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10.30.16

The Importance of the Patent Trial and Appeal Board Proven by the Fact That It’s Under Endless Attacks From the Patent Microcosm

Posted in America, Patents at 12:44 pm by Dr. Roy Schestowitz

Patent maximalists just want patents on everything

PTAB impotence

Summary: The Patent Trial and Appeal Board (PTAB) continues to invalidate patents that should never have been granted in the first place, not slowing down even in the face of greater and louder opposition from reckless patent maximalists

THE SCIENCE-LED PTAB is one of the best aspects of the USPTO. It’s almost like the equivalent of the besieged appeal boards at the EPO and it helps ensure high patent quality.

“The patent microcosm just can’t stand the idea of high-profile patents (with high royalties) being subjected to proper scrutiny.”Don’t assume that PTAB is popular with everyone. Not all people have the same goals; peace, for example, isn’t an objective when you sell weapons. There’s bemoaning of PTAB in IAM ‘magazine’ this month (more of the usual) and MIP writes about Kyle Bass essentially making money out of PTAB. Making money by blowing away bad patents is not an evil thing; in a way, this should be very much encouraged. “The Patent Trial and Appeal Board has invalidated the claims of a patent covering Shire’s Gattex drug,” MIP wrote. Well, good riddance then. Bass does not just go after solid, decent patents. The patent maximalists call him a “troll” (or “reverse troll”) for it. The patent microcosm just can’t stand the idea of high-profile patents (with high royalties) being subjected to proper scrutiny.

In re Aqua, one high profile case involving PTAB, got covered at Patently-O in recent days/weeks [1, 2]. It’s one of those increasingly common cases where a company gets a bogus patent application past careless examiners at the USPTO and then PTAB steps it, threatening to throw it away, whereupon the grantee wants to modify/change the patent (post-grant) for apparent merit. What is this system going to look like if there are post-issuance edits? What are the patent maximalists sinking/stooping down to? To quote Patently-O:

The only pending en banc patent case before the Federal Circuit is In re Aqua Products (Appeal No. 15-1177) involving claim amendments during inter partes review. The Patent Statute contemplates claim amendments as a possibility but not a right — notably, 35 U.S.C. 316(d) states that “the patent owner may file 1 motion to amend the patent” with additional motions to amend permitted in limited situations. The scope of amendment is also limited to (A) cancelling challenged claims and (B) proposing “a reasonable number of substitute claims” that do not “enlarge the scope of the claims of the patent or introduce new matter.”

Another article from Patently-O says that “[i]n a split opinion, the Federal Circuit has affirmed the PTAB’s determination of obviousness. Biota’s patent claims influenza treatment through oral inhalation of zanamivir while the prior art teaches the identical treatment by nasal inhalation. A second prior art reference also suggests that similar compound can be taken via “inhalation” (without the nasal or oral modifier). On appeal, the Federal Circuit affirmed that the general inhalation disclosure “is reasonably understood to disclose inhalation by either the nose alone, mouth alone, or both.””

It sure looks like attacks on the legitimacy of PTAB come from many directions and they usually fall flat on their face. The PTAB Litigation Blog, one or those blogs that are managed or run by the patent microcosm (Jones Day in this case), has this new article titled “The Equitable Doctrine of Assignor Estoppel Does Not Prevent PTAB from Instituting an IPR”.

“What is this system going to look like if there are post-issuance edits?”It’s all about stopping PTAB, isn’t it? It’s a serial destroyer of software patents, which is a lot more efficient than US courts (more patents invalidated more quickly).

Finnegan et al (other firms that profit from patents) are increasingly afraid of PTAB and do anything within their capacity to politely (more than Watchtroll) delegitimise it. Finnegan, Henderson, Farabow, Garrett & Dunner LLP can be seen here poking PTAB again. They just never give up, do they?

Michael Loney, who has done a lot of coverage regarding PTAB this year, has this roundup which includes PTAB news and going back to Patently-O, this one new article is attempting to use any tricks in the book to shoot down PTAB because it invalidates patents and does its job by ensuring high patent quality. To quote one very recent article: “Patent Academic Ray Mercado also took advantage of the request for a responsive brief to file an amicus brief. Mercado argues that patents should be seen as “private rights” and therefore cannot be administratively cancelled. He writes: “Once the historical uniqueness of patent law is taken into account, it is clear that patents are ‘private rights’ for purposes of this Court’s separation of powers jurisprudence, and their validity must be decided by Article III courts.””

“It sure looks like attacks on the legitimacy of PTAB come from many directions and they usually fall flat on their face.”So they try to scrutinise the very existence of PTAB. How predictable. Another new article from Patently-O reveals that large companies are exploring ways to overcome PTAB and maintain their invalid, bogus patents. Here are some of the details: “On rehearing in Medtronic v. Robert Bosch, the Federal Circuit panel has reaffirmed its earlier determining that the PTAB’s vacatur of an IPR institution decision is a decision as to “whether to institute an inter partes review” and therefore is “final and nonappealable.” The original Medtronic decision had been released prior to Cuozzo v. Lee (2016) and the rehearing decision now explains that “nothing in Cuozzo is to the contrary.” [...] An additional difficulty with all of this stems from the pending Ethicon petition and the difference between action by the Director and action by the PTAB. The statute separates the roles – indicating that the PTO Director’s role is in determining “whether to institute” an IPR. Under the statute, the PTAB then steps in to conduct the trial. Those separate roles were then combined by PTO regulation which states “The Board institutes the trial on behalf of the Director.” 37 CFR 42.4. A question – unanswered in this case – is whether the Director’s regulatory delegation above should be interpreted to also extend to vacating and terminating petitions. I’m not sure that it does.”

To clarify, IPRs are about invalidation of patents including software patents (killing software patents one at a time, which isn’t optimal/ideal). Anyone in this domain already knows this, yet law firms spin it as “settlement”. That’s highly misleading a characterisation. Watch what Finnegan, Henderson, Farabow, Garrett & Dunner LLP is saying: “Through October 1, 2016, the Federal Circuit decided 120 PTAB appeals from IPRs and CBMs. The Federal Circuit affirmed the PTAB on every issue in 95 (79.17%) of the cases, and reversed or vacated the PTAB on every issue in 9 (7.50%) of the cases. A mixed outcome on appeal, where at least one issue was affirmed and at least one issue was vacated or reversed, occurred in 11 (9.17%) of the cases.”

“We expect PTAB to come under plenty of new/fresh attacks, including complaints to politicians, to courts, and misinformation (targeting the public and stakeholders).”No matter how much law firms may attempt to destroy the reality (for profit), there are no effective changes to PTAB. Its large-scale patents invalidation progress is not slowing down, not judging by these latest figures. As MIP put it: “The ability to include testimonial evidence with patent owner preliminary responses in Patent Trial and Appeal Board proceedings has not been much help since it was introduced in May, according to an analysis by Oblon’s Scott McKeown”

We expect PTAB to come under plenty of new/fresh attacks, including complaints to politicians, to courts, and misinformation (targeting the public and stakeholders). We’ll keep a close eye on progress and report on it periodically.

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