Not All of the New Patent Reform Ideas are
A few weeks back House Judiciary Committee Chair Bob
Goodlatte (R-VA), released
a "discussion draft" of further patent reform ideas. The Draft is a
collection of adjustments to the U.S. patent system designed to
encourage a dialogue on these important reform issues. In particular the
abusive litigation tactics of so called "patent trolls" are the
driving force behind the legislative effort. For this reason, the bulk of the
proposals of the Goodlatte Draft are squarely aimed at preventing the
abusive behaviors and practices of patent trolls. Yet, there is one
proposal of the Draft that stands out as a glaring exception. This
troll-friendly provision, if enacted into law, would virtually ensure the
continued success of the patent troll business model.
One of the most formidable
weapons against abusive patent litigation practicesis the ability to remove
the high cost litigation from the courts by forcing the patentability
determination of suspect patents back to the USPTO. In the 9 months
since the passage of the post grant challenge provisions of the America
Invents Act (AIA), roughly
300 patent disputes have been sent to the Patent Trial & Appeal Board
(PTAB). In many cases the low cost PTAB proceeding forces a
complete shut down of the higher cost litigation proceeding.
The benefits of PTAB proceedings as compared
to traditional district court style litigation are well known. That
is, the judges at the PTAB are engineers and scientists; the patentability
determination performed at the PTAB does not require the "clear and convincing
standard" of evidence to prove unpatentability; PTAB proceedings must
be completed within 12 months; there is no presumption of validity at the
USPTO, and patent claims are not construed to preserve validity, but instead,
are given a broadest reasonable interpretation. It is these standards that greatly
enhances the efficacy and affordability of PTAB challenges to patent
trolls relative to court-based options.....which is why it is so strange
for the Goodlatte Draft to propose changing some of these standards to make
them consistent with court practices.
Specifically, the Draft proposes introducing the
presumption of validity of 35 U.S.C. § 282 to PTAB claim construction:
'(14) providing that for all purposes under this
chapter, each claim of a patent shall be construed as such claim has been or
would be in a civil action to invalidate a patent under section 282, including
construing each claim of the patent in accordance with the ordinary and
customary meaning of such claim as understood by one of ordinary skill in the art,
the prosecution history pertaining to the patent, and prior judicial
determinations and stipulations relating to the patent.
(red text shows newly proposed duties of the PTAB)
Let's take this new standard step-by-step.
First, when filing a patent challenge with the PTAB the
proceeding will only go forward if, based on the showing of a challenger's
petition, there is a
likelihood that the patent is unpatentable. So under the above proposal,
once the PTAB determines that the patent is suspect, they would be asked
to construe the claims in accordance with 35 U.S.C. § 282.... in which the claims
are presumed valid and construed to preserve validity...HUH?
Perhaps even stranger the proposal seeks to employ
judicial determinations to influence PTAB claim constructions.
Let's think about this one for a minute. For example, Patent Troll A files suit
in 2011 against a 5 small companies-4 settle out, but the 5th fights through to
a Markman Hearing with inadequate counsel due to cost (where the claims are
construed). The Markman Order is bad for the 5th company, so they also settle
In 2013, a new round of litigation is pursued against a
larger swath of technology companies. Rather than settling, the new
companies decide to challenge the patent at the PTAB. Under the last part
of the proposal above the PTAB's technically trained judges are to look to
this poorly litigated claim construction order for guidance? Indeed, since
the court previously applied § 282 the PTAB may even be bound by the
Lastly, the proposal would result in the PTAB performing
a construction that has never before been performed by the agency for Inter
Partes Review (IPR) and Post Grant Review (PGR) on one hand, while on the
other hand, the PTAB would use the existing challenger friendly standards
for patent reexamination proceedings; perhaps even at the same time on a
patent. This would force challengers away from the robust contested proceedings
of the AIA, which were crafted to overcome the well known failings of the ex
parte reexamination system, back to the patent reexamination system of
Clearly there are aspects of the Goodlatte Draft that
will never see the light of day, this provision should be one of them.
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