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09.17.17

Patent Trial and Appeal Board (PTAB) Under Attack by IBM and Other Patent Parasites Who Undermine Patent Quality

Posted in America, IBM, Patents at 3:05 pm by Dr. Roy Schestowitz

Ginni Rometty

Summary: The PTAB, which has thus far invalidated thousands of abstract/software patents, is under a coordinated attack not by those who produce things but those who produce a lot of lawsuit

HAVING just covered the PTAB-dodging "scam" which the Mohawk tribe participates in, we now turn our attention to PTAB bashing or to shameless lobbying by the patent ‘industry’. The EPO has already marginalised its equivalent of PTAB, known as the appeal boards, in order to reduce patent quality, so why not the USPTO too?

“Manny Schecter, IBM’s patent chief who is friends with Watchtroll, is already lobbying the likely new Director of the USPTO.”Watchtroll is attacking PTAB again. It does this almost every other day. It has done this many dozens of times if not over a hundred times. Who or what is Watchtroll? This is basically a bunch of lawyers trying to destroy technology companies. Just look at who writes for them and who the founder is. His sidekick Paul Morinville is one of the radicals who burned stuff in unauthorised protests on USPTO premises and two days ago he too joined his ‘master’ in attacking PTAB. His headline speaks of a “failed PTAB experiment,” but actually, it has been exceptionally successful when it comes to squashing bad patents which should never have been granted in the first place. Technology companies certainly support and appreciate PTAB! We wrote a lot about that. There are very few exceptions to this, notably IBM. “IBM continues to push for legislation to abolish Alice and restore swpats [software patents] in the US,” Benjamin Henrion (FFII) wrote a few days ago. This does not surprise us because IBM is nowadays a lobbyist for software patents and it habitually attacks small(er) companies with large-scale patent lawsuits. Manny Schecter, IBM’s patent chief who is friends with Watchtroll, is already lobbying the likely new Director of the USPTO. In what platform? None other than Watchtroll (soon to be promoted by Patently-O, increasingly conjoined with Watchtroll).

Here are some portions from what Schecter wrote, citing the villainous Chamber of Commerce (it would not be surprising if it’s a front group to IBM too):

At long last, the next Director of the U.S. Patent and Trademark Office (USPTO) has been revealed. My congratulations to Andrei Iancu of Irell & Manella on his nomination to lead the USPTO. I recently wrote about the direction the next leader of the USPTO will need to provide[1] and the U.S. patent system remains at an important crossroads. Assuming Director-designee Iancu’s nomination is eventually confirmed, he will have the opportunity, through a variety of channels, to meaningfully influence the path of the U.S. patent system going forward.

In the 2017 U.S. Chamber report on Global IP[2] the U.S. patent system fell from the best in the world to tenth, equal with the patent system in Hungary. The Chamber report explains that the post-patent grant challenge proceedings created under the America Invents Act adds substantial costs and uncertainty, and the Court’s narrow interpretation of patentability of biotech and computer-related inventions puts the U.S. in a disadvantageous position as compared to international standards. Clearly there is work to be done to restore the competitiveness of the U.S. patent system. Unfortunately, there is currently a lack of consensus in the U.S. on how to proceed. Patent subject matter eligibility is prime among the substantive issues for which legislation has been proposed, but to date no legislation has been formally introduced. Many of the major IP associations have published resolutions urging legislation to amend 35 U.S.C. 101, but work to build consensus continues .[3]

So he is bashing AIA, which brought PTAB into existence. This isn’t new or unexpected from him. The truth of the matter is, as IBM sues all sorts of companies the Patent Trial and Appeal Board (PTAB) often comes to the victims’ rescue. We habitually name new examples, which this guy continues to keep abreast of [1, 2]. The latest:

  • Startup Perigen can’t get patent on fetal monitoring machines thx 2 PTAB random (mis)application of Alice precedent: https://e-foia.uspto.gov/Foia/RetrievePdf?system=BPAI&flNm=fd2016002806-08-30-2017-1 …
  • PTAB finds 2-page long, kitchen sink patent claim by IBM as just an”abstract idea” https://e-foia.uspto.gov/Foia/RetrievePdf?system=BPAI&flNm=fd2016003153-08-24-2017-1 … guess War&Peace also abstract?

IBM is a big patent bully, so PTAB invalidating its software patents and stopping its aggression is a good thing. But not in the eyes of the above patent maximalist, who is right now attacking the EFF in a patent trolls’ site (Dominion Harbor), only to be promoted by other patent maximalists, including patent trolls.

Spotted the pattern yet? Notice who’s attacking PTAB.

Again come out the PTAB bashers, who simply want software patents and a patent trolls resurgence, piggybacking SCOTUS by lobbying to abolish PTAB. There was a long article about this in Blooberg a few days ago. This long article by Tony Dutra did a reasonably OK job explaining that it’s the patent microcosm against those who actually make stuff. To quote some portions from the article:

Stakeholders have filed 31 friend-of-the-court briefs reviewing petitioner Oil States Energy Services LLC’s (OSES) argument that a patent is a private property right that can only be revoked by a federal court, not by the PTO ( Oil States Energy Servs., LLC v. Greene’s Energy Grp., LLC , U.S., No. 16-712, briefs filed 8/31/17 ). Companies and individual inventors with patents contend that patent rights include the Seventh Amendment right to a jury trial, which is not provided for in a PTAB proceeding before administrative patent judges.

