ptab – Techdirt (original) (raw)

Congress Poised To Bring Back Unfettered Patent Trolling

from the all-trolling-all-the-time-act dept

Have you been missing patent trolls destroying innovation and making products you like more expensive? Have you felt that, maybe, some lawyers who did nothing but send extortionate shakedown letters weren’t getting rich enough? Well then, good news for you, Congress is looking to bring all that back!

In the early years of Techdirt, we spent a lot of time talking about patent trolling, and how terrible, ridiculous patents that never should have been granted were being used as a shakedown mechanism against actual innovators. Greedy, shameless lawyers would get or buy extremely broad and vague patents, where there was no intention to actually bring a product to market, and then they’d threaten, extort, or otherwise shakedown, companies who actually built successful products, often totally unrelated to the patents in question.

Thankfully, a decade or so ago, the worst aspects of patent trolling were limited (though certainly not eliminated). Changes to the law made it easier to challenge bad patents, and the Supreme Court ran through a series of cases that made it clear that terrible concepts like business models and pure software were not patent-eligible subject matter. Both have been hugely important.

And the Senate is looking to roll back both of them.

In 2012, the America Invents Act had some issues, but among its good ideas was the Patent Trial and Appeals Board (PTAB), which enabled “Inter Partes Review” (IPR) of patents. This allowed anyone to challenge the validity of a patent by showing prior art to the PTAB, allowing the PTAB to say that the original patent examiner made a mistake and shouldn’t have granted a patent.

This process has been hugely important in stopping dangerous and bad patents. In the early 2000s, scholars detailed part of the reason the patent system was so broken was the lack of an antagonistic process in the granting of patents. You have the party applying for the patent, and then you have the examiner. The examiner may challenge the applicant on certain points, but there is no such thing as a “final” no (even if there is something called a final rejection), such that the applicant can keep trying. And there’s no one pushing back on the other side and pointing out why something doesn’t deserve a 20-year monopoly.

That resulted in plenty of patents that shouldn’t have been granted becoming weapons of mass litigation. The IPR process allowed people to challenge these patents, to show that the sole patent examiner who handled the case got it wrong, and to get rid of the dangerous and unnecessary monopoly.

Patent trolls have long hated the IPR system. They’ve challenged it multiple times, but so far, the concept has held up in court, including the Supreme Court.

The other major change that helped stop terrible patents was the Supreme Court repeatedly taking cases about people patenting things that should never have been patentable, and calling out the patent office and the lower courts for allowing this nonsense. One of these cases, Alice v. CLS Bank, from a decade ago, effectively said that software and business models weren’t patentable (though not as clearly as it should have). This followed on similar rulings saying that medical diagnostics and genes shouldn’t be patentable either.

But, of course, some people in Congress love patents and patent trolling. Senators Chris Coons (who, for years, worked for W.L. Gore, a company known for its patent enforcement, though which was also on the receiving end of many patent lawsuits) and Thom Tillis have long been supporters of ever more troll-friendly IP laws.

They have two bills that may get voted on today that seek to wipe out all of the good things discussed above. EFF has a summary of each:

The Patent Eligibility Restoration Act (PERA, S. 2140) would overturn Alice, enabling patent trolls to extort small business owners and even hobbyists, just for using common software systems to express themselves or run their businesses. PERA would also overturn another 2013 Supreme Court case that prevents most kinds of patenting of human genes.

Meanwhile, the PREVAIL Act (S. 2220) seeks to severely limit how the public can challenge bad patents at the patent office. Challenges like these are one of the most effective ways to throw out patents that never should have been granted in the first place.

Both of these would be horrific for the future of innovation and would bring back into the foreground more patent trolling shakedowns over completely bogus patents that never should have been granted. It would literally set innovation back a decade. And for what? To help a few lawyers shakedown more innovators? Who wants that other than the patent trolls?

Over the last decade, patent trolling hasn’t gone completely away, but it has become less of an existential threat for innovators than it was for the first ten to fifteen years of the 2000s. These two bills would destroy that and bring us back to an era of less innovation and more shakedowns.

The EFF link has ways to contact your senators to vote against these bills, and I hope that many of you will do so.

Filed Under: alice v. cls bank, business model patents, chris coons, gene patents, ipr, patent trolls, patentable subject matter, patents, ptab, software patents, thom tillis

The Patent Troll Lobby Set Up An AI-Powered Comment Creator To Support Its Bad Patent Policy

from the all-regulatory-comments-are-now-chatgpt's-opinion dept

You may recall that, back during the last net neutrality open comment period, the FCC’s comment system was overrun by millions of faked comments, including from many dead people. Not surprisingly, it was eventually determined that legacy broadband companies funded the fake comment submissions, which they felt they needed to do because actual activists were actually effective in getting the public to speak out in favor of net neutrality.

But of course, now we live in the “age of generative AI,” and it’s worth wondering just how that’s going to impact all of this. Amusingly, there are already academic journals suggesting that the government should sort and maybe even respond to regulatory open comments using AI as a tool.

But what about commenters themselves using AI to generate the comments in question?

We just recently wrote about how the US Patent Office is seeking comments on a dangerously problematic plan to make it much harder to kill bad patents by reforming the IPR (inter partes review) process to allow the patent director to just flat out reject challenges for certain classes of inventors, including many patent trolls. In that post, we linked to an EFF page urging people to send in their own comments against this proposal. But, really, the EFF is just linking people directly to the page on the Federal Register where you can comment. While they suggest some language, on the whole they expect users to write their own comment.

It appears the patent trolls who want this change have decided to use AI.

