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05.13.18

The Patent Microcosm is ‘Snookering’ Andrei Iancu on PTAB Deforms and Broadest Reasonable Interpretation (BRI), Amongst Other Things

Posted in America, Law, Patents at 10:15 pm by Dr. Roy Schestowitz

‘Snookered’ or just servicing the former employer and professional ‘compatriots’?

IAM and Trump
IAM IANAL (I am Not a Lawyer): Masquerading as objective but actually servicing patent maximalists (they wanted to put in charge of the USPTO someone even more radical than Iancu)

Summary: The Donald Trump-nominated and appointed USPTO chief turns out to be the disaster he was expected to be considering the fact that he came from the patent microcosm (from a firm that used to work directly for Trump)

THE USPTO did fantastic work for a number of years. We were rather enthusiastic if not thrilled about the reforms implemented by Lee, Matal and others. It seemed like the US patent system had shifted back in the direction of science and technology rather than Big Litigation (law firms), which is where Iancu comes from. His firm used to work for Trump, who later nominated him. We don’t want to make this ad hominem, so we shall focus on the actions and words of Iancu. It doesn’t look too encouraging, especially in light of the past week. The Patent Trial and Appeal Board (PTAB) is being defended by the highest US court, but Iancu seems eager to weaken it. Moreover, his ‘guiding hand’ seems to be think tanks of billionaires like the Koch brothers and a bunch of patent extremists. Not good.

This post is a concise summary of the past week’s developments, starting with this piece from Gene Quinn (Watchtroll), one of the first people to write about it. To quote:

Earlier today the USPTO announced proposed rulemaking that would change the prior policy of using the Broadest Reasonable Interpretation (BRI) standard for construing unexpired and proposed amended patent claims in PTAB proceedings under the America Invents Act and instead would use the Phillips claim construction standard.

This is about BRI. Sandip H. Patel (Marshall, Gerstein & Borun LLP) wrote about it as well later on. To quote his article (in a site of patent law firms):

The Patent Office today issued a press release of its notice of proposed rulemaking that would replace the broadest reasonable interpretation standard the Patent Trial and Appeal Board applies to construe unexpired patent claims and proposed substitute (amended) claims in AIA trial proceedings with the Phillips standard applied in patent cases before federal district courts and the International Trade Commission (ITC). The Office also proposes to amend the rules “to add that the Office will consider any prior claim construction determination concerning a term of the involved claim in a civil action, or an ITC proceeding, that is timely made of record in an [AIA trial] proceeding.” Any proposed changes adopted in a final rule would be applied retroactively to pending AIA trials.

By May 11th we already saw several more articles about it, e.g. one from Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. An article by Michael C. Newman, Peter J. Cuomo and Patrick T. Driscoll said this:

The U.S. Patent and Trademark Office announced a propose change to the standard for construing both unexpired and amended patent claims in Patent Trial and Appeal Board (PTAB) proceedings under the America Invents Act (“AIA”). The change would replace the current Broadest Reasonable Interpretation (“BRI”) standard with the standard articulated in Phillips v. AWH Corp. 415 F.3d 1303 (Fed. Cir. 2005) (en banc). This change would harmonize the claim construction standard applied in inter partes review, post-grant review, and covered business method patent proceedings before the PTAB with the one used by federal district courts and the International Trade Commission. The proposed amendment would also allow the PTAB to consider any prior claim construction determination concerning a term of the involved claim in a civil action, or an ITC proceeding, that is timely made of record in an AIA proceeding.

Patently-O wrote about this bunch of changes (more than one) several times, starting with this press release:

USPTO Press Release: Alexandria, VA – Today, the United States Patent and Trademark Office announced its proposed rulemaking to change the prior policy of using the Broadest Reasonable Interpretation standard for construing unexpired and proposed amended patent claims in Patent Trial and Appeal Board (PTAB) proceedings under the America Invents Act. The proposed new standard is the same as the standard applied in Article III courts and International Trade Commission (ITC) proceedings.

The USPTO also proposed to amend the rules for PTAB trials to add that the USPTO will consider any prior claim construction determination concerning a term of the claim in a civil action, or an ITC proceeding, that is timely made of record in an Inter Partes Review (IPR), Post Grant Review (PGR), or Covered Business Method (CBM) proceeding.

