Locking in the Rules at the PTO

President Trump’s administrative agencies are working hard to lock-in policy changes before the major shift expected in January.  The Patent Office is no different. The changes here (except those implementing court precedent) are ones that the next administration could change, but the implementation Final Rules and Precedential Decision create administrative hurdles.

Final Rules on PTAB Practice: A new set of final rules has now been published and will become effective on January 8, 2021. [Rules].

  • Eliminating Presumption in Favor of Petitioner’s Evidence: During the institution stage, there is currently a presumption in favor of the petitioner involving testimonial evidence. 37 C.F.R. § 42.108(c) states that “a genuine issue of material fact created by such testimonial evidence will be viewed in the light most favorable to the petitioner solely for purposes of deciding whether to institute [a] review.’’  The change eliminates that presumption and going forward the Board will simply consider and weigh all presented evidence according to the institution standard.
  • Right to a sur-reply: this rule provides the patentee with the right to get-in the last word in the institution-stage briefing.  The new rules also allows the patent owner to respond to a decision to institute.  These changes have already been adopted by the Board, but are now codified within the Rules.
  • SAS: The new rules also implement the requirements of SAS barring partial institution (either all challenged claims are reviewed, or no claims are reviewed).

[Rule Change]

New Precedential Decisions: The PTAB (operating under the guidance of Dir. Iancu) has designated three recent institution related decisions as Precedential.  These decisions are important for locking-in the Board’s approach because the Federal Circuit no longer has authority (Thryv) to guide the scope and procedure of IPR institutions.

  • RPX Corp. v. Applications in Internet Time, LLC, IPR2015-01750, Paper 128 (Oct. 2, 2020) (precedential) (Finding that Salesforce is a real-party-in-interest of RPX, and thus that RPX is time-barred from petitioning for IPR).
  • SharkNinja Operating LLC v. iRobot Corp., IPR2020-00734, Paper 11 (Oct. 6, 2020) (precedential) (Board only needs to resolve real-party-in-interest disputes that would impact the time-bar).
  • Apple Inc. v. Uniloc 2017 LLC, IPR2020-00854, Paper 9 (Oct. 28, 2020) (precedential) (Denying institution/joinder of Apple’s copycat petition as a serial challenge; applying the General Plastics model.)

[PTO Description and Links to Cases].  It is easier for the next admin to make changes to these precedential decisions than it is to change rulemaking, but would at least be done in a public manner.

 

45 thoughts on “Locking in the Rules at the PTO

  1. 3

    Re: “SharkNinja Operating LLC v. iRobot Corp., IPR2020-00734, Paper 11 (Oct. 6, 2020) (precedential) (Board only needs to resolve real-party-in-interest disputes that would impact the time-bar).”
    But, may we assume that if claims not cancelled in an IPR are in suit or later sued on in a D.C., that the patent owner can with D.C. discovery show that the real party in interest is the suit defendant and is thus subject to IPR estoppel against raising any invalidity defense that could reasonably have been raised in the IPR? Would not this Board-precedent-decision otherwise encourage “straw man” IPRs?

        1. 3.1.1.1

          Yes. They are listed as a sponsor. I do not know if that is separate from any ongoing guest columns.

          I will note though that being a paid sponsor there does not shield them from criticism, as the organization is routinely (and rightfully) pilloried.

          1. 3.1.1.1.1

            I was referring to their guest columns.

            What type of companies are their typical members/clients?

            1. 3.1.1.1.1.1

              “What type of companies are their typical members/clients?”

              Easy answer. Those companies which prefer to have a proxy do their dirty work of stealing / keeping the innovations of others for themselves.

              More specifically, they are industry / field agnostic; with membership open to all those willing to pay their fees.

              Money over morals.

  2. 2

    The term “lock in” is completely misleading, and actually obscures the problem with too much empowerment of an Executive Branch agency.

    There is literally nothing that Trump can do now that cannot be — simply — undone under ANY next Party holding the Executive office.

    1. 2.1

      “There is literally nothing that Trump can do now that cannot be — simply — undone under ANY next Party holding the Executive office.”

      While likely correct, tougher to move a cornerstone already in place . . . than to pour a new one.

      Plus, any attempts at cornerstone-moving will have to be done in the bright light of day . . . providing innovation-protecting stakeholders ample opportunity to challenge any such moving attempts.

      1. 2.1.1

        Except not – and several fronts.

        One, we are talking about Executive Branch changes. There is NO “we can challenge” to any reversion of what is currently being implemented based on the fact that the current implementation is not challengable.

        Two, you miss the larger point that in putting so much power into the Executive Branch, we have implicated Separation of Powers issues vis a vis Statutory laws (this is a far more nuanced position, so I don’t ‘ding’ you so much for missing it).

        1. 2.1.1.1

          “One, we are talking about Executive Branch changes. There is NO “we can challenge” to any reversion of what is currently being implemented based on the fact that the current implementation is not challengable.”

          Executive Branch challenges or not, still tougher to re/move that which is already in place.