A few folks forwarded me copies of an email they received from “US Inventor” which is, effectively, a lobbying trade group for patent trolls, telling their members to submit a comment, and pointing them to an app on Streamlit. I’ll note that the email is ridiculous:

As you may know, the 2011 America Invents Act (AIA) created the Patent Trial and Appeal Board (PTAB). The PTAB is a nonjudicial administrative tribunal within the USPTO. The sole purpose of this court is to invalidate the same patents the USPTO previously granted, thus, creating a dictatorial power for the USPTO Director over America’s most important property right.

The statistics tell the truth about the destruction the PTAB has caused for inventors, small business owners, and startups. A staggering 69% of trials resulted in all claims being unpatentable, with an additional 15% leading to some claims being unpatentable. In total, 84% of patents reviewed by the PTAB result in the cancellation of claims.

I mean, no, as the Supreme Court itself made clear, just as the US PTO can grant a patent, so too can they review it, and then revoke it, if they realize they made a mistake. That’s not “dictatorial power.” And, let’s not even get started on the idea that patents are “America’s most important property right.” I mean, people with brains read this. Don’t insult them.

As for the second paragraph, a normal person would read that and think, wow, it sure looks like the IPR process that enables the PTAB to review patents is pretty damn important since it appears to be catching a very large number of mistakenly granted patents, which would otherwise gum up the work of actual innovation by blocking innovators from bringing products to market.

Because, remember, if the patent is a good, valid, patent, then the PTAB will not cancel claims. The only reason the PTAB cancels claims is if they are bad claims that should not have been granted in the first place, and would create an innovation-destroying monopoly power to block products that should be on the market. So even in this email, the troll lobby is effectively admitting that their real problem with the IPR/PTAB process is that it’s getting rid of their bad patent claims, that never should have been granted.

Anyway, the email sends people to a form that says will help you craft a comment. They don’t say it’s using AI, but it is.

You put in a link to a bio or a LinkedIn profile, some “information about you or your company” and then it generates a pro-patent troll argument for you. It gives you three attempts to do this.

The person who forwarded me the email also tried generating the letters, using the LinkedIn addresses of random people, and the “comments” it generated… were clearly just using AI to read someone’s LinkedIn bio to add some “pro-patent color” at the beginning, then some random AI-generated nonsense in the middle, before appending the identical text at the end of the comment.

Sometimes, the results are (in true generative AI fashion) total gibberish. One of the samples I saw definitely attacked the PTAB, but not for the IPR process. Instead, one claimed that the PTAB was changing claims to appear even broader than the inventor meant (which, um, is not happening).

Of course, the end of each of the “generated” comments is identical, and appears to be pre-filled in the comment generator app. No matter what information you put into the generator, at the end it pushes specific “policy alterations” that the submitter (who did not write the comment) claims should be considered.

Now, there’s an argument that making it easier to generate stronger comments during public comment periods might be a good thing in general. Having read some terrible comments submitted by the public, I could see some general value in letting people scribble in their general thoughts (like they normally submit) and having a tool turn it into something more substantive and useful. But… it also likely means that open comment systems for the federal government are even more likely to be overrun with questionable comments, probably many of which were not even generated by humans.

And that seems like it could be problematic for the overall process of regulatory bodies seeking public comments in the first place.

Filed Under: ai, comments, fake comments, ipr, patent trolls, patents, ptab, regulatory comments
Companies: us inventor

ITC Blocks Import Of Apple Watches Based On Claimed Infringement… But The Patents Have Already Been Declared Invalid

from the the-loophole-lives... dept

It’s been many, many years since we were regularly covering what we referred to as the ITC loophole in patent enforcement. The issue was that patent holders could get two totally separate at bats to try to force a company that was actually innovating to pay up over dubious patents. They could go to court, of course, by filing a patent lawsuit. But they could also go to the International Trade Commission, claiming infringement, and if the ITC agreed, it could ban the import of products it claimed was covered by that patent. While the ITC couldn’t force a company to pay fees for infringement like a federal court could, it was effectively just as bad, because once an import ban was in place (since most products are manufactured outside the US), the companies would be forced to negotiate a huge settlement just to keep their business going.

Thankfully, the worst parts of this “loophole” were at least somewhat limited a decade ago with the America Invents Act patent reform, which introduced the concept of the Inter Partes Review (IPR), in which anyone could petition the Patent Trial and Appeals Board (PTAB) to review a patent to determine if a mistake was made in the original granting. While that didn’t stop the use of the ITC, it created a more rapid path to invalidating a patent, which in theory was supposed to stop proceedings under the ITC. From the law:

The petitioner in an inter partes review of a claim in a patent under this chapter that results in a final written decision under section 318(a), or the real party in interest or privy of the petitioner, may not assert either in a civil action arising in whole or in part under section 1338 of title 28 or in a proceeding before the International Trade Commission under section 337 of the Tariff Act of 1930 that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review.

Patent holders (mostly trolls, but practicing entities as well) have tried to kill the IPR process, but their efforts to get the Supreme Court to throw it out failed. Twice.

Anyway, the ITC loophole still exists, but is (thankfully) less potent.

However, it appears to have bitten Apple, and in the process demonstrated the serious problems with the system. A company named AliveCor claimed that Apple was infringing on three of its patents with certain Apple Watch features related to tracking heart rates. AliveCor filed its complaint with the ITC directly, seeking an injunction blocking the import of Apple Watches into the US. The patents in question are US Patents 10,638,941, 10,595,731, and 9,572,499.

