Posts Tagged: "PTAB"

Post grant procedures can be an effective and efficient way of promoting patent quality by invalidating weak, inappropriately granted patents. What we need now is thoughtful review and assessment, based upon five years of experience about what is working and what needs to be done to improve the system. The above issues need to be watched and analyzed, and, if appropriate, modifications need to be suggested and tried. Many improvements can be made by the USPTO itself through transparent rule-making. Some may need legislative intervention. But there is no need to throw out the entire process. We should learn from what has happened before and be willing to improve the system for the benefit of innovation in our country and the continued growth of our economy.

As we mark the fifth anniversary of the effective date of Patent Trial and Appeal Board trials on September 16, we find that the early years of the practice have been a learning experience both for the PTAB and for PTAB practitioners.  Reflecting on the past five years, three key lessons emerge for practitioners, from practice and directly from the APJs presiding over these cases when they have spoken on topic: Follow the rules, including those that are explicit and those that are unspoken, know your audience, and focus on the facts.  

Hiring senior associates to be Administrative Patent Judges was a mistake, hiring so many senior associates from the same firm was an even bigger mistake. Making it clear that their job was to kill patents at all costs was inexcusable. Interpreting the rules at every turn to be disadvantageous to patent owners is un-American, violates fundamental notions of fairness of procedure, and tilts the balance so heavily toward challengers that it has become more feared by patent owners than any government agency or body. In short, the PTAB has destroyed the U.S. patent system and the value of U.S. patents. In my opinion, the only solution for the very serious transgressions of the PTAB is to disband this runaway tribunal.

East Palo Alto, CA-based web security firm Finjan Holdings recently filed a Form 8-K with the U.S. Securities and Exchange Commission (SEC) which disclosed a patent assignment agreement made with Armonk, NY-based information technology giant IBM (NYSE:IBM). Under the terms of the agreement, Finjan Blue, a newly formed subsidiary of Finjan, will acquire a series of IBM security-related patents with potential pathways for the IBM and Finjan to work collaboratively on development of those patented technologies.

A jury verdict recently entered into a patent infringement case in the Northern District of Texas found that Japanese gaming giant Nintendo infringed upon a patent asserted by Texas-based medical tech firm iLife Technologies Inc. In the verdict, the jury agreed that iLife proved that it was owed $10.1 million in a lump sum royalty for the sales of a series of games for the Wii U console. The jury also found that Nintendo didn’t prove invalidity of the asserted patent. The jury found that sales of Nintendo’s Wii U games including Wii Sports, Wii Sports Resort, Wii Club Sports and Mario Kart 8, infringed upon claim 1 of U.S. Patent No. 6864796.

According to 35 U.S.C. § 316(a)(11), the PTAB is required to issue a final determination in an inter partes review not later than 1-year after the date of a decision to institute review is made… That the PTAB has not extended a single case for cause should not be confused with the PTAB following the mandates of § 316(a)(11). Indeed, the parties have been waiting for a decision in IPR2016-00237 for more than 14 months… It seems that the PTAB is here, and presumably in other joinder cases, giving itself more than 1-year without a showing of cause. If that is the case the PTAB is intentionally misreading § 316(a)(11) in order to construe it to give themselves 1-year from the last joinder Order rather than 1-year from the date of institution as the statute requires.

Several of the briefs address the absurdity currently being advanced, claiming patents are so-called “public rights.” This novel notion — more in line with Karl Marx than John Locke — is a direct assault upon the very essence of private property rights… The Cato-ACUF brief reasons “public rights” into a sniveling lump: “Ultimately, the implications of the argument that merely because a right to particular property flows from a statutory scheme, such rights are ‘public rights’ and that disputes over them can be withdrawn from Article III courts are staggering. Such a conclusion would mean that anyone who derives his land title from the Homestead Act can be forced to have any disputes over that property be resolved by a bureaucrat in the Bureau of Land Management. Under this view, Congress could require that a dispute between an individual and a private financial institution over a mortgage or a student loan be heard before an official in the Treasure Department on the theory that the relevant loans were made pursuant to a federal statutory scheme. The government enacts statutes affecting property rights all the time, but that does not convert the rights that trace their roots to such statutes into ‘public rights.’”