          “Two, you miss the larger point that in putting so much power into the Executive Branch, we have implicated Separation of Powers issues vis a vis Statutory laws (this is a far more nuanced position, so I don’t ‘ding’ you so much for missing it).”

          Chuckles. Miss the larger point I didn’t — and I agree that Sep of Powers is the most important issue at hand (‘ding’ on my friend! :-)

          1. 2.1.1.1.1

            Executive Branch challenges or not, still tougher to re/move that which is already in place.

            No more — and importantly, no less — difficult for the current administration to be making the change NOW.

            It’s just NOT the big deal that you are making it out to be, AND you continue to miss the larger picture that BECAUSE it is not such a big deal, one is introducing an “at a whim” Executive Branch” level of ‘control’ over what is supposed to be Statutory law.

            So even though you say that you are not missing the bigger picture, by preserving is attempting to make the Executive move ‘difficult to undo,’ you ARE missing the bigger picture.

            1. 2.1.1.1.1.2

              Ugh. Again; missing the big picture I am not.

              And donuts-to-dollars, the Biden admin will neither remove / abrogate — nor modify — any of these new rules or prec decisions.

              1. 2.1.1.1.1.2.1

                Ugh. Again; missing the big picture I am not.

                Ugh right back at you, if you insist on some non-present ‘difficulty,’ AND miss out on why such an absence f difficulty creates a Separation of Power issue then, ye, you are indeed missing the big picture.

                You not missing the big picture would be BOTH you recognizing your initial position is in error AND why that error brings to bear the larger issue.

                You may be thinking this – but such is just not in evidence.

  3. 1

    “President Trump’s administrative agencies are working hard to lock-in policy changes before the major shift expected in January.”

    Before the major shift expected in January? WTAF, Dennis?

    1. 1.1

      SV has its boy uncle Joe in office.

      My prediction is that patent value will drop 25% at least in the next four years.

      What I am seeing is clients shifting their portfolio dollars to China and the EPO and de-emphasizing the USA. Actually, it is so bad with some corporate clients that they are actually starting to use Chinese patent attorneys because they feel China is a more important market and then filing those applications in the USA too.

      There was some reversal with Trump in that patent value climbed back up some during the Trump administration, but basically we are very near the tipping point in the USA.

      The corporate budgets are shifting to other markets for patents.

      1. 1.1.1

        From what I’ve seen they just feel like a USA patent is unenforceable. They seem to want USA patents still but put the big money at the EPO and China where they feel there is a chance of enforcement.

        We are kind of like how corporations file in Korea/Japan but don’t put too much money into it. That is what is happening to the budget money. Litigators are saying that the USA is worthless to try to enforce.

      2. 1.1.2

        And yes this is just anecdotal evidence from my practice.

        We see US patent applications originating from the USA continuing to drop.

        I still think we will see a 40 % drop over the next 5 years. Watch out for that bottom. Corporations are cut throat. As soon as they think something is a waste of money the money is pulled to make the Wall Street numbers that quarter.

        The USPTO is in for some big changes. I’d recommend a 50% reduction in their salaries to start with.

        1. 1.1.2.1

          A 50% drop in salaries will NOT provide any saving grace.

          All that such would do would be to hasten the de ath spiral.

        2. 1.1.2.2

          “The USPTO is in for some big changes. I’d recommend a 50% reduction in their salaries to start with.”

          Thank you so much for sharing your compensation and budgeting experience with the PTO. We’re awfully confused about what’s happening in the world, somehow from January 2020 to October 2020 we increased the number of examiners by 200! Whoops! Would you be willing to come on board in the field of human resources? Based on your recommendation, it’ll pay around $30k.

          1. 1.1.2.2.1

            Yes Ben I realize that. But the applications have been coming from China to make up for the loss of innovation in the USA.

            And that supply of applications is not stable.

            1. 1.1.2.2.1.1

              “And that supply of applications is not stable.”

              Anything Xi says is stable from his slaves is stable bro.

                1. I hear ya anon, but yeah I think it’ll be fairly stable increase tbh even for “us”.

                  And yes beijing biden as he’s known will bene us with his ties perhaps.

        3. 1.1.2.3

          Are you speaking of EP national stages based on US apps continuing to drop? US origin applications have doubled over the last twenty years, and have been pretty stable, and the same applies to foreign origin applications. At least according to the USPTO. link to uspto.gov

          Maybe there has been a drop in a particular sector?

          1. 1.1.2.3.1

            DC, the number of applications that are filed based on US inventors has dropped. “over the last 20 years” is not relevant. What is relevant is post-AIA/Alice.

          2. 1.1.2.3.2

            Why do I get these some questions each time I say it?

            The numbers say the number of applications from US inventors has dropped over the last three years. The expectation is a continuing drop.

            What has happened is CN has plugged the hole for now for the PTO. I don’t think that is saying much for the USA innovation.

            Again, the people that make the publicity are the ones with SV megabucks. So the real news is seldom reported.

