04.29.18

Patent Maximalists Are Using SAS Institute v Iancu to Distract From Their Epic Defeat in the Vastly More Important Oil States

Posted in America, Courtroom, Deception, Patents at 8:01 am by Dr. Roy Schestowitz

“For a decade, makers of AIDS medicines had rejected the idea of lowering prices in poor countries for fear of eroding profits in rich ones. The position required a balancing act, because the companies had to deflect attacks on the global reach of their patents, which granted exclusive marketing rights for antiretroviral drugs.” –Barton Gellman

Summary: As one might expect, law firms don’t want pairs of eyes and attention on Oil States, so they start speaking about a far less critical case — a case that might, under some circumstances, give PTAB even more work

JUST under a decade ago we criticised Florian Müller for all sorts of reasons, half a decade after he had fought software patents. Over the past 3-4 years, owing largely to EPO scandals, Müller and us became amicable again. He’s no longer attacking FOSS like he used to (while Microsoft paid him). He’s back to software development and he’s getting involved in USPTO matters. He wants software patents to go away (virtually all software developers reject software patents).

“Over the past 3-4 years, owing largely to EPO scandals, Müller and us became amicable again. He’s no longer attacking FOSS like he used to (while Microsoft paid him).”“Someone wrote on Twitter that patent holders had something to celebrate yesterday,” he wrote in Twitter a day after Oil States. “Classical spin doctoring?”

Yes.

Both Oil States and SAS Institute v Iancu (formerly SAS Institute v Lee) are about patents. But it’s clear which of the two decisions matters a great deal. We cover patents dozens of times per week and rarely do we even mention SAS Institute v Iancu (it’s about patents but not so important). Müller went on to writing a whole blog post about it: [via]

Someone wrote on Twitter that patent holders had something to celebrate yesterday: After the Supreme Court’s Oil States (7-2 confirming constitutionality of PTAB inter partes review) and SAS (5-4 holding that PTAB must render decision on all challenged patent claims after granting review), patent holders were allegedly in a stronger position than before, which–as the same tweeter (I forgot the name) noted–is rarely the case when the Supreme Court overrules the Federal Circuit as it did in SAS.

Classical spin doctoring? A comparison of the number of amicus briefs filed shows where most of the attention was. 54 briefs in Oil States vs. only [one] in SAS. If patent holders at large had cared a lot about SAS, more of them than just the Intellectual Property Owners Association (amicus brief, PDF) would have chimed in. However, many of those who’d have preferred to have done away with PTAB IPR in the first place presumably welcome anything that adversely affects PTAB’s operational efficiency–and even when (as is the case here) it’s not easy to predict the fallout, someone who hates PTAB probably just thinks it can hardly get worse from that particular vantage point.

Exactly!

“Both Oil States and SAS Institute v Iancu (formerly SAS Institute v Lee) are about patents. But it’s clear which of the two decisions matters a great deal.”Over the past few days we’ve waited patiently and collected examples of this diversion tactic.

At Patently-O, for example, Dennis Crouch wrote that Justice “Ginsberg, joined by the other three most liberal justices, calls Gorsach’s [sic] reading “wooden” and lacking of any true understanding or indication of congressional intent” (Gorsuch is as “wooden” as the Kochs and their think tanks which he cited).

Here’s more:

Simplifying petitions decisions: The decision here should simplify the petition institution decisions. Following SAS, the question should simply be whether there is at least 1 challenged claim where the petitioner has presented a “reasonable likelihood” of prevailing on the merits. 35 U.S.C. 314(a).

[...]

Writing in dissent, Justice Ginsberg, joined by the other three most liberal justices, calls Gorsach’s [sic] reading “wooden” and lacking of any true understanding or indication of congressional intent: “Court’s opinion offers no persuasive answer to that question, and no cause to believe Congress wanted the Board to spend its time so uselessly.”

Over a year ago Patently-O worked ‘overtime’ trying to slow things down at PTAB. It was like a contingency (in case they cannot undermine or altogether eliminate PTAB). Watchtroll, piggbacking SAS Institute v Iancu, is also hoping to slow things down. Its headline from 4 days ago was self explanatory.

