Posts Tagged: "sanctions"

On Wednesday, June 21, the U.S. Court of Appeals for the Federal Circuit (CAFC) ruled in a nonprecedential opinion that a Florida district court correctly dismissed a UK-based patent owner’s infringement case after he willfully disobeyed the court and disrupted the enforcement of a court order. The ruling is the second time that the UK resident, Yoldas Askan, lost a patent infringement lawsuit against FARO Technologies. Askan first sued FARO, alleging that the firm’s 3D scanner product infringed on claims in three of his U.S. patents. In the first case, Askan was sanctioned twice by the court and failed to respond to a court order demanding that he show cause.

The U.S. Patent and Trademark Office’s (USPTO’s) Patent Trial and Appeal Board (PTAB) yesterday made public a Sanctions Order against a patent owner that resulted in the cancellation of all 183 claims of five patents challenged in separate inter partes review (IPR) proceedings. The PTAB order said that Longhorn Vaccines & Diagnostics “committed an egregious abuse of the PTAB process” by “selectively and improperly” withholding “material results that were inconsistent with its arguments and the patentability of both original and proposed substitute claims.”

Last week, cyber threat intelligence firm Centripetal Networks filed a petition  with the U.S. Court of Appeals for the Federal Circuit seeking mandamus relief from the Patent Trial and Appeal Board’s (PTAB) “extraordinary departure from basic elements of due process” during inter partes review (IPR) proceedings challenging Centripetal’s patent claims. If left unremedied, Centripetal argues to the Federal Circuit that its own treatment at the hands of the PTAB “sen[ds] a message to the entire patent bar: Any attempt to hold APJs to standards comparable to those of Article III judges [will] be met with sanctions.”

The Patent Trial and Appeal Board (PTAB) has a well-earned and perfectly appropriate problem with perception, and U.S. Patent and Trademark Office (USPTO) Director Kathi Vidal seems to be doing her level best to make that problem of perception even worse. It isn’t bad enough that petitioners do not owe the PTAB or the Office itself a duty of candor, but now they can stay in a case as a petitioner even if they are found to have engaged in extortion. There has long been a systemic bias against patent owners, who have for many years suffered through lengthy examinations of their innovations. But ever since former PTAB Chief Judge James Smith embraced the moniker of “patent death squad” as a badge of honor, the PTAB has suffered from a perception problem, and really now lacks all credibility.

On Friday, February 3, U.S. Patent and Trademark Office (USPTO) Director Kathi Vidal issued an order in the ongoing Director Review of OpenSky v. VLSI, restoring OpenSky as a party to the inter partes review (IPR) and awarding reasonable attorney fees to VLSI as sanctions against OpenSky. Vidal had dismissed OpenSky from the proceedings in December after first merely relegating OpenSky to be a “silent understudy” to the proceedings. In Friday’s order, following briefing from OpenSky and VLSI on her order to show cause as to why OpenSky shouldn’t have to pay compensatory damages to VLSI, Vidal held that VLSI was entitled to attorney fees for the time it spent addressing OpenSky’s abusive behavior, “including the Director Review process in its entirety.”

Following United States Patent and Trademark Office (USPTO) Director Kathi Vidal’s December 2022 precedential decision that Patent Quality Assurance (PQA) abused the inter partes review (IPR) process in its case against VLSI Technology, PQA has filed a petition seeking mandamus relief in the matter with the U.S. Court of Appeals for the Federal Circuit (CAFC). Vidal ruled in December that PQA abused the IPR process by filing an IPR and threatening to join a separate IPR against VLSI in order to receive a payout from the technology firm. Vidal also found that PQA misrepresented an “exclusive engagement” with a witness, Dr. Adit Singh, who was involved in another IPR petition against VLSI from OpenSky. She wrote in the decision dismissing PQA from the IPR that, “though the behavior here may not be as egregious as that of OpenSky… I find that PQA’s behavior, nonetheless, amounts to an abuse of process.”

