07.29.18

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Rebellion Against Patent Trial and Appeal Board (PTAB) Inter Partes Reviews (IPRs) Comes From Patent Extremists, Demonstrating PTAB’s Success

Posted in America, Courtroom, Patents at 2:17 pm by Dr. Roy Schestowitz

This past week’s PTAB roundup

Police at protest

Summary: Considering where the backlash against PTAB keeps coming from, PTAB should be overwhelmingly pleased and rest assured that scientists and technologists are on its side

THE BIG QUESTIONS regarding abstract/software patents were all answered a very long time ago (over 4 years) by SCOTUS. Well, software patents are in general not suitable for enforcement; those that had been granted could barely be enforced successfully after Alice. Few even bother trying anymore. It’s too risky and far too expensive in case of failure. It’s a dangerous gamble.

“…software patents are in general not suitable for enforcement; those that had been granted could barely be enforced successfully after Alice.”Banner & Witcoff’s Charles W. Shifley, i.e. the patent microcosm, has this interesting new article. USPTO officials, who didn’t care about patent quality, belatedly realise that the image of patents is nowadays being eroded and has become negative, so they try to create a “new narrative” rather than improve patent quality. To quote Shifley:

These days, the U.S. Patent and Trademark Office (PTO) has a new Director, and reflecting only on the recent “bad,” he calls for a “new narrative” about patents, one that emphasizes their benefit to society. 1 Is a new “new narrative” possible, at this time, and for the foreseeable future? One in which patents are good?

[...]

So back to the introduction. With a whipsawing through bad-to-good and good-tobad again, and with a new PTO Director calling for a “new narrative” about patents, is a new “new narrative” possible? Can there be a new “morning in America” for patents?

Of course, only time will tell. But consider what caused the earlier change from bad-to-good. First, bad led to the adoption of new law, the law that created the Federal Circuit, and the law it created of due care for patent rights. Fast-forward, in the period since the rise of patent enforcement entities, there has certainly been new law. The prime example is the America Invents Act (AIA), with its creation of inter partes reviews (IPRs), and similar postgrant proceedings, to reconsider issued patents. The AIA and IPRs passed a major test in recent months, surviving a constitutional challenge in the Oil States case.

If they worry so much about perception/image of patents being tarnished, then they need to ask themselves what critics are really saying; they usually don’t oppose patents as a concept but bemoan just how far patents have gone. Patent maximalism is the problem; there’s an analogous issue surrounding copyright law (many aspects of it, e.g. term lengths, Fair Use).

“Patent maximalism is the problem; there’s an analogous issue surrounding copyright law (many aspects of it, e.g. term lengths, Fair Use).”The America Invents Act (AIA) has actually been part of the solution; most critics of the old status quo are generally supportive of AIA and pertinent items like PTAB, IPRs etc. It’s not hard to see who opposes these; it’s almost always the patent maximalists; here’s one of them stating that: “So far in July, the PTAB has issued 20 decisions involving claim rejections based on 101/Alice ineligibility. Only 1 decision reversed the examiner.”

He also said that “[t]he PTAB quietly hit a milestone in June in reversing Alice Section 101 rejections,” linking to the latest from a PTAB bashing site called Anticipat (been quiet for a very long time).

They’re just ‘pulling a Berkheimer‘ again:

As we have pointed out in a previous post, for more than a year, reversal rates for abstract idea (Alice) rejections have been extremely low. We are finally seeing an uptick of reversals likely due to Berkheimer and other Federal Circuit case law and recent guidance by the USPTO. As we’ve previously predicted, this reversal rate should continue (and may even go up). But until leadership at the USPTO clarifies its policies, it remains to be seen by how much.

As we’ve previously reported, from August 2016 to April 2017, the PTAB had months where it reversed abstract ideas in the 20 and 30 percentage range. That is, if a month had 100 abstract idea decisions, the Board would reverse the examiner on 20 or 30 of those cases. But May 2017 saw a dismal change in appellant fortunes: the reversal rate for abstract idea rejections tanked. For this period of over a year ago, many months saw only single digit reversal rates. Indeed, no month during this time exceeded a 15% reversal rate. The period was bad for Alice appellants.

We responded to this last weekend in a couple of posts. Basically, Berkheimer has had no considerable impact, but patent maximalists are trying to entice customers by alleging that it has. It is no magic wand and no effective tricks have been pulled out of a hat. It’s almost pure fiction, but these people believe that if they keep saying Berkheimer people will nod (without even knowing the case). We call it ‘pulling a Berkheimer‘; sometimes the lawyers call it “Berkheimer Effect’ (capitalised even), similar to “Alicestorm” and other catchphrases they make up.

