Legislation to curb abuse of post-grant proceedings?

There’s an article here, and it refers to an article in the Columbia Science & Tech L.J., here, about perceived abuse.  The article cites to a survey it conducted that shows 25% of lawyers know of abuse.

The other side of the coin.

On a larger scale, it is quite odd to have the PTO saying, over and over again, that it got it wrong by issuing a patent.

About David

Professor of Law, Mercer University School of Law. Of Counsel, Taylor English Duma, LLP. Former judicial clerk to Chief Judge Rader; former lawyer with Baker Botts and other firms

22 thoughts on “Legislation to curb abuse of post-grant proceedings?

  1. 8

    The new IPR system allows the patent owner to respond to a request prior to a decision on whether to authorize the IPR. In contrast, the ex parte re-examination system does not allow the patent owner to respond prior to the decision to order re-examination. Thus the patent owner in an ex partake re-examination cannot demonstrate to the examiner that the request includes fraud.

    Furthermore, even if later the patent owner successfully defends the re-examination and has his claims confirmed, neither the courts nor the patent office will allow an examination of the fraudulent conduct committed by requesters on the basis that the examiner can actually read the references for himself and make the call. What we need of course is the ability of the examiner to deny a re-examination request on the basis that the request includes fraudulent material and misrepresentations of fact.

    While the rules require that IPR requesters be licensed practitioners, the rules do not require that ex parte requests be filed by licensed practitioners. Thus, the patent office may not have jurisdiction to discipline fraud committed in the filing of an ex parte re-examination request where the filing was made by an attorney who is not a PTO-licensed practitioner.

    When there is opportunity for abuse and fraud without penalty, can anyone seriously doubt that such abuse and fraud does not take place?

  2. 7

    In reply to a comment, YES, I do have personal knowledge having had five (5) ex partes filed against my patents over 15 years. All five ex parte requests mirror the responses from the survey. The most frequent violation of Rule 11.18(b) being entire paragraphs created that do not exist in the prior art reference. Second most frequent violation of PTO rules is back-dating prior art references that do not quality. Then the requester makes their arguments based on these false paragraphs, creating the impression the prior art reference taught the invention. In four of the ex partes (filed by competitors) 100% of the claims were confirmed after alerting the examiner of the fraud. The fifth ex parte is currently being examined with all but one claim already confirmed 100%. YES, the violations were reported to the PTO. The ‘attorney argument’ point is wrong, because the attorney argument is based on absolute false submissions. In many licensing negotiations I have been confronted with companies saying, “If you don’t license on OUR terms, we will throw you into reexam”, as a consequence of no penalty for this deceit. Spending hundreds of thousands of dollars just to defend against unwarranted ex parte requests is deadly to the patent system. I was not part of the survey, none of my ex parte violations comprise the survey results, although I would be happy to add my experiences to the survey findings. Also the notion that the survey should have asked the attorneys who filed the fraudulent requests for balance – is like asking the fox to guard the Hen-House ! Does the person posting that comment expect the attorney who committed the fraud to happily report that fact ? Not knowing if his admissions of committing fraud on the PTO ‘might’ be reported for an official investigation ? In summary, I have actual evidence of numerous violations of Rule 11.18(b) that if committed by an applicant seeking a patent would result in either the patent being revoked and/or inequitable conduct charges. But since no penalty is available for attacking valid patents with false allegations resulting in ‘tricking’ the PTO into granting reexam, the competitor has accomplished his goal of causing the patent owner harm, in view of the historical background of OED.

    1. 7.1

      Thanks Larry.

      You mention that you reported them to the PTO. Did you likewise report them to the state bar and its ethics committee?

      You are not entirely correct in stating that there is no penalty.

  3. 6

    Yeah, I know it’s a resource allocation issue. But I think my point’s still valid, ESPECIALLY about 101 (which I don’t think is a validity defense, anyway). It’s odd for a government agency to give someone a property right, presumed by Congress valid, but then to allow multiple attacks on it.

