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03.25.18

Where Opposition to the Patent Trial and Appeal Board (PTAB, AIA) Has Come From Over the Past Week If Not Year

Posted in America, Courtroom, Patents at 11:18 am by Dr. Roy Schestowitz

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Cato Institute and Koch Brothers Reach Agreement - The New York Times
Reference: Cato Institute and Koch Brothers Reach Agreement – The New York Times

Summary: The push against PTAB, a relatively short time before the much-anticipated Oil States decision, appears to have lost momentum; but those who persist are almost always linked to patent maximalism

QUALITY assurance is essential when it comes to patents. That is the whole essence of patent examination — something which EPO management conveniently overlooks when it turns the EPO into another INPI. The USPTO, by contrast, enjoys scrutiny from PTAB, which basically reassesses granted patents and sometimes patent applications too. PTAB helps assure that people who were granted patents have confidence in enforceability (or lack thereof). Spurious expenses, notably court/lawyers’ fees, are being spared. Sounds good, no? Well, not to patent maximalists. The lawyers want a lot of fights because they profit from these fights.

“Spurious expenses, notably court/lawyers’ fees, are being spared. Sounds good, no? Well, not to patent maximalists.”This post glues together recent developments related to PTAB, which we expect to be further cemented into the system when SCOTUS rules on Oil States (possibly weeks if not a few months from now).

Several days ago Professor Rantanen (University of Iowa) spoke of a “symposium, Administering Patent Law, [which] is co-sponsored by the Iowa Law Review and the center I direct, the Iowa Innovation, Business and Law Center.”

“The concept of post-grant patent challenges isn’t a novel one, nor should it be controversial.”Rantanen also mentioned Melissa Wasserman's joint paper on why examiners at the USPTO grant low-quality patents which then help patent trolls. More recently she co-authored a paper with Christopher J. Walker. It was about PTAB and it has just been reposted under a slightly different title (“Situating PTAB Adjudication Within the New World of Agency Adjudication”) at Patently-O, again by Jason Rantanen, who wrote three posts there (in just one day) mostly for self-promotional purposes. One of those revealed slight bias — albeit the sort of bias one might expect from Patently-O, which keeps bashing PTAB for at least a year now (we watch these trends closely as we strive to understand and track the money flows).

“Suffice to say, just because someone questions the legitimacy of a patent does not mean that the patent is instantaneously illegitimate. There’s a process for that and it is improving over time.”The concept of post-grant patent challenges isn’t a novel one, nor should it be controversial. The EPO had practiced it for decades (although years ago, under Battistelli, this concept came under attack in defiance of the EPC). The other day we saw this article about US patent number 9,738,929. Arguing over whether the USPTO granted a bogus patent (which happens a lot unfortunately, due to patent maximalists who ruined the system), here is the outcome boasted about in a press release:

ONT had sought to dismiss Pacific Biosciences’ complaint for infringement of U.S. Patent No. 9,738,929 by alleging that the patent’s claims recite ineligible subject matter. A hearing on the matter was held on February 27, 2018 and the ruling by Judge Stark was issued on March 22, 2018. In its ruling, the Court disagreed with ONT’s contentions and also took note of the inconsistent statements made by ONT in front of the U.S. International Trade Commission and in prosecuting ONT’s own, later-filed patent applications.

Suffice to say, just because someone questions the legitimacy of a patent does not mean that the patent is instantaneously illegitimate. There’s a process for that and it is improving over time. PTAB has in fact expanded panels to actually improve confidence and oversight when it comes to patent assessment, but Watchtroll is such a dishonest site that it now claims the very opposite, attributing that to extremists like itself/himself (who profits from such lies). Some say that we should just ignore Watchtroll, but it’s important to see what prominent anti-PTAB sites are saying and occasionally debunk their arguments.

