(cross-posted from IP Watchdog)
I’ll be speaking on November 17, 2015 at IAM’s Patent Law and Policy event. (It looks to be a really interesting day.) My panel has the provocative title, “Death to all patents! The realities of the USPTO’s review procedures,” which expresses a point of view I hear all too often.
It amazes me that a procedure like inter partes reviewAn adversarial procedure created by the AIA for challenging patents. Intended to be similar to a court proceeding, the parties argue before an Administrative Patent Judge, not a patent examiner. The challenger must show a reasonable likelihood of successfully invalidating one claim before the PTAB will agree to grant a petition for review. has become so controversial, with the Patent Trial and Appeals Board being called a “patent death squad” and people talking about patent “kill rates.” The argument typically goes something like this: a high percentage of patent claims are invalidated in inter partes reviewAn adversarial procedure created by the AIA for challenging patents. Intended to be similar to a court proceeding, the parties argue before an Administrative Patent Judge, not a patent examiner. The challenger must show a reasonable likelihood of successfully invalidating one claim before the PTAB will agree to grant a petition for review. (the exact percentage claimed varies), therefore the PTABPatent Trial and Appeal Board. Reviews adverse decisions of examiners on written appeals of applicants and appeals of reexaminations, and conducts inter partes reviews and post-grant reviews. The Board also continues to decide patent interferences, as it was known as the Board of Patent Appeals and Interferences (BPAI) before the AIA. is killing patents.
While I don’t think that the evidence supports the 70% or 80% “kill rate,” the invalidation rate alone doesn’t say much about the job the PTABPatent Trial and Appeal Board. Reviews adverse decisions of examiners on written appeals of applicants and appeals of reexaminations, and conducts inter partes reviews and post-grant reviews. The Board also continues to decide patent interferences, as it was known as the Board of Patent Appeals and Interferences (BPAI) before the AIA. is doing. Let’s look at two possible explanations:
Explanation 1:
The entire procedure is stacked against patent owners. There’s no presumption of validity and a challenger only has to prove that a patent claimThe section of a patent that describes the legal scope of the invention. Patent claims are supposed to establish the boundaries of the patentee’s entitlement to exclude. Under peripheral claiming as practiced in the U.S., claims establish the outer bounds of the patentee's privilege to exclude others. For further reading, see Burk and Lemley, Signposts or Fence Posts. is more likely than not to be invalid. Moreover, claim constructionSee Markman hearing is broader than in district court, which makes it easier to invalidate claims. Plus, Administrative Patent Judges seem to have a bias against patents; it may be an unconscious bias, but it’s there. If IPRIntellectual Property Rights. Usually associated with formal legal rights such as patent, trademark, and copyright. Intellectual property is a broader term that encompasses knowledge, information, and data considered proprietary whether or not it is formally protected. is a substitute for district court, we should get the same result either way.
Explanation 2:
Petitioners have a strong motivation to be selective about which patents to petition for review. Inter partes reviewAn adversarial procedure created by the AIA for challenging patents. Intended to be similar to a court proceeding, the parties argue before an Administrative Patent Judge, not a patent examiner. The challenger must show a reasonable likelihood of successfully invalidating one claim before the PTAB will agree to grant a petition for review. may be cheaper than district court, but it isn’t cheap. Between PTOPatent and Trademark Office, informally used interchangeably with USPTO. fees and legal fees, a single IPRIntellectual Property Rights. Usually associated with formal legal rights such as patent, trademark, and copyright. Intellectual property is a broader term that encompasses knowledge, information, and data considered proprietary whether or not it is formally protected. can easily cost over $100K. Plus, failing in an IPRIntellectual Property Rights. Usually associated with formal legal rights such as patent, trademark, and copyright. Intellectual property is a broader term that encompasses knowledge, information, and data considered proprietary whether or not it is formally protected. is very costly: 1) no court is likely to invalidate a patent if the PTOPatent and Trademark Office, informally used interchangeably with USPTO. didn’t even institute an IPRIntellectual Property Rights. Usually associated with formal legal rights such as patent, trademark, and copyright. Intellectual property is a broader term that encompasses knowledge, information, and data considered proprietary whether or not it is formally protected.; and, 2) if the PTOPatent and Trademark Office, informally used interchangeably with USPTO. institutes an IPRIntellectual Property Rights. Usually associated with formal legal rights such as patent, trademark, and copyright. Intellectual property is a broader term that encompasses knowledge, information, and data considered proprietary whether or not it is formally protected. and affirms the challenged claims, the petitioners are estopped from challenging them again, anywhere. Given the cost of being wrong, we shouldn’t be surprised that petitioners are choosing which patents to challenge fairly well.