            1. 1.1.2.3.2.1

              “The numbers say the number of applications from US inventors has dropped over the last three years. The expectation is a continuing drop.”

              There was a 3% drop between 2017 and 2018, and a 0.5% drop between 2016 and 2018.

              link to uspto.gov

              I am curious what the 2019 numbers will be (apparently they’ll be released around April) and what they’ll suggest about the slope of the trend, but it’s not exactly DEFCON 1 yet.

                1. The 3% and 0.5% numbers were calculated off the column labeled “Utility Patent Applications,
                  U.S. Origin“.

                  That column contrasts the column “Utility Patent Applications, Foreign Origin“.

              1. 1.1.2.3.2.1.2

                Ben,

                It is too bad that those stats do not correct for large multi-nationals who are merely nominally “US” (but who do not have the same allegiance factor as an entity – small org or individual – that truly does for the US.

        4. 1.1.2.4

          “I still think we will see a 40 % drop over the next 5 years. ”

          “The USPTO is in for some big changes. I’d recommend a 50% reduction in their salaries to start with.”

          Lelz. You’ve said this for 20 years. Why would it be the case now?

        5. 1.1.2.5

          “The USPTO is in for some big changes. I’d recommend a 50% reduction in their salaries to start with.”

          In all seriousness, you should be aware that if the PTO had a massive and prolonged drop in applications/maintenance income, they would not cut salaries by X%. They would cut staffing by Y%. Less work means the PTO needs less people to work, not that their people will work for less.

          Further, that is exactly what you want as a PTO customer. If you slash Examiner salary, you will lose a lot of people with the loses being concentrated amongst those who have options (likely correlated with general competence). The reduction-in-force protocols might cull some low-seniority competence, but it’d effect the competence of the workforce much less than a general pay cut.

          Even better, if I was charged with dealing with a longterm budget shortfall, I’d hire a huge number of RQAS detailees, makes some small adjustments as to how cases are reviewed so as to produce better evidence for probation/termination, and then just work through the bottom Y% of examiners over a few years. No sign of this, yet!

          1. 1.1.2.5.1

            Actually, Ben, my 50% salary cut was tongue-in-cheek, but the point is that as patents become more like junk paper in the USA that it is simply not worth hiring skilled people to deal with patents.

            We are moving to where probably a registration system with maybe an automated search on the claims is best and then an IPR if you want to assert your patent or license it.

            I know you feel nice and comfy safe because CN has made up for the short fall it the USA and because the effects of the AIA still haven’t worked their way through the corporate system.

            I see these things from a trench level where I have friends who know people in the government in China. Remember I said way before anyone else that China was going to radical reform their patent system. My friends told me this. I also see the corporate people where their disenchantment with the US patent system continues. It is all a matter of reaching a tipping point where they would rather enforce the patents in other jurisdictions and see the USA as a place that doesn’t have a viable patent system.

            We are close to that. And if Chien gets another Trade Secret bill passed, then boy watch out.

            Anyway….and 6, I have not said that for 20 years.

            1. 1.1.2.5.1.1

              “We are moving to where probably a registration system with maybe an automated search on the claims is best and then an IPR if you want to assert your patent or license it.”

              I think that this very well might be preferable to a system with insufficiently funded examination. Cheers!

              You’ll probably characterize the above as anti-patent, so I’ll also note that I’d even more prefer a PTO generously funded at the taxpayer’s expense providing fee-free examination to applicants. Underfunded examination, constrained by applicant fees seems to me to be a local minima. Escape is more important than the direction.

            2. 1.1.2.5.1.2

              Actually, Ben, my 50% salary cut was tongue-in-cheek, but the point is…

              Meh, I think that the counter point presented was merely geared to your ‘tongue-in-cheek’ missing.

              As to whether or not we are moving to a registration system, I DO recall a certain someone (me) making comments to that effect quite a few years ago now (AND in the process saving innovators that currently support the bloated? Patent Office ANNUAL tab of several BILLION dollars).

              As I have noted a BETTER functioning registration system could be had for literally hundredths of penny’s on the dollar compared to the (innovator-paid) examination system.

              It is usually at this point that the likes of Greg “I Use My Real Name’ DeLassus pipes up about the costs of lawsuits, and how examination largely prevents those costs (or some such).

    2. 1.2

      Are you questioning whether there will be a major shift under the Biden administration, or are you questioning whether there will be a Biden administration?

      1. 1.2.1

        If that question is directed to me I’m wondering WTF Dennis chose such mealy mouthed language instead of just saying “…before Joe Biden is inaugurated.” Is Dennis afraid of upsetting Trumpanzee snowflakes?

        1. 1.2.1.1

          Ah, I think the “major shift” is supposed the be the Biden administration’s attitude/policy, rather than the Biden administration itself. You could have a change of administrations without the PTO being terribly affected after all. Also, we don’t seem to have had any Kraken whisperers here, so I doubt Dennis is afraid of loosing that audience.

          1. 1.2.1.1.1

            I actually agree with Ben. It is possible that for whatever reason including just shear negligence that nothing much will change.

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