Patent Reform Moving Forward in Congress

By Dennis Crouch

While the attention of the patent community rightly be focused on the Supreme Court for the next few months, patent reform initiatives are rapidly moving forward in Congress, the US Patent Office, State Legislatures, and the Court of Appeals for the Federal Circuit. The only area where patent reforms are seemingly stalled is WIPO.

Congressional Patent Reforms: In particular, I expect that major patent reforms will pass in the Senate by May 2014 in a strongly bi-partisan bill supported by President Obama. This is one area where the parties see the potential for getting something done and are ready to move. The House of Representatives has already passed a companion bill that would (a) dramatically raise the pleading standards for filing a patent infringement action; (b) require that courts award the prevailing party attorney fees and expenses except for certain cases; (c) allow defendants to force joinder of those with a direct financial interest in the patents at issue as a mechanism for both ensuring that the prevailing party fees are paid and that the financial interests behind patent litigation become public; (d) limit discovery until after claim construction; (e) require more particular pre-filing notice for willful infringement; (f) boost transparency of patent ownership requirements; (g) limiting PGR estoppel only to actually raised issues and eliminating the “reasonably could have raised” provision; (h) etc.

The Senate is moving forward with consideration of its leading patent reform bill, S. 1720 known as the Patent Transparency and Improvements Act of 2013. The Judiciary Committee is holding hearings on the proposal on April 3, 2014.

94 thoughts on “Patent Reform Moving Forward in Congress

  1. Seeing Chairman Leahy’s letter,

    link to judiciary.senate.gov

    I think now we’d be better off waiting for Chairman Sessions next year to push a much better bill through Senate Judiciary. Leahy is hostile to real tort reform and a clear loser pays mandate that is needed to reduce parasitism against innovators.

    I don’t think we’re getting a bill out of the Senate this year that will help startups, small companies, and creators against the dangerous mess of our patent system and its trolls. Next year when Sessions replaces Leahy is a better bet.

  2. NWPA: the history of civilization is flux–typically building up, golden age, and the decline and fall. Wipe out. Restart. Just like Rome. That is what we are seeing in the U.S. We are getting closer and closer to that wipe out stage.

    Clearly the answer is more patents!!!

    Seriously, guys, I bet there’s whole Yahoo chatrooms solely devoted to discussing how America is turning into the worst country ever, mainly because of the Great Usurper and his communist plots. Why not go there where you’ll be surrounded by equally childish buffoons? You can learn some new tricks, maybe.

      1. something on point.

        LOL. As if your abject wankery deserves anything but mockery.

        It’s going to be long year for you, Tr0llb0y. Get those meds adjusted.

    1. MM: So, you disagree with my statement? The way the patent law is being undermined is just symptomatic of what is going on with the U.S.A.

      1) No real director, but a shadow director that met with “business leaders” and not the Senate as required by law.

      2) A SCOTUS that is ignorant of science and innovation to such a degree that any discussion of the real merits of a case is impossible. And, yet the justices appear to believe they are geniuses that understand everything.

      Need I go on? Well, I might include the Anti-Patent Entrepreneurs (APEs) that are making a living off of burning down the system.

      1. So, if you haven’t figured it out yet, the way the patent system is being burnt down is a lot like the way our entire society is being burnt down.

        For example, no regulation for banks. Gee, isn’t Obama using the same tactics as Clinton did? We don’t need to do this in the open or have real discussion. We–the elite–know there should be no patents.

        No, re-think your little APE post and try again.

      2. I see in typical Troll fashion MM doesn’t respond to substance. He just takes things out of context and runs! Run APE! Run. See the APE run.

        1. LOL – just the typical table pounding from Malcolm.

          He does not have the law so he cannot pound the law.
          He does not have the facts so he cannot pound the facts.

    2. Believing in the work product we produce – and the system for protecting and promoting that work product – is the greater and more noble path.

      If one understand what Quid Pro Quo means, then yes (an emphatic yes) is the only meaningful rejoinder to ‘More Patents All the Time’ as a patent that meets the Quid Pro Quo necessarily means that we as a society are meeting what the Founding Fathers envisioned when they wrote into the Constitution the grant of authority to the Legislative Branch.

      It is by the invisible hand that the ‘grifting‘ nature of the human species turns us from the base to the noble. That ‘grifting‘ and ‘lottery-seeking‘ that form the basis of any individual’s self-interest is ultimately economically beneficial to society as a whole. The patent system is in place to make that happen.

      Quid Pro Quo – if one understands this foundation, then attacks on the patent system can be seen for what they are.

