A few weeks ago, I covered a PTAB case that illustrates why the PTO’s proposed rule on who bears the burden on amended claims in IPRs is fatally flawed. In that case, ZTE challenged a CyWee patent and LG joined the ZTE petition. But CyWee filed an amended claim that ZTE wasn’t concerned by. ZTE chose not to oppose this amendment, which makes sense—but it’s also actively refusing to allow LG to step in to oppose the amendment. LG argued that they should be allowed to step in, and that the only reason ZTE was blocking them was because of some type of side arrangement between ZTE and CyWee.
The PTAB panel in the case decided that LG would not be permitted to oppose, claiming the public benefits when a new claim is proposed at the PTAB and no one is permitted to oppose it. They also refused to inquire (or allow LG to inquire) into whether there was a side agreement of the type LG alleged.
LG has now requested rehearing by the Board.
LG isn’t crazy to think that there might be some hidden agreement that’s being used in an attempt to block PTAB review. CyWee’s lawyers have a history of using questionable—at best—tactics in an attempt to keep the PTAB from doing its job and reviewing the validity of a patent.
One of CyWee’s lawyers, Michael Shore, is best known for trying to use Native American tribal sovereign immunity to block PTAB reviews, a tactic that was rejected by the Federal Circuit. He’s also currently representing CyWee in an attempt to use a fraud case to overturn a PTAB decision against CyWee—an illegitimate collateral attack undertaken to try to claw out a win because the appeal of the PTAB’s decision is likely to be rejected by the Federal Circuit.
Shore is advised in these cases by law professor Jay Kesan, currently on unpaid leave from his position for over a year.
Given Shore’s history of using agreements to try to keep patents from being reviewed, it’s hardly outside the realm of possibility that this may reflect a similar strategy.
In Their Own Words
It’s also not unthinkable, given evidence filed alongside the request for rehearing. LG asked ZTE whether it was representing that it had no written or oral agreement with CyWee. In response, ZTE’s lawyer said “I make no representations one way or another.” If there was no such agreement, ZTE’s lawyer could have saved his client time and money by stating that there was no such agreement. A refusal to represent that no such agreement exists suggests that, in fact, there is such an agreement.
That’s relatively anodyne compared to the words out of Michael Shore’s mouth. Unsolicited, Shore contacted LG’s lawyers after the PTAB’s decision to say, “Get ready for the district court case, buddy.” He continued:
There’s a certain irony in Shore claiming he’s going to obtain discovery into an alleged conspiracy by LG, when he ardently refused to provide discovery into a far more probable conspiracy between CyWee and ZTE.
In DC, that implicit threat to drag a lawyer into a fraud case would potentially be professional misconduct violating Rule 8.4(g). (Texas, where Shore practices, doesn’t have an equivalent rule so Shore is likely safe, but it’s certainly instructive regarding this approach to lawyering.)
Shore goes on to discuss how CyWee is going to “make LG pay dearly” for defending itself. The notion that defendants should just pay patent owners rather than defend themselves against a claim of infringement isn’t an unusual position for opponents of patent reform to take, but it’s rare to see someone openly admit that that’s what they believe should be true.
A Simple Fix
All of this leads back to one main problem—the PTO’s proposal to place the burden for amendments on the petitioner, rather than the patent owner. This case is exceptional because there’s a joined petitioner who would step in—in the average case, if the petitioner didn’t care to oppose an amendment, there’d be no active party bearing the burden and amended claims would effectively sail through unopposed.
That’s why CCIA suggested to the PTO that it should place the burden on the party where ordinary legal principles suggest it should go—on the party requesting relief, the patent owner. The Board should rehear this case and reverse itself, but more importantly, the Director should revisit the PTO’s proposed rule and determine that a rule placing the burden on the petitioner is inappropriate.
Absent such changes, we’re going to see many more cases like this one, where the patent owner can get their amendment without any active opposition.