On the other side are the Silicon Valley heavyweights and generic drug manufacturers that have used IPR proceedings as a way to avoid the higher hurdle for showing patent invalidity in court. A federal judge and jury must presume the patent is valid and require clear and convincing evidence to the contrary. The AIA set up the IPR proceeding without the presumption of validity, with the challenger’s burden of proving invalidity by an easier standard, the preponderance of the evidence.

Counterarguments by Greene’s Energy Group LLC, the successful challenger to OSES’s U.S. Patent No. 6,179,053, which relates to protecting wellheads during fracking, and the U.S. Office of the Solicitor General, are due by the end of October. Several more amicus briefs supporting the AIA’s constitutionality are expected then as well.

The court has not yet set a date for oral arguments, but it should be before the end of this year, with a decision before June 2018.

Dutra then mentions the disgraced/corrupt judge, Randall Rader:

Critics often call the PTAB a “death squad” because of the high rate of patent claims that it kills, but the phrase was originally used to describe the constitutional questions about the board’s role.

Former Federal Circuit Chief Judge Randall R. Rader coined the term in 2013, before any IPR was decided. He meant it in a way that underlies the constitutional argument, that it is wrong to have the PTO with “7,000 people giving birth to property rights”—referring to the patent examiner corps—while PTAB judges are “acting as death squads, killing property rights.”

And finally:

IPLAC lays out the question in terms of the PTO’s rights as to follow-on action after a patent issues. Prior to the AIA, the Patent Act gave the PTO no such rights, according to the association’s brief. But the AIA changed the nature of the PTO’s ongoing involvement. From the implementation date, the PTO’s grant is better characterized as only an “issue-from-examination … while-subject-to-further-processes-of securement,” IPLAC said.

Not a bad article overall. Compare that to the usual PTAB/IPR bashing from Dennis Crouch. Days ago he wrote: “As a placeholder – I’ll note here that the pending en banc case of In re Aqua Products regarding amendments during IPR Proceedings is still pending before the Federal Circuit.”

“Companies that make stuff like PTAB.”Crouch spent a great deal of effort earlier this year trying to compel the Federal Circuit to step on PTAB's toes. Follow the money and the interests and it’s abundantly clear what the motivations are…

Companies that make stuff like PTAB. This isn’t a subjective observation.

Companies (or firms) that just make lawsuits hate PTAB. The evidence is out there for all to see (e.g. in the form of amicus curiae briefs, pretending to be the highest court‘s “amici”).

Some law firms have grown so afraid/wary of PTAB that they apparently have such a thing as “PTAB chair”. See this new article from a patent maximalists’ news site:

Scott McKeown (right) has joined Ropes & Gray as partner in Washington, DC, and as chair of the firm’s Patent Trial and Appeal Board (PTAB) practice.

Maybe they should focus more efforts on applying for better patents (quality rather than quantity); then, PTAB would not be a concern to them and their clients.

To close this on a more positive note, have a look at the CCIA’s Josh Landau with his analysis of Oil States, claiming that the PTAB’s IPRs have saved over $2,000,000,000 in just 5 years. Here’s a portion from Landau’s good article:

This Saturday, September 15, 2017, marks the five-year anniversary of the first filing of an inter partes review. We’ve seen nearly 7,000 post-grant reviews filed since then, a Supreme Court case dealing with IPRs, and there are a pair of IPR Supreme Court cases up this term. [Oil States] [SAS]

Over the next few weeks, I’ll tell you about particular stories where inter partes and covered business method patent reviews have curtailed abusive litigation and allowed smaller companies to defend themselves even if they might not have been able to fight a full-fledged patent lawsuit.

But today I just want to step back and look at the effects of the inter partes review system as a whole. One of the reasons IPR was created was to “provid[e] a more efficient system for challenging patents that should not have issued; and reduc[e] unwarranted litigation costs and inconsistent damage awards.” (Page 39-40 of the House Report on the AIA.)

All in all, the IPR system has been incredibly effective at achieving these goals—I estimate that the implementation of inter partes review has helped plaintiffs and defendants avoid at least $2.31 billion in deadweight losses by providing an efficient system for challenging patents.

This benefit is purely based on avoiding deadweight loss from legal fees; it does not account for the benefit of preventing transfers from defendants to plaintiffs based on patents that should have been invalidated. The financial data used in this analysis is based on publicly available data, as well as some data derived from the 2017 AIPLA Economic Survey. Unfortunately, this survey is not publicly available; where possible, I have linked to open summaries of the data contained in the survey.

We certainly hope that Justices can tell apart parasites from producers. At the moment, with very rare exceptions, all those who oppose PTAB basically oppose science and technology. All they want is more and more litigation, blackmail, and threats (which merely drain money out of the productive economy).

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