Posts Tagged: "PTAB"

The lead APJ serving on the panel of multiple CBM reviews petitioned by Apple, who also wrote the final written decision on at least one CBM review petitioned by Apple and invalidated claims of the ‘772 patent, was Administrative Patent Judge Matt Clements. According to Clements’ LinkedIn profile, he has served as an administrative patent judge at PTAB since March 2013; up until that time he served as a patent attorney at international law firm Ropes & Gray going as far back to September 2006. While at Ropes & Gray, Clements was part of a legal team that represented Apple in patent infringement cases. According to legal party data made available by Law360, Clements served as counsel for Apple up to December 2012 and served on a team with fellow Ropes & Gray lawyer James Batchelder as well as Eric Albritton of the Albritton Law Firm. Both Batchelder and Albritton were counsel of record representing Apple in the Smartflash infringement case where the ‘772 patent was asserted against Apple. Batchelder and Clements both worked at Ropes & Gray’s East Palo Alto offices, where Batchelder served as managing partner, so there’s a distinct likelihood that Clements reported directly to Batchelder in his work with Ropes & Gray. The November 2014 petition by Apple for CBM review of the ‘772 patent was also filed by counsel from Ropes & Gray including Ching-Lee Fukuda, another one of the lawyers representing Apple in the Smartflash action. These types of relationships would have led to the recusal of a federal judge on a manner and yet APJs at the PTAB are not subject to rules that are supposed to prevent this kind of conflict of interest that comes with deciding a matter that includes a former employer.

An Inter Partes Review (IPR) is an important tool for companies that face frequent patent infringement challenges. An IPR is essentially a mini-litigation focusing solely on patent validity conducted before a panel of administrative patent judges sitting in the Patent Trial and Appeal board (PTAB). Once an IPR is initiated, a decision on validity is issued within one year. The narrow focus, fast timing, and lower cost of an IPR, along with certain legal advantages that make proving invalidity easier in an IPR than in a district court, make it an attractive alternative to district court litigation when good invalidity arguments are available.

Concerns over software and biotechnological innovations being patent eligible, the omnipresent threat of patent reform that could make it even more difficult to enforce the patent property right, and no clear path to a philosophical or ideological turning point make for little to celebrate this World IP Day in America… If Congress wants to resurrect the U.S. patent system these three decisions would be overturned. As long as these decisions remain in force the U.S. patent system will continue to suffer and will undoubtedly be looking up in the rankings to the likes of Hungary when the Chamber releases its 2018 world IP rankings.

Unified Patents is a relatively new form of patent troll that works as a “Troll of Trolls” or “ToT.” They file IPRs (inter-partes reexamination requests) to kill patents. While they purport to only attack “bad patents,” their definition of a “bad patent” is simply any patent asserted against their clients. So who are their clients? Good question – that is a large part of the problem. They keep most of their clients’ identities secret. Unified does identify a handful of their members on their website such as Adobe, Google, NetApp, Roku, and Salesforce… But China is different. Here, a mercenary third party attacking innovation via patents is problematic. China, unlike America, has made innovation a top priority. China’s government has also, over the last few years, created the best patent enforcement environment in the world.

Fixing America’s patent system is necessary for meaningful economic growth for America’s workers and America’s global competiveness over countries like China. Not surprisingly, Judge Michel thinks that “[w]hile we’ve been weakening our patent system in many ways in recent years, China and other countries have been greatly upgrading their patent systems . . . investment is shrinking here and it’s growing elsewhere.” Judge Michel kept returning to the theme that the lack of new jobs “is the biggest single problem in America today,” and that “whether you talk about job creation or growth or revival of distressed cities . . . the innovation ecosystem is at the heart of the solution.”

As Senior Counsel of the House Judiciary Committee, Vishal Amin was a primary architect of the Patent Trial and Appeal Board (PTAB), the administrative tribunal that has destroyed thousands of patents, destabilized the U.S. patent system, and sent venture capital and countless technology startups fleeing to China… He must explain his reasoning for the most damaging legislation to American innovation in U.S. history. These questions must be asked of Vishal Amin in his confirmation hearings. Unless he can reasonably and satisfactorily explain his position on these issues, it must be assumed he is not qualified for the position of White House Intellectual Property Enforcement Coordinator.

The Federal Circuit affirmed a Patent Trial and Appeal Board (“Board”) decision finding a patent owned by Novartis AG and Mitsubishi Tanabe Pharma Corp. (collectively “Novartis”) to be unpatentable as obvious… Refusal by the Board to institute an IPR based on a particular reference does not necessarily preclude the Board from relying on that reference as additional support for a motivation to combine other references. Separate patentability arguments for dependent claims must be clearly argued lest they stand or fall with parent claims. A nexus for non-obviousness due to commercial success must clearly flow from the patented invention and not from subject matter known in the prior art.