In response, Apple initiated an IPR process, claiming that all three patents were invalid and should never have been granted. At the beginning of December, the PTAB ruled in Apple’s favor, finding all three patents to be invalid. For all three patents, Apple pointed to two earlier patents, referred to in the proceedings as the Shmueli invention and the Osorio invention. And with all three patents, the PTAB found that combining the ideas of Shmueli and Osorio would be an obvious thing for someone skilled in the art to do, rendering AliveCor’s patents invalid as obvious. Here’s part of one of the invalidations (though they’re all pretty similar):

For the reasons set forth above, we find that the combination of Shmueli and Osorio discloses or renders obvious the arrhythmia detection and confirmation recited in the challenged claims. We also find that one of ordinary skill in the art would have been motivated to combine the cited references with a reasonable expectation of success in arriving at the challenged claims. Patent Owner does not specifically challenge any other aspect of Petitioner’s showing with respect to Ground 1. Having reviewed the argument and evidence of record, we find that Petitioner has shown by a preponderance of the evidence that claims 1, 5, 7–9, 11, 12, 16, 18–20, 22, and 23 are unpatentable as obvious in view of Shmueli and Osorio.

So… the patents are invalid. In theory, that should kill the ITC process, but nope. As AliveCor noted in a press statement after the USPTO invalidated these patents, it apparently didn’t matter, as the ITC could still issue an injunction:

AliveCor is deeply disappointed and strongly disagrees with the decision by the PTAB and will appeal. The PTAB and ITC are two, separate independent bodies and will make their own separate independent decisions. We look forward to the separate Final Determination from the ITC expected December 12 and are cautiously optimistic based on the Initial Determination for AliveCor in June of this year.

And, indeed, last week (a few weeks later than expected) the ITC issued a final determination in favor of AliveCor, and issued an injunction that would block Apple from importing Apple Watches, though it has suspended the enforcement of the injunction while President Biden gets to review the ruling and while waiting for a “final resolution” from the PTAB on the validity of the patents.

Notice is hereby given that the U.S. International Trade Commission (“Commission”) has determined that there is a violation of section 337 in the above-captioned investigation. The Commission has further determined to issue a limited exclusion order and a cease and desist order and to set a bond in the amount of $2 per unit of covered articles imported or sold during the period of Presidential review. The enforcement of these orders, including the bond provision, is suspended pending final resolution of the U.S. Patent and Trademark Office, Patent Trial and Appeal Board’s (“PTAB”) Final Written Decisions finding the asserted patent claims unpatentable.

The Presidential review bit is important here, because when the ITC issues one of these injunctions, the President is actually allowed to step in and overturn the ruling. In fact, President Obama did exactly that in a similar scenario a decade ago after the ITC issued an injunction on iPhones and iPads over some Samsung patents.

One hopes that Biden will do the right thing and knock out this attempt at hindering basic innovation. Especially given that the USPTO has already found the patents invalid, even if AliveCor is appealing.

Filed Under: apple watches, heart tracking, injunctions, ipr, itc loophole, joe biden, patents, ptab
Companies: alivecor, apple

NY Times Editorial Board Gets It: Drug Patents Are Bankrupting Americans & It Needs To Be Fixed

from the fix-the-system dept

There has been a push over the last few months by some pro-patent academics and (of course) the pharmaceutical industry to insist that high drug prices and high healthcare costs have nothing whatsoever to do with our broken patent system that grants drug and device makers a full on monopoly. That claim doesn’t just defy logic, it defies all evidence and reality. As we noted last year, an investigation by the House Oversight Committee found some incredibly damning examples of how drug companies exploited the patent system to jack up prices — with the most damning being the story of how AbbVie hired McKinsey to come up with a sneaky plan to effectively extend the patent monopoly of Humira, an important drug for many, many Americans.

They deliberately did some shady stuff to extend the life of the patent monopoly while jacking up prices to insane levels.

Anyway, it appears that the Editorial Board at the NY Times has been paying attention to all of this as well, and has published a fantastic piece calling for significant fixes to the patent system to stop this nonsense and to lower drug and healthcare costs. The article is called “Save America’s Patent System,” but it might just as easily have been called “Save America’s Healthcare.” Because it can do both.

Drugmakers for decades have argued that patents are essential to American innovation. For all that lip service to medical advancement, though, a recent investigation by the House Oversight Committee concluded that market share is more likely the point. Twelve of the drugs that Medicare spends the most on are protected by more than 600 patents in total, according to the committee. Many of those patents contain little that’s truly new. But the thickets they create have the potential to extend product monopolies for decades. In so doing, they promise to add billions to the nation’s soaring health care costs — and to pharmaceutical coffers.

And for all the hand-wringing over how to lower prescription drug costs in recent years, little has been said about the patent system or its many failings. Put simply: The United States Patent and Trademark Office is in dire need of reform.

The editorial comes up with some pretty straightforward suggestions for fixing the patent system. First, stop granting patents for minor changes. The law requires that a patent be new and nonobvious to those skilled in the art. Yet it regularly approves new patents on very minor updates to long-existing ideas.

The pharmaceutical industry is a good example. Nearly 80 percent of the drugs associated with new patents between 2005 and 2015 were not new. But the issue is not confined to drugmakers. The Theranos debacle, to take just one other example, was touched off by officials who granted scores of patents for a device that had never been built and that turned out not to work. The company was able to secure those patents without disclosing almost any technical information about its product.

It also suggests a move that I’ve been arguing for for many years: there needs to be a point at which patent rejections are final. While there is something called a “final rejection,” it’s not actually final. Patent applicants can adjust and keep appealing. And this bogs down the system, and actually encourages patent examiners to eventually approve a patent just to get it off of their pile. We’ve been calling out this problem for nearly two decades, and it hasn’t yet been fixed.