  3. Tr0llb0y: There is a certain ivy league taint – in the Court’s composition and in a certain analogous manner, in the academia that seeks to entreat the Court to wrest control of patent law and write the map that the Court should merely be reading.

    Certain “ivy league taint”? What in the world is that supposed to mean?

    You gotta love it when the patent teabaggers resort to the lamest wingnut memes out there. Can they be any more desperate? “Keep the guvvermit outa my patent system!”

    1. Look up “Ivory Tower” – hardly a “patent teabaggers” concept.

      As to the proper “meme,” try Quid Pro Quo.

        1. Geez, what a lot of miserable fools you are.

          fool: a person who lacks judgment or sense.

          Tell me Malcolm, what sense is there in staking out a position that one’s posts do not have to be intellectually honest?

          Your constant spin and accusations are wildly meritless. That you have some First Amendment right to choose to ignore critical elements of the law in your posts on this social media vehicle very much seems to be in question if you are as you imply an actual attorney. Your constant QQ should be aimed first at yourself, as that is behavior within your power to control (?).

          And before 6 gets all hot and bothered by the use of the word ‘control,’ he should turn his gaze to Malcolm’s (typically AOOTMD) post at 9.1.1 – Malcolm’s own cry for help. Then he should realize that attorneys have an obligation of controlling misconduct within our ranks.

          Malcolm’s misconduct is so pervasive on these boards, that one has to wonder how his ‘swagger’ can but be indicative of his behavior in his ‘professional’ life.

          You may want to look up the section of the ABA model rules of professional conduct that supersede Malcolm’s First Amendment “position” to post WHATEVER he wants to (hint: section 8).

  4. Tr0llb0y: – there is an historical lesson here too with the general failure of appeasement theory – note the Churchill/Chamberlain theme I draw upon.

    LOL! The patent teabaggers never cease to disappoint.

    What a bunch of pathetic creeps.

      1. ad hominems with ZERO substance

        ROTFLAMO!!!!!!!!!!

        This from the guy who drags Hitler into a discussion about patent reform.

        Get a life, creep.

        1. Sorry but wrong again Malcolm (actually, I am not sorry – Malcolm is sorry, a sorry excuse that is).

          The historical figure I dragged into a conversation was a Third Reich Master of propaganda – and the techniques I highlighted were directly on point.

          Hey – you are the one using the techniques, don’t tell me to get a life.

  5. For loser pays provision, how will this effect Hatch-Waxman litigation? Will the generics still take the risk of filing and ANDA for composition of matter patents?

  6. ‘require that courts award the prevailing party attorney fees and expenses except for certain cases’

    All this will do is make it harder for inventors and other small entities to enforce their rights, which is all these huge infringer lobbyists bills ever do. In short, they simply legalize theft.

    Just because they call it “reform” doesn’t mean it is.

    link to npr.org
    link to npr.org

    “patent reform”…America Invents Act, vers 1.0, 2.0, 3.0…

    “This is not a patent reform bill” Senator Maria Cantwell (D-WA) complained,
    despite other democrats praising the overhaul. “This is a big
    corporation patent giveaway that tramples on the right of small
    inventors.”

    Senator Cantwell is right. All these bills do is legalize theft. Just because they call it “reform” doesn’t mean it is. The paid puppets of banks, huge multinationals, and China continue to brain wash and bankrupt America.

    They should have called these bills the America STOPS Inventing Act or ASIA, because that’s where they’re sending all our jobs. The present bill (vers 1, 2, 3, etc) is nothing less than another giveaway for huge multinationals and China and an off shoring job killing nightmare for America. Even the leading patent expert in China has stated these bills will help them steal our inventions.

    Patent reform is a fraud on America. These bills will not do what they claim they will. What they will do is help large multinational corporations maintain their monopolies by robbing and destroying their small entity and startup competitors (so it will do exactly what they paid for) and with them the jobs they would have created. They have already damaged the US patent system so that property rights are teetering on lawlessness. These bills will only make it harder and more expensive for small firms to get and enforce their patents. Without patents we cant get funded. In this way large firms are able to play king of the hill and keep their small competitors from reaching the top as they have. Yet small entities create the lion’s share of new jobs. According to recent studies by the Kauffman Foundation and economists at the U.S. Census Bureau, “startups aren’t everything when it comes to job growth. They’re the only thing.” Meanwhile, the large multinationals ship more and more jobs overseas. These bills are a wholesale destroyer of US jobs.

    Small entities and inventors have been given far too little voice on this bill when one considers that they rely far more heavily on the patent system than do large firms who can control their markets by their size alone. The smaller the firm, the more they rely on patents -especially startups and individual inventors. Congress and Obama tinkering with patent law while gagging inventors is like a surgeon operating before examining the patient.

