USPTO Director Issues Sanctions for Abusing IPR Process in OpenSky/VLSI

by David Hricik, Mercer Law School

The October 4, 2022 presidential decision awarding sanctions against OpenSky LLC and its counsel is here.  There are several amici briefs that went into this order which is a doozy.

Boiled way down, after VLSI obtained a verdict for $675 million against Intel, OpenSky was formed and, according to the Director, was formed solely to file an IPR petition that it copied from one that Intel had previously filed, but which had not been instituted based on the Finitiv factors.  The petition included copy of Intel’s expert’s declaration from it. Later, Intel joined the petition.

Then, OpenSky sought money from both Intel (or it would abandon/not zealously pursue the IPR, and so not save Intel from potential damages) and VLSI (or it would do so, and so jeopardize the judgment VLSI had obtained).  As the order found (because OpenSky refused to provide discovery as ordered by the Director):

In other words, in the absence of contrary evidence due to its discovery misconduct, OpenSky’s behavior and complaints about budgeting establish that it did not intend to pursue the patentability merits but instead intended to leverage the IPR’s existence only to extract a payout from one side or the other.

The Director, among other things, barred OpenSky from actively proceeding but permitted Intel to become the active petitioner, thus arguably permitting Intel to benefit from OpenSky’s wrong-doing, but allowing it because there was no evidence Intel had participated in its wrong-doing. However, Intel is required, on remand, to show a compelling case that institution had been proper.

That is a gross oversimplification, but… wow.

About David

Professor of Law, Mercer University School of Law. Formerly Of Counsel, Taylor English Duma, LLP and in 2012-13, judicial clerk to Chief Judge Rader.

One thought on “USPTO Director Issues Sanctions for Abusing IPR Process in OpenSky/VLSI

Comments are closed.