Introduction

Created by the 2011 America Invents Act (AIA), the Patent Trial and Appeal Board (PTAB) has invalidated 84% of the 2,925 patents they have reviewed. It was called a “death squad for patents” by a former chief judge of the Court of Appeals for the Federal Circuit. PTAB trials can add hundreds of thousands of dollars and several years of delay to patent litigation. Inventors who attempt to enforce their patents face a high risk of incurring expense, delay, and invalidation in a PTAB trial.

The AIA establishes a bifurcated system for reviewing patents – the institution stage and the trial stage.

The trial stage is largely governed by the statute: it is adversarial; decisions are made by administrative judges; evidence is limited; strict deadlines are imposed; and the burden of proof is low. The high invalidation rates are largely a result of these statutory provisions.

The institution stage is largely governed by agency regulations prescribed by the Director. In particular the Director has discretion to deny institution for reasons related to: 1) previously considered prior art and arguments; 2) the effect on the economy; 3) the integrity of the patent system; and 4) the efficient administration of the patent office.

In prescribing regulations…the Director shall consider the effect…on the economy, the integrity of the patent system, the efficient administration of the Office – 35 U.S.C §316(b)

Under the America Invents Act, the only viable approach to “securing to inventors the exclusive right to their discoveries” as required by the U.S. Constitution is to screen patents at the institution stage. Institution must play a gatekeeping role to control which patents are sent to the “death squad” that is an AIA trial. Absent robust screening, patents are not reliable instruments to attract capital and advance progress in the useful arts. This screening function can and must be done via regulation.

The Director shall prescribe regulations…setting forth the standards for the showing of sufficient grounds to institute a review – 35 U.S.C §316(a)(2)

I: Predictability

Regulations must provide predictability. Stakeholders must be able to know in advance whether a petition is to be permitted or denied for policy reasons. To this end regulations should favor objective analysis and eschew subjectivity, balancing, weighing, holistic viewing, and individual discretion. The decision-making should be procedural based on clear rules. Presence or absence of discrete factors should be determinative, at least in ordinary circumstances. If compounded or weighted factors are absolutely necessary, the number of possible combinations must be minimized  and the rubric must be published in the Code of Federal Regulations.

II: Multiple Petitions

1. A petitioner, real party in interest, and privy of the petitioner should be jointly limited to one petition per patent.
2. Each patent should be subject to no more than one instituted AIA trial.
3. A petitioner seeking to challenge a patent under the AIA should be required to file their petition within 90 days of an earlier petition against that patent (i.e., prior to a preliminary response). Petitions filed more than 90 days after an earlier petition should be denied.
4. Petitioners filing within 90 days of a first petition against the same patent should be permitted to join an instituted trial.
5. These provisions should govern all petitions absent a showing of extraordinary circumstances approved by the Director, Commissioner, and Chief Judge.

III: Proceedings in Other Tribunals

1. The PTAB should not institute duplicative proceedings.
2. A petition should be denied when the challenged patent is concurrently asserted in a district court against the petitioner, real party in interest, or privy of the petitioner and the court has neither stayed the case nor issued any order that is contingent on institution of review.
3. A petition should be denied when the challenged patent is concurrently asserted in a district court against the petitioner, real party in interest, or privy of the petitioner with a trial is scheduled to occur within 18 months of the filing date of the petition.
4. A petition should be denied when the challenged patent has been held not invalid in a final determination of the ITC involving the petitioner, real party in interest, or privy of the petitioner.

IV: Privy

1. An entity who benefits from invalidation of a patent and pays money to a petitioner challenging that patent should be considered a privy subject to the estoppel provisions of the AIA.
2. Privy should be interpreted to include a party to an agreement with the petitioner or real party of interest related to the validity or infringement of the patent where at least one of the parties to the agreement would benefit from a finding of unpatentability.

V: Economic Impact

Regulations should account for the proportionally greater harm to independent inventors and small businesses posed by institution of an AIA trial, to the extent it harms the economy and integrity of the patent system, including their financial resources and access to effective legal representation.

USEFUL LINKS TO HELP YOU:

If you’d like to learn more and conduct your own research, so as to craft your own detailed comments, these downloads and links may help:

Official Federal Register Notice.

Tips For Submitting Effective Comments (Regulations.gov)

Petition For Rulemaking Pursuant To 5 U.S.C. § 553(e) For Specific Criteria For Deciding Institution Of AIA Trials

PTAB Institution Data Analysis Proves That Reforms Have Failed

Letter to Patent Public Advisory Committee (PPAC) Ref: PTAB destroying the integrity of the patent system