Importantly, the NY Times also highlights that the process to challenge bad patents needs to be improved:

Bad patents have steep costs. They gum up the wheels of innovation by making it harder for would-be inventors to proceed with their work. They strain budgets by preventing cheaper products from entering the market. And they leave honest inventors vulnerable to patent trolls — people who buy up weak patents not to create anything new or useful but to hold legitimate inventions ransom. But the process of weeding these patents out once they’ve been granted remains fraught: It can take years and many thousands of dollars to challenge a bad patent in court, and even when the case seems obvious, success is never guaranteed.

This is big and important for a number of reasons. In the US’s last big patent reform, they enabled some better methods of invalidating bad patents, via the Patent Trial and Appeal Board (PTAB) and the “inter partes review” process, allowing for at least some path to revisiting granted patents to see if they should have never been granted in the first place.

Yet, many in Congress are actually looking to go in the other direction, and to make it much, much harder to challenge bad patents. So it’s great to see the NY Times pushing Congress to actually move the needle in the other direction and to strengthen the PTAB process.

The next suggestion is really great, and surprising. It notes that too many Patent Office directors come directly from industries that rely heavily on patent monopolies, and that they’re biased towards ever more patents, regardless of the quality. And that should stop.

Too many patent office directors have come from or gone to industry jobs within months of holding the federal post. This revolving door poses a real risk to the integrity of the patent office. The most recent example of that comes from the Trump administration appointee Andrei Iancu. During his tenure, the patent office used its discretionary powers to deny a challenge to a patent held by a company that his former law firm represented. He then returned to that firm as soon as his time in government was up.

And then my favorite suggestion of them all — recognizing that under the Constitution, the patent system is supposed to be for the benefit of the public, not the corporations holding the patents. And thus, the public should be a part of the process:

For too much of its history, the patent office has treated inventors and companies as its main customers while all but ignoring the people whose lives are affected by patenting decisions. That needs to change. Officials can start by appointing more public representatives to the patent office’s public advisory committee. Right now, six of the committee’s nine members are attorneys who represent commercial clients or private interests; only one works in public interest.

Officials should also establish a public advocate service similar to the one that exists at the Internal Revenue Service and should make a concerted effort to ramp up their public outreach. “The patent system has gotten so complicated that it’s impossible for anyone who’s not an inventor or a lawyer to penetrate it,” said Mr. Duan.

There’s much more in the piece, but it’s one of the rare NY Times editorials that I think is 100% on point, and hopefully the Patent Office and Congress move towards doing what’s in there to not only help save the patent system, but to fix America’s continuing healthcare debacle.

Filed Under: drug patents, ipr, patent system, patent thicket, patents, ptab, uspto

Senators Tillis And Leahy Raise The Alarm About Judge Albright's Patent Forum Selling In Waco

from the good-for-them dept

At times I’ve been at odds with Senators Pat Leahy and Thom Tillis regarding their view on intellectual property (though Leahy has a good history on patent law — Tillis… not so much). However, kudos to both of them for recognizing a very, very real problem in the way in which Judge Alan Albright has been engaged in what’s been called jurisdiction selling.

If you don’t recall, Judge Albright, who was a patent litigator before being appointed to the bench in Waco, Texas, went on tour advertising that patent plaintiffs should file in his district court (where he is the only judge). And, this resulted in a ton of cases all being filed there. And despite Supreme Court precedent that says judges need to be willing to transfer patent cases to proper venues, Albright has been thumbing his nose at higher courts and seeming to do everything he can to keep cases in his court.

And now, both Tillis and Leahy are ringing appropriate alarm bells over Albright’s activities. Leahy and Tillis together have sent a letter to Supreme Court Chief Justice John Roberts to call out Judge Albright’s behavior. It is not often that you see two Senators (who lead the IP subcommittee, no less) sending a letter to the Chief Justice to accuse a district court judge of being up to no good. It’s quite a letter.

We write you to express our concern about problems with forum shopping in patent litigation. Our understanding is that in some judicial districts, plaintiffs are allowed to request their case be heard within a particular division. When the requested division has only one judge, this allows plaintiffs to effectively select the judge who will hear their case. We believe this creates an appearance of impropriety which damages the federal judiciary’s reputation for the fair and equal administration of the law. Worse still, such behavior by plaintiffs can lead individual judges to engage in inappropriate conduct intended to attract and retain certain types of cases and litigants.

We are particularly concerned with this problem in the context of patent litigation. In the last two years our nation has seen a consolidation of a large portion of patent litigation before a single district court judge in Texas. In 2016 and 2017, this single district court heard only, on average, one patent case per year. Last year, however, nearly 800 patent cases were assigned to one judge in this district. This year, this district appears to be on track to have more than 900 cases. This means that roughly 25% of all the patent litigation in the entire United States is pending before just one of the nation?s more than 600 district court judges.

The concentration of patent litigation is no accident. We understand that a single judge in this district has openly solicited cases at lawyers? meetings and other venues and urged patent plaintiffs to file their infringement actions in his court. Our understanding is that this single judge has also repeatedly ignored binding case law and abused his discretion in denying transfer motions. This has resulted in a flood of mandamus petitions being fled at the Federal Circuit. The Federal Circuit has been compelled to correct his clear and egregious abuses of discretion by granting mandamus relief and ordering the transfer of cases no fewer than 15 times in just the past two years.