    Those wishing to help fight big business giveaways and set America on a course for sustainable prosperity, not large corporation lobbied poverty, should contact us as below and join the fight as we are building a network of inventors and other stakeholders to lobby Congress to restore property rights for all patent owners -large and small.

    for a different/opposing view on patent reform, please see…
    link to truereform.piausa.org
    link to piausa.wordpress.com
    link to washingtonexaminer.com
    link to hoover.org

      1. In essence, the letter explains, every patent holder is treated as though they are a “troll” by many of the pending provisions.

        From the more readable post at PatentDocs: link to patentdocs.org

        FUD, boogeyman tactics, denigration, slander, all the historical G propaganda devices – go figure.

        1. Sen. Schumer stressed that it is not necessary to worry about the details.

          The ends do not justify the means.

          They never have.
          They never will.

    1. And, staff, the history is that corporations have had a very hard time innovating. The solution has been to take the technology from start-ups or to buy the start-up. In either case, the weakening of the patent system immediately decreases the value of the innovation generated by the start-up.

      It amazes me that there are so many people willing to sell their soul for the approval and money of the big corporation. Or any of the other myriad of other reasons such ignorance, bandwagon mentality, etc.

      1. It is not amazing at all.

        Human nature is more like it. Not all of human nature is virtuous, or hard-working, or innovative.

        Sure some of it is, and yes, that ‘some of it’ should be protected (that is why we have a patent system in the first place). But we also should not be amazed that a variety of reasons and dogmas exist that would love nothing more than to see the patent system so wrecked as to make the entire system not ‘worth’ having.

        As Malcolm would say, this is basic logic. Those forces do exist and the patent system is under attack. As should be expected.

        Believing in the work product we produce – and the system for protecting and promoting that work product – is the greater and more noble path.

        If one understand what Quid Pro Quo means, then yes (an emphatic yes) is the only meaningful rejoinder to ‘More Patents All the Time’ as a patent that meets the Quid Pro Quo necessarily means that we as a society are meeting what the Founding Fathers envisioned when they wrote into the Constitution the grant of authority to the Legislative Branch.

        It is by the invisible hand that the ‘grifting‘ nature of the human species turns us from the base to the noble. That ‘grifting‘ and ‘lottery-seeking‘ that form the basis of any individual’s self-interest is ultimately economically beneficial to society as a whole. The patent system is in place to make that happen.

        Quid Pro Quo – if one understands this foundation, then attacks on the patent system can be seen for what they are.

        1. I guess what is a amazing anon is that the statistics are all on our side.

          Another thing that is at least remarkable is that the attorneys are so afraid of the SCOTUS that they don’t even stand up to the ignorant justices and read them the riot act. I’d bet that Gingsburg could have been shamed.

          1. What is amazing is that Malcolm continues so unrelentingly with his trademark:

            Accuse Others Of That Which Malcolm Does.

            For him to accuse anyone of lying so smacks of hypocrisy. He has built his entire on-line persona around the theme of “intellectual honesty is not required because this is just a blog and not a court,” that for him to NOT realize that he has no credibility whatsoever is more than a bit audacious. But beyond that, his ever-present spin amounts to nothing less than lies.

            He is the first to decry (and incessantly so) other people’s ethical shortcomings, and yet wants to pretend that his own constantly blaring examples somehow are protected under some notion of First Amendment rights.

            If he were truly an attorney, he would take more care and would most definitely pause given the articles posted on the Hricik side of the blog as I noted previously. The use of social media – as defined – includes blogging. Blatant misrepresentation – either overt or by knowing omission – is simply unethical.

            If the screws of ethics are tightened down – as he seemingly whines for in regards to ‘grifters,’ he himself will be hugely impacted in the manner that he conducts himself in this avenue of social media.

          2. As for attorneys being afraid – that too is understandable if one stands in the shoes of that person standing before the highest Court in the land.

            While current polls place the level of respect among common people for the Court at historic lows, those of us familiar with law, and advocates of law, have ingrained a desire to hold that Court in the highest respects. It is in part this yearning for respect that fuels the strength of emotions when that Court falls short.

            1. A sign of our society coming apart is the disparity between how the justices self rate themselves, which I think is at an all time high, compared with how low the average person rates the justices.

              I’d guess the average person views the justices as basically scamming criminals whereas the average justice appears to rate themselves as great scholars and geniuses that are sacrificing massive amounts of money to rule our society.

