False USPTO narratives and the Urgent need for PTAB reform
This week, I won’t be doing an interview or having a conversation on IPWatchdog Unleashed. Instead, I’d like to talk about the Patent Trial and Appeal Board. The PTAB was in the news a lot last week. You can listen to the full discussion on monetizing revenue streams backed by intangibles assets anywhere you get podcasts (links are here) or at IPWatchdog Unleashed, a Buzzsprout channel. If this topic is of interest to you, we invite you to join us at IPWatchdog Studios on January 27-29 2025 for our 5th Annual PTAB Program. While some Senators expressed concerns, enough agreed that they would vote yes but with the caveat of requesting further changes before voting for the bill on floor. Even so, this is a long-awaited win for Senator Chris Coons, who introduced the idea of reforming PTAB almost a decade earlier, introducing the STRONG patents Act in 2015, which was then referred to as the STRONG Patents Reform Act. The very next day after this Senate victory for those in support of PTAB reform Kathi Vidal wrote in the Director’s blog about how wonderful the PTAB had been, stating in part… “Since AIA procedures It is false to claim or suggest that 70% challenged patents were upheld by the PTAB. This claim is false, and many people within the USPTO are aware of it.
Unfortunately, these egregious and objectively false claims persist, presumably because if the truth were admitted the patent system would be exposed for being little more than a scheme to defraud patent owners.Not only does the Patent Office handsomely charge for the acquisition and maintenance of a patent to the original innovator, but they also handsomely charge for the right to challenge those patents after issue. This creates an incentive for the Patent Office to issue bad, low-quality patents. Those in the industry are well aware of the arms dealer nature with which the Patent Office sells both sides of the battle for patents. You would be hard pressed not to find a structure or system more contradictory to its stated purpose. The PTAB’s own facts show that of the patents that are finally decided by the PTAB in a written decision, 85% have lost at least one claim. 70% have lost all claims. This is the exact opposite of what Director Vidal claimed. The PTAB is not a friendly forum for patent owners–it has always been and continues to be an extraordinarily favorable forum for challengers.
The truth is that if the PTAB issues a final decision the patent owner is virtually certain to lose. These statistics have remained largely unchanged with only a minimal fluctuation since the PTAB was established in 2012. Who is fooling whom? The way the rules have been structured and the way that we have seen the PTAB work confirms the fact that no patent will ever be safe. This is not intended as an indictment against PTAB judges, who are simply doing their job according to the rules and statutes created by the USPTO. It is, however, a scathing indictment of those laws and rules, which demonstrate an urgent need for PTAB reform.
Against this pitiful backdrop there is a growing understand in the U.S. Senate that the PTAB is being abused by big-tech giants using various tactics. The current iteration of his efforts is the PREVAIL Act. The PREVAIL Act is the current iteration.
Amongst other things, PREVAIL changes the standard of review so that the PTAB can only invalidate a patent claim if there is a clear and convincing proof of a mistake. This is the standard which has been used in federal courts for many years.
If this is true, the law currently allows the PTAB invalidate a patent claim if it disagrees with the examiner, and would have made a This so-called preponderance standard means administrative judges can after the fact simply overrule the consideration of the examiner because they don’t think the examiner should have allowed the patent.Despite the statute saying that patents are property, we all know they aren’t. No property regime would ever be able to withstand such uncertainty, and arbitrary application after the fact. The Supreme Court confirmed that patents were no longer property several years ago, when it said that they are just a government license that can be revoked at any time. At one time, this ruling would have been scandalous. But can you really blame Supreme Court for simply recognizing what patents are? A patent is not property if you can take it away at any time, and if you can challenge it indefinitely. A U.S. Patent is now more of an albatross or anchor than a piece property. We know from petitions that 18 of the 20 top challengers are big tech. A review of PTAB submissions shows Apple, Google, Microsoft Intel and Cisco in the top 10. In the past, these companies would buy smaller entities that had invented something exciting and work to improve it and bring it to market for consumers’ benefit. Why buy something you can get? Why buy something that a friendly forum like the PTAB can easily invalidate? Why buy when you could beat smaller entities to the ground by filing challenges, forcing them to spend up to $1 million per time in order to have a realistic chance of winning the battle? The PTAB is preventing small businesses and individuals from starting up in America.
