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12.09.17

The Patent Trial and Appeal Board Will Endure Supreme Court Test and Overcome the Tribal Immunity “Scam”

Posted in America, Patents at 2:11 pm by Dr. Roy Schestowitz

Mayan dream

Summary: The Patent Trial and Appeal Board (PTAB), based on the latest news, is still winning the argument and justifying its existence/importance

THE TRIAL which has PTAB hanging on the balance is no longer being covered. Almost nobody cares and PTAB foes appear to have accepted, based on oral proceedings, that PTAB will endure.

PTAB, however, may face some other perils/hurdles/obstacles. None of these seems potent, but it’s worth keeping an eye and a log.

The other day, the EFF’s Vera Ranieri wrote about how Native Americans are still being exploited for a patent “scam”, as some people call it (the proper description of it is PTAB dodge, misusing tribal immunity that’s an exception to ordinary law).

Quoting Ranieri:

On September 8, 2017, the multi-billion dollar pharmaceutical company Allergan announced that it “sold” its patents relating to its eye drops drug “Restasis” to the Saint Regis Mohawk Tribe. But this was not a usual “sale.” The Tribe doesn’t appear to have paid anything in exchange for becoming the legal owner of Allergan’s patents. Instead, Allergan paid the Tribe $13.75 million, and also agreed to pay the Tribe up to $15 million more each year in exclusive licensing fees.

Last week, EFF and Public Knowledge explained to the Patent Office how Allergan and the Tribe’s deal doesn’t mean Allergan’s bad patents can’t be challenged.

The reason that Allergan and the Tribe engaged in this deal is not a secret. Both Allergan and the Tribe [PDF] readily admit the deal was done to try to prevent Allergan’s patents from being revoked through a Patent Office procedure known as “inter partes review.” Inter partes review allows any member of the public to challenge a patent as improperly granted based on the fact that what the patent claims as an invention was known to the public, or was an obvious change from information and innovation already held by the public.

[...]

Shortly after announcing the deal, the Tribe asked the Patent Office to end the proceedings, saying that since the Tribe owns the patents, the Patent Office has no authority to reconsider their legitimacy without the Tribe’s consent. The generic companies have opposed this motion on various grounds, arguing that the proceeding can continue. The Patent Office, perhaps in recognition of the significant controversy generated by the Allergan-Tribe deal, asked the public to weigh in as to whether the proceeding needed to be terminated.

On November 30, 2017, EFF and Public Knowledge submitted a brief arguing that the Patent Office has all the authority it needs to continue the inter partes review proceeding, despite the Tribe’s sovereign immunity. We argued that the proceeding was not one that required the Tribe’s presence at all, meaning sovereign immunity had no application. We also suggested that the Patent Office consider asking its question in a more accessible proceeding, so that more voices could be heard.

According to this blog post from IAM (also a few days ago), “CEO Leonard Schleiffer last week describing the move as “nuts”, because it broke Allergan ‘social contract’…”

Within context:

Fehlner’s comments come at a time when there are acute political controversies surrounding pharmaceuticals patents and market exclusivity in the US. Allergan’s recent attempt to circumvent the inter partes review patent invalidity process by transferring its Restasis rights to a Native American tribe has provoked public criticism, and even attracted censure from within the industry: Regeneron CEO Leonard Schleiffer last week describing the move as “nuts”, because it broke Allergan’s ‘social contract’ and made it look bad to the public.

As we explained before, it seems safe to assume that US Congress will scuttle this loophole, probably before the Supreme Court cements PTAB’s role in the system. Another IAM article (latest issue, behind paywall) says that “[t]he Federal Circuit’s ruling in Aqua Products serves as a short-term win for patent owners in inter partes review proceedings, but numerous long-term questions remain unanswered…”

We wrote a lot about the Aqua Products case and Managing IP revisited it a few days ago when it published a “PTAB round-up”. From the text that is not behind paywall we can see more participation — in the form of amicus briefs — in the tribal immunity controversy:

November PTAB news included the lowest petition filing since January 2016, oral arguments at the Supreme Court, amicus briefing on whether tribal ownership immunises a patent from IPR challenges, guidance on motions to amend, new procedures for remands from the Federal Circuit, and an increase in fees

In November, 112 Patent Trial and Appeal Board petitions were filed. This consisted of 109 inter partes review (IPR), one covered business method (CBM) and two post-grant review (PGR) petitions.

The term “IPRs” is misleading propaganda that should not be used unless it’s about “inter partes reviews” (at PTAB). It’s an unfortunate collision of acronyms (in the same disciplinary occupation) and to quote this one new tweet: “Alexandra Poch of @EU_IPO EU Observatory on Infringements of IPRs…”

They don’t mean inter partes reviews and Europe’s equivalent (the appeal boards) is under an unprecedented attack — a subject we shall revisit later in relation to the EPO.

What else is new in ‘PTAB land’? Well, as usual we have Patently-O with its subtle PTAB bashing. It continues to cherry-pick cases that make PTAB look bad, even though these are rare. The latest is this:

The court here does not decide whether preclusion would also apply if the original obviousness rejection was based upon a PTAB decision that had not been appealed to the Federal Circuit.

Although losing on Claim 25, the Mouttet’s appeal was important because it forced the USPTO to drop its PTAB indefiniteness holding. The PTAB held that his claims 35-40 were indefinite because they merged statutory classes. On appeal, though, the solicitor conceded that the PTAB judgment was incorrect. The court agreed. The formerly problematic claim is written as a “35. A method of … using the processor of claim 1 … [to perform a series of steps].”

Note here that the PTAB had also substantially sided with Mouttet – reversing all of the examiner’s obviousness rejections.

The very fact that patents get modified/edited post-grant rather than altogether invalidated is troubling in its own right. The same thing happens at the EPO however, and it can be seen as incompatible with (if not antithetical to) the core principles of patents.

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