            2. Unfortunately, there is some grain of truth to what you say. But I view this not so much a sign of society coming apart, as much as a sign of how our society reflects old habits.

              Law is still very much a guild-like enterprise. This pre-dates our country’s founding. And to the extent that connections and who you know, and monied influence exist in the guild-like system, the further we are away from the benefits of a true meritocracy.

              The running joke on the disparity is reflected by the common man’s wondering how the judges, with their wealth, their connections, their typical ivy-league background can understand the rest of the country. This is not a new joke.

              There is a certain ivy league taint – in the Court’s composition and in a certain analogous manner, in the academia that seeks to entreat the Court to wrest control of patent law and write the map that the Court should merely be reading.

              That being said, the lack of meritocracy in academia reminds us that at least in law, merit can be more easily pressed. If, that is, issues are not run away from. If we seek Churchills rather than Chamberlains.

            3. No anon. The disparity is happening because our society is coming apart. The .01 percent are getting everything they want and the rest of the people know it. This patent “reform” and attack on information processing is just another example of it.

              Big picture: yeah, there is a problem with some junk patents being asserted by some bad actors. No doubt about it. But, this is only a pretext to burn the system down.

            4. NWPA,

              I note that a bit of the “blue sky is falling” is just your nature (and I have poked fun at you for that in the past), but if you understood history you would realize that for forever and a day the then-current mantra of every society – at each point in history – has that same notion that “society is coming apart.”**

              That too is human nature. More to the truth is that society is always in flux. Do not confuse the flux and those negative elements with a larger scale notion that society is coming apart. It is a bit of the ‘boy who cried wolf’ that lessens the effectiveness of the grains of truth that you do recognize and post on.

              ** – there is an historical lesson here too with the general failure of appeasement theory – note the Churchill/Chamberlain theme I draw upon. In truth, those that do not remember and learn from history are doomed to repeat it.

            5. anon, the history of civilization is flux–typically building up, golden age, and the decline and fall. Wipe out. Restart. Just like Rome. That is what we are seeing in the U.S. We are getting closer and closer to that wipe out stage.

            6. And, one final point anon. You keep saying I saying the sky is falling as if I am exaggerating the situation. However, the last time you did this, my statements were more mild than either Moore’s or Rader’s regarding Alice.

              Let’s fact it: you keep accusing me of this over the last several years, but the patent system has been getting worse and worse. And, from what I can see, it is about to get even worse.

              And, you know, if CJ Smith is stacking the board as I suspect in return for a big pay day in a few years, then we can kiss goodbye making the examiners behave.

            7. My “accusing you” should be tempered with my comment of “poking fun.”

              Yes – you do hit on some really serious issues. But you also do need to recognize what I posted: Every point in history claims that that particular point is at the critical downward spiral point.

            8. >>Every point in history claims that that particular point is at the >>critical downward spiral point.

              Well, I think it is apparent that we are in a downward spiral. I don’t think any of these points are the last straw or the “critical point.” I think we are in a tail spin and it would take a lot to pull out of it at this point.

  7. 2.2.3.1.1.1.1. Re: “it [IPR] shouldn’t be very expensive if it’s junk and you have the art and the argument.”
    Sorry, but it will be disillusioning for ex parte practitioners to discover the hard way that AIA post-grant proceedings are contested case TRIALS run by APJs, not examiners, and run very much like interferences, with similar unique and strict procedural and evidence requirements, dangers and costs, including declarations being subject to live cross-examinations. Not at all like either application prosecution or patent reexaminations. [But, still a lot cheaper than D.C. litigation, especially due to a lot less expensive discovery and very limited issues - asserted 102 or 103 from only patents or publications.]

    1. To answer another question you asked: Yes, if one small company is suing another small company competitor to get an injunction to put them out of business [sometimes this is even a personal vendetta by a small company controlled by an individual], not just a suit to collect damages, then that small company defendant is faced with a patent owner intending to take them expensively all the way to trial, not into a cheap settlement, and thus even small companies in that situation may well want to use an IPR.

      P.S. Sorry to harp on AIA IPR’s, but that is because I think they will provide more real patent litigation reform than any of the present pending legislative proposals with the possible exception of “limiting discovery until after claim construction.” It may even reduce the unfortunate current tendency of 103 issues being raised in a backdoor manner by 101 based summary judgments.

    2. Thanks, Paul.

      I don’t see any need for “live cross examinations” in the cases I’m thinking of. That would be an incredible waste of everyone’s time.

      I’m talking about the sort of junk we often discuss here. You know, complete garbage like “trouble shooting using a proxy server” sort of “innovations”. Bottom-feeding junk of the lowest order.

