by Dennis Crouch
In the America Invents Act (AIA), Congress created two primary new forms of challenging issued patents in an administrative trial setting before the Patent Trial and Appeal Board. The more popular form is Inter Partes Review while Post Grant Reviews have seen less interest. The comparative popularity appears to stem primarily from the fact that IPRs can be used to challenge any issued patent — including pre-AIA patents and patents issued years-ago. PGRs, on the other hand has two important timing limitations: (1) PGRs are only applicable to post-AIA patents (effective priority date > March 2013); and (2) a PGR petition must be filed within 9-months after the patent grant. That said, IPRs have a comparative downside: While a PGR may challenge patent claims on any patentability ground (except best mode), IPRs are limited only to anticipation and obviousness challenges based upon prior patents and published prior art.
The Covered Business Method Review (CBM) program is added as a layer atop IPRs and PGRs. CBMs can only be used to challenge patents directed to financial, non-technological business methods. However, like PGRs, those CBM patents can be challenged on any ground (including eligibility, enablement, and indefiniteness). Further, like IPRs, CBM petitions can challenge any patent regardless of its filing and issuance dates.
The CBM program is also Transitional — it sunsets in two years 2020 (no petitions accepted after that date).
Rep. Issa is heading-up hearings and a review of the program to consider whether the CBM program should be made permanent and potentially expanded beyond its current narrow scope. Issa has stated he sees the program as a more efficient mechanism for eliminating low quality patents.
In the recent hearing, three witnesses testified:
David Hale – TD Ameritrade. “Thankfully, the America Invents Act appears to have turned the tide [against abusive patent litigation]. Upon the implementation of the CBM process, TD Ameritrade has actively used the process to combat several of the low quality patents brought against it, bringing a total of eight CBM petitions. [Testimony]
John Neumann – Government Accounting Office. “Stakeholders we interviewed generally agreed the effects of the CBM program on innovation and investment have been minimal or mostly positive.” [Report]
Aaron Cooper – Business Software Alliance and former Chief IP Counsel for Senate Judiciary Committee. “Programs that target specific areas of technology – such as the Transitional Program for Covered Business Method Patents (CBM Program) – are detrimental to the patent system in general, and the software industry in particular.” [Testimony]
Watch the hearing here:
The hearing was interesting. All participants made questionable assumptions.
While the US government should not be giving out bogus claims to IP, to land, or to mineral veins, it is not clear what actual harm to the US economy a few patents do that should never have issued.
The GAO and the Congress should consider the whining of large incumbent corporations to be of no interest when it results from the belief of such corporations in their right to steal IP.
Capitalism is unstable and tends to wealth concentration that destroys the capitalist political economic system. The patent system provides small and gentle resets on the wealth concentration tendency. It does not really matter whether the patent should have issued vel non.
It is far from obvious that the post-grant proceedings are much less expensive than seeking a decision on validity in District Court.
If a streamlined procedure for validating claims is needed, a patent claim ejectment procedure is a better solution and constitutional unlike the post-grant proceedings.
Yet an observer can safely assert that the post-grant proceedings are creating chaos in the patent system and threatening the US economic system.
When a corporation becomes large enough to undermine the patent system, it is probably too large and is ready for breakup.
The patent system was corrupt long before the AIA.
I made a patent application for a completely statutory packet switching device, but senior patent officials ordered the examiner to reject the claims under the unlawful SAWS program without telling me that the application was in flagged in SAWS (a clear APA violation).
During examination I had to respond to completely dishonest rejections which encompassed every possible 101 rejection, almost every possible 112 rejection as well as silly and vacuous 102 and 103 rejections.
To guarantee the application would die in the CAFC, the APJs, who knew the SAWS status, lied in the Decision on Appeal in Ex Parte Martillo in order materially to affect the CAFC decision (18 USC 1001 and 18 USC 371 criminal violations). Although the application was fully public, the Decision on Appeal in Ex Parte Martillo was withheld from the FOIA reading room, and thus scrutiny of PTAB and USPTO crimes was less likely. I have determined that case of my application is hardly unique. The PTAB in the Appeal of the examination of the Martillo application consisted of three senior 101 experts. These APJs merit at least disbarment, and every single one of their Decisions on Appeal should now be suspect.