The extreme concentration of patent litigation in one district and the unseemly and inappropriate conduct that has accompanied this phenomenon are, in our view, the result of an absence of adequate rules regulating judicial assignment and venue for patent cases within a district. While we do not know of similar problems occurring in other single-judge districts, it is not hard to imagine similar scenarios arising under a set of rules that allows a plaintiff to effectively choose a particular judge to hear their case. In order to correct these issues, we request that you direct the Judicial Conference to conduct a study of actual and potential abuses that the present situation has enabled. Additionally, we ask that such a study consider and implement appropriate reforms that you can take to address this issue. Finally, we ask that such a report provide legislative recommendations to ensure this problem does not arise in the future.

While simply asking for a study and exploring reforms may not seem like a big deal, it does seem like a warning shot. If something isn’t done to fix this by the Judicial Conference, then Congress may need to step in.

Meanwhile, on the same day Tillis sent another letter (without Leahy) to the current commissioner for patents at the USPTO calling out a separate issue involving Judge Albright. This gets a bit deep into the weeds, but, as we’ve covered, there have been ongoing fights over the whole inter partes review process. This is where certain patents can be challenged before a special patent review board — the Patent Trial & Appeal Board (PTAB) — which is charged with determining whether or not the original patent was granted in error. Patent holders hate hate hate hate the PTAB/IPR process and have been looking to kill it for some time. A key part of their argument is often that it involves two different processes — sometimes in parallel for killing a patent. The patent can be challenged both in court during a case, and before the PTAB via IPR. Last year, in the Apple v. Fintiv case, a rule was put forth that the PTAB would deny the IPR process to cases that were far enough along, to prevent two parallel challenges to the patent (with possibly opposing outcomes) happening at the same time.

This new letter from Tillis highlights how Albright appears to be using this ruling to block PTAB IPR challenges by scheduling unrealistic trial dates, which are then used to block the PTAB from going forward with an IPR.

As you know, Fintiv instructs the PTAB not to institute an Inter Partes Review (?IPR?) procedure to challenge a patents validity if the panel deems it to be more efficient to allow parallel district court litigation to proceed based on a balancing test comprising six non-dispositive factors. Again, while I strongly support the policies underlying Fintiv, my concern relates to the PTAB?s application of the second of these factors: the proximity of the court’s trial date to the PTAB?s projected statutory deadline for a final written decision. Specifically. I am concerned that the PTAB?s historical practice of crediting unrealistic trial schedules. This has not only produced outcomes that are untethered from the policy underpinnings of the Fintiv rule, but it has also created harmful incentives for forum shopping and inappropriate judicial behavior.

The negative consequences are most pronounced in the Waco Division of the U.S. District Court for the Western District of Texas. The sole judge in that division schedules very early trial dates for all patent cases assigned to him. Often, these dates prove to be not just unrealistic, but they [sic] impossible to fulfill as multiple conflicting trials are frequently scheduled to occur on the same date before the same judge in the same courtroom. However, because PTAB panels interpret Fintiv to require scheduled trial dates to be taken at face value, panels have regularly exercised discretion to deny institution of IPRs in deference to litigation pending before that district.

Tillis doesn’t hold back that this is mostly because of Judge Albright:

To be clear, Ibelieve judicial conduct is partly to blame for this situation. Once a case has been filed in the Waco Division, many defendants have found it all but impossible to persuade the division’s sole judge to transfer the case to a more appropriate venue. In denying such transfers, the court has repeatedly ignored binding case law and abused his discretion. This misconduct has resulted in a flood of mandamus petitions being filed at the Federal Circuit, The Federal Circuit has been compelled to correct his clear and egregious abuses of discretion by granting mandamus relief and ordering the transfer of cases no fewer than 15 times in just the past two years.

Notably, in granting these petitions, the Federal Circuit has cast grave doubt on the reliability of the Waco Division’s trial schedules and claims regarding efficiency of adjudication. The appellate court has strongly criticized the division’s improper reliance on purportedly greater ?congestion? in transferee courts in attempting to justify inappropriate denials of transfers under 28 U.S.C. § 1404(a). More specifically, the Federal Circuit has refused to credit the division’s overly optimistic assumptions regarding the time-to-trial in cases, admonishing the division’s judge that a ?proper analysis? considers ?the actual average time to trial rather than aggressively scheduled trial dates.” Moreover, the circuit court has also implicitly questioned whether even amore accurate ?proper analysis? based on precise caseload counts and the accurate time-to-trial statistics produces a reliable assessment of relative court congestion, characterizing this analysis as mere ?speculation.?

Tillis concludes by basically saying that the PTAB should ignore trial dates set by Albright in doing a Fintiv analysis:

Based on the facts currently available to me, it is difficult to imagine any plausible justification for the continued reliance on the demonstrably inaccurate trial dates set by the Waco Division. I therefore ask that you undertake a study and review of this matter and consider whether Fintiv should be modified to account for unrealistic trial scheduling. I ask that you complete this review and implement appropriate reforms based on your findings by no later than December 31, 2021.

It’s pretty incredible for a single judge to get this much attention, let alone two separate letters calling out his behavior. Of course, seeing as he’s done little to change his behavior despite the Federal Circuit continuing to push back on his activities, it’s unclear if any of this will change how Judge Albright acts.

Filed Under: alan albright, forum selling, forum shopping, inter partes review, ipr, john roberts, pat leahy, patents, ptab, thom tillis, uspto

Supreme Court Says Patent Review Judges Are Unconstitutional, But It Can Be Fixed If USPTO Director Can Overrule Their Decisions

from the well-that-creates-some-other-problems dept

As you may recall, a few weeks ago I wrote about how Congress was asking the GAO to investigate whether the director of the US Patent & Trademark Office had been interfering in determinations made by the Patent Trial and Appeal Board (PTAB). I’m not going to go into all of the background again (please read the original for that), but under the America Invents Act, a process for reviewing patents after they were granted was set up, known as the Inter Partes Review (IPR) process. This was important, because the granting of patents is a non-adversarial process, where patent examiners are not given very much time to actually review everything. So the IPR process allowed those (especially those with prior art) to kick off a process by which the PTAB would recheck to see if the original examiner made a mistake in granting a 20 year monopoly to someone.