      Or are you suggesting that the blueness of the sky is contestable in these proceedings? Are they really a complete joke? Is that what you’re suggesting?

      1. I’m just trying to explain that if you think you can file a cheap simple IPR that merely more or less argues [with mere attorney argumentation] that “here is some good prior art and it will be obvious from this prior art content that the these patent claims are 103 invalid,” that IPR will simply get thrown out ab initio without any consideration.

      2. If you don’t see the need for that level of complication, ex parte reexamination is still available.

        Not filing an expert declaration leaves your case-in-chief exposed to the patent owner’s expert. Attorney argument is not going to fare well against a sworn expert as a matter of law. While you may then rebut the patent owner’s expert with your own, your expert may not buttress the prima facie case, merely tear down the patent owner case.

        If your case is so strong, you have no fears of the estoppel that arises from losing. Who knows, you may be right. Somehow I can’t yet bring myself to tell my clients that it will be ok if I do not use an expert. I will wait for your line of cases to show me the way.

      3. Oh, btw, when an expert declaration does harm to its own case, avoiding cross-examination can be smart: it leaves no chance to fix the problem.

        1. All good points Eric.
          Simple reexaminations used to be even cheaper before the big PTO fee increase. They are now only available ex parte [no response to anything the patent owner argues]. Also, the patent owner can get unlimited new [narrower] claims. Most disadvantageously of all, their sequential PTO CRU +Board proceedings have been taking way too long to get decided in many cases – not even before the related patent litigation trial dates, thus defeating their main purpose.

    3. “[I]t will be disillusioning for ex parte practitioners to discover the hard way that AIA post-grant proceedings are contested case TRIALS run by APJs, not examiners, and run very much like interferences, with similar unique and strict procedural and evidence requirements, dangers and costs, including declarations being subject to live cross-examinations. Not at all like either application prosecution or patent reexaminations.”

      Paul,

      A very astute and accurate characterization of these AIA post-grant proceedings.

    4. > Sorry, but it will be disillusioning for ex parte practitioners to
      > discover the hard way that AIA post-grant proceedings are contested
      > case TRIALS run by APJs, not examiners, and run very much like
      > interferences …

      This is exactly right. The costs of doing an IPR or CBM, while certainly less than full-blown patent litigation, are substantial. The preparation of the initial petition is an extremely costly process that has to be done with a very high level of meticulousness by experienced practitioners, and the way things are going, most petitions come with full-blown expert declarations. I’ve counseled several clients who obtained ‘quotes’ from several firms, and for the reputable ones, the costs of doing a fairly bare-bones IPR (e.g., one or two references, three or four claims) is a few hundred grand or so.

      1. The preparation of the initial petition … has to be done with a very high level of meticulousness by experienced practitioners

        Also true of patent applications … but they don’t cost hundreds of thousands of dollars to prepare. Even the really complicated ones don’t cost that much. Or at least nobody is ever charged that much …

        the way things are going, most petitions come with full-blown expert declarations.

        Again: if you’ve got a really close case I can see that. But if it’s just the typical junk that should never have been issued in the first place because the Examiner had his head up his arse or just got tired of arguing with a toxic applicant it shouldn’t cost more than a fraction of the quotes you are floating.

        Are these things being run like Examination-on-Crack, with the patentee allowed to kick up massive dustpiles and these Board judges just inhaling it because “freedom” or some such nonsense?

  8. If the purpose of ‘loser pays’ is to protect small businesses from those patent trolls, why don’t we limit ‘loser pays’ to cases where the defendant is a small entity ???

            1. Ah – I see – rational as in the Strict Scrutiny sense – I was using rational as in the logical rational sense.

              I still see a problem with any law that so tampers with due process based incomes of the parties involved. Do you have a “rational basis” in mind that would permit disparate treatment in seeking justice? As is currently the law, patent infringement is a strict liability type of offense, and there is NO class distinction even present. You actually have to first create a class distinction and then find some “rational basis” for disparate treatment – a double whammy and one not covered under any of the existing bills.

            2. LOL – I see that Malcolm is attempting to use his “Vinnie Barbarino” response here as some type of ‘evidence’ that “he really showed me“…

              What a T.O.O.L.

    1. With loser pay the big loser will always be the small entity. Either by losing and paying, or by paying for the risk that the small entity could lose. All others can afford to play the game and lose small in relation.

    2. The question is, if the loser pays provision is limited to accused entities with, say, less than US$10MM in revenues, will the patent maximalists and the patent bar support the provisions? The only reason to restrict it is to reduce the opposition it will rouse in order to pass the thing through congress.

