Its latest problem: serial challenges against the same patent.
Few topics in the industry elicit such emotion as the Patent Trial and Appeal Board at the United States Patent and Trademark Office.
Ushered in by the 2011 America Invents Act with the intent of providing an administrative process for getting rid of bad patents, the board has been called a death squad by some and celebrated by others. The truth probably lies somewhere in the middle, but it is extremely difficult to tell. The USPTO provides extremely misleading statistics that seem to have the intent of making the board seem less of a threat than patent owners know it to be.
Further complicating the true story behind the board is a relatively new problem associated with harassing patent challenges. I’m referring to serial challenges against the same patent. We are starting to see a phenomenon emerge whereby challenge after challenge is filed against a patent, only to be denied institution by the board. Then mysteriously, without explanation as to what changed, an identical challenge is filed and suddenly the board institutes the proceeding on the same prior art that was previously seen as unpersuasive. Worse, the way the statistics are calculated, these serial, harassing challenges make it look as though the board has a lower institution rate.
An example involves inter partes review (IPR), a PTAB trial proceeding that reviews the patentability of claims in a patent only on grounds that could be raised under Sections 102 and 103, and only based on prior art consisting of patents or printed publications. If four IPR review challenges are filed against a patent and all denied but a fifth, identical IPR is instituted, that means that out of those five challenges the institution rate was only 20 percent—hardly anything to get upset about. But that is nonsense. The patent owner had to respond to five challenges and still has to fight the proceeding, so from his or her perspective it might as well be a 100 percent institution rate.
Federal Circuit Rulings are Telling
The arbitrary and capricious nature of what goes on at the board started to come to light last year with several decisions from the U.S. Court of Appeals for the Federal Circuit, after being carefully hidden from the public and excused by both the patent office and the courts for years. This awakening accounts for the board’s rollercoaster 2016.
At the beginning of last year, the board was riding high on a wave of complete power with courts deferring time and time again to whatever it wanted to do, and whatever procedural unfairness befell a patent owner. The high-water mark for the board came in June when the Supreme Court issued its rul – ing in Cuozzo Speed Technologies v. Lee, which ruled that the broadest reasonable interpretations standard was acceptable and that IPR institution decisions were not appealable. After that, however, the tide turned decidedly—with the federal cir – cuit finding the board acted arbitrarily and capriciously, and that it was blatantly using the wrong definition of a Covered Business Method patent (see related story) to institute chal – lenges on patents that were not financial business methods.
The year ended with the federal circuit considering whether the board’s refusal to allow motions to amend, despite the stat – ute saying they are allowed, is within its discretion. The board is in a very different place than it was at the start of last year.