Unfortunately, because the members of the PTAB are designated as Administrative Patent Judges (APJs), there was the question of whether or not they needed to be appointed by the President with Senate confirmation to abide by the Appointments Clause of the Constitution. That question has been hanging out in the Supreme Court for many months — with the decision finally coming down this week. In arguing against this notion, the USPTO itself had claimed that the APJs were “interior officers” that don’t need Senate confirmation, and part of their “proof” was that the Director of the PTO could review their decisions. This raised some alarms in Congress, because it certainly wasn’t their intention (from everything stated so far) to allow the Director of the PTO to put their finger on the scale of what is and what is not patentable.

The full opinion from the Supreme Court is a bit of a mess — with different Justices signing onto different parts. But the key bits to pull out of this are that the Supreme Court found that the APJs are (or have been) “Principal Officers” meaning they should have been appointed by the President and confirmed by the Senate.

History reinforces the conclusion that the unreviewable executive power exercised by APJs is incompatible with their status as inferior officers. Since the founding, principal officers have directed the decisions of inferior officers on matters of law as well as policy. Hamilton articulated the principle of constitutional accountability underlying such supervision in a 1792 Treasury circular. Writing as Secretary of the Treasury to the customs officials under his charge, he warned that any deviations from his instructions ?would be subversive of uniformity in the execution of the laws.? 3 Works of Alexander Hamilton 557 (J. Hamilton ed. 1850). ?The power to superintend,? he explained, ?must imply a right to judge and direct,? thereby ensuring that ?the responsibility for a wrong construction rests with the head of the department, when it proceeds from him.?

However, in then immediately inserts its own remedy, saying that everything is fixable if the Patent Office Director actually can review the IPR decisions.

In sum, we hold that 35 U. S. C. §6(c) is unenforceable as applied to the Director insofar as it prevents the Director from reviewing the decisions of the PTAB on his own. The Director may engage in such review and reach his own decision. When reviewing such a decision by the Director, a court must decide the case ?conformably to the constitution, disregarding the law? placing restrictions on his review authority in violation of Article II

So, the good news here is that the important PTAB/IPR process remains alive. But it does seem quite worrisome that the end result is that any Director of the Patent Office can now step in and overrule the PTAB. One would hope that the political ramifications of doing so would prevent it, but it does seem that it’s now possible that a Director who just doesn’t like the whole IPR/PTAB process (and there are many patent system fans who hate it) could just automatically deny every single IPR.

And that seems very worrisome. Of course, all of this could be solved by making the APJs Senate confirmable, but apparently no one wants to bother with doing that. Alternatively, we could rethink the entire patent approval process altogether, so that it doesn’t need to go back and realize it granted 20 year monopolies for no good reasons… but, you know, that would take actual effort.

Filed Under: appointments clause, oversight, patent appeals board, patent review, patentability, patents, ptab, supreme court, uspto

Congressional Committee Calls On GAO To Investigate Whether Patent Office Director Is Putting Thumb On The Scale Of Patent Reviews

from the very,-very-interesting dept

The chair and ranking member of the House IP subcommittee that covers intellectual property is now asking the Government Accountability Office (GAO) to investigate whether or not the Director of the Patent Office is pressuring the important Patent Trial and Appeal Board (PTAB) to make certain decisions on the validity of patents. There’s a lot of important background here, but it’s all kind of fascinating how two big legal issues are coalescing in this result, in which the USPTO’s own legal arguments may reveal how the Director has been unfairly influencing decisions. The two key points to understand are (1) the Inter Partes Review (IPR) process, and (2) questions about the constitutionality of certain appointments — both of which are issues that we’ve covered for years, that seem deep in the weeds, but turn out to be quite important.

First, we’ve got the IPR process. This was an effort that was put in place with the America Invents Act (AIA) back in 2012. It was a recognition (FINALLY) that the Patent Office was approving way too many bad and overly broad patents, that were then being abused to shake down companies. The fact that the USPTO was approving so many awful patents was a built in bug (or feature?) of the way the patent system works.

The process for getting a patent is not truly adversarial. You have the party seeking the patent, and the examiner. Yet examiners were often judged on how many applications they dealt with, rather than the quality of the patents they approved. So there’s no party arguing for why something does not deserve a patent. In theory, the examiner might do that, but the incentive structure there is broken as well. There is something called a “final” rejection from a patent examiner, but it’s not actually final, since the party seeking the patent can continue to file renewed requests/appeals forever. And with the Patent Office getting heat for having too long a backlog, sooner or later, there are strong incentives for the examiner to just approve a patent to get it off his or her docket.

Rather than fix the many inherent problems in this setup, the AIA introduced a compromise that was better than nothing. It would create this special PTAB, which anyone could use to challenge a previously granted patent. At that point (usually once someone started threatening or suing over a patent) then finally, there would be a more careful review, with an adversarial process, to examine whether or not the patent should have been granted in the first place. Patent trolls and their friends have hated the whole IPR process since it began and have tried a variety of ways to challenge it. In 2018, the biggest legal challenge to the whole IPR process was rejected by the Supreme Court, who said that of course the PTO can invalidate the patents it never should have granted.