      If nobody is going to step up and agree that the limit makes it totally acceptable to everyone who opposed it before, then why should the advocates give up the mild approval and support it gets from IBM and Google?

      1. Re the question: If a “loser pays” provision is limited to entities with less than $10M in revenues would it be supported?
        Clearly not, since this is supposed to be an anti-troll bill and a number of troll patent suits are by troll “shell” corporations assigned the patent for the suit, which have NO revenues, just an anticipated law suit settlement, and no assets other than a mailbox in E.D.TX and funding for litigation costs for the attorneys from the real party in interest .
        [That also poses a "how to actually collect from a loser'' issue which some of this draft legislation is struggling with.]

  9. and eliminating the “reasonably could have raised” provision; etc.

    Clear bait and switch tactic – thank you Big Corp lobbyists…

    1. Has anyone collected data on who has primarily been using PGR thus far? e.g., is it primarily being used by “BigCorp” to snuff out “little guys”, or is it being used by a more diverse group of entities?

      1. I’m not sure what you mean by “little guys.” Contrary to any anti-patent myth, since patent litigation is very expensive, few patent owners ever use patent litigation to try to squeeze “blood out of a [mere] turnip.” They sue large infringers for which there is a possibility of getting a substantial settlement for potential damages recoveries.
        As to your question, from what I have seen reported, PGRs has never yet been used [and are highly unlikely to ever be used much due to their severe time restrictions and estoppels], CBM’s have only rarely been used, and IPR’s have been widely used by almost any patent suit defendant getting honest counseling from their litigation counsel as to its vastly higher odds of success in presenting patent or publication prior art to Board APJ’s that will be understood as relevant to claims as compared to lay juries.

        1. I should have added this question, which would be a relevant test:
          Has anyone demonstrated a substantial reduction in the ability of “little guys” [sic] to obtain essentially free “contingent fee” patent litigation attorney representation, and/or PAE financing, to file patent suits against large infringers, since IPR’s became available to defendants? Or, have IPRs significantly impacted the proven business model success of PAEs such that PAE’s no longer attract investments from large private investors?

          1. There are really three categories of cases out there you have think about: (1) the “crap” cases, the multi-party cases that lack merit, assert invalid claims and ultimately settle for well under the cost of defense; (2) the “big-ticket” cases, the substantial cases involving real inventions that have some track record in the industry or through licensing (think companies like Tivo or Qualcomm); and (3) the “middle” of the road cases that fall somewhere between (1) and (2).

            Where I’m seeing IPR make a big difference is in category (3).

            Crap cases in category (1) continue to get filed in large numbers because an IPR is expensive and involves a lot of up-front costs in litigation. The crap cases that settle in the six-figure range will keep getting filed because, economically speaking, there are enough defendants who would rather pay to get rid of them than spend the money challenging the patent.

            Big-ticket cases in category (2) are not being affected all that much. I’ve seen patent holders in this category respond to IPR with a “bring it on” attitude, sometimes stipulating to stays of the litigation pending IPR. There is simply too much money in this category of case to be dissuaded by IPR.

            The middle-of-the-road cases are where, me personally, I am seeing a reduction in case filing. These cases are the ones where the plaintiff wants something around $5M or so. They’re not big enough to be big-ticket, but the licensing demands make litigating and fighting them worth the effort. These are the cases that present the largest risk from IPR because they don’t offer the possibility of big casino payouts, but they’re big enough to justify a vigorous IPR and litigation challenge.

            In my view, things like IPR will not really stop the crap from getting filed. The only things that will stop those are provisions for recovery of fees, etc.

            1. Nice comment, Lode.

              Re this: (3) the “middle” of the road cases that fall somewhere between (1) and (2).

              Which of the three groups is presently the largest, do you suppose?

              things like IPR will not really stop the crap from getting filed.

              If the PTO demonstrates that it can do its job competently and get rid of the junk efficiently then it will become an increasingly attractive option for everyone.

            2. > Which of the three groups is presently the largest, do you
              > suppose?

              That’s easy. In terms of the raw number of cases, the “crap” cases vastly outnumber the other two categories. This is because the NPE business model behind “crap” patents depends entirely on a large volume of suits. You’re talking about contingency fee lawyers filing poorly investigated claims against a large number of companies (with particular emphasis on the smaller companies), and trying to get very quick settlements without doing much work. The Complaints are cookie-cutter and largely identical from defendant to defendant, and you see dozens of companies settling these claims quickly, oftentimes before even filing an answer.