Inter Partes Review (IPR) is viewed by many as late-stage destruction of fully developed early-stage investor ROI in patented property. The Lee study will presumably weigh the costs of the PTAB and IPR against its benefits, but the worst far-reaching costs will not show either in its records or dialogue with its “users.” Examining “five years of PTAB files and user experience” cannot reveal the indirect harm the PTAB has inflicted on our innovation ecosystem through the threats to file IPR petitions during licensing negotiations, the impact on declining patent values, the weaponization of the PTAB by the infringement defense bar and its unexpected heavy utilization. Discovering what the PTAB hasn’t seen and why it never saw it would be more informative and more relevant.

If the patent owner intends claim terms to have a special meaning, the patent must provide a clear disavowal of ordinary meaning or an alternative lexicography. Otherwise, the patent owner can expect to obtain the full scope of the term’s plain and ordinary meaning. Ordinary meaning also may yield to context, as where “sequence” may include “one bit,” not “at least two.” The Court also stresses that anticipation requires that a single reference “describe the claimed invention with sufficient precision and detail to establish that the subject matter existed in the prior art.” Ambiguous references do not anticipate a claim.

On appeal, Novartis argued that the PTAB unlawfully reached different conclusions than the Federal Circuit and U.S. District Court for the District of Delaware in addressing the “same” arguments and the “same” evidence… The Court stated that “Novartis’s argument fails on factual and legal grounds.” First, the record in front of the PTAB differed from that of the prior litigation, meaning that Novartis’ argument rests on a “faulty factual predicate.”… “Nevertheless, even if the record were the same, Novartis’s argument would fail as a matter of law.” The PTAB reviews patentability under the “preponderance of the evidence” standard. See 35 U.S.C. § 316(e). District court litigation requires “clear and convincing” evidence. Therefore, “the PTAB may properly reach a different conclusion based on the same evidence.”

It is clear that the current regulations are almost exclusively focused § 316(b)’s “the ability of the Office to timely complete proceedings” and not the other language of § 316(b): “the effect of any such regulation on the economy”, “the efficient administration of the Office” or “the integrity of the patent system.” Changes can be made to improve the IPR process without throwing the baby out with the bath water. Invalid patents can still be addressed at the USPTO while returning some of the lost integrity of the patent system… The patent owner should be allowed to petition the Director for a reconsideration of Institution…

The timing of the announcement is curious given that Michelle Lee’s days seem numbered as Director of the Office. As first reported on IPWatchdog.com, Commerce Secretary Wilbur Ross has interviewed at least three candidates for the position of Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office. Those receiving interviews were Phil Johnson, former Vice-President for Intellectual Property Strategy & Policy for Johnson & Johnson, Randall Rader, former Chief Judge of the United States court of Appeals for the Federal Circuit, and an unidentified patent attorney characterized by one source as a dark horse candidate.

On January 3, 2017 the Court of Appeals for the Federal Circuit (the court) handed down two decisions relating to obviousness under § 103 – In re: Marcel Van Os, Freddy Allen Anzures, Scott Forstall, Greg Christie, Imran Chaudhri, No. 2015-1975 (Fed. Cir. 2017) (Van Os) and In re: Ethicon, Inc., No. 2015-1696 (Fed. Cir. 2017) (Ethicon). In Van Os, the Appellants appealed a decision from the Patent Trial and Appeal Board (PTAB) affirming the Examiner’s rejection of the claims of U.S. Patent Application No. 12/364,470 under § 103. The court addressed the question of whether the PTAB properly held that the claims were obvious in light of prior art. The court vacated and remanded. In Ethicon, the Appellant appealed a decision from the PTAB affirming, in a merged inter partes reexamination, the Examiner’s rejection of the claims of U.S. patent 7,591,844 (the ’844 patent) under § 103. The court addressed the question of whether the PTAB properly affirmed the rejection of the claims of the ’844 patent under § 103. The court affirmed. These two cases raise several interesting questions, especially given that they were decided on the same day.

If you are having trouble figuring out how Zond could have had 371 claims, lost all of them, but only 1,220 claims were instituted out of 1,377 claims challenged, you understand the problem. These are not misprints or mistakes. Zond had 371 unique patent claims, but because of the IPR gang tackling phenomena those 371 claims were challenged a total of 1,377 times, but instituted only 1,220 times. Thus, the number of institutions is more than three times the number of unique claims Zond owned. In other words, the institution rate shouldn’t have been 88.6%, it should have been closer to 329%!

Patent claims being adjudicated valid in federal district court and then being killed in an administrative proceeding at the PTAB is exactly the problem so many of us saw coming. Time and time again throughout the debates in Congress, and all through the legislative history, post grant proceedings were explained as being a faster, low-cost alternative to litigating validity disputes in Federal District Court. That was just a lie. Post grant proceedings at the PTAB are not cheap, and they are not an alternative to district court proceedings. The PTAB is duplicative and anti-patent. In fact, because of the different standards used between district courts and the PTAB, and because district courts presume patents are valid pursuant to 35 U.S.C. 282, different outcomes are practically inevitable.