    Odd.

  4. 5

    The comments above about the survey indicate they did NOT read the survey. The survey cited specific examples of back-dating prior art, false translation of foreign patents, etc. This is factual evidence available to be read in the reexam files. The comments above fail to realize that 20% of ex parte reexam challenges are decided in favor of the patent owner, with 100% of their challenged claims confirmed, certainly indicating the ‘challenge’ was suspect. More than that, the survey explains its results are nearly identical to other surveys (finding fraud being used by bad actors) in other professions such as financial services industry.
    Pretending it doesn’t happen in the patent world is naive and indicates a lack of knowledge of the patent system. There is competitor abuse hiring unscrupulous attorneys to cause patent owners time and expense in just defending their patents. Again, anyone truly reading the survey will see it is backed by a huge body of evidence. Denying the obvious, (fraud on the PTO in post-grant review) is endorsing fraud on the PTO and the patent owners who invest valuable time and money in pursuit of their ideas and inventions. After 35 years of day to day involvement in the U.S. patent system, I found the survey results about what myself and many others expected. It just confirmed our beliefs.

    1. 5.1

      Larry,

      A question for you – and not meant to impugn your view at all – did you have personal knowledge of this proof? Did you act in accordance with the ethical rules for reporting the known fraud of another in view of your knowledge of this proof? Did opposing counsel?

      It is one thing to QQ and say “don’t be naive, don’t ignore reality” and quite another when the duty to report another is shirked. In your 35 years, have you ever reported another?

    2. 5.2

      The comments above about the survey indicate they did NOT read the survey. The survey cited specific examples of back-dating prior art, false translation of foreign patents, etc. This is factual evidence available to be read in the reexam files.

      No, the survey tallied reports of back-dating prior art, false translation of foreign patents, etc. These are certainly allegations of facts, but the survey itself provides nothing that is verifiable. It’s also the case that the reports of specific misconduct that are of the sort that are objectively verifiable were only a small number of the total reports, as in one allegation relating to “false translation” and six relating to publication dates. The majority of reports were of things that have a large subjective components, such as “baseless” or “frivolous” arguments.

      I’m by no means saying that there is no attorney misbehavior in reexaminations. Instead, I’m saying that the survey’s 25% number is meaningless, given the major flaws with the methodology.

      The comments above fail to realize that 20% of ex parte reexam challenges are decided in favor of the patent owner, with 100% of their challenged claims confirmed, certainly indicating the ‘challenge’ was suspect.

      If by “suspect” you mean “abusive,” then that’s ridiculous. Are you suggesting that the losing side in every civil proceeding abused the process? According to your figures, 80% of the ex parte challenges are decided in favor of the challenger – does that indicate that the patent owner’s prosecution of the patent in each of those cases was abusive? Of course it doesn’t.

      It just confirmed our beliefs.

      I suppose that’s the best kind of survey, isn’t it?

      1. 5.2.1

        LB, take a look at an earlier article cited in this one evidently by the same guy (Mercado, The Use and Abuse of Patent Reexamination, 12 Colum. Sci. & Tech. L. Rev. 92 (2011)). There were some case studies that actually delve into more substantive allegations than just the reports in the survey. Also take a look at the Total Containment case cited there too, where the court found the defendant-requester withheld information about a prior art reference in reexam. Total Containment, Inc. v. Environ Prods, Inc., 921 F. Supp. 1355, 1378 (E.D. Pa. 1995). Interesting stuff. Don’t know what to make of the 25% number but can’t say it’s meaningless. Something’s going on.

  5. 4

    On a larger scale, it is quite odd to have the PTO saying, over and over again, that it got it wrong by issuing a patent.