              This business model is, under current law, largely foolproof and irresistible. For the nominal cost of drafting a complaint, and paying the $400 federal filing fee, you get the defendant to cough to a couple hundred grand in a quick settlement. The return on investment is astounding, and for the filing contingency lawyer, this translates into an effective billing rate of, in some cases, tens of thousands of dollars per hour.

              Sorry to sound cynical, but I counsel small companies and start-ups that get crap patent threats all of the time, and the result is always the same. They go through the five stages — denial, then they get angry, then they want to fight, “send a message,” then they go through bargaining and acceptance. And ultimately they conclude, as they must, that they cannot sacrifice their limited funds (which they often need for R&D or just to make payroll) simply to fight a case where their best outcome is a victory at trial years later, with millions of dollars and countless hours of employee time spent, that they’ll never recover because of the high standard for fee shifting. So so they shell out the $250K settlement (or whatever), and go about their business.

            3. for the filing contingency lawyer, this translates into an effective billing rate of, in some cases, tens of thousands of dollars per hour.

              If this be true, then there is an existing mechanism to combat this scourge.

              While admittedly rather loose, see the ABA Model Rules of Professional Conduct, Rule 1.5 – unreasonable fee (total fee). Even on contingency basis, tens of thousands of dollars per hour cannot be considered ethical billing.

              As to your cynicism, would even the fee-shifting here in these bills be enough to compensate the larger opportunity costs of your small entity’s principles?

        2. You didn’t answer my question, Paul.

          I’m not sure what you mean by “little guys.”

          Small entities, as opposed to large entities like Google, Apple, Facebook, Merck, etc, who allegedy bought the legislation so they could steal everbody’s patents.

          Illumina, for example, recently won a IPR against Columbia University (the patent holder). Is that case an example of the nightmare scenario we should all be concerned about? You know, “BigCorp” stealing stuff from the “little guy”?

          since patent litigation is very expensive, few patent owners ever use patent litigation to try to squeeze “blood out of a [mere] turnip.” They sue large infringers

          That’s what the typical troll does, for sure. Last time I checked, though, lots of small companies compete with other small companies and patents are part of that competition.

          I asked a straightforward question. Someone probably has the straightforward answer already. I’m patient.

          1. You didn’t answer my question, Paul.

            LOL – gee, shockers, Malcolm. How about you answer some questions put to you instead of the typical non-sense non-answers from your stale script?

          2. MM, how can you equate patent claims held invalid under 102 or 103 in an IPR [on prior patents or publications completely missed by application examiners in very limited prior art searches] as “stealing patents?” Are you suggesting that universities should get a much greater opportunity to collect big damages or settlements for invalid patents than everyone else?
            If Board APJ’s are really miss-applying prior art or missinterpreting claims in IPRs the Fed. Cir. will soon put an end to it, because as patent owner with a real case is not going to fold at the PTO level.
            P.S. I also appreciated the personal observations of “Lode_Runner. ” However, I think IPR usage will increase further with more experience, just as did inter parte reexaminations. Unless there are a lot of claims to challenge, and a prior art search and filing of an adequately supported IPR petition can be done for not a lot more than $300K, that can be less than just a few weeks of litigation activity or discovery costs, or even less than many suit settlement demands, and can lead to faster and cheaper settlements.

            1. MM, how can you equate patent claims held invalid under 102 or 103 in an IPR [on prior patents or publications completely missed by application examiners in very limited prior art searches] as “stealing patents?”

              [eye roll]

              I’m paraphrasing the cries of the critics of the IPR regime (and the AIA generally) who view everything through the lens of the malicious BigCorp trying to destroy the mythical “small inventor” and take his/her precious innovation and trillion dollar entitlement away.

              Still waiting for the answer to my question. Not from you, of course. Just anybody. The question again: who are the people using these programs to challenge patents at the USPTO? Is it primarily “BigCorp”, half/half, or hardly “BigCorp” at all?

            2. Unless there are a lot of claims to challenge, and a prior art search and filing of an adequately supported IPR petition can be done for not a lot more than $300K

              Assume you’ve got the art in your hand already (because the PTO simply effed up the first time around), assume that all of the claims are going to fall with the independent claim (as is typically the case) or you don’t care about the dependent claims because you don’t infringe. Why in the world would it cost $300,000 to tank the patent this way? You know you don’t need to play pattycake with a patentee spinning a giant web of complete b.s. Once you’ve got the PTO’s attention and you’re holding him/her by the hand, the usual whack-a-mole games played by applicants are pretty easily swatted away. It’s not like you need two partners working full-time to get the job done.

