation, it was an additional layer of unnecessary and costly process for each party. And there is now a direct conflict between the final determination from two agencies on the question of whether the patent in question is valid. And why would any rational system ever give the final word to the inferior officers of the PTAB over Constitutionally nominated and confirmed officers? This whole strange episode of PTAB supremacy is a lot like giving the employee final word over the boss.

Not Too Late

Thankfully, it is not too late for the USPTO to do the right thing. Just recently, Acting Director Stewart issued a Show Cause Order demanding the challenger explain why an IPR should not be terminated immediately after the patent survived five reexaminations and a federal district court proceeding that was affirmed by the Federal Circuit. At a minimum, a similar Show Cause Order seems entirely appropriate here.

The uncertainty this creates is a self-inflicted wound on the entire system and is perfectly illustrative of why patent owners don’t believe a challenge by an infringer is over until the patent is ultimately taken away. Win repeatedly in other tribunals and you still need to face the PTAB that just knows they know better. That needs to change, and terminating this IPR as improvidently granted would go a long way to establishing proper balance to a PTAB process that has increasingly grown insane.