2011 creation of PTAB is No. 1 for impact
BY GENE QUINN
With a month of a new decade already in the books, here are the top five patent stories of the 2010s—according to me!
Creation of the United States Patent and Trademark Office’s Patent Trial and Appeal Board (2011): At 11:42 a.m. on Sept. 16, 2011, President Barack Obama signed the America Invents Act into law. U.S. patent laws dramatically changed forever.
There had been much debate and discussion about the U.S. moving from a first-to-invent system to a first-to-file system. Without a doubt, however, the biggest change to the U.S. patent system was the creation of the Patent Trial and Appeal Board and the simultaneous creation of three new opportunities for challengers to invalidate patent claims at the USPTO: Inter Partes Review, Covered Business Method Review and Post-Grant Review. Former United States Court of Appeals for the Federal Circuit Chief Judge Randall Rader referred to the PTAB as a “death squad.”
The Supreme Court is poised to decide whether it is the PTAB’s prerogative to institute challenges even after the statute of limitations has expired.
Alice vs. CLS Bank (2014): On June 19, 2014, the United States Supreme Court issued its decision in this case that significantly changed the way courts and patent examiners evaluated patent eligibility of computer-implemented innovation in the United States. The unanimous decision held that because the claims are drawn to a patent-ineligible abstract idea, they are not eligible for a patent under Section 101.
Almost immediately after Alice, patent examiners began issuing new subject-matter eligibility rejections for computer-implemented innovations using the abstract idea exception to the statutory categories of patent eligibility.
Kyle Bass challenging pharma patents (2015): In April 2015, the Wall Street Journal published an article explaining the novel strategy of Kyle Bass, leader of Hayman Capital Management, to make money by invalidating patents. Bass has filed several petitions at the USPTO asking the PTAB to invalidate patent claims covering drugs. He then either shorted the stock of the company owning the patent or bought shares in companies that would be helped by the patent claims becoming invalidated.
The America Invents Act passed in large part because big pharma and big biotech companies relented and joined big tech. They were convinced they had nothing to worry from the PTAB because no one would ever challenge their patents with an inter partes review.
But once challenges started flying, pharmaceutical companies sought a carve-out that would exempt pharmaceutical patents. The saga provoked by Bass provided a rare glimpse into the underbelly of lawmaking and the extreme consequences paid for the miscalculation of pharma advisers with respect to passage of the AIA.
Sequenom v. Ariosa Diagnostics (2015): If a medical test that reduces risk from a potential catastrophic event to no chance of a catastrophic event is not patent eligible, something is significantly wrong. Surely the Supreme Court would step in and modify its decision in Mayo v. Prometheus. But the high court did not, and that was the outcome of Sequenom v. Ariosa.
In June 2016, SCOTUS denied certiorari (a writ or order by which a higher court reviews a decision of a lower court) to Sequenom Inc., which let stand a federal circuit decision that ruled a truly revolutionary medical test to be patent ineligible.
Examiner A submits fraudulent time sheets (2015) and commerce department uncovers patent examiner fraud (2016): On August 31, 2016, the inspector general of the United States Department of Commerce released a scathing report titled “Analysis of Patent Examiners’ Time and Attendance,” which detailed what appeared to be widespread patent examiner financial fraud at the USPTO.
The investigative report—prompted by interest in the infamous “Examiner A” who falsely claimed he worked 730 hours in fiscal year 2014—concluded that from August 10, 2014 through November 28, 2015, patent examiners submitted 288,479 hours that could not be supported or verified as being worked. These unsupported hours equated to $18.3 million in overpayments.
To be fair, respected commentators have raised legitimate questions about the findings of the inspector general. However, there have been patent examiners who have commented on IPWatchdog.com and have admitted to fraud.