Apple Inc. v. Vidal (Supreme Court. 2023)
Under former director Iancu, the USPTO created a set of guidelines allowing the PTAB to deny IPR institution even in situations where the challenger raises strong challenges. These discretionary denials are known as Fintiv guidelines based upon the precedential case of Apple Inc. v. Fintiv, Inc., IPR2020-00019 (P.T.A.B. 2020). The statute appears to provide the USPTO Director with discretion in at least two key ways: (1) The statute does not expressly require institution but rather sets the reasonable-likelihood of success as a minimum threshold for granting institution. (2) The statute also indicates that the decision of whether to issue is non-appealable, suggesting a discretionary approach.
A group of five large companies led by Apple then sued the USPTO in the N.D. Cal. — arguing that the discretionary denials were in violation of the Administrative Procedure Act (APA). These five companies all regularly face patent infringement allegations and want a smoother path to invalidating the claims via IPR and PGR.
The district court dismissed the APA case and that was largely affirmed on appeal (although the Federal Circuit did ding the USPTO for failing to follow notice-and-comment procedure). See, Jordan Duenckel, IPRs and the APA: Review of Director’s Discretion to Initiate IPRs, Patently-O (March 15, 2023).
In a recent filing, the plaintiffs have indicated that they are planning to petition the Supreme Court to hear the case. The new filing is a request for extension of time until August to file the petition for writ of certiorari.
In the background, Dir Vidal has moved forward with her Advance Notice of Proposed Rulemaking (ANPRM) for potential PTAB reforms that place some limits on discretionary denials, but not to the extent Apple would like. The forthcoming brief is likely argue that the Federal Circuit’s ruling has led to the PTO signaling interest in adopting rules that would contradict the America Invents Act (AIA) and that fail to adequately address concerns.
Meanwhile, comments on the ANPRM are due June 20, 2023.
Big tech is entitled to unlimited tries to invalidate patents in at least three different venues. There can be no restraints. What big tech wants, big tech gets.
“Capture” is not a new concept.
As opposed to applicants getting unlimited tries to getting claims that cover competitors products through continuation practice.
Or divisionals.
You do know how the “no new matter” rule works, right?
+1. The no new matter restriction … is of no matter .. to those unwilling to accept how the U.S. patent works.
Surprised we are not.
And yet, you have a select few (common) posters that would decry the term “anti-patent” and pretend that such a term has no meaning.
Yes, Greg is one of the ring leading deceivers of that group.
Everyone knows how the “no new matter” rule is *supposed to* work. In the real world, that’s not what happens: Examiners turn into rubber stamps at the second or third continuation in the family.
The way “no new matter” is supposed to work is the way it works for substitute claims in IPRs, but that is not always the way it works in ex parte prosecution, where no adverse party is checking back through the spec for every added or removed claim element. Nor does it affect the U.S. practice of adding continuation or divisional claims years later that are drawn as narrow as possible to avoid prior art [including prior art cited in later litigation] without adding new matter yet reading on subsequent products. This “late claiming” is legal in the U.S. It was referred to re one such case as “claims written from the catbird seat.”
You appear to be speaking to two very separate and different issues:
1) not working properly (no one checks); and
2) working properly (but somehow you are not ‘liking it’).
As for 1), that would be unfortunate and diligent practitioners will of course attempt to NOT do as you indicate (couple this with the Office falling down on the job — as it IS their job to do the policing).
As for 2), your whine does not impress me much, as we have plenty of rules guiding any expansion (plus, competitors KNOW FULL WELL what is in the four corners to which any ‘catbird’ could dwell – as well as knows whether or not an active application exists).
The flipside is also true: “inventors” know full well the universe of prior art and thus are on notice of what’s out there that could invalidate their patent.
The whine that defendants will use the fora that are available to them to invalidate questionable patent claims “does not impress me much.” Especially when those claims were drafted based on an analysis of their products – a scenario that I litigate all the time.