Watch what a Koch-funded think tanker, Adam Mosoff, said a few days ago. Mosoff, who links to Cato (Koch), tweeted: “GREAT READ in @RegulationMag by Professor Jonathan Barnett: How evidence shows that stable & effective property rights in patents are important & why this matters for US innovation economy in 21st century object.cato.org/sites/cato.org… #OilStates #PatentsMatter @CatoInstitute”

“Kochs like to piggyback a pseudo-libertarian sentiment to engender and spread hatred for any sort of government regulation.”It’s not hard to imagine who signal-boosted this. Not only those making a career out of lying for billionaires but also the patent maximalists, such as Ania Jedrusik, who wrote: “There’s no firm basis to assert that the #patent system is regularly issuing low-quality patents or that technology markets are stuck in a morass of patent claims that will frustrate #innovation…”

Kochs like to piggyback a pseudo-libertarian sentiment to engender and spread hatred for any sort of government regulation. This isn’t new. It’s a well-recognised pattern of their lobbying fronts, including Cato. Their meddling in Oil States isn’t surprising either. They have a lot of money at stake.

“In the vast majority of cases PTAB actually (re)affirms examiners’ rejections based on (citing) Section 101.”Thankfully, some of the above is being challenged. FFII Sweden’s Bosson responded with: “What would that benchmark look like? We know from history that regions outside patent systems have been prosperous. East vs West coast US for instance. Now we have Alice vs pre-Alice.”

FFII’s André Rebentisch‏ then said: “The litmus test is: does it involve software? I haven’t seen a non-trivial patent in the field.”

“Exactly,” Bosson replied. “My experience is that pretty much all software parents are abstract methods on math discoveries or information re-organization embedded in patent-babble complexity. Have helped kill one recently – at high cost.”

Don’t tell that to patent lawyers though; they hardly know what software is and how it works, having never written even a simple computer program. Watchtroll attempted to claim that he did, but when asked to name it he ran away and blocked me, hoping to spare himself this embarrassment. He’s no programmer, he fails to explain what computer programs are, yet he constantly promotes software patents. It’s all about money to him.

“Patent maximalists such as IAM and Patently-O are obviously not happy, but what can they do short of attacking judges’ credibility (something that they already do on occasions)?”An online friend of his keeps complaining about rejection of such patents. This one too is no programmer, yet always happy to promote software patents and block those who practice software (like myself). He wrote about a “50 Page Rejection of a Neology Patent after IPR–at least no 101 rejection…” (it’s Section 101 which scares them the most; we’ll cover that separately)

This patent maximalist is citing this PDF [PDF] from the PTAB-hostile Anticipat, selectively choosing a case where, according to him, “PTAB Reversed Examiner’s [Section] 101 Rejection of Claims in SAP Patent Application; Some Good Arguments Presented by SAP Counsel…”

In the vast majority of cases PTAB actually (re)affirms examiners’ rejections based on (citing) Section 101. The same goes for CAFC cases that look into PTAB rejections based on Section 101.

Patently-O has long attempted to change the status quo on IPRs, CBM and so on.”Patent maximalists such as IAM and Patently-O are obviously not happy, but what can they do short of attacking judges’ credibility (something that they already do on occasions)? IAM posted this sponsored rant about CAFC and Patently-O wrote about a case where “the district court followed the PTAB and ruled that the claims were invalid as indefinite.”

Sometimes this PTAB-bashing blog shows (for a change) courts and PTAB in agreement. Most of the time, however, it chooses to highlight dissent. This one is about a laughable patent. Under “AIA Trials” it says that “the Federal Circuit agreed that Sarif’s claim construction position of no-means-plus-function was “well supported” – despite ultimately losing the case.”

