Posts Tagged: "IPR"

It was another business-as-usual week for patent filings in the District Courts and before the Patent Trial and Appeal Board, with 54 suits and 29 petitions (two post grant reviews and 27 inter partes reviews, no covered business method reviews) filed. The Board already cited and relied on the new Apple v. Fintiv case in denying an IPR (filed three months after a complaint was filed) against a Fortress IP subsidiary’s patent; this week also saw a battle between e-cigarette (i.e., vaping) giants, saw another implantable medical device suit against Medtronic, and a surprising number of pet-related patent disputes, including iFetch, LLC and a suit between Pet Qwerks, Inc. and Benebone, LLC.

Whoever wrote the America Invents Act (AIA) left out the U.S. Patent and Trademark Office (USPTO) examiners. The examiner on any given patent at issue in an inter partes review (IPR) proceeding at the Patent Trial and Appeal Board (PTAB) agreed with the patent holder that the patent claims, as amended, were valid. Examiners are specialists, working under Supervisory Patent Examiners (SPEs), who are even more experienced, though in very narrow fields. As such, they knew the state of the art at the time a patent was being prosecuted.

The business of the Patent Trial and Appeal Board (PTAB) continues on as most practitioners transition into another month of working from home. Like many courts, the PTAB has adapted its standard practices. For example, the PTAB has transitioned to remote hearings and encouraged remote depositions, but has otherwise continued to advocate for business as usual. The PTAB also appears to be accommodating requested scheduling changes. This article addresses the main highlights from recent PTAB actions to provide practitioners with additional resources as they navigate PTAB practice over the next weeks and/or months.

The America Invents Act (AIA) outlines an adversarial, inter partes, process for reviewing patents and determining their validity. Patent owners deserve a fair process, presided over by entirely neutral decision makers. But AIA trials are corrupted when judges at the Patent Trial and Appeal Board (PTAB) expand the trial proceedings to address invalidity grounds beyond those asserted in the IPR petition. When considering whether appellate review is available to prevent the PTAB from invalidating patent claims based on grounds not asserted in the petition, however, different Federal Circuit panels have arrived at different outcomes.

This week, Patent Trial and Appeal Board (PTAB) filings are back up, with four post grant reviews (PGRs) and 37 inter partes reviews (IPRs), while there were 83 district court complaints; the district court numbers skew high because of the WSOU entities’ proclivity for filing dozens of independent complaints per defendant, as discussed below. This week saw a major suit from PayPal against an online coupon competitor, allegations of abusive demand letter practices by BlackBerry, and even what appears to be a Matrix-themed gag filing in Delaware. Lockdown doesn’t seem to have slowed down suits in the slightest, despite what has been happening in other industries; only time will tell how earnings reports and market dips affect the patent marketplace longterm, though if history is any guide, litigation and patent assertion will likely rise in a recession economy.

Earlier this year, the Patent Trial and Appeal Board (PTAB) established a two-part framework for applying 35 U.S.C. § 325(d), under which the PTAB may deny institution of an inter partes review (IPR) if substantially the same art or arguments previously were presented to the U.S. Patent and Trademark Office (USPTO). This framework injects a degree of rigor into the PTAB’s discretionary Section 325(d) determinations and suggests ways that IPR participants may more effectively raise or resist Section 325(d) arguments. The framework and its practical implications are discussed below.

Recently, the Federal Circuit affirmed a decision of the Patent Trial and Appeal Board, holding that the Board correctly determined that the claims 21–24 of U.S. Patent No. 6,754,640 (’640 patent) and claims 1-20 of U.S. Patent 8,768,840 (’840 patent), both owned by Bozeman Financial LLC (Bozeman), are directed to patent ineligible subject matter under 35 U.S.C. § 101. To reach this decision, the Federal Circuit first determined the appellees, all 12 of the United States Federal Reserve Banks (Banks), to be “persons” under the America Invents Act (AIA) and, therefore, eligible to petition for post-issuance review under the AIA. See Bozeman Fin. LLC v. Federal Reserve Bank of Atlanta, No. 2019-1018, 2020 U.S. App. LEXIS 11315 (Fed. Cir. April 10, 2020) (Before Lourie, Dyk, and Moore, Circuit Judges) (Opinion for the Court, Moore, Circuit Judge).  

Is there something in the water this week? While Patent Trial and Appeal Board (PTAB) filings were up slightly (the spike due entirely to 14 new petitions from Comcast against Rovi in their massive ongoing licensing dispute), the district courts—particularly the Texas branches—had a banner week, with 127 new filings—54 of which were filed Friday, April 24 alone. The majority, 31, were filed in Texas courts.
The 54 new complaints included a spate of filings by entities controlled by IP Edge and Leigh Rothschild, more VoIP-PAL suits, and some high-profile standard-essential patent infringement cases by Conversant Wireless against Tesla. They also included 16 new suits filed by a new entity, as described below.

