Arbitrary rulings are the board’s trademark. 

If doubt remained that the Patent Trial and Appeal Board is a thoroughly broken tribunal incapable of redemption or fixing, that doubt has to be erased after a recent ruling by the United States Patent and Trademark Office’s entity.

The PTAB has a history of harassing Trading Technology International, which owns patents on various graphical user interfaces. These patents have been subject to repeated covered business method (CBM) challenges at the PTAB despite the fact that graphic user interfaces are not business methods, and they present a technological solution to a technological problem. These same TTI innovations have been patented in Europe, where there is a prohibition against business methods; they were patented because they represent a technological innovation.

According to Section 18 of the America Invents Act, the USPTO may institute a CBM patent challenge to review method claims for performing data processing or other operations used in the practice, administration, or management of a financial product or service. Specifically excluded from the definition of CBM patents are those that relate to technological inventions. To determine whether a patent is for a technological invention, the PTAB is supposed to consider whether the claimed subject matter recites a technological feature that is novel and unobvious over the prior art, and solves a technical problem using a technical solution.

The legislative history confirms that the entire point of CBM review was to provide an extraordinary post-grant review proceeding for business method patents, because Congress believed the USPTO was ill equipped to examine this type of patent application in the late 1990s and early 2000s. Every example of a CBM provided in the legislative history claims at some level a business method or data processing technique. Moreover, the legislative history specifically states in unequivocal terms that patents claiming graphic user interfaces for trading, as opposed to patents claiming a trading strategy, are not CBMs. In particular, the bill’s sponsor, Sen. Chuck Schumer (D-N.Y.), agreed with Sen. Dick Durbin (D-Ill.) that a patent claiming “software tools and graphical user interfaces that have been widely commercialized and used within the electronic trading industry to implement trading and asset allocation strategies” was not a CBM.

Nonetheless, multiple TTI graphical user interface patents were instituted for CBM review by the PTAB. USPTO Director Michelle Lee has been asked to use her power—a power the patent office specifically and correctly acknowledges was given to the office in the America Invents Act—to put an end to this harassment at the hands of multiple petitioners and a complicit PTAB.

She has refused. In fact, Lee has not stepped in to exercise her power to save patent owners from harassment, despite the fact that certain patent owners find themselves hauled into multiple post-grant challenges for each patent they own.

Logic Quickly Disappears

In any event, on January 18 of this year the United States Court of Appeals for the Federal Circuit determined that the claims of two TTI graphical user interface patents—U.S. Patents No. 6,772,132 (“the ’132 patent”) and No. 6,766,304 (“the ’304 patent”)—consisted of patent-eligible subject matter. The PTAB had previously instituted a CBM review of the ‘304 patent. To the credit of the majority of the PTAB panel considering the ‘304 patent in CBM2015-00161, once the federal circuit issued its decision the CBM proceeding against the ‘304 patent was terminated. That, however, is the end of where logic prevails.

One administrative patent judge, Meredith Petravick, dissented. She said it was inappropriate for the PTAB to terminate the ‘304 patent CBM because the parties were different when compared to the federal circuit case. Petravick said that the review should be limited to the record of the ‘304 patent and not consider extraneous, out-of-record matters such as a federal circuit determination that the very same claims are, in fact, patent eligible.

According to logic employed by Judge Petravick (if you can call it that), a ruling as a matter of law that claims are patent eligible is of no consequence, and patent owners must obtain a favorable patent eligibility ruling against each challenger in every case or challenge. Absurd! Furthermore, the PTAB is an administrative tribunal subordinate to the federal circuit.

That is not the end of the story. On the same day the PTAB terminated the CBM on the ‘304 patent, the same panel of PTAB judges issued a final written decision finding the claims of another TTI graphical user interface patent to be patent ineligible. In CBM 2015-00179, which challenged the claims of U.S. Patent No. 7,533,056, Administrative Patent Judges Petravick, Sally Medley and Jeremy Plenzler all ruled that claims that are substantively indistinguishable from those of the ‘304 patent are all patent ineligible.

The PTAB determined that the ‘056 patent claims an abstract idea, but both the United States District Court for the Northern District of Illinois and the federal circuit determined that the ‘304 patent claims did not claim an abstract idea. The PTAB determined that the ‘056 patent claims “do not add significantly more to the abstract idea or fundamental economic practice.” Both the United States District Court for the Northern District of Illinois and the federal circuit determined that even assuming the claims covered an abstract idea, the ‘304 patent claims did recite an inventive concept that added significantly more.

How is it possible that the claims of the ‘304 patent are patent eligible but the claims of the ‘056 patent are patent ineligible? It is this kind of arbitrary and capricious ruling that is becoming the trademark of the PTAB, which does not like patents—so they see everything as abstract and not contributing substantially more.

Time for an Alternative?

The sole purpose for the creation of the PTAB was to provide a lower-cost alternative to challenge low-quality patents and get rid of patent trolls. But the PTAB has failed to deliver a solution. What’s worse are the head-scratching decisions that seem to be made by those without any familiarity with law or process.

Given the lack of due process, arbitrary and capricious rulings, refusing to consider timely submitted evidence, fundamentally misapplying the law of obviousness, determining that an MRI machine is an abstract idea, and its ignoring the law, it is time to seriously consider whether the only solution available is to disband the PTAB and search for a different answer