On another day it wrote about CBM (Covered Business Method) in relation to AIA. To quote some background:

In the America Invents Act (AIA), Congress created two primary new forms of challenging issued patents in an administrative trial setting before the Patent Trial and Appeal Board. The more popular form is Inter Partes Review while Post Grant Reviews have seen less interest. The comparative popularity appears to stem primarily from the fact that IPRs can be used to challenge any issued patent — including pre-AIA patents and patents issued years-ago. PGRs, on the other hand has two important timing limitations: (1) PGRs are only applicable to post-AIA patents (effective priority date > March 2013); and (2) a PGR petition must be filed within 9-months after the patent grant. That said, IPRs have a comparative downside: While a PGR may challenge patent claims on any patentability ground (except best mode), IPRs are limited only to anticipation and obviousness challenges based upon prior patents and published prior art.

The Covered Business Method Review (CBM) program is added as a layer atop IPRs and PGRs. CBMs can only be used to challenge patents directed to financial, non-technological business methods. However, like PGRs, those CBM patents can be challenged on any ground (including eligibility, enablement, and indefiniteness). Further, like IPRs, CBM petitions can challenge any patent regardless of its filing and issuance dates.

Patently-O has long attempted to change the status quo on IPRs, CBM and so on. Patently-O is all about patent maximalism, i.e. more software patents, patents on business methods etc. It yearns for the old days of patent trolls’ freedom to sue and blackmail everyone.

“It’s actually the Berkheimer nonsense which is “making a comeback,” having been misinterpreted and misused by the patent microcosm for about a month now (we wrote nearly a dozen articles and rebuttals about it).”“Business methods making comeback on appeal at the Board,” Anticipat exclaimed some days ago, “Citing Berkheimer PTAB panel holds Examiner must show evidence…”

It’s actually the Berkheimer nonsense which is “making a comeback,” having been misinterpreted and misused by the patent microcosm for about a month now (we wrote neatly a dozen articles and rebuttals about it). Anticipat writes:

We have previously reported on the very low reversal rates of abstract idea rejection within tech center 3600, home of business method art. Indeed, over the past few months, the reversal rate has been about 12%, as shown on the Anticipat Research database. But the Federal Circuit has recently pushed the Alice test closer toward patentees, and the Board appears to be following their lead. This is shown in a pair of recently-decided appeals involving business method applications

[...]

The PTAB will continue to side with Examiners in affirming many abstract idea rejections of business method applications. But the recent reversals show that a compelling argument lies in the novel arrangement of claim elements. This is especially compelling if the Examiner has not established on the record that these elements are conventional or routine.

So that last paragraph almost directly contradicts the headline and, much as we expected, Berkheimer has made virtually no difference.

But why let facts of even statistics get in the way of ‘good’ agenda? Anticipat goes further with some revealing numbers. Notice the part about Section 101:

We recently reported that the top patent firms (by registered practitioner as featured on a Patentlyo post) pursue ex parte appeals very differently. This, despite apparent equal knowledge of the benefits of pursuing an appeal to further prosecution. While this finding is interesting, pursuing an appeal and winning on appeal are two different things. Here we report on the differences in appeal outcomes along the three firms Finnegan, Fish & Richardson, and Knobbe Martens.

As brief background, we have found that average reversal rates among the various grounds of rejection to be quite stable. In a recent post, we reported that across the entire USPTO, Section 101 has about a 20% reversal rate on appeal, Sections 102 and 112 hover at about 50%, and Section 103 is around 33%. To look at these firms’ outcomes, we used Anticipat’s Research database and Practitioner Analytics.

Got that? Section 101 reversals are at a mere “1 in 5″. So why even bother?

“PTAB actively enforces Section 101 and there are rarely exceptions to that.”The other day a patent maximalist noted that “PTAB Affirmed Examiner’s 101 Rejection for MasterCard Claims for Making a Sale/Payment with a Mobile Device,” citing a new PDF from Anticipat. This is quite frankly the usual; to suggest that there’s a point trying to work around the law is to basically mislead clients. PTAB actively enforces Section 101 and there are rarely exceptions to that. We’ll say more about Section 101 in later posts, especially misuse of Berkheimer as precedent.

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