Lobbyists and bribed politicians still attempt to undo patent reform in Washington

Summary: Anti-PTAB legislations (whose sole purpose is to lower patent quality) try to make their way past common sense; the patent microcosm is boosting these while courts carry on doing their job, which nowadays more often than not involves rejection of erroneously-granted US patents

THE USPTO would almost certainly be granting patents like a patent-printing machine if it wasn't for constant scrutiny from patent courts and groups like the EFF, CCIA and so on. Sadly, as we've just noted, 35 U.S.C. ۤ 101 isn't taken seriously enough by the Office. The new Director, a litigation person whose firm worked for Donald Trump, keeps trying to water it down. It cannot be done unless courts leave an opening/gap to be cherry-picked; as things stand, SCOTUS supports Patent Trial and Appeal Board (PTAB) inter partes reviews (IPRs) and the Federal Circuit gave away nothing but Berkheimer, which the Director (Iancu) was happy to exploit irrespective of the facts (Berkheimer has not changed anything in the courts).

We've been carefully watching the latest attacks on patent quality. Watchtroll, for instance, was belatedly catching up with Click-To-Call at PTAB (among other news that may mean patent law firms will carry on rotting away). Robert Schaffer wrote about IPR time-bar^* [1, 2] on a couple of occasions and together with his colleague Joseph Robinson he was covering the matters/affairs of the Federal Circuit (CAFC) in light of recent cases, such as this 35 U.S.C. ۤ 285 case (typically about whether the accused gets awarded legal fees by the trigger-happy accuser). We've pretty much covered all these cases before or at least mentioned these in passing. Joseph Robinson wrote about another important CAFC case -- one wherein we saw software patents invalidated by a high court. The defendant, BuySeasons, did a good job leveraging the law against US Patents numbers 6,035,294, 6,243,699, and 6,195,652 [1, 2]. Quoting Watchtroll:

On August 15, 2018, the Federal Circuit affirmed the invalidation of BSG Tech LLC’s (“BSG”) patents as ineligible subject matter. See BSG Tech LLC v. Buyseasons, Inc., No. 2017-1980, 2018 WL 3862646 (Fed. Cir. Aug. 15, 2018) (before Reyna, Wallach, and Hughes, J.) (opinion by Hughes, J.).

BSG asserted three patents with similar specifications that were directed to a “self-evolving generic index” for organizing information stored in a database — U.S. Patents No. 6,035,294, 6,243,699, and 6,195,652. The patents were “self-evolving” because users of the database could “add new parameters for use in describing items”, with guidance from the system, which would allow the database to be searched according to the new and existing parameters.

We generally prefer not to quote Watchtroll, but in order to understand what patent maximalists are up to it's helpful to keep an eye on Watchtroll. Last week they used the term "IP Assets" in the headline (three lies in two words). Katharine Wolanyk generally alludes to universities using taxpayers-funded research to feed patent trolls that then attack the public as "Legal Finance" (what a breathtaking euphemism!). Her innovation seems to be that of euphemisms for bad practices that should be banned if not severely punished for (penalties, fines, maybe even sanctions).

Fenwick & West LLP's Nina Srejovic and Charlene M. Morrow wrote a few days ago about IPRs in relation to appeals; This too was about a recent CAFC case. To quote:

The Federal Circuit further restricted a petitioner’s ability to appeal a decision by the Patent and Trademark Appeal Board upholding the validity of a patent. The court this month found in JTEKT v. GKN Automotive that a competitor who filed a petition for inter partes review could not appeal the PTAB’s validity determination because its product design was not definite enough to create a concrete and substantial risk of infringement or the likelihood of a claim of infringement. If this line of decisions stands, it will make it harder for competitors to clear the field of conflicting patents that they believe are invalid, as there would be no ability to appeal from an adverse Board decision.

They generally try anything they can to thwart PTAB and thus defend invalid/bogus patents from scrutiny. Gene Luoma, writing for Watchtroll yesterday (a Sunday), promotes the misleadingly-named "Inventor Protection Act" -- one among several bills striving to take down patents like his. "This is why we need your support to help us restore our patent rights," he concluded, mistaking patents for "rights" (they're not rights, technically and legally speaking). He pleaded: "Please help us in our fight to pass H.R. 6557, the Inventor Protection Act, which has been introduced into the House of Representatives. After a decade of destruction of our patent rights, this bill restores patent rights to inventors like me who own their patents, helping us to continue supporting our families with the money earned from our inventions."

This is nonsense. He also uses his disability to add an angle that has nothing to do with his patent/s; sympathy-garnering exercise at best. If his patent is worth what he believes, why should he fear PTAB? In our experience, people who loathe PTAB are those whose patents are of questionable quality (and deep inside they know it).

A few days earlier the American Enterprise Institute wrote about RALIA, another anti-PTAB bill. Michael Rosen from this patent zealots' front group (American Enterprise Institute has always been misleadingly named) is trying to reduce patent quality and help patent trolls, not enterprises. Here is what he wrote (soon to be boosted by patent maximalists):

Shortly after several new patent reform bills were introduced in Congress over the summer, a new, even more radical piece of legislation has entered the scene.