The purposes of the proposed rule include, among other things, to ensure consistency in claim construction between the PTAB and proceedings in district court or at the ITC, and to increase judicial efficiency.

A Notice of Proposed Rulemaking (NPRM) will publish on May 9, 2018. Please submit comments to ptabnpr2018@uspto.gov within 60 days from the notice of publication.

They are open to comments. Will Iancu gradually sabotage PTAB to help patent maximalists (and thus discredit the USPTO again)?

“Will Iancu gradually sabotage PTAB to help patent maximalists (and thus discredit the USPTO again)?”Writing under an identical heading (identical to Patently-O‘s) and very similar wording to the original, Andrew R. Cheslock (Foley & Lardner) had more to say and so did Thomas A. Haag (Seyfarth Shaw LLP), who merely edited the press release on the face of it:

The USPTO announced today proposed rulemaking for changing its policy related to claim interpretation in Patent Trial and Appeal Board (“PTAB”) proceedings (not including patent examination). Currently, the broadest reasonable interpretation (“BRI”) standard is applied when analyzing claims. The proposed new rules would result in “the same as the standard applied in federal district courts and International Trade Commission (“ITC”) proceedings;” i.e., “ordinary and customary meaning” according to “a person of ordinary skill in the art in question at the time of the invention,”1 and “reasonable certainty” for definiteness analysis2. In addition, it is proposed that the USPTO/PTAB “will consider any prior claim construction determination concerning a term of the involved claim in a civil action, or an ITC proceeding, that is timely made of record in an IPR, PGR, or CBM proceeding.”

The Notice of Proposed Rulemaking is scheduled to publish tomorrow, May 9, 2018. The comment period is scheduled to end 60 days from publication—July 8, 2018. The unpublished Proposed Rule can be found here.

It appears that the USPTO and the PTAB are reacting to recent Supreme Court decisions, e.g., Oil States and SAS (See our summary of these cases here). Or perhaps, this is the next step in USPTO Director Andrei Iancu’s pledge to “provide reliable, predictable and high quality IP rights.” In any case, it is clear that there are still many changes coming to post grant proceedings before the USPTO.

Here’s another post about it:

The U.S. Patent and Trademark Office published a notice of proposed Rulemaking in the Federal Register (83 Fed. Reg. 21221) today which would provide a change to the claim construction standard used in Inter Partes Reviews (IPRs), Post-Grant Proceedings (PGRs), and Covered Business Method Reviews (CBMs). Instead of the broadest reasonable interpretation (“BRI”) standard originally adopted, and blessed by the Supreme Court in Cuozzo Speed Technologies LLC v. Lee, the proposed rulemaking would adopt the same standard used by district courts and the ITC. The use of a harmonized standard has been long advocated by patent holders, specifically because they are faced with an unfair dichotomy — a more stringent construction when alleging infringement, but a broader construction when faced with an allegation of unpatentability at the PTAB. Or, as the Office acknowledged in the notice, it is possible that “even if a competitor’s product would not be found to infringe a patent claim if it was sold after the patent’s effective filing date, the same product nevertheless could constitute invaliding prior art if publically sold before the patent’s effective filing date.” Nevertheless, over time, the BRI standard for post-issuance proceedings has been refined by the Federal Circuit to the extent that it was almost approaching the Phillips standard anyway. In fact, cases in which the claim construction standard has been outcome determinative are few and far between. Still, this effort to harmonize the construction of issued claims regardless of which tribunal is considering the issue is welcome and long overdue.

Iancu at the Office seems to be an ‘agent’ of patent trolls and law firms (as expected), but can courts/judges compel him to stop this?

“US To Weaken Post-Grant Patent Reviews,” Steven Seidenberg wrote in his headline at IP Watch. To quote:

Government agencies do not ordinarily relinquish power easily, or without a struggle. But these are not ordinary times in the USA. Trump appointees have pushed a variety of federal agencies – including Interior, EPA, and HUD – to surrender much of their powers. Yesterday, the USPTO joined that list, when it announced proposed new regulations that would weaken the agency’s review of existing patents.