On November 17, patent owner VLSI Technology and petitioner OpenSky Industries each filed briefs at the U.S. Patent and Trademark Office (USPTO) in response to Director Kathi Vidal’s order for OpenSky to show cause as to why it should not be required to pay attorney’s fees to compensate for its abuse of inter partes review (IPR) proceedings at the Patent Trial and Appeal Board (PTAB). While VLSI argues that OpenSky should be ordered to compensate all attorney’s fees and costs incurred from each IPR petition encouraged by OpenSky’s own petition filing activities, OpenSky argues that Director Vidal’s order to show cause fails to identify any compensable harm stemming from OpenSky’s IPR conduct.

There 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.

In June of this year, United States Patent and Trademark Office (USPTO) Director Kathi Vidal replied to a late April request by Senators Thom Tillis (R-NC) and Mazie Hirono (D-HI) for answers to a number of questions surrounding abuse of the inter partes review (IPR) system, explaining that she was working on the problem. Now, Vidal has sent a follow-up letter providing more detail on two of the questions raised in the letter, specifically with respect to the USTPO’s authority to issue sanctions for bad faith petitions. In addition to providing statistics on the Patent Trial and Appeal Board’s use of sanctions since the America Invents Act (AIA) was passed, Vidal also said she plans to seek stakeholder input to explore further options for addressing misconduct.

On Wednesday, August 3, the U.S. Court of Appeals for the Eleventh Circuit affirmed a district court’s ruling against Vital Pharmaceuticals, Inc. (VPX) in the form of sanctions for violating its discovery obligations in a trade dress dispute with Monster Energy Company. The Eleventh Circuit also denied Monster’s motion for sanctions in the form of attorney’s fees and double costs.

As horrifying images continue to flow from Ukraine, politicians in the United States and Europe find themselves increasingly pressured to expand economic sanctions against Russia. On April 6, 2022, the White House announced a prohibition on new investment in Russia by any U.S. person. This move has undoubtedly been a factor in the stunning exodus of U.S. companies from the region, as it leaves management teams in legal limbo as to whether maintaining current facilities—or even repairing equipment—could be considered a prohibited “investment.”

The U.S. Patent and Trademark Office today announced in an unpublished Federal Register Notice that it has established an administrative process for investigating submissions filed with the USPTO in trademark matters that appear to violate the Trademark Rules of Practice. The announcement comes as part of the USPTO’s broader effort to improve the integrity of the U.S. trademark register amid a surge in fraudulent filings, largely from China.

On Friday, December 10, the United States Patent and Trademark Office (USPTO) issued a “Show Cause Order” imposing sanctions against Huanyee Intellectual Property Co., Ltd. and its Executive Director, Yusha Zhang, for violations of the USPTO’s trademark rules of practice relating to improper trademark submissions. The 198-page Order, comprised mostly of an exhibit listing all of the company’s trademark filings, indicates that the Respondents named in the Order “have filed more than 15,000 trademark matters before the USPTO” and “engaged in the unauthorized practice of law, provided false domicile information for applicants, impermissibly entered the signature of the named signatory on declarations and verifications, and violated other USPTO Rules and the USPTO’s website terms of use.”

On August 22nd, an order was entered in the inter partes review (IPR) proceedings currently ongoing between between VoIP-Pal and Cupertino, CA-based consumer device giant Apple Inc. The order removed the panel of administrative patent judges (APJs) that had been adjudicating the IPR, replacing them with Deputy Chief APJ Scott Boalick and Vice Chief APJs Jacqueline Bonilla and Michael Tierney. This is the second time the panel of APJs has been completely changed in this particular IPR proceeding. Originally, the panel had consisted of APJs Barbara Benoit, Lynne Pettigrew and Stacy Beth Margolies. Although no explanation was provided (as is typical with the PTAB) the panel was changed a few weeks after we reported that APJ Margolies had previously represented Apple in patent infringement proceedings in U.S. district court.

Several weeks ago, the House Small Business Committee held a hearing titled ZTE: A Threat to America’s Small Businesses to explore the economic and national security threats posed by the Chinese telecommunications equipment and systems firm ZTE. The day’s discussion focused on ways that American small businesses could protect themselves from ZTE specifically and Chinese-backed entities more generally as well as the mixed signals being sent by the administration of President Donald Trump regarding ZTE.