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PTAB Discretionary Denials Up over 60% in 2020

Rochelle · Jan 15, 2021 ·

In 2020, the PTAB logged a record increase in “discretionary” denials, with 228 petitions denied without considering the merits.  The vast majority—62%—came under either the NHK Spring/Fintiv “trial date” framework or were based on the new parallel petition requirements.  In a year where denials were up generally, roughly 20% of all institution decisions (and almost half of ALL denials) were procedurally denied, compared to 12.5% in 2019.  

Remarkably, the Board has accelerated their use of procedural denials based on trial dates, despite district trials continually being delayed—and many cancelled outright—due to the current pandemic. This 60% increase in denial rates was due to the explosive use of 314(a).  Indeed, even in the trial on which this line of decisions were based–-the NHK Spring decision—the trial never materialized.  

That overall decisions were down in 2020 (based on a dip in filings in 2019) throws those numbers in to even starker relief; as you can see from the chart below, “procedural” non-merits denials made up almost half (43+%) of all denials, merits or otherwise. 


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Congress Must Stop USPTO from Arbitrarily Denying Access to IPR Process

Rochelle · Aug 29, 2020 ·

In the past, productive, innovative companies found themselves in years-long, costly patent lawsuits facing accusations of infringing on weak or invalid patents. Many companies were – and still are – sued by shell companies that produce no goods or services and had no employees themselves.

Congress passed the America Invents Act (AIA) in 2011 to help reduce the explosion of abuse occurring in our nation’s patent litigation system. Congress wanted to strip the shell companies – ‘patent licensing entities’ who existed only to file these lawsuits – of the bad patents they used to fuel their litigation.

For the first several years of its operation, the system Congress created to eliminate bad patents worked well. An efficient, inexpensive new system to review questionable patents was put in place, and as the ‘worst of the worst’ patents were invalidated, the number of these reviews sought annually dropped. More importantly, the explosion in patent lawsuits subsided and started to decrease, and the number of those suits brought by patent licensing entities started to drop as well.

Unfortunately, over the last year, the US Patent and Trademark Office (USPTO) under Director Andrei Iancu made a radical course change with regard to this procedure for getting rid of bad patents called the inter partes review (IPR). Director Iancu has been engaging in a series of actions aimed at cutting off access to the review process in a way that seems diametrically counter to the very reasons Congress passed the AIA.

Through a series of ‘precedential’ rulings, the USPTO Director (and hence the Patent Trial and Appeal Board (PTAB) judges) has created a series of administrative and procedural rules that has led to even the most meritorious review requests (called “institution requests”) being denied – without ever considering the merits of the case itself. Worse yet, Director Iancu has put these new roadblocks in place without any opportunity for public comments, with no formal rulemaking process and with no ability to appeal for judicial review. US*MADE recently joined 14 other leading think tanks and industry associations in protesting these actions.

These changes are already leading to harmful but unsurprising results: patent lawsuits are once again on the rise and in particular, lawsuits brought by patent licensing entities that produce no goods or services have exploded.

In late August, some of the nation’s leading companies took the rare step of filing a lawsuit against the USPTO to stop the agency from thwarting the purpose of the AIA – to restore access to the efficient review of invalid patents. That lawsuit is now pending.

These new PTAB decisions are illogical and run directly counter to the intent of Congress. IPR allows only the most truly questionable patents to get a second look to see if they should have ever been granted in the first place. With only 8,500 patent examiners to review nearly 650,000 patent applications every year, it certainly makes sense that a few bad patents could slip through the cracks.

Before Congress created the IPR, the only way to adjudicate a patent infringement case was in the federal District Court. This could take five or more years and cost millions of dollars – even to win. An IPR takes 12-18 months and often costs under $1 million. While hardly inexpensive, it is a far more efficient and cost-effective way to invalidate the most unquestionably bad patents.

The IPR process is conducted by three PTAB judges. If a party requests an IPR for a patent, there is a two-step process for moving toward a review of the patent: first, the PTAB judges decide whether the IPR request has potential merit. If it does, they then ‘institute’ the IPR – or move the process to the second step – which is an actual trial over whether the patent should be invalidated or not. If they do not ‘institute’ the IPR, the process ends there.

Since passing into law, the IPR has worked very well. It is used judiciously: Of over 3 million patents currently in force, under 1,000 were partially or entirely invalidated by an IPR last year or the year before. Yet when IPRs do find patents to be invalid, their findings are upheld on appeal 9 in 10 times.

We applaud the effort by the companies who filed the APA case questioning the validity of the recent line of decisions by the PTAB put into place under Director Iancu and look forward to returning to the IPR process as set out by the America Invents Act.

Beau Phillips is Executive Director of US*MADE, a coalition of manufacturers working to protect U.S. employers from abusive patent litigation.

See: PDF

Patent Litigation is on the Rebound

Rochelle · Jul 13, 2020 ·

Some aggressive nonpracticing entities—and perhaps growing interest in litigation funding—have put 2020 district court filings 16% ahead of the previous six months’ pace.

COVID-19 may have taken a big bite out of the economy, but it hasn’t slowed down patent infringement litigation.

Read More: Law.com

Patent Lawsuits on Rise, Buying Spree Hints More To Come

Rochelle · Jun 23, 2020 ·

Federal courts are seeing a jump in patent infringement lawsuits, and recent intellectual property sales are hinting at a further increase.

Even as the coronavirus outbreak disrupted U.S. courts and businesses, patent lawsuits in the first five months of 2020 increased 9% year-over-year, Bloomberg Law data show. The lawsuit pace is also up 5% from the same period in 2018.

Read More: Bloomberg Law

Supreme Court Affirms Bad Patents Exist, Saves Review Process

Lucy Van Schaijik · Jun 11, 2020 ·

In April, the U.S. Supreme Court made a strong statement against “bad patents” (patents granted despite failing the tests of patentability) and in support of the integrity of America’s patent system.

In a 7-2 ruling little noted outside the rarified world of intellectual property law, the justices reaffirmed the process that the Patent and Trademark Office (PTO) uses to take another look and eliminate bad patents. Meanwhile, some in Congress want to weaken this critical safeguard.

The legal issue in Thryv Inc. v. Click-to-Call Technologies was simple: Could a court overturn the PTO’s determination that a deadline had not passed for challenging a bad patent?

Read More: Bloomberg Law

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