But that hasn’t stopped the efforts by trolls and friends to invalidate the IPR process. The latest attempt is in the US v. Arthrex case, in which it is argued that the “judges” on the PTAB are unconstitutional for violating the Constitution’s appointments clause. That case was heard by the Supreme Court a few months ago and a ruling should be coming soon.

And that takes us to the other deep in the weeds issue we’ve talked about for over a decade: whether or not appointments to various quasi-legal tribunals within the executive branch violate the Constitution’s appointments clause. The Appointments Clause says certain “principle officers” of the government, including judges, need to be nominated by the President and approved by the Senate. There have been questions for years about whether or not certain roles that were appointed by various department heads violated this clause. Back in 2012, for example, a court said that the Copyright Royalty Board nominations were unconstitutional (though the court then immediately worked around that issue with a sort of wink and a nudge).

So, now the question at the heart of Arthrex is whether or not the PTAB judges are constitutionally appointed, since they’re appointed not by the President with the consent of the Senate, but directly by the director of the Patent Office. And, in that case, the US government (defending the constitutionality of the PTAB judges) claimed that they were not principal judges, but rather “inferior officers” who could be appointed by the PTO director. That’s all very interesting, but a key argument made by the government in defending that was that the PTO Director controls the PTAB judges, including how they decide cases.

And while that may be necessary to prove that their appointments were constitutional under the Appointments clause, it rang some alarm bells because it sure as hell suggested that the PTAB might be deciding whether or not patents are valid not based on the evidence before it but based on what the PTO director wanted. And that would be a big problem.

And, so that finally gets us to the latest bit of news, in which Reps. Hank Johnson and Darrell Issa, a bipartisan sort of odd-couple who head up the IP subcommittee are asking the GAO to look into whether or not the USPTO director is actually pressuring the PTAB judges into deciding the validity of patents one way or the other:

Recently, the Supreme Court granted certiorari in United States v. Arthrex, Inc., an appeal from a Federal Circuit decision that determined that APJs were ?primary officers of the United States? and, thus, unconstitutionally appointed without Senate confirmation. In that appeal, the government?s position is that APJs are instead ?inferior officers? who do not require Senate confirmation because they are subject to significant oversight and control by the Director of the USPTO, who is a Senate-confirmed political appointee. The government argues that this control includes, for example, the ability of the Director to dictate the outcome of PTAB cases by controlling which APJs decide which cases (i.e., APJs who will decide each case as the Director wishes) and by providing policy directives that APJs are obligated to follow.

If the government?s arguments are accurate, PTAB cases may have been decided based on factors outside of the evidentiary record and public legal authority (e.g., statutes, regulations, court precedents) available to the parties. This possibility raises potential due process concerns and would be inconsistent with the intent of Congress in enacting the AIA.

There is then a long list of fairly specific requests for the GAO to investigate that could raise some eyebrows. Here are just a few:

* The policies, written or unwritten, that exist at the USPTO to effectuate each of the above mechanisms, as well as the statutory or other legal authority that forms the basis for each of the above mechanisms. * How APJs understand the role of the Director in the decisions they reach in AIA cases, including APJs? awareness of the above mechanisms and associated policies and the number of APJs who have been subject to one or more of them. Also, the impact that the exercise of these mechanisms and policies have had on the decision-making of APJs in AIA cases. * Whether any APJs have objected or dissented, or attempted to object or dissent, to the above mechanisms and policies, or the exercise of those mechanisms and policies in specific AIA cases. If so, the results of those objections and the processes that were made available to APJs to object or dissent. Also, how APJs understand the extent to which they may object or dissent. * How often the Director, or a designate thereof, has directly influenced or changed a decision in a specific AIA case (i.e., inter partes review, post-grant review, or covered business method review). Also, the way those decisions were influenced or changed by the Director, and the mechanisms that were used to influence or change those decisions. * Whether specific notice was provided to the parties in those cases indicating that the Director, or designate thereof, was influencing or changing a decision in the case, and the information included in any such notice. Also, whether the decisions themselves document that influence or change, and explain the reasoning or justification for it.

In other words… either the Patent Office director is unfairly controlling or strongly influencing PTAB IPR decisions or the Patent Office lied to the Supreme Court. The most charitable explanation, of course, is that the PTO director could step in and order certain decisions, but has chosen not to. But even that would be worrisome and problematic. None of this looks particularly good for the PTO.

Filed Under: appointments, darrell issa, gao, hank johnson, inter partes review, ipr, patents, ptab, uspto

Appeals Court Rejects Sketchy Plan To Pretend To Sell Patents To Native American Nation To Avoid Scrutiny

from the sovereign-assholery dept

Some ethically sketchy patent lawyers thought they had come up with a brilliant scam to avoid having awful patents scrutinized by the special review board created by Congress within the Patent Office — a process known as “inter partes review” or IPR. This Patent and Trademark Appeals Board (PTAB) has been a useful tool in going back and reversing the mistakes made by patent examiners in letting through bad patents. However, back in September, we wrote about a fairly devious plan by the lawyers from the law firm of Shore Chan DePumpo to help their clients avoid a PTAB review. The situation began with a PTAB ruling back in early 2017 in a review of a patent held by the University of Florida. The University claimed sovereign immunity exempted it from the whole PTAB process under the 11th Amendment (universities claiming sovereign immunity in patent cases goes way back) and the PTAB agreed it had no jurisdiction.

Sensing an opportunity, the lawyers at Shore Chan DePumpo worked out a neat little scheme in which a pharmaceutical company would “sell” its patents to a Native American nation (in this case, the St. Regis Mohawk Tribe). The “sale” was in name only. The pharmaceutical companies retained not just an exclusive license to the patents, but basically all other rights as well. The only thing St. Regis got was a nice little income stream in exchange for having its sovereign status used to shield the pharma companies’ patents from scrutiny before the PTAB.