This wasn’t enough for this patent-maximising pair. They carried on and on.

“We predict that tomorrow, right after the webinar with David Ruschke, the patent microcosm will try as hard as it can to leave Oil States behind, burying it while shouting from the rooftops about SAS Institute v Iancu.”Saurabh Vishnubhakat, an Associate Professor at the Texas A&M University School of Law and the Texas A&M College of Engineering,‏ wrote in Twitter: “After 7-2 finding in #OilStates of #PTAB constitutionality, #SCOTUS 5-4 in #SASInstitute rejected partial institution. Court denied @USPTO call for deference at #Chevron step 1: relevant text unambiguous. Oil States: https://bit.ly/2Hq9OSJ SAS Institute: https://bit.ly/2Hq9OSJ”

Guess which decision Saurabh Vishnubhakat decided to write about for Patently-O… not Oil States. Not convenient? Dennis Crouch published for him a long article titled “First Steps After SAS Institute” and to quote:

The incentive of the Patent Office, meanwhile, is likely to deny institution relatively more often in the wake of SAS Institute, at least initially. One reason is that the Court’s opinion has no effect on the PTAB’s ability to grant full institutions. Panels could already do so and still can. What panels now confront is the prospect of fully instituting even where some arguments in the petition may lack merit. Rather than dispense with these potentially unavailing arguments at the institution phase, where estoppel would at least arguably not attach, the only alternative left is to try all of these arguments fully, with all the Chenery obligations that such a choice entails, and the specter of estoppel looming larger than before for the petitioner. This represents a potentially significant increase in the PTAB’s workload and is not something that the Patent Office is likely to undertake lightly.

Another reason why the agency’s incentives now point more, if not entirely, toward denial is the workaround proposed in Justice Ginsburg’s dissent. Only a paragraph in length, it expressly contemplates precisely this sort of full denial of a petition, except that the PTAB in its decision to deny institution would also identify which claims were worthy of review and which claims were not. Petitioners could then refile in light of this guidance. Justice Ginsburg described this exercise as the PTAB spending its time “uselessly”—in contrast simply to allowing partial institutions and reaching the same point without the added step of refiling.

But this is actually a reasonable idea. Just as petitioners themselves now have greater incentive than before to focus their challenges in order to make full institution more tenable than full denial, the PTAB can also play a useful complementary role by explaining in its denials of institution just what it finds worthy or unworthy of review, and why. By channeling petitioners to “file new or amended petitions shorn of challenges the Board finds unworthy,” the PTAB may create additional work in the short run. Over time, however, its guidance would conserve the agency’s adjudicatory resources by discouraging the overinclusive petitioning that partial institution fostered because the PTAB had a way to manage its workload without having to discipline extravagant petitioners.

This is no longer the case, and the PTAB’s own workload is now more closely tied to the burdens that it allows petitioners to visit upon patent owners. The opinion of the Court purported not to take a stance on policy arguments about efficiency, directing such arguments to Congress. Nevertheless, the decision in SAS Institute may produce efficiency gains after all.

It’s a very long article overall. Nothing from him (that we can see) about Oil States. Except a “tweet”…

Ellie Mertens, who works for/serves the US patent microcosm, wrote the following:

The US Supreme Court has decided in SAS Institute v Iancu that the PTAB must review all or none of the challenged claims. Observers say the PTAB petitioners could react to the ruling in a number of ways, and it “may increase the number of issues that bubble up to the Federal Circuit”

The US Supreme Court has decided in SAS Institute v Iancu that Patent Trial and Appeal Board (PTAB) must review all or none of the challenged claims.

To be fair, Mertens did write about Oil States as well (we shall cover that separately).

Dennis Crouch, writing again a few days later, resorted to jingoistic patent propaganda from Ross and Iancu. Here they go again:

In a joint statement, Secretary of Commerce Wilbur Ross and Andrei Iancu, Undersecretary of Commerce and USPTO Director, have released a joint statement following upon President Trump’s statements yesterday that the Administration is “tak[ing] steps to strengthen our patent system.” In particular, President Trump focused on increasing “reliability and enforceability of patents.” Following today, Iancu and Ross have announced that “The Department of Commerce and the United States Patent and Trademark Office will be taking steps to further strengthen our patent system” and that our intellectual property rights must be “strong, reliable and predictable.”