“We call it ‘pulling a Berkheimer‘; sometimes the lawyers call it “Berkheimer Effect’ (capitalised even), similar to “Alicestorm” and other catchphrases they make up.”Anyway, previous tricks for bypassing Section 101 have fallen on deaf ears in the courts. Some have even attempted to avoid the courts altogether, asserting that they’re basically immune from the law. PTAB didn’t fall for that trick and neither did judges above PTAB. Native American status does not imply corporations can piggyback that status and it's unlikely that SCOTUS would see it differently if it even bothers dealing with an appeal (which is also unlikely because the Federal Circuit was pretty firm and unambiguous). Here’s one more article we’ve missed, a report from Cyrus Farivar which a reader forwarded to us a few days ago. Let it sink in:

In a unanimous decision, an appellate court has resoundingly rejected the legal claim that sovereign immunity, as argued by a Native American tribe, can act as a shield for a patent review process.
On July 20, the United States Court of Appeals for the Federal Circuit found in a 3-0 decision that the inter partes review (IPR) process is closer to an “agency enforcement action”—like a complaint brought by the Federal Trade Commission or the Federal Communications Commission—than a regular lawsuit.

IPR is a process that allows anyone to challenge a patent’s validity at the United States Patent and Trademark Office—it was used famously in 2017 to reject the “podcasting patent.”

“This win is a victory in our ongoing efforts to stop patent abuses by brand companies and to help drive access to more affordable medicine,” Mylan CEO Heather Bresch said in a statement on July 20.

A Patent Trial and Appeal Board (PTAB) inter partes review (IPR) would be good for the customers too; lower prices, better access to medicine etc.

“An Patent Trial and Appeal Board (PTAB) inter partes review (IPR) would be good for the customers too; lower prices, better access to medicine etc.”Well done, PTAB.

“The PTAB recently clarified eligibility for a covered business method review (CBM),” wrote Jones Day’s Matthew W. Johnson a few days ago, shedding some light on business methods (although CBM is part of AIA and isn’t quite the same thing), which are intrinsically similar to software patents. To quote:

See Xerox Corp. v. Bytemark, Inc., No. CBM2018-00011 (P.T.A.B. July 12, 2018) (Paper 12). To establish standing for CBM review, a petitioner must show that the patent in question is a CBM patent. 37 C.F.R. § 42.304. CBM patents “claim[] a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service . . . .” Leahy-Smith America Invents Act (AIA), Pub. L. No. 112-29, § 18(d)(1), 125 Stat. 284, 329-31 (2011).

In Xerox Corp., the Petitioners requested CBM review of U.S. Patent No. 8,494,967 (’967 patent), which claims a system that allows human ticket-takers to verify already-purchased electronic tickets without having to use a barcode scanner. See No. CBM2018-00011, Paper 12 at 2, 4. Petitioners argued that the ’967 patent is a CBM patent because (1) the utilization and validation of a purchased ticket constitutes a “financial product or service,” and (2) the claimed activities “associated with” the purchased ticket are financial activities. Id. at 9. The Patent Owner responded that the ’967 patent is not a CBM patent because its claims only cover “post-sale” activity. Id.

These are almost definitely abstract patents; The Leahy-Smith America Invents Act (AIA) enables PTAB to squash these. PTAB is awesome and it typically gets things right. More software patents have just been squashed, as reported just before the weekend by Law 360. Here are the details (it’s about CBM):

The Patent Trial and Appeal Board on Wednesday invalidated two patents covering digital management systems that were challenged by Dish Network, saying the claims in both patents were directed to the abstract idea of delivering certain data to users.

The PTAB ruled in separate America Invents Act covered business method reviews that Customedia Technologies LLC’s patents were invalid under the U.S. Supreme Court’s Alice ruling, concluding that U.S. Patent Numbers 7,840,437 and 9,053,494 B2 were directed to nothing more than the abstract ideas of delivering “rented…

Dish Network (stylised as “DISH Network” or shorthanded “DISH”) is actually making stuff; Alice came to its rescue. Customedia Technologies, the plaintiff, is nothing but a pile of patents and lawsuits, based on our quick research. This means that PTAB helps technology here; that’s more of the usual.

“Customedia Technologies, the plaintiff, is nothing but a pile of patents and lawsuits, based on our quick research.”Patent lawyers and attorneys aren’t happy about any of this. That’s expected. To them, PTAB is “death squads” (their analogies really go that far). This whole “death” narrative is being perpetuated every day, giving people the impression that PTAB is “killing”. Here’s a new example: “US Pat 9053494, System for data management and on-demand rental and purchase of digital data products; Killed w/Alice in CBM…”

Killed? Invalidated, not “killed”. But whatever…

Writing about Ex parte Galloway, Donald Zuhn (Patent Docs) wrote:

In a decision issued in May, the Patent Trial and Appeal Board of the U.S. Patent and Trademark Office reversed the final rejection of claims 35-48 in U.S. Application No. 13/512,585. The claims at issue had been rejected by the Examiner under 35 U.S.C. § 103(a) as being unpatentable over U.S. Patent No. 7,056,690 (“Laskey”) in view of Pajor et al., International Society for Analytical, Cytometry Part A. (2008) (“Pajor”), and Stoeber et al., J. Nat. Cancer Inst. 94(14): 1071-79 (2002) (“Stoeber”), and under 35 U.S.C. § 101 as being directed to a judicial exception without significantly more.