The CAFC explained that the doctrine of assignor estoppel does not bar an assignor from filing a petition for IPR to challenge the validity of the assigned claims, even though such a challenge would have been estopped in a district court… Stoll suggests that “it is time for this court to consider en banc the doctrine of assignor estoppel as it applies both in district court and in the Patent Office” in order to clarify this “odd and seemingly illogical regime in which an assignor cannot present any invalidity defenses in district court but can present a limited set of invalidity grounds in an IPR proceeding.”

The traditional wisdom—that patent suits rise and fall with the economy—seems backward. With some data forthcoming on that point, both during the last downturn and this one, patent filings haven’t slowed much, if any. Last week, 22 Patent Trial and Appeal Board (PTAB) petitions were filed—one post grant review (PGR) and 21 inter partes reviews (IPRs)—just a few more than last week and down substantially now and on the year from the highs of a few years ago. But patent suits haven’t slowed, with 77 complaints nationwide this week, a docket chock full of repeat offenders, mostly comprising NPE aggregators like Oso IP and Equitable IP, with the occasional new campaign listed below or biopharmaceutical litigation, as listed below.

Yesterday, the United States Supreme Court ruled that the Director of the United States Patent and Trademark Office (USPTO), by and through his designees, the Patent Trial and Appeal Board (PTAB), has the unchallengeable authority to institute inter partes review (IPR) proceedings even when they are brought outside the statute of limitations. Thus, the PTAB is now the most important patent court in the United States. This begs an important question that Congress must soon wrestle with regarding access to the PTAB. We have been told over and over again just how essential the PTAB is to the patent system. How necessary the PTAB is with respect to rooting out bad patents that never should have issued. And, honestly, the PTAB has been very, very good at killing patent claims and patents. But there is a fundamental unfairness at the PTAB. If the PTAB is so important, why are the fees so high? If the PTAB plays such a vital role in correcting the egregious mistakes of patent examiners (of which there are apparently many given the number of valuable patents that die upon review), why should only those patents that are owned by independent inventors, universities, start-ups and research and development companies be the targets? What about the truly ridiculous, idiotic patents that are issued to large entities?

Yesterday’s Supreme Court decision in Thryv, Inc. v. Click-to-Call Technologies was in some ways unsurprising, but has generated buzz among the patent community all the same. Many pointed to Justice Gorsuch’s dissent as being particularly poignant, and perhaps indicative of what issues will be front and center in other pending petitions at the Court, such as Arthrex v. Smith & Nephew. IPWatchdog Founder and CEO Gene Quinn said yesterday that, with the Thryv decision, “the Supreme Court sets hundreds of years of fundamental procedural law on its head…. No challenge is proper, and if the PTAB wants to institute outside the statutory time period there is nothing anyone can do.” Here is what some other members of the patent bar had to say.

In an opinion authored by Justice Ginsburg, the Supreme Court ruled today that Section 314 (d) of the U.S. Patent Act, which bars judicial review of Patent Trial and Appeal Board (PTAB) decisions to institute inter partes review (IPR), should preclude appeals of PTAB institution decisions, even where the appeal is based on Section 315(b)’s one-year time-bar for institution. “Congress designed inter partes review to weed out bad patent claims efficiently,” wrote the Court in today’s decision. “Allowing §315(b) appeals, however, would unwind agency proceedings determining patentability and leave bad patents enforceable.” Despite Click-to-Call’s argument that the bar on appeals under Section 314(d) is limited to the agency’s threshold determination under §314(a) of the question whether the petitioner has a reasonable likelihood of prevailing, the Court explained that Cuozzo Speed Technologies, LLC v. Lee “is fatal to that interpretation.”

District court patent filings are again high this week—73 new complaints filed (just a few shy of last week), but Patent Trial and Appeal Board (PTAB) cases are down a bit, with 18 newly filed inter partes review (IPR) and three post-grant review (PGR) petitions. Thus far, there has been no visible change in patent assertions based on the current economic and health crises affecting other industries, though PTAB filings continue to decline.

On April 6, Arthrex, Inc. filed a petition for certiorari in the U.S. Supreme Court on two discrete patent issues. Notably, one of the issues raised in Arthrex’s April 6 petition is likely to prove especially compelling to the Supreme Court, and may well tilt the balance for it being granted, as it provides an inroad to a constitutional Appointments Clause issue that is central to several other petitions by various parties on the same issue. Arthrex is widely anticipated to file another petition for certiorari on this issue stemming from the Court of Appeals for the Federal Circuit’s recent denial of a rehearing en banc in Arthrex v. Smith & Nephew wherein the main issue had been the Federal Circuit’s ruling that Patent Trial and Appeal Board (PTAB) judges were indeed unconstitutionally appointed under the America Invents Act (AIA), but that the Federal Circuit’s field expedient blue penciling of the underlying statutes corrected any constitutional flaws nunc pro tunc.