      2. From what I have seen (and this is very limited), PGR-type filings are typically:

        1. directed to a single patent or small group of patents prior to licensing,
        2. used preliminary to a lawsuit to avoid particular claim interpretations, or
        3. used by the patent owner to refine patent protection.

        The rather high fees seem to be a way of the PTO shedding costs while still allowing patent holders and potential licensees/infringers to resolve some issues prior to proceeding with a lawsuit.

        The high fees take this out of the realm of independent inventors but do provide access to medium sized businesses attempting to negotiate patent issues.

        1. Stan, your points 2. and 3. have been more typical of reexaminations, but most IPR’s so far are reportedly for patents IN litigation [and meeting the IPR requirement of filing the IPR within a year of the complaint]. Also, PGRs, IPRs and CBMs are not available for patent owners, only ex parte reexaminations and “supplemental examinations” are.

    2. Eliminating “could have been raised” is not about “Big Corp lobbyists.” It’s about incentives. The fact is that under the “could have been raised” standard for estoppel, patent challengers are incentivized to dump a ton of prior art than is necessary into their petitions, or file a multiplicity of petitions instead of just one — all to assert a lot more grounds for fear that they’d either have to “use it, or lose it” in their post-grant proceeding. This places a huge burden on the PTAB, which had to deal with it in strange ways, like inventing a new “redundancy” ground for rejecting otherwise meritorious challenges that presented more work than they could handle.

      This is actually a very good change to the law, and frankly, it probably isn’t going to make that much difference on patent litigations generally. If a defendant challenges a patent in IPR or PGR and loses, for example, the patent holder will still be able to bring the challenge into evidence at trial. The defendant may not technically be estopped from asserting other grounds, but from a practical standpoint, it will likely be a de facto estoppel since the jury will believe that the defendant put the best stuff it had into the IPR or PGR challenge.

      1. The absence of “use it or lose it” plays directly to the Big Corp’s Infringers’ Rights handbook.

        See chapter 14.

        1. The [insert any rule which arguably makes it more difficult to threaten people with patent lawsuits] plays directly to the Big Corp’s Infringers’ Rights handbook.

          Fixed.

          We’re all out to get you, TB! BOO!!!!

          Plus I bought Lemley a really cool dark cloak to wear. Super scary. You’re going to have trouble sleeping at night between that and all the communists.

      2. Not to necessarily agree, but simply to point out that any estoppel change will have no effect on the 97%+ of patent suits that never get a trial, or the vast majority of patents that are not asserted until long after the first 9 months after they have issued and thus not even subject to a PGR.

        1. the vast majority of patents that are not asserted until long after the first 9 months after they have issued and thus not even subject to a PGR

          Post grant review doesn’t require a lawsuit, does it? Most companies try to keep an eye on their competitors and if they see some junk getting issued, they can choose to do something about it instead of waiting for the competitor to make a move.

          Another really fun thing to do is send the competitor’s attorney some art by registered mail with a note explaining why the art tanks their pending claims. Sooper dooper fun times!

          1. Paragraph 2 is a highly dubious assumption in many industries, both as to the extent of their “watch” for patents that may only affect future products and their willingness to start expensive legal action against a patent they have never even been threatened with. The continued non-use of PGR’s will be self-demonstrative.

            Paragraph 3 is cheap, easy and sometimes effective, but seriously risks the applicant citing that art and getting infringing claims allowed over it since you cannot in any way rebut any argument or declaration the applicant makes ex parte to allegedly distinguish it.

            1. Paragraph 2 is a highly dubious assumption in many industries, both as to the extent of their “watch” for patents that may only affect future products and their willingness to start expensive legal action against a patent they have never even been threatened with.

              But again: it shouldn’t be very expensive if it’s junk and you have the art and the argument. We’re talking about cleaning up after the PTO here. Teaching the Examiner to walk. If you are a business and you are infringing and you know the patent is junk and was intended to target your product, why continue to infringe? Is it going to be more expensive to tank with PGR, tank at summary judgment, or take a license (to a piece of junk)? Not to mention the cost of the continued uncertainty. Instead, force the patentee to watch the cost of prosecution swirl down the drain while you enjoy your freedom and the good feeling that comes from educating someone.

              Obviously, you can’t do much (and won’t want to) if you have no idea whether the patent will ever matter to you because you don’t know what you’ll be selling in five or ten years. That’s not the scenario I’m talking about.

        2. PGR will be most useful for pop-up continuation or divisional patents that could be added to a litigation where the litigation defendant would like to bring his 112 issues to bear. Obviously, a lot of strategy goes into such a decision regarding how the consolidation of the extra patent would affect the case calendar, the products at issue, etc.

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