Ex Parte Martillo seems to be the last case that was flagged in SAWS in an Appeal from examination.
Crooked patent officials seem to have realized that the post-grant proceedings are much better for “bait-and-switch” con scams as we have seen in Telebrands v Tinnus PGR and Cirrus v Knowles Inter Partes Reexamination.
There is already more than enough public evidence for FBI and SEC to crawl all over USPTO records. USPTO corruption is a more appropriate topic for a Congressional hearing, and Congress should be considering bringing back pre-GATT patent law. Reexamination, if really needful — I have doubts, should be replaced by a patent claim ejectment procedure.
JM: The patent system provides small and gentle resets on the wealth concentration tendency.
Oh jeebus not this ridiculous bullc@rp again.
I have worked off and on in forensic accounting and statistics. We have learned to let the special agents know when someone (especially a possible shill) floccinaucinihilipilifies what the facts and some basic math and statistical analysis tells us.
The point I am making is simple. If I play heads or tails with 10 pennies in my pocket against someone that has 5000 pennies, I will lose my ten pennies in Gambler’s Ruin even if every coin toss is fair.
Samuel Clemens, neither an economist nor a mathematician, pointed out well over a hundred years ago that a fair game whether poker or a capitalist market sector has one winner.
[Morton Davis provides a basic introduction to game theory in Game Theory: A Nontechnical Introduction.]
Not all patent lawyers or patent agents are pro-patent system. Some represent clients that are strongly anti-patent and have the deep pockets for direct corruption or that can judiciously make use of the revolving door.
I have not yet researched where USPTO officials are going to work from USPTO, but I have identified at least one USPTO official that, after burying a patent application in SAWS, suddenly seemed to have a lot of money for real estate investments.
I doubt a corruption link between the USPTO and the federal judiciary, but I have noticed a suspicious case of at least one federal judge, whose family investments seem to have increased tremendously in value because of a number of his IP-related decisions. Drug patent cases have very rapid and large effects on big pharma stocks. Temptations must be immense.
Economists from Adam Smith to Thomas Piketty worry about wealth concentration or overaccumulation of capital within a capitalist system. The problem worsens once the patent system is destroyed.
Malcolm
Does
Not
Care
(no matter how much he may rail against “those with money” – he is simply anti-patent and ANY notion that patents – gasp – may help the less well-off and less already-established with its focus on innovation as a competitive force (as opposed to monied non-competitive factors) will simply not register with Malcolm.
Ever notice how his “preferences” go SO against the form of innovation most accessible to those without an already established war chest?
Interesting. Stock prices in tinfoil just skyrocketed.
One of the major complaints on blogs about post-grant trial proceedings has been plural such proceedings, where the patent owner sues plural defendants. The Patents Post-Grant blog today notes that the PTAB declared 2 cases to be “informative” on the meaning of “same or substantially the same prior art or arguments” as a basis for rejecting plural proceedings under 35 U.S.C. § 325(d): Kayak Software Corp. v. International Business Machines Corp., Case CBM2016-00075 (PTAB Dec. 15, 2016) (Paper 16), and Becton, Dickinson & Company v. B. Braun Melsungen AG, Case IPR2017-01586 (PTAB Dec. 15, 2017) (Paper 8).
As to ALL adversarial post-grant proceedings, recently my point that all patent owners need to maintain a correct current mailing address for any PG Petition service in the file of their patents was disputed.
They should read HTC Corp. v. J.A. Salazar, IPR2018-00273, and 37 C.F.R. § 42.105(a).
Are you saying that the normal requirements of service are diminished with 37 C.F.R. § 42.105(a)?
Keeping in mind (of course) that ACTUAL ownership listing is not a requirement at the Patent Office…
Although the additional fact that any such CBM must have as a precursor an actual suit in court mollifies the owner identification issue for proper service – for CBM’s – the other post grant review items do NOT carry that same weight, now do they Paul?