Richard Lloyd, who lobbied Iancu in person (PTAB-shaming tactics), admits that PTAB is still doing fine but still tries to demolish PTAB in order to help patent trolls (his employer’s sponsors). “Change in claim construction at PTAB may not have a big practical impact but its message is clear,” says his headline. From outside the paywall:

Since he took over as Director of the USPTO, Andrei Iancu has been outlining his intention to bring greater predictability to the US patent system. That has been a welcome message to rights owners who over the last few years have become accustomed to a whirlwind of legal and policy changes, many of which have not exactly gone their way. However, as he strives for that predictability, in recent weeks the market has been getting accustomed to a new era of change for the US patent system.

What “new era of change”? Self-fulfilling prophecies again? UPC advocacy tactics?

It certainly seems like Iancu is low-hanging fruit to patent maximalists. Judging by this new article from Mike Masnick, something is clearly amiss. In an official USPTO event they now evoke/invoke “terrorism” for their purposeless, shameful agenda. To quote:

For many years now we’ve had fun pointing out the ridiculous claims of the legacy copyright industry execs insisting that copyright infringement funds terrorism. Of course, the evidence for this was seriously lacking. Back in 2011 there was an incredibly detailed, evidence-rich debunking of the claim by Joe Karaganis, showing basically no connection between terrorism and infringement.

But, alas, it’s a topic that never seems to go away. And now it appears that a design patent lawyer has updated the talking points to now claim that terrorists are infringing on design patents to fund their terroristic activity. First, as a quick refresher: when we talk about patents, we’re usually talking about utility patents, which are a monopoly for a new invention or process. Design patents, on the other hand, are really more akin to trademarks, in that they grant a monopoly on the look of something. The idea that ISIS is out there infringing on, say, the look of someone’s fancy belt buckle or a new planter is just sort of ludicrous on its face. But it certainly didn’t stop big shot patent lawyer Robert Katz from making the claim at a recent event held by the US Patent and Trademark Office (who, really, should know better).

The event was the USPTO’s “Design Day” held a few weeks ago, in which there were a series of discussions on design patents and such. If you go to the Livestream of the event, about an hour in Katz starts out by playing up how crafty infringers are getting, saying that they’re getting smarter about how they avoid getting caught…

[...]

Katz goes one better in talking about how “dangerous” products were introduced into the market, he gets to claim that knockoff makeup products were causing people to break out in rashes because they had “feces” in them. Indeed, there was just a seizure by the LAPD of some supposedly counterfeit makeup products, and the whole “feces” claim made a bunch of headlines (though, it’s odd that half the stories call it “animal waste” and the other half call it “human feces.”) There don’t seem to be many details beyond a tweet from the LAPD — an organization never known for exaggerating anything or making statements that are inaccurate.

He also claims that sex traffickers are using infringement to fund their efforts (I thought they were using the trafficking to fund it, but… who knows?) But that’s just the lead in to the really nutty claim. It all comes back to… TERRORISM!

This is totally insane, but we’re becoming accustomed to that in this age of Trump/Trumpism. Patent lawyers can be mad extremists sometimes, salivatising over litigation, financial ruin, and destruction of science. Does the USPTO remember who or what it was supposed to serve (originally)?

“This is totally insane, but we’re becoming accustomed to that in this age of Trump/Trumpism.”Iancu comes from the patent microcosm, so he now repeats the lie from lobbying fronts like the Chamber of Commerce (CoC). What next? Koch Brothers? From the summary: “USPTO Director Addresses U.S. Patent System’s Decline in U.S. Chamber of Commerce Worldwide Patent Protection Rankings” (this whole index is based on a major lie, as Unified Patents recently reminded me).

Watch Iancu drinking this Kool-Aid: “Iancu then turned to patent opposition procedures, primarily Inter Partes Review (IPR). (Note: Since giving this address, the Supreme Court held in a 7-2 decision in Oil States v. Greene’s Energy that IPR proceedings do not violate Article III or the Seventh Amendment of the Constitution.)”

“Iancu comes from the patent microcosm, so he now repeats the lie from lobbying fronts like the Chamber of Commerce (CoC).”Oil States will be covered here later (and separately). Will the USPTO even take much account of it? Or will it try to have it ‘shelved’ it like the patent microcosm hopes?