As the old saying goes: Ignorance of the law is no excuse. So there seems to be no good reason that the Examining corps’ inability to apply the law to the facts in ex parte appeals should be costing applicants this much money yearly. We should not have 2X higher reversal rates for novelty and obviousness than statutory subject matter. However, until something changes about how the USPTO decides to take cases to the board, it is apparent that patent applicants will continue to have to be patient and pay.

Tinnus argues in its appeal that the PTAB panel applied standards for inter partes review (IPR) proceedings to a trial that was instituted as a PGR. “In its institution decision, the Board incorrectly applied the lower ‘reasonable likelihood’ standard used for IPRs, rather than the higher ‘more likely than not’ standard governing PGRs,” Tinnus’ appeal reads, adding that the PTAB panel didn’t recognize this error in its final written decision.

The PTAB is openly refusing to follow the Supreme Court’s decision in Nautilus, Inc. v. Biosig Instruments, Inc., it has found a term previously determined definite by the Federal Circuit to be indefinite, and the Solicitor’s Office is siding with an infringer with a reputation as a knock-off artist over an independent inventor… But why doesn’t the USPTO follow Nautilus? Because the Patent Office feels that since they apply the broadest reasonable interpretation to claims that means that the indefiniteness standard set forth by the Supreme Court in Nautilus does not apply to the Office. Breathtaking!

The Federal Circuit reversed. Indeed, it found that the Board committed legal error by improperly relying on inherency to find obviousness and in its analysis of motivation to combine the references. The court found that the Board erred in relying on inherency to dismiss evidence showing unpredictability in the art in rejecting Honeywell’s argument that a skilled artisan would not have been motivated to combine the references with a reasonable expectation of success. It referred to an earlier opinion [citations omitted] to state that “the use of inherency in the context of obviousness must be carefully circumscribed because “[t]hat which may be inherent is not necessarily known” and that which is unknown cannot be obvious.”

The Federal Circuit vacated and remanded the Board’s decision, finding that it “failed to adequately articulate its reasoning, erroneously rejected relevant evidence of nonobviousness, and improperly shifted to Stepan the burden of proving patentability.” … The Board cannot shift the burden of proving patentability to the applicant, and must provide sufficient reasoning or explanation for why a skilled artisan would have found the claimed invention obvious, particularly when given evidence of unexpected results or “no reasonable expectation of success.” It is not enough for the Board to merely state that a combination of prior art would have been “routine.”

Under Patent Office regulations, a party seeking to submit supplemental information more than one month after the date an IPR is instituted must request authorization to file a motion to submit the information. 37 C.F.R. § 42.123(b). The request to submit new information must show: (1) why the supplemental information reasonably could not have been obtained earlier, and (2) that consideration of the supplemental information would be in the interests of justice. Id. The Court found that Ultratec’s motion to admit the expert’s trial testimony satisfied both requirements… Belated evidence in an IPR may be admitted when the evidence was not available sooner and would serve justice to be considered. It is an abuse of discretion for the Board to reject such evidence without a reasonable basis and without explanation.

Buried in the claim language, conditional limitations may be a vulnerability in an otherwise valuable claim. A conditional limitation is a claim feature that depends on a certain condition being present. For example, when or if condition X is present, feature Y is implemented or has effect. Without condition X, feature Y may be dormant or have no effect. Patent owners should be cognizant of possible conditional limitations implications because conditional limitations may affect claim validity and infringement as discussed below in the context of recent U.S. Patent Office and Federal Circuit cases. In Ex Parte Schulhauser, the Patent Trial and Appeal Board (“the Board”) held certain claims as unpatentable based on conditional limitations.