Crouch also wrote about “USPTO Guidance for Dealing with SAS Decision” as follows:

The US Supreme Court recently decided SAS Institute Inc. v. Iancu (U.S. Apr. 24, 2018), holding that USPTO has been improperly issuing “partial-institution” and holding AIA trials on only a subset of challenged claims. The USPTO has now issued a one-page introductory guidance memorandum for procedure moving forward.

Here’s the original statement. There’s a webinar about it tomorrow at 1PM Eastern Time:

The PTAB is holding a “Chat with the Chief” webinar on Monday, April 30 from noon to 1 pm ET about the Supreme Court’s decisions on Oil States and SAS. Chief Judge David Ruschke will discuss the decisions, their impacts on AIA trial proceedings, and answer questions.

The webinar is free and open to everyone to attend. Webinar access information is provided on the left side under Event Summary.

Yes, PTAB’s Chief Judge David Ruschke will be there too.

Regarding the guidance, there has been a lot of coverage about it (almost more than about Oil States). Michael Loney, editor of a patent maximalists’ site, wrote this summary:

Guidance includes stipulating that for pending trials in which a panel has instituted only on some challenges in the petition, the panel may issue an order supplementing the institution decision to institute on all challenges raised in the petition

Guidance in relation to SAS Institute v Iancu was also mentioned by IP Watch, which has not been doing much ‘watching’ lately (they gave the platform to maximalists). To quote:

The United States Patent and Trademark Office has issued guidance on changes to post-grant proceedings following the 24 April decision by the US Supreme Court in the SAS Institute v Iancu case. The Court ruled that the USPTO must decide the patentability of each claim that is challenged in petitions for inter partes review.

Guidance as such was also noted by Watchtoll, which got all worked up over Oil States and preferred to deflect: (deflection over to SAS Institute v Iancu)

On Thursday, April 26th, the U.S. Patent and Trademark Office issued new guidance regarding the effects of the U.S. Supreme Court’s judgment in SAS Institute Inc. on America Invents Act (AIA) trial proceedings held before the Patent Trial and Appeal Board (PTAB). Along with the new guidance, the USPTO also announced a webinar with PTAB Chief Judge David Ruschke taking place next Monday to further discuss the impact of recent Supreme Court decisions regarding the trial activities conducted at the PTAB.

SAS Institute v Iancu coverage by Kevin E. Noonan, another patent maximalist:

Well, that didn’t take long. The U.S. Patent and Trademark Office issued Guidance today, just two days after the Supreme Court decision in SAS Institute Inc. v. Iancu came down, regarding how the Patent Trial and Appeal Board (PTAB) will apply the Court’s mandate in that inter partes review (IPR) decisions are all or nothing with respect to challenged claims (“Guidance on the Impact of SAS on AIA Trial Proceedings”).

The Guidance is simple: going forward (i.e., for all pending and future-filed petitions), the Board will institute on all challenged claims so long as the petitioner has shown a reasonable likelihood of invalidating at least one of the claims. For cases where the Board has engaged the parties in partial institution proceedings, the Board “may” issue an order “supplementing the institution decision to institute on all challenges raised in the petition.” In such cases the Board also has discretion to take action “permitting additional time, briefing, discovery, and/or oral argument.” Examples included in the Guidance include granting additional time for the Patent Owner Response or, if the statutory twelve-month time is close to expiry, taking advantage of the additional six months provided by the statute for extraordinary cases. The Guidance stresses however that such decisions will be made on a case-by-case basis.

Patent Docs covered not only SAS Institute v Iancu; as we’ll show in our next post, they also mentioned Oil States, but these two decisions were treated almost as equal. They’re not. To repeat what Müller said, we have “54 briefs in Oil States vs. only [one] in SAS” (which is quite revealing).

We predict that tomorrow, right after the webinar with David Ruschke, the patent microcosm will try as hard as it can to leave Oil States behind, burying it while shouting from the rooftops about SAS Institute v Iancu. Did Iancu even want to ‘win’ this case (unlike Lee)? █

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