Ten Things the USPTO can do to improve the PTAB

This is IPWatchdog Unleashed. I talk to my long-time friend Jim Carmichael. He’s a former Administrative Patent Judge, and the founder of Carmichael IP. Jim served on the Board of Patent Appeals and Interferences of the United States Patent and Trademark Office, which was the predecessor of the Patent Trial and Appeal Board. Jim and his firm represent patent owners exclusively in post-grant procedures, including inter partes reviews (IPR), Post Grant Reviews (PGR), and reexaminations. This conversation was to capture these conversations and, in light of where the industry is today, create a list of things that we think the Patent Office can and should do to create a better, fairer PTAB process. In a recent decision, the USPTO decided to separate the IPR and PGR institutional decision between discretionary denial and merits (i.e. patentability). The relevant statutes give the Director the authority to decide whether to institute or not, and while Acting Director Coke Stewart has clawed back the authority to make decisions regarding whether to exercise discretion to deny petitions, Carmichael says the entirety of the institution decision should reside with the Director, not the PTAB panel that will ultimately decide the case on the merits if the challenges are instituted.

Eliminate expert witnesses.

The statute says that IPR and PGR are to be decided based on patents and printed publications, but the PTAB heavily relies on expert witnesses with respect to both institution decisions and decisions on the merits. In some cases, PTAB has permitted more than a dozen expert witnesses to testify in a single proceeding. If the PTAB believes an expert would be helpful, it would make more sense to consult with an experienced patent examiner in the field of the invention rather than a paid consultant, or a dozen paid consultants.

1. Eliminate supplemental preliminary briefing. According to the U.S. Supreme Court, the IPR petition or the PGR petition is supposed to set the boundaries for the challenge. Petitioners are often granted permission to submit supplemental briefs in order to strengthen weak or inadequate petitions. This practice needs to stop.
2. Presume nexus for secondary considerations. The PTAB is largely an obviousness tribunal, with more than 90% of decisions turning on the question of whether the claimed invention is obvious. Secondary considerations are one of the four factors to be considered in making an obviousness decision. Why should the PTAB ask patent owners to prove secondary considerations if petitioners are the ones who have the burden of proof, as they are based on explicit statutory language? Petitioners rarely address secondary considerations, if at all, in their petitions. Instead, they wait until the patent owner raises the issue in his response. Petitioners receive supplemental briefings to address the issue they previously ignored. Why should petitioners be able later to argue that secondary considerations were not included in the petition if they ignore them? Why should an element that petitioners ignore be weighed in the petitioner’s favor? When evaluating 325(d), Office should give credit to 1449 and 892 form. The Office has never explained what it means to “consider” prior artwork. The PTAB does not “consider” prior art that was actually found by an examiner during a pre-examination. The PTAB requires that an examiner has used the prior art in order for it to be considered, but it is well-established as a matter both of law and fact by examiners to consider much more than what they actually use when rejecting claims. Examiners often consider many references and disregard them as not being material to patentability. The examiner does not use these irrelevant references or patents, but they do consider them. The Office can and should easily fix what it means to be “considered.”
3. Terminate VLSI v. OpenSky. This case was a real mess. In a dispute over the validity claims of U.S. Patent No. OpenSky’s attorneys offered in writing, if they were paid, to secretly throw a IPR that would allow the patent owner to win. OpenSky proposed that they refuse to pay their expert in order to guarantee that the expert would not appear at the scheduled deposition. OpenSky would then join the patent owner to file a motion for dismissal after the expert failed to appear at the scheduled deposition. This was likely based on an understanding that OpenSky couldn’t win without the expert. Director Vidal sanctioned OpenSky, but allowed the IPR proceeding. Intel, which was barred from filing its own IPR due to time constraints, was allowed to proceed instead of OpenSky. The only way to remedy this egregious, unethical behavior would be to terminate the IPR. The case is currently on appeal at the Federal Circuit and the USPTO should either (1) unilaterally terminate the IPR; or (2) confess to the Federal Circuit that Director Vidal was mistaken when she allowed the case to continue.
4. Eliminate reliance on common knowledge. The statute requires only patents and printed publications to be the basis for invalidating claims in an IPR or PGR. The PTAB uses this non-statutory, amorphous rationale to invalidate claims every time. This is inappropriate.
5. Real party in interest. When a membership organization, such as RPX or Unified Patents, files an IPR or PGR they should be required to disclose their membership. The statute states that parties who lose cannot challenge claims at the USPTO, or in another proceeding before another tribunal. It is ironic that these membership organizations and their members demand transparency with respect to patent litigation funding while carefully hiding the names of their members. This is particularly ironic given these membership organizations and their members demand transparency with respect to patent litigation funding while carefully hiding the names of their members.
6. Require petitioners to justify multiple petitions and/or reexams. Currently, a petitioner must justify multiple or serial petitions filed by the same party. The USPTO needs to expand this requirement so that it includes (1) reexams, and (2) other parties. Acting Director Stewart has added other parties as discretionary denial criteria, but has not yet required petitioners to submit a justification and excluded reexams. The use of reexaminations after the PTAB has already ruled in favor of a patent owner is a growing and concerning problem and warrants special justification.
7. Settled expectations should mean explaining late challenges. When Acting Director Coke Stewart brought the discretionary denial decision-making back to the Director’s Office, one of the factors she announced the Office would consider are the settled expectations of the parties. This factor should include whether the petitioner was able to locate the references cited in the petition in time to submit them to the examiner via third-party submission prior to the patent issuing or within the first nine months after the grant of the patent (making a PGR feasible). If a petitioner knew or could have earlier found the references relied upon in an IPR petition, the petitioner should have to explain why a late challenge to the patent is appropriate.
8. In addition to these ten fixes the Office can itself undertake, Carmichael also mentions several things Congress can do, and why it is important for the Trump Administration to appoint judges to the Federal Circuit who will show respect to granted patents and patent owners.You can listen to my conversation with Jim Carmichael by downloading the podcast wherever you normally access podcasts, by visiting IPWatchdog Unleashed on Buzzsprout, or by watching the video on the IPWatchdog YouTube channel.
9. Gene Quinn

   Gene Quinn is an expert on patent law, innovation policy and patent law. Mr. Quinn was twice named as one of the 50 most influential people in the world

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