ESPECIALLY seeing as at least IPRs do not even require standing to be kicked off in the “Part-1” non-Article III forum.
You being taken to task previously (while you obviously still have hurt feelings over it) remains something that you should have been taken to task over.
Could you be a little more specific in regards to IPR2018-00273?
(I am not finding it at link to uspto.gov )
Shouldn’t the sun be setting on Issa already?
On our frozen h e ll sc @pe, we join forces again to defeat the Issa.
Of course, I do support him on this particular issue but, generally speaking, he’s a p 00 p stain.
The GAO study and report Dennis hotlinked above has some CBM statistics of interest.
Another limitation on CBM usage: one must be actually sued or charged with infringement of that patent to try to bring a CBM against it.
A primary advantage: 101, as well as 112, 102 and 103 issues, can be raised in a CBM if it really has at least on business method claim.
Thanks Paul:
Section 18(a)(1)(B) of the AIA specifies that a person may not file a petition for a transitional proceeding with respect to a covered business method patent unless the person or person’s real party-in-interest or privy has been sued for infringement of the patent or has been charged with infringement under that patent.
That is important to raise, Paul.
From what I’ve seen, what happens is that the patent is reamed with so many different CBMs that it has little chance of survival and if it does survive the CAFC will be glad to invalidate the claims for you.
NW, yes, a rare case where “the patent is reamed with so many different CBMs” could only occur where the patent owner has been suing or threatening to sue many different defendants. And it presumes no joinders and no adverse decisions in any one of them disposing of the others.
[In the five years CBMs have been available less than 400 in total have been requested.]
“[In the five years CBMs have been available less than 400 in total have been requested.]”
What a better indicator of the overblown “Tr011” hype could there be?
The microbe on the tail of the flea on the tail of the dog, wagging the dog.
Nope, the small number of CBMs is because of the severe subject matter limitation of CBMs [versus the alternative of IPRs] and the fact that many business method patent suits have been shot down on Alice 101 motions – not needing a CBM.
Expand the numbers as you may suggest to include those alternatives and then compare to the number of claims of issued patents in force.
Maybe something is wagging the microbe….
compare to the number of claims of issued patents in force.
Oh for goodness sakes this is beyond silly.
Tr 0lls are people, “anon.” Specifically, they’re people with junky patents who aren’t producing anything except lawsuits and “do it on a computer” patents and business method patents.
It’s the absolute number of tr 0lls and the abundance of junky patents that is the problem.
The fact that there are reasonable patent owners and reasonable patents out there doesn’t make the tr 0ll problem disappear. Your reasoning would apply equally poorly to, e.g,. gun violence. “Divide by the number of good things people do every day and voila! what me worry?”
Relative scale is important.
See the Katznelson expose on the White House “Tr011 Hunt” fallacies.
Sorry if this makes you “feel” somewhat diminished in your desires, but hey, the truth as to the scale really does matter (and implicates the “types” that you so often like to “rail” against – you know, the Banksters and the 1%ers).
That’s right Paul. From what I’ve seen patent owners that have tried to assert their patents with multiple D’s get a CBM from each of the D’s.
Just imagine the expense to the P to have to defend against 20 different CBMs.
Please provide citations. This has to be a rare exception, not the rule. You are talking hundreds of thousands of dollars for a CBM.
“Less than 400 in total” INCLUDES the artificial bloat induced by the AIA vis a vis non-joinder…
Pay no attention to that man behind the current (the wizard of oz to Dorothy)
Who were the stack holders that were interviewed?
Major original stakeholders in support of the last-minute addition of CBMs to the AIA were NYC banks via S. Schumer.
Big banks….
Odd bedfellows to the likes of Malcolm, eh?
Odd bedfellows to the likes of Malcolm,
[eye roll]
Credit unions use computers, too.
Obtuse.
Is it deliberate?
I think the number one contributor to Issa is Google.
Comments are closed.