PREVAIL Act Would Overhaul PTAB Practice
“While C4IP’s Jamie Simpson said it will be important to monitor whether the House introduces companion legislation in the coming weeks, she noted that ‘it’s really promising that the Chair and Ranking Member of the Senate IP Subcommittee are behind these bills. We’re getting closer to a chance of something happening.’”
On the same day the Patent Eligibility Restoration Act of 2023 was introduced by Senators Chris Coons (D-DE) and Thom Tillis (R-NC), the two senators, along with their colleagues, Dick Durbin (D-IL) and Mazie Hirono (D-HI), introduced the Promoting and Respecting Economically Vital American Innovation Leadership (PREVAIL) Act today.
The bill’s aim is to reform the Patent Trial and Appeal Board (PTAB) and would build upon Coons’ STRONGER Patents Act, introduced in 2019.
Key provisions in today’s bill would:
- Require standing for PTAB challengers—specifically, that they must have been sued or threatened with a patent infringement lawsuit beforefiling a PTAB challenge—and limit multiple petitions against the same patent by “prohibiting any entity financially contributing to a PTAB challenge from bringing its ownchallenge”;
- Do away with joinder for time-barrred parties;
- Apply estoppel at the time the challenge is filed rather than after the Final Written Decision;
- Institute a “clear and convincing evidence” standard for patent invalidity at the PTAB and require claims be interpreted using the “plain and ordinary meaning” standardused in district courts;
- Require the Director to establish a Code of Conduct for PTAB judges and would demand more transparency of the USPTO Director with respect to their involvement in PTAB decisions;
- Require parties to choose whether to bring their action at the PTAB or in district court, but not both, in an effort to end duplicative proceedings;
- End the practice of filing reexaminations following failed PTAB petitions;
- End fee diversion; and
- Mandate reports that would evaluate “the impact of patentsand abusive demand letters on small businesses” and expand access to patent-searchingdatabases that are available only in-person at public search facilities.
As part of the goal to increase transparency at the PTAB, the bill would also establish that PTAB judges who decide whether to institute a post-grant proceeding would not be the same judges who decide the outcome of the proceeding.
Judge Kathleen O’Malley, (ret.), a former U.S. Court of Appeals for the Federal Circuit judge and Council for Innovation Promotion (C4IP) Board Member, said in a C4IP press release that the issues of patent eligibility and implementing the clear and convincing evidence standard at the PTAB must be prioritized. “Without these essential measures, the incentives to foster innovation in the United States will diminish to the detriment of our future prosperity and well-being,” O’Malley said.
Jamie Simpson, who is C4IP Chief Policy Officer and Counsel and Former Chief Counsel for the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet, told IPWatchdog that the overall theme of both the PREVAIL Act and the Patent Eligibility Restoration Act of 2023 is that “there needs to be clarity and certainty to support the investment required for innovation” and that both bills go a long way toward that.
While Simpson said it will be important to monitor whether the House introduces companion legislation in the coming weeks, she noted that “it’s really promising that the Chair and Ranking Member of the Senate IP Subcommittee are behind these bills. We’re getting closer to a chance of something happening.”
The senators’ press release on the bill said “the PTAB has become a forum where patent claims are consistently invalidated through proceedings that are duplicative of – not an alternative to – district court” and that the legislation would make changes that “promote fair treatment for inventors, provide a true alternative to district court, and ensure the USPTO has the resources it needs to effectively administer a patent system that incentivizes American innovation and enables U.S. innovators to compete.” .
The Biotechnology Innovation Organization (BIO) and Innovation Alliance both expressed support for the bill. Innovation Alliance Executive Director Brian Pomper said in a statement that the PTAB simply hasn’t been working as intended:
“Despite claims that the PTAB process benefits small businesses, the most frequent users and beneficiaries of the PTAB system have been Big Tech companies, along with large Chinese tech companies such as ZTE and Huawei, who have filed hundreds of PTAB petitions to challenge the patents of smaller competitors. With armies of lawyers and nearly bottomless resources, these Big Tech companies have also used the PTAB to file multiple challenges against the same patents, forcing small inventors to drain their resources defending their innovations again and again.”
A fact sheet on the bill is available here, and a section-by-section summary here.
Speaking at IPWatchdog’s Patent Litigation Masters Program in May, retired Federal Circuit Chief Judge Paul Michel said that, even if congress drags its feet on these bills, the mere introduction of such legislation could speed up the process. He explained:
“I think when the bills are introduced and get cosponsored by numerous people of both parties, and then they start holding hearings, that will create a huge amount of momentum, and when the courts see the momentum, they will start acting on their own – particularly the Federal Circuit.”
Michel said at the time that bills were in the works to address “the three biggest problems” with the U.S. patent system right now: eligibility, the PTAB and injunctions. The latter is not addressed in either of the two bills introduced today and will presumably be introduced separately at a later date.
IPWatchdog Founder and CEO Gene Quinn, who has long called for a code of conduct for PTAB judges, in addition to advocating for other issues mentioned in the bill, said the PREVAIL Act would do a lot to restore confidence in the patent system:
“This bill is extremely important and would go a long way to transforming the PTAB into a tribunal that is much more fair. A standing requirement is a good move, as is separating those involved with institution from the ultimate merits. And it is long overdue for the PTAB to have a code of conduct. If these APJs want to be called judges they should have a judicial code of conduct that is at least as strict as the code of conduct that applies to the attorneys that appear in cases before the tribunal.”
Image Source: Deposit Photos
Image ID: 70280439
Author: sarahdesign85
Eileen McDermott
Eileen McDermott is the Editor-in-Chief of IPWatchdog.com. Eileen is a veteran IP and legal journalist, and no stranger to the intellectual property world, having held editorial and managerial positions at […see more]