Several days ago Dennis Crouch (a PTAB foe) wrote about an anti-PTAB stunt, basically giving publicity to a bunch of crazies. People with bogus patents try to sue their government for granting them bogus patents. And here are the details:

A new class-action lawsuit has been filed against the U.S. Government alleging damages suffered by “patent holders whose property was taken by the USPTO without compensation in violation of the Fifth Amendment of the Constitution.” Christy, Inc. v. USA, 18-cv-00657 (Ct. Fed. Clms. 2018) (2018-05-09-1-Complaint).

The basic story here begins with the USPTO’s “public (and shocking) admission” that the AIA Trials are targeted toward patents that were “erroneously granted in the first instance” — i.e., the USPTO erred in issuing the patents and that is why the AIA trials are now necessary. The problem though is that the erroneous issuance lead to a granted property right with the potential for substantial royalty income, substantial payments of maintenance and other USPTO fees, and often substantial costs involved with the AIA-trial.

Watchtroll didn’t take long to give them a platform as well:

In the class action suit, Christy is asserting claims against the U.S. government founded upon the breach of express or implied contract claims to which the U.S. is a party, the Takings Clause of the Fifth Amendment as well as violation of due process. The contract claims at issue include the agreement by the government to issue patents with specific claims which are covered for a specific period of time in exchange for the patent owner’s payment of issuance and maintenance fees; Notice of Allowance and Fee Transmittal forms represent the express or implied contract made by the patent applicant or owner with the U.S. government.

Considering Oil States, this is a futile lawsuit which will never take off.

“It’s like the worst of patent maximalism (Koch, CoC, Watchtroll and patent trolls) have got Iancu by the ears; his only ‘boss’, however, should be courts like CAFC and SCOTUS.”Speaking to the judge-bashing Watchtroll, which was witch-hunting his predecessor, Iancu reveals his true colours again. Does he not know what Watchtroll has been doing? We doubt it. It just shows that he’s OK with it. Giving an interview is a form of endorsement. And that’s a bad sign.

Here’s another take from Dennis Crouch, this time about Administrative Claim Construction Procedure (ACC):

Several years ago, I proposed an Administrative Claim Construction Procedure (ACC)— allowing a patentee or third party to request a claim-construction by the USPTO. The process would be much like an Inter Partes Review (IPR) proceeding – although my proposal would end the proceedings before actually analyzing whether the prior art reads upon the claims.

[...]

In his first major action as USPTO Director, Andrei Iancu has proposed modifying the approach to claim construction that the Patent Trial and Appeal Board (PTAB) applies in IPR proceedings (as well as PRG and CBM proceedings). Rather than using the usual examination standard of “broadest reasonable interpretation,” the proposal would shift to the “ordinary meaning” of claim terms as applied by the courts and exemplified by Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc) and adjusted by Teva Pharms. USA, Inc. v. Sandoz, Inc., 135 S.Ct. 831 (2015).

Although the BRI and Ordinary Meaning standards are actually quite close, the courts and PTO have regularly held them to be different enough to avoid preclusion or even consideration when considering a claim construction performed by another judicial body. Thus, the PTO Notice explains: “Minimizing differences between claim construction standards used in the various fora could lead to greater uniformity and predictability of the patent grant [and] could help increase judicial efficiency overall.” (Note – the notice does not mention issue preclusion or collateral estoppel).

Last but not least, in relation to Post-Grant Review (PGR) again, as well as estoppel, there’s new input from CAFC.

Andrew H. DeVoogd, Christopher G. Duerden and Anthony E. Faillaci (Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.) wrote the following:

The Federal Circuit recently overturned a decision estopping the plaintiff from pursuing its infringement claims in the United States District Court for the Eastern District of Arkansas, and clarified the effect of reexamination on equitable estoppel and laches. In John Bean Technologies Corporation v. Morris & Associates, Inc., the Federal Circuit held that District Court abused its discretion applying equitable estoppel to bar John Bean Technologies Corp.’s (“John Bean”) infringement action without considering the impact of an intervening ex parte reexamination on the claims of the asserted patent.

This again is an example of the courts doing their job, unlike the Office under Iancu. We fear that the Office is now more or less servicing an angry mob rather than technology firms. It’s like the worst of patent maximalism (Koch, CoC, Watchtroll and patent trolls) have got Iancu by the ears; his only ‘boss’, however, should be courts like CAFC and SCOTUS. It should be about justice, not economics of law firms.

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