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The Supreme Court Can Reassert the Legitimacy of the Patent Trial and Appeal Board (PTAB) Later This Year or Next Year

Posted in America, Courtroom, Law, Patents at 12:39 pm by Dr. Roy Schestowitz

Making Patent Quality Great Again


Summary: What lawyers-centric media characterises as a risk to PTAB may actually be an opportunity to silence critics of PTAB and help it carry on squashing bogus patents

THE Patent Trial and Appeal Board (PTAB) is one of the best aspects of AIA, which the current chief of the US patent system played a role in.

We wrote about the Court of Appeals for the Federal Circuit (CAFC) just earlier today (a couple of hours ago), noting the rather bad CAFC record on justice. When it comes to patents, it almost always gets it wrong, judging at least by cases that SCOTUS grabs to reassess. As a reminder to readers who don’t know this yet or simply forgot, CAFC is responsible for the introduction of software patents in the US, whereas SCOTUS is responsible for the elimination of software patents with its 2014 decision on Alice. CAFC and SCOTUS are often opposites when it comes to patents.

“…CAFC is responsible for the introduction of software patents in the US, whereas SCOTUS is responsible for the elimination of software patents with its 2014 decision on Alice.”What about PTAB and CAFC? Well, statistics from this year and last year suggest an 80% rate of concurrence, i.e. cases where both PTAB and CAFC agree on the in/validity of patents. As for some newer statistics, shared recently by Managing IP: “Patent Trial and Appeal Board filing in May was below average for the year, but included a record amount of PGR petitions.”

So PTAB is still doing OK. Earlier this year it peaked, which was indicative of growing demand for reassessment of patents through petitions (IPRs).

One patent maximalist clings onto the exceptions, noting a “small ray hope 4 #patent practitioners PTAB judge says “significant, important invention” that helps people read is NOT “abstract idea”” (but how often does this happen really? See image in tweet).

“So PTAB is still doing OK. Earlier this year it peaked, which was indicative of growing demand for reassessment of patents through petitions (IPRs).”PTAB, for the uninitiated, is consistently reviled by patent maximalists. They’re terrified of it. Some of them openly insult it (or the judges). IAM, for example, has just called PTAB judges “death squads” in an effort to demonise those who apply Alice (§101) and invalidate software patents. To quote: “With the PTAB’s forthcoming anniversary in mind, the data analytics team at Lex Machina crunched the numbers and this morning released a comprehensive five-year report which digs down into topics like the most common resolutions of board trials, the top petitioners, most targeted patent owners and the leading law firms.”

Lex Machina’s numbers are often the ones Managing IP — not just IAM — goes by. It’s a good service which is provided by a trolls-hostile academic (who is behind Lex Machina). Writing about pharmaceutical aspects of PTAB, IAM just ranted again, whereas Patent Progress was optimistic. “The differences,” it said, “continue after institution. When you look at the final written decisions, there are significant differences between IPRs as a whole and drug patent IPRs.”

In simple terms, the ability to invalidate patents at PTAB (through IPR/s) varies across sectors. When it comes to software patents, PTAB can seem merciless. An IPR alone can herald the death knell of a patent.

Written some days ago by the above patent maximalist was this tweet: “PTAB says @uspto §101 guidelines r NOT RELEVANT 4 determining patentability https://e-foia.uspto.gov/Foia/RetrievePdf?system=BPAI&flNm=fd2016005945-06-20-2017-1 … use when Examiner cites only guidelines?”

“…the ability to invalidate patents at PTAB (through IPR/s) varies across sectors.”Well, §101 and Alice are not exactly the same thing. They are only related and a powerful lobby is attempting to change §101 rather than the SCOTUS decision (Alice), which is final and immutable.

There is a growing danger, however, that not only §101 will be changed but also PTAB itself. PTAB’s decision on some patents (but not software patents on the face of it) will go to SCOTUS for consideration quite soon. There have been many articles about this so far. This one from Managing IP has a very misleading headline, suggestive of existential threat to PTAB. Here is a more balanced article from Managing IP, another one from Patently-O, and an even better one from Joe Mullin, who wrote: “The US Supreme Court will soon weigh the constitutionality of “inter partes reviews,” a procedure that has been hailed by many in the tech sector as one of the most effective ways of weeding out bad patents.”

“There is a growing danger, however, that not only §101 will be changed but also PTAB itself.”Even the more mainstream media wrote about it some days ago. To quote: “From the start, some patent-holders have questioned the constitutionality of these new ways to invalidate patents. Now the Supreme Court has finally agreed to hear a case that addresses this question. In Oil States Energy Services LLC v. Greene’s Energy Group LLC, Greene’s Energy used one of these procedures to challenge the Oil States patent on a lockdown mechanism for equipment used in the oil industry. In 2015, the PTAB struck many of Oil States’ claims, and in 2016, the Federal Circuit Court of Appeals affirmed the decision. At the Supreme Court, Oil States is arguing that this is wrong. Oil States says that its patent is private property (like a land grant), which, once granted, can be revoked only through a decision of a court, where the patent-holder basically has a right to a jury. Greene’s Energy, on the other hand, would classify patents as essentially public rights, like rules of the road. As such, it claims that Congress was within its authority when it established these procedures and allowed the PTO to revisit the merits of the Oil States patent.”

Patently-O‘s Dennis Crouch (who worked hard to delegitimise PTAB or CAFC's handling of PTAB appeals) took a closer look and Managing IP published a third article to say: “The Supreme Court has granted cert to Oil States Energy Services v Green’s Energy Group to assess whether inter partes review violates the Constitution by not providing a jury trial. It is the third PTAB case the court will hear…”

Well, herein we have an important case which is going to look into an essential tool for crushing bogus software patents. Even though the patent in question is not a software patent, the authority is being questioned. To put it more gently, it is being reconsidered and PTAB can, as a result, be sort of enshrined into law if Justices are on its side. So it can be seen as an opportunity for legitimacy.

“…herein we have an important case which is going to look into an essential tool for crushing bogus software patents.”“Supreme Court agrees to hear constitutional challenge to the PTAB, against wishes of Trump administration,” said this headline from IAM.

Finally, another new article from Managing IP spoke of institution rates at PTAB, based on a study from a generic company.

There is a lot at stake in this case, for various sectors other than software in fact. Will SCOTUS defend PTAB? We believe that it will. As we shall show in our next post, SCOTUS has just reversed yet another CAFC decision (Sandoz v Amgen).

Speaking of PTAB, it is worth taking note of this case where “PTAB in Fujifilm Corp. v. Sony Corp. (IPR 2017-01267 & 2017-01268) granted permission to the patentee to file a motion to disqualify an expert for the petitioner. APJ Kokoski, after a teleconference, granted permission to file the motion.”

Whatever removes or discredits allegations of foul play or mistrial will serve PTAB better in the long run.

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