[...]

RALIA would also rewrite the statute on patent eligibility, making it easier to obtain software and so-called business method patents, a process that the Supreme Court’s 2014 landmark Alice decision has strongly affected. The legislation contends that “the Supreme Court’s recent jurisprudence concerning subject matter patentability has harmed the progress of science and the useful arts” and loosens its strictures.

No, it does the exact opposite. But don't let facts get in the way of career lobbyists.

Russell Slifer, part of the patent microcosm, then defines "bad" as what's bad for the litigation 'industry'. The lobbyists' media of choice, The Hill, seems very happy if not eager to let these vultures do their lobbying. Slifer promotes the STRONGER [sic] Patents Act as follows: "One good place to start is the Support Technology and Research for Our Nation’s Growth and Economic Resilience (STRONGER) Patents Act, H.R. 5340, introduced by Reps. Steve Stivers (R-Ohio) and Bill Foster (D-Ill.) and its companion Senate bill, S.1390, introduced last year by Sen. Chris Coons (D-Del.). These bills address some of the negative unintended consequences of the 2011 America Invents Act. To truly return America as a world leader in intellectual property protection, Congress must resolve to reverse the Supreme Court and allow our new industries to protect their innovations in the U.S, not China and Europe."

These are all just anti-PTAB bills whose net effect is reduction in quality assessment and decline in patent quality. They rely on the perception that there's anger, that there's a scandal, and that there are feuds.

Alluding to last month's RPX setback and Judge Reyna's role in an earlier case, McDermott Will & Emery's Brian A. Jones wrote about news several months too late (almost two months). Why now? To quote:

Addressing whether an inter partes review (IPR) petition was time barred under 35 USC €§ 315(b), the US Court of Appeals for the Federal Circuit vacated and remanded a finding by the Patent Trial and Appeal Board (PTAB) that the petitioner was not a real party in interest to the entity that had been served with an infringement complaint in district court more than one year earlier. Applications in Internet Time, LLC v. RPX Corp., Case Nos. 17-1698, -1699, -1701 (Fed. Cir. July 9, 2018) (O’Malley, J) (Reyna, J, concurring).

Applications in Internet Time (AIT) sued Salesforce.com, a software company, for patent infringement. Salesforce was served with a copy of the complaint on November 20, 2013.

[...]

Judge Reyna wrote separately to point out an independent ground for vacating the PTAB’s decision, namely that it failed to address whether RPX was also a “privy” of Salesforce. A petitioner is time barred under €§ 315(b) from filing a petition more than one year after the “petitioner, the real party in interest, or privy of the petitioner is served with a complaint.” Judge Reyna explained that a number of additional factors must be considered to determine privity, including whether a legal relationship exists between the parties or whether one party acted as a proxy/representative for the other party. In the case of RPX and Salesforce, a contractual relationship existed, and RPX may have been acting as Salesforce’s proxy. Therefore, Judge Reyna would have instructed the PTAB to also thoroughly review whether RPX and Salesforce were in privity in these circumstances.

This is one of those rare PTAB cases where patent maximalists have something to gain. They will carry on cherry-picking and then boosting such cases. Knowing that politicians soon return to work (many come back tomorrow), they want to provoke them into endorsement of anti-PTAB bills. ⬆ ___ ^* In his latest PTAB post, Kevin E. Noonan provided a more balanced interpretation, including some background:

Patent law has traditionally been considered to be fraught with traps for the unwary, which in practice just means that it is unwise to assume anything (see Carl S. Koening, "Clarifying Patent Terminology and Patent Concepts - An Introduction to Some Basic Concepts and Doctrine," 15 Cath. U. L. Rev. 1 (1966)). Petitioner for an inter partes review proceeding, Vizio, Inc., v. ATI Technologies ULC suffered the consequences of one of those traps, when its petition for review of U.S. Patent No. 7,633,506 was deemed untimely under 35 U.S.C. ۤ 315(b) because the petition was not filed within one year of Patent Owner filing suit against Petitioner Vizio. While a seemingly simple docketing matter, in this case the error arose over when (i.e., what date) the complaint was filed.

As set forth in the Board's Decision denying institution, the facts are these. Vizio filed its IPR petition on February 1, 2017, one year after receiving the complaint. Patent Owner filed an affidavit of service, establishing that Patent Owner had mailed the complaint to Vizio on January 30, 2017. The question before the Board was whether the one-year time period under ۤ 315(b) for filing an IPR petition ran from the date of mailing by Patent Owner or the date of receipt of the complaint by Petitioner Vizio.

To answer this question, the Board looked to Federal Rule of Civil Procedure 4(h)(1)(A), which states that a corporation is served "in the manner prescribed by Rule 4(e)(1) for serving an individual." Fed. R. Civ. P. 4(e)(1) states that service on an individual under the Rules is done "following state law for serving a summons in an action brought in courts of general jurisdiction in the state where the district court is located" (or where service is made). Thus, the Board reasoned, the time and manner where service was accomplished was a matter of Delaware law (where the Patent Owner was incorporated).