The people who buy into some variant of the first explanation are generally the ones complaining about patent death squads. Certainly, it’s true that the PTABPatent Trial and Appeal Board. Reviews adverse decisions of examiners on written appeals of applicants and appeals of reexaminations, and conducts inter partes reviews and post-grant reviews. The Board also continues to decide patent interferences, as it was known as the Board of Patent Appeals and Interferences (BPAI) before the AIA. uses a broader claim constructionSee Markman hearing and a lower burden of proving invalidity than a district court.
But the second explanation I’ve offered is far simpler, and I think it’s more likely. Why do I think that?
First, if the PTABPatent Trial and Appeal Board. Reviews adverse decisions of examiners on written appeals of applicants and appeals of reexaminations, and conducts inter partes reviews and post-grant reviews. The Board also continues to decide patent interferences, as it was known as the Board of Patent Appeals and Interferences (BPAI) before the AIA. was issuing consistently bad decisions, we’d expect to see a decent number of them reversed by the Federal CircuitSee CAFC. Nearly every PTABPatent Trial and Appeal Board. Reviews adverse decisions of examiners on written appeals of applicants and appeals of reexaminations, and conducts inter partes reviews and post-grant reviews. The Board also continues to decide patent interferences, as it was known as the Board of Patent Appeals and Interferences (BPAI) before the AIA. IPRIntellectual Property Rights. Usually associated with formal legal rights such as patent, trademark, and copyright. Intellectual property is a broader term that encompasses knowledge, information, and data considered proprietary whether or not it is formally protected. decision has been affirmed.
Second, even though the standards may be different from district court, there’s an important safeguard against poor decisions: there are three Administrative Patent Judges on every panel. Each judge is an experienced practitioner, and the PTABPatent Trial and Appeal Board. Reviews adverse decisions of examiners on written appeals of applicants and appeals of reexaminations, and conducts inter partes reviews and post-grant reviews. The Board also continues to decide patent interferences, as it was known as the Board of Patent Appeals and Interferences (BPAI) before the AIA. tries to have at least one judge with relevant technical expertise on the panel. Three people on a panel means that it’s less likely that a decision will be way off. In a district court, the single judge generally has no technical expertise and the jury doesn’t either. If you read PTABPatent Trial and Appeal Board. Reviews adverse decisions of examiners on written appeals of applicants and appeals of reexaminations, and conducts inter partes reviews and post-grant reviews. The Board also continues to decide patent interferences, as it was known as the Board of Patent Appeals and Interferences (BPAI) before the AIA. decisions in IPRs, you’ll find that they’re typically very thorough and well-reasoned, much better reasoned than district court opinions.
I understand that patent owners are upset at having the playing field leveled somewhat. They must feel like the rules of the game have changed, and, to be fair, they have to some extent. But a patent is not real property and it’s not an entitlement. It’s a temporary grant of exclusivity by the government in exchange for sharing one’s invention with the public, assuming that the invention is novel and non-obvious. If it turns out that the original patent issuance was wrong, i.e., someone else came up with the invention first, you have to give up that grant.
It’s no consolation to a patent owner whose patent has just been invalidated, but this is the right policy. We don’t want people enforcing invalid patents. IPRs are helping prevent that.
Patents are a crucial part of our economy, for both startups and existing companies. Members of my own organization, the Computer & Communications Industry Association, received over 4.5% of all patents issued in 2014. This isn’t about killing all patents; it’s about making sure we’re careful about which patents are out there.
As I’ll be talking about at my panel, I think that overall the PTABPatent Trial and Appeal Board. Reviews adverse decisions of examiners on written appeals of applicants and appeals of reexaminations, and conducts inter partes reviews and post-grant reviews. The Board also continues to decide patent interferences, as it was known as the Board of Patent Appeals and Interferences (BPAI) before the AIA. is doing its job well. I hope you’ll come and hear what promises to be an interesting discussion.