[...]

The Board concluded that the Examiner failed to provide evidence to support a prima facie case of patent ineligible subject matter, citing Berkheimer v. HP Inc., 881 F.3d 1360, 1369 (Fed. Cir. 2018), for the proposition that “[w]hether something is well-understood, routine, and conventional to a skilled artisan at the time of the patent is a factual determination.” In particular, the Board noted that “the Examiner did not establish with factual evidence, that the cell counting step, as claimed, is conventional or known in the art.” The Board therefore reversed the Examiner’s rejection of the claims at issue under § 101.

Just ‘pulling a Berkheimer‘ again; this concerns § 101, which is often utilised when software patents are asserted outside or inside the court (threats of litigation, a lawsuit at the district courts, or an expensive appeal to the Federal Circuit).

“This whole “death” narrative is being perpetuated every day, giving people the impression that PTAB is “killing”.”The Patent Docs contributor Michael Borella then weighed in on Ex Parte Jung, which is being labeled informative (like precedence more or less) by the USPTO. It’s about a patent describing a “scene to be played back from the media server in response to the request,” i.e. another nonsensical abstract patent. To quote:

In it, the PTAB clarifies how a certain commonly-used claiming technique could be construed as either in the conjunctive or disjunctive depending on the disclosure of the specification. While this interpretation is not new and dates back to a 2004 Federal Circuit opinion, many practitioners still use similar language in claims with the intent for these claims to be interpreted in the disjunctive only. Therefore, it is worth revisiting this case.

[...]

…specification resulted in a conclusion that while both a conjunctive and disjunctive interpretation was supported therein, there was no “clear definition or disavowal which would compel a disjunctive construction.”

Regarding the second instance of “at least one” in the claim, the PTAB found support for a disjunctive interpretation. But, it stated that “neither the claims nor the remainder of the Specification ever suggest that a connection branch and a contents connection list must be mutually exclusive . . . [t]hus, nothing compels interpreting ‘and’ to mean ‘or’ contrary to its ordinary meaning.”

Therefore, both instances of “at least one” were properly construed as conjunctive. As a result, the PTAB reversed the Examiner’s obviousness rejections, as the PTAB’s claim construction was sufficiently narrower than that of the Examiner to avoid reading on the cited references. The irony here, however, is that the narrower construction of “at least one of a connection branch and a contents connection list” was not adequately supported by the specification. Consequently, the claims were rejected under 35 U.S.C. § 112, first paragraph for lack of written description.

The practice tip here is that a claim term in the form of “at least one of A and B” will be interpreted in the conjunctive unless the Applicant clearly requires a disjunctive interpretation. Nonetheless, numerous practitioners are unaware of SuperGuide and still expect such a term to mean “A or B.” A safe bet for those who wish to claim in the conjunctive or disjunctive is to use “A and B” or “A or B”, respectively. With appropriate support in the specification, of course.

This “obviousness” case serves to show that PTAB is pretty strict — something which Patent Docs (and the likes of it) can barely tolerate, nor can patent extremists like Mr. Gross, who is again ranting about Section 101:

#patent stakeholders: PTAB message is clear – if there is any way you can posit your claims as relating to GUI improvement, your chances of beating bogus 101 test are vastly improved: https://e-foia.uspto.gov/Foia/RetrievePdf?system=BPAI&flNm=fd2017003187-06-25-2018-1 …

Managing IP‘s Michael Loney is now acting as his (Mr. Gross) megaphone in their fight against patent quality. They are nitpicking decisions and quotes (even from dissent) to suit their warped agenda.

Mr. Loney seems to really like perpetuating these talking points of patent maximalists; RPX being one of their latest. As Mr. Gross put it the other day:

As expected, Unified Patents is panicking about repercussions of Internet Time v. RPX case by CAFC to their patent blackmail IPR threat model!, their FAQs are modified to try and paper their way into safe harbor; before and after website versions attached to show dramatic changes pic.twitter.com/huOlngXDym

“14 of the 22 patent suits filed Monday were filed by patent trolls,” said this tweet last week, “according to RPX Corp. That’s 64%.”

“They are nitpicking decisions and quotes (even from dissent) to suit their warped agenda.”RPX is dying a slow death; it profits from an abundance of patent trolls and as PTAB halts much of their activity the necessity for RPX membership isn’t quite there anymore.

In a perfect world, patent trolls would simply go extinct. In order for that to happen patent quality would need to be improved and scrutiny of patents made cheaper (more accessible). This is why PTAB is so important. This is why it has passionate enemies among patent maximalists. They rely on low-quality patents/examination — a prerequisite to explosion in grants and litigation those grants can entail.

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