11.01.17

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Large Technology Groups Explain to the Supreme Court Why the Patent Trials and Appeal Board is Important

Posted in America, Courtroom, EFF, Patents at 7:39 am by Dr. Roy Schestowitz

The Patent Trials and Appeal Board (PTAB) is loathed by patent trolls and the litigation 'industry'

PTAB

Summary: The Patent Trials and Appeal Board (PTAB), which is expected to be defended by the highest US court in a number of months, receives support in the form of briefs from the EFF and CCIA

TECHRIGHTS has published well over a hundred articles about PTAB. Some were quite long. To European (or EPO) folks who don’t know what PTAB is, think of it as the US equivalent of the Boards of Appeal (these are not identical but similar). They help assure patent quality and are pretty much independent from the patent gold rush.

The world needs PTAB. Not just the US. A lot of patent litigation still takes place in the US, so it’s the US patents that currently pose a great threat to any company which is merely accused.

Early this morning we saw this new article by the EFF’s Vera Ranieri. She explains why the US Supreme Court must protect PTAB to protect the innocent and defend real innovation. She has published her article in two places [1, 2] with the same headline: “Stupid Patent of the Month: Bad Patent Goes Down Using Procedures at Patent Office Threatened by Supreme Court Case” (Oil States v Greene’s Energy).

Here’s a portion.

At the height of the first dot-com bubble, many patent applications were filed that took common ideas and put them on the Internet. This month’s stupid patent, U.S. Patent No. 6,738,155 (“the ’155 patent”), is a good example of that trend.

The patent is titled “System and method of providing publishing and printing services via a communications network.” Generally, it relates to a “printing and publishing system” that provides “workflow services…using a communication network.” The original application was filed in 1999, and the patent issued in 2004.

The ’155 patent has a significant litigation history. Starting in 2013, its owner CTP Innovations, LLC, filed over 50 lawsuits alleging infringement, and told a court it intended to file as many as 200 additional cases. CTP claimed [PDF] that infringement of its patent was “ubiquitous” by the printing and graphic communications industry.

The EFF’s site, almost at the same time (as the above), revealed that it filed an amicus brief explaining why PTAB is important for preserving/improving patent quality. They again mention the above troll:

The Patent Office doesn’t always do the best job. That’s how Personal Audio managed to get a patent on podcasting, even though other people were podcasting years before Personal Audio first applied for a patent. As we’ve detailed on many occasions, patents are often granted on things that are known and obvious, giving rights to patent owners that actually belong to the public. As a result, it’s important for the public to have the ability to challenge bad patents.

Unfortunately, challenging bad patents in court can be hard and very expensive. In court, challenges are often decided by a judge or jury with little technical knowledge. Courts also require a high level of proof (“clear and convincing”) that can be hard to come by, especially after the passage of time.

[...]

In our amicus brief, we detail the long history of patents being used as a public policy tool, and how Congress has long controlled how and when patents can be canceled. We explain how the Constitution sets limits on granting patents, and how IPR is a legitimate exercise of Congress’s power to enforce those limits.

Not only the EFF did this. Joshua Landau from the CCIA, having published many long posts on the subject, also files an amicus brief on behalf of the CCIA. As expected, all his blog posts are becoming something that can make a big impact (Justices may read it). To quote yesterday’s post (meaning they filed it on Monday):

Yesterday, we filed an amicus brief (along with the Internet Association, the National Association of Realtors, the Software and Information Industry Association, the Association of Global Automakers, and SAS Institute) in the Oil States v. Greene’s Energy case in the Supreme Court. This case is a challenge to the constitutionality of the inter partes review (IPR) system, claiming that IPR is unconstitutional.

Oil States, a drilling company, patented a technique used in fracking. It then sued another drilling company, Greene’s Energy, claiming Greene’s had infringed the patent. Greene’s, faced with an expensive lawsuit, chose to file an IPR. The Patent Trials and Appeals Board decided that the Oil States patent was invalid, and the Federal Circuit affirmed.

Oil States, rather than accepting that the prior art disclosed their idea, chose to appeal their case to the Supreme Court, claiming that the same executive agency which determines whether to grant a patent cannot legally review whether that grant was erroneous. They claim that doing so violates Article III of the Constitution and the Seventh Amendment.

The Summary of Argument in the brief does a nice job of making our point, so I’ll just show you what we said.

The role of PTAB isn’t just quality assurance; it is also saving relatively small companies from unjust sanctions using legal bullying. Dermott Will & Emery’s Sunita Adluri, for example, has just recalled Arista Networks, Inc. v International Trade Commission — a case that we wrote about nearly half a dozen times. Basically, PTAB already invalidated Cisco patents which Cisco had used for embargo on Arista products (through the ITC), but outrageously enough the ITC imposed that embargo anyway. As if it didn’t care what PTAB decided…

To be fair to Cisco, even Cisco itself openly supports PTAB and it is one of the main funders of a pro-PTAB front group. The latest in this bizarre twist was explained yesterday by Adluri as follows:

he US Court of Appeals for the Federal Circuit affirmed a limited exclusion order issued by the International Trade Commission (ITC) against infringing “network devices, related software and components thereof,” finding no requirement that the ITC make specific findings regarding components of the accused products. Arista Networks, Inc. v. International Trade Commission, Case No. 16-2539 (Fed Cir., Sept. 27, 2017) (Reyna, J).

The ITC instituted a § 337 investigation in response to a complaint by Cisco alleging that Arista’s imports of certain network devices, related software and components thereof infringed six of Cisco’s patents. The administrative law judge (ALJ) issued a final initial determination finding a violation with respect to three of the six asserted patents (one had been withdrawn). Cisco and Arista each asked for ITC review. In its final determination, the ITC determined that Arista infringed the asserted claims of three of the remaining five patents, and entered a limited exclusion order against imports by Arista of “certain network devices, related software and components thereof.” Arista appealed the ITC’s claim construction of a term in one of the patents and the scope of the limited exclusion order.

[...]

The Federal Circuit noted that the ITC has “broad discretion in selecting the form, scope, and extent of [a] remedy, and judicial review of its choice of remedy necessarily is limited,” and that it will not interfere in an ITC remedy determination unless “the remedy selected has no reasonable relation to the unlawful practices found to exist.” The Court determined that blocking imports of articles that induce patent infringement has a reasonable relationship to stopping unlawful trade acts, and therefore found no error in the ITC’s limited exclusion order.

Unlike the troll examples given by the EFF, here we have an embargo which harms public choice. It could be argued, therefore, that PTAB can help ensure fair competition, too.

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