PublishedJanuary 30, 2023

Newly Released GAO Report Shows Previous Leadership’s Improper Influence on PTAB and Need for Improved Transparency

Many in the IP world suspected improper influence at the U.S. Patent and Trademark Office (USPTO) under former Director Andrew Iancu, previously a partner at a firm with a long history of representing non-practicing entities (NPEs). But a new final report by the U.S. Government Accountability Office (GAO) that covers Iancu’s tenure shows just how far he went to tilt the scales toward NPEs and his own business interests—and underscores the need for more transparency at USPTO

I previously wrote about the GAO’s preliminary findings, which include crucial information from judges at the Patent Trial and Appeal Board (PTAB), but the final report is also worth digging into – below, I’ll discuss some of the key takeaways. 

Iancu Used His Power to Influence Patent Judges  

The GAO shined a bright light on the extraordinary control Iancu and USPTO leadership exercised over the PTAB. As part of the report, GAO conducted a survey of PTAB judges, and considering the nearly 90% response rate, the judges had a lot to say. In fact, the GAO found that a vast majority – a whopping 75%– felt that directors and management had affected their independence and decision-making, especially under Iancu.  

One judge said, “Under [Iancu], we had a director who want[ed] to have direct influence over cases but he refused to put his name on the decisions. To me that violates the APA [Administrative Procedures Act] because there was no notice to the parties about who was making the decision or why.” 

In America Invents Act (AIA) proceedings, nearly 70% of judges felt pressure to either change or modify their decisions based on review by USPTO leadership. Those that didn’t comply were removed or replaced – and many worried disagreeing with management could impact their careers. 

Iancu’s unprecedented influence was particularly pervasive in preliminary proceedings about whether to institute patent challenges under the AIA

Judges said time and again that leadership influence was particularly strong in institution decisions. One judge told the GAO, “In my view, my freedom and independence is limited with respect to whether or not to exercise discretion to deny institution in an AIA proceeding.” Another reported that, “If the case presents a Fintiv factor analysis, then the decision outcome and analysis is constrained by whatever may be the current Director or management policy.” 

Iancu’s Influence Benefitted Patent Holders

Iancu’s influence over the PTAB created a potential conflict of interest, because his policies directly and consistently benefited his former, and now current, law firm Irell & Manella. 

The rule prescribing the Fintiv analysis is a prime example. That rule requires PTAB judges deciding whether to review patents asserted in litigation to consider a list of factors that weigh heavily in favor of denying review.

Irell & Manella is well known for representing patent owners in high-profile and highly lucrative cases. For example, in one of patent troll VLSI’s cases against semiconductor manufacturer Intel, the PTAB denied one review petition on the same day Fintiv went into effect and another two weeks later – not on the merits, but because trials involving the challenged patents were scheduled. When those trials eventually took place, VLSI went on to win more than $2 billion in damages – a win that Fintiv made possible. Since then, they’ve won even more in damages thanks to the rule Iancu put in place.   

The Patent Office Needs Greater Transparency 

The GAO made strong recommendations to the USPTO – including clarifying management’s engagement in reviewing PTAB decisions, improving transparency about management’s interaction with judges, greater communication between PTAB and stakeholders, and guidance for stakeholders on providing feedback on PTAB decisions. 

Everyone should embrace these recommendations wholeheartedly. Ensuring PTAB proceedings are fair and transparent benefits the USPTO, PTAB judges, patent owners, prospective petitioners, and members of the public affected by likely-invalid patents. Indeed, the new USPTO Director, Kathi Vidal, has embraced these recommendations and, before their release, had already taken steps to improve transparency. I hope patent holders, who have expressed concerns about undue influence over the PTAB, welcome these changes.

Alex Moss

Executive Director, Public Interest Patent Law Institute

Alex Moss is the executive director of the Public Interest Patent Law Institute. Alex previously worked as a staff attorney and the Mark Cuban Chair to Eliminate Stupid Patents at the Electronic Frontier Foundation and continues to serve as a Special Advisor. Before joining EFF, she was an attorney at Sullivan & Cromwell and Durie Tangri. After graduating from Stanford Law School, she served as a judicial clerk to the Honorable Timothy B. Dyk of the U.S. Court of Appeals for the Federal Circuit. She has argued cases in state, federal district, and appellate courts. In 2019, she spoke at the National Academy of Sciences and testified before the Senate Judiciary Committee on the state of patent-eligibility law in the U.S. Before law school, Alex worked for independent record label Rough Trade.

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