I’m sure it seemed like a good idea to someone at the time, but it has been an utter failure. In October, the district court made it clear that this was a scam it didn’t intend to allow to go forward. Then, in February, the PTAB itself denied the tribe’s motion, pointing out that the PTAB wasn’t stupid and totally understood the scam being played:

Upon consideration of the record, and for the reasons discussed below, we determine the Tribe has not established that the doctrine of tribal sovereign immunity should be applied to these proceedings. Furthermore, we determine that these proceedings can continue even without the Tribe’s participation in view of Allergan’s retained ownership interests in the challenged patents. The Tribe’s Motion is therefore denied.

And now, just to add one more nail to the coffin of this terrible idea, the Federal Circuit, which traditionally is happy to rubber stamp any scam to keep patent owners happy, has rejected this plan as well. The CAFC ruling doesn’t call out this procedure as a scam, but rather focuses in on the procedural questions of whether or not the IPR process is akin to an agency enforcement action (which would not be blocked by sovereign immunity) v. a civil lawsuit (which would be). It goes through a number of factors and decides that it’s more of an agency action, and thus the tribe (acting as a front for the pharma companies) can’t claim sovereign immunity and avoid having the Patent Office review its patents.

I guess the lawyers at Shore Chan DePumpo will just have to go back to sending frivolous takedown notices to bloggers who criticize the firm…

Filed Under: cafc, federal circuit, inter partes review, ipr, mohawk nation, patents, ptab, sham transactions, sovereign immunity, st. regis mohawk tribe, uspto
Companies: allergan, mylan

from the happy-endings dept

You may recall that way back in early 2015, we discussed the absurd story of the New Jersey Turnpike Authority suing Jersey Boardwalk Pizza for trademark infringement. At issue was that the pizza joint’s owners, both from New Jersey, had crafted a clever logo that mimicked the logo for the Garden State Parkway, except it altered all the words to be the parlor’s name and the food it served. It was a clear homage. Nobody denied it. That didn’t change the fact, however, that the NJ Turnpike Authority is both not in the business of selling pizza, nor is it in the business of being in Florida. As such, there was zero potential for customer confusion, and the court dismissed the case.

You would have thought that would be the end of this story. But, no, the NJTPA decided to go the trademark office and try to have the pizza parlor’s trademark invalidated. Why in the hell it bothered doing so is anyone’s guess. Regardless, it didn’t work out well for the Garden State.

Three administrative judges with the United States Patent and Trademark Office ruled Monday that Jersey Boardwalk Pizza can continue to use its logo, which the New Jersey Turnpike Authority argued was confusingly similar to the Parkway logo.

In dismissing the authority’s claims, the patent office’s governing board noted the similarities, but the restaurant’s business is unrelated to the roadway. The case was heard in February and took three months to decide.

All sorts of questions leap to mind. What exactly did the folks at the NJTPA think was going to happen at the PTAB after a U.S. District Court refused to entertain this bullshit? Who exactly makes up the legal staff for the NJTPA and are they, or are they not, fully functioning human beings? Is there some kind of gas leak we should be aware of, or perhaps some sort of underground radiation resting just under this legal team’s offices?

The most important question, however, is this: how much taxpayer money was flushed down the litigious toilet, all because a couple of New Jersey transplants wanted a callback to their home state for a Florida pizza business? If the answer to that question is greater than zero, it sure feels like there should be exit interviews going on post-haste.

Filed Under: new jersey, new jersey turnpike authority, pizza, ptab, trademark
Companies: jersey boardwalk pizza

It's Over: The Podcast Patent Troll's Patent is Officially And Completely Dead

from the podcast-away,-folks dept

Going back many years now we’ve written about the company Personal Audio, which built itself up as a patent troll for digital audio. Back in 2011, it won a patent lawsuit against Apple over patents on playlists. In 2013, as podcasting was starting to take off, Personal Audio decided that one of its other patents actually covered podcasting as well and sued some top podcasters while threatening many others. EFF stepped in to use the valuable inter partes review process to seek to invalidate the patent, which worked. Though, in the process the company sought to intimidate EFF donors.

While all of this was happening, the company also realized that podcasters don’t make any money, and figured out how to dump its lawsuits against individual podcasters… while still going after large companies like CBS.

After the Patent Office’s appeals board (PTAB) invalidated the patent, Personal Audio went to court to overturn the ruling. Last year, an appeals court rejected that attempt, noting that the PTAB was correct in invalidating the patent. Personal Audio still kept fighting, and asked the Supreme Court to hear it’s appeal.

Thankfully, on Monday, the Supreme Court denied that request, meaning that Personal Audio’s podcasting patent is finally, truly and completely, dead.

Still, the fact that this process took about five years and a ton of time in court should demonstrate just what a drag bogus patents can be on the economy and innovation. It also shows just how valuable a bogus patent can be for the trolls that hold them. Even after Personal Audio realized that all the podcasters it was trying to shakedown had little money to hand out, it still fought to the bitter end in trying to keep the patent alive, knowing that it could successfully get larger media companies to pay up. So this is a victory, but also a demonstration of just how broken the patent system is. Personal Audio did nothing to help podcasts become a thing. It did nothing to help podcasts move forward or become popular. Its only contribution to the podcast world was to wreak havoc on a bunch of podcasters, scaring many of them and costing them a ton of money in legal fees. That’s all a dead weight loss to the economy, that could have gone into making more and better content.

Filed Under: inter partes review, ipr, patents, podcasting, ptab, scotus, supreme court
Companies: eff, personal audio