    This statement represents a fundamental misunderstanding of what examination is. We do (hopefully) the best search we can in the limited time allotted, and if we can’t then reject your claims, you get a patent. This does not mean that we have searched every last piece of prior art, or that we were aware of some fairly obscure prior use, or that nobody will ever be able to come up with something better. In fact, when tens of thousands of dollars are behind a single prior art search, it’s to be expected that in many cases, someone is going to find something that we’ve missed.

    While I’m on the topic, presumption of validity is a (bad) joke. It may seem like a way to prevent chaos in the patent system, but it really just indicates that no Congressperson has ever talked to a patent examiner to find out what the job really entails and what the maximum reasonably expected quality of the work product should be.

    1. 4.1

      That all is perfectly reasonable, apotu. Of course, the PTO gets it wrong, over and over again – it examines hundreds of thousands of applications each year, with limited resources. It would be impossible to design an error-free examination process, and it would be prohibitively expensive to even try.

      1. 4.1.1

        Lemley had an interesting article on the mandatory trade-off between perfection and processing.

        That being said, the presumption of validity remains one of the reasons why the US patent system invigorates innovation far better than any other patent system in the world.

        we really need to put this entire “Troll” thing in proper perspective.

        1. 4.1.1.1

          the US patent system invigorates innovation far better than any other patent system in the world.

          Because you say so? How do you measure the amount of “innovation invigoration” caused by the presumptiono of validity?

  6. 3

    The article cites to a survey it conducted that shows 25% of lawyers know of abuse.

    The survey is ridiculous. The author solicited input only from attorneys who represented patent owners in reexamination proceedings. It’s hardly surprising that 25% of them said that the opposing parties misbehaved. The survey is also subject to self-selection bias, since only a small fraction of those contacted responded. Who is most likely to respond to a survey like this – perhaps the attorneys who recently lost and felt particularly aggrieved? If you surveyed the attorneys for the challenging parties and asked them if the patent owners’ representatives engaged in misconduct, you would likely get similar results. All of which proves nothing except that attorneys are humans and tend to think of their opponents in adversarial proceedings as “bad.”

    Further, I note that the most commonly alleged misconduct was “baseless or frivolous arguments.” How many advocates DON’T think that their opponents advance baseless or frivolous arguments?

    This survey is of zero value in assessing whether post-grant proceedings are being abused in any significant manner.

    1. 3.1

      I would add to Leopold’s statement and wonder just how many of the 25% followed up on their “knowing” by reporting these known transgressions to the bar authorities as is our duty?

    2. 3.2

      Sure, there could be some selection bias here, but the survey also reports a lot of people expressly declined to participate because they found the issue way too sensitive. So there could be some undercounting going on at the same time as overcounting, hard to know. The survey also points out that the 25% number is nowhere near what you’d expect if you were doing a survey on inequitable conduct. If there were severe selection bias here, wouldn’t we expect the numbers to be way higher? So I wouldn’t dismiss these results out of hand.

      In a study on Rule 11 filings the number one allegation was baseless arguments as well, but do we really think that Rule 11 is too robust or being invoked too often?

      No question more work’s got to be done but then again when there isn’t an open mechanism for dealing with this stuff (beyond the mysterious workings of OED), how are we supposed to know what’s going on? We’ve got to be careful making claims about “abuse” but I definitely don’t think post-grant proceedings are immune from it.

    1. 1.1

      Derek,

      Without judgement, wouldn’t such “minimal standing” be in direct opposition to the recent tightening down of the “far-too-easy” plague of mere accusations of inequitable conduct?

      1. 1.1.1

        Anon, not sure I follow. Can you elaborate? The standing requirement I proposed would limit the general public’s ability to request a review at the PTO. I don’t see how it would affect the patentee’s duty of disclosure or inequitable conduct in general. But I could be missing something.

        1. 1.1.1.1

          The error is mine Derek, as I read your post as making it easier to have standing – not the opposite. I read the ‘standing’ requirement in trademark law to be ridiculously easy to meet.

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