Absolute nonsense:
“The flipside is also true: “inventors” know full well the universe of prior art”
You clearly have never been on the inventor’s side of the table.
Re: ” “inventors” know full well the universe of prior art.” Most U.S.* inventors are in corporations and do not do their own patent searches or maintain prior art studies. A high percentage of original application patent claims need to be narrowed in prosecution to avoid prior art, especially patent prior art, that inventors were not aware of. If they were really that often aware of material prior art and were not disclosing it, successful inequitable conduct defenses would be common rather than rare.
*unlike in Japan
It may be helpful to note that there is simply no legal requirement in the US for anyone to do a prior art search.
Your comment was “competitors KNOW FULL WELL what is in the four corners to which any ‘catbird’ could dwell – as well as knows whether or not an active application exists.”
By that reasoning, applicants are also on notice of the universe of prior art and so whining about invalidity challenges is a bit rich.
Not at all.
You are going from competitors to the entire world of prior art.
If you do not understand why this is a world of difference, I have to wonder about your experience as a litigator as well.
You have chosen to answer my questions about your prosecution knowledge in both your avoidance of direct answers, and the answers that you have provided (such as this one).
You are also quite confused as to some type of impropriety as to, “Especially when those claims were drafted based on an analysis of their products”
If the support is present for such drafting, such is not only entirely permissible , it is entirely reasonable.
That you “litigate” is a hint. Have you ever prosecuted, or are you strictly a litigator?
Re: “..competitors KNOW FULL WELL what is in the four corners to which any ‘catbird’ could dwell – as well as knows whether or not an active application exists).”
Glad to hear that if you are hired for a new product infringement clearance study that you will have guarantied the study of every existing active application specification that might possibly be relevant to the hardware and software to determine if an infringing claim could be written therefrom. [For some reason I never got such an assurance from any other IPL firms.]
Nice strawman, as THAT certainly is not the same thing that I stated (and WOULD STILL EXIST even if the old power-grab limitations on Continuations had been successful).
In other words – your anti-patent narrative is showing, and showing badly.
The important thing to remember, Paul, is that the inbuilt, structural advantages of my side of the game are right, and just, and as the Lord/founders intended, whereas the inbuilt, structural advantages of the other side are dirty pool.
^^^
That’s some serious B$ gaslighting by Greg-I-Use-My-Real-Name-Except-When-I-Don’t with equating both sides of a position as being equal and “inbuilt structural.”
No one should be f00led by this type of attempt to “normalize” the corruption of a captured system.
The AIA is total ‘crap’ anyway and so should be repealed by Congress as soon as possible. We don’t need or want a European modeled patent system, especailly since ours was the first decent (and equitable) one ever created> The AIA is ‘obviously’ not ‘equitable’, since it’s only even remotely fair to wealthy corporations and monopolies. It does absolutely nothing to help make life easier for independent inventors not ‘bound to a corporation’! This is the exact OPPOSITE of what the Founders wanted when they provided for patent rights.
Patent ‘rights’ were not supposed to only apply to the wealthiest in the nation, but to ALL Americans, rich or poor! So, what the hell happened and why doesn’t Congress do something about this catastrophe that will render independent invention extinct (as desired by the wealthy elites)?
Say NO to the AIA even being allowed to continue on. It’s just a disaster for American innovation. It makes real innovation (as should be protected with ‘broad’ patents) entirely impossible now. If you can’t EVER get a broad patent on a major discover or technology improvement (like the string trimmer as a simple example), then what’s the point of inventing? Just to have it ripped off in under a month, with no consequences and/or no affordable defense possible? Indeed the U.S. should have laws against ‘plagiarism of ideas’ too (to protect individuals), not just patent infringement. Some other countries do, so why not the U.S.?
“If you can’t EVER get a broad patent on a major discover or technology improvement (like the string trimmer as a simple example), then what’s the point of inventing?”
Beyond parody. Thank you again, patent blogosphere, for the endless amusement at the expense of the most infantile, entitled and persecution-complexed people on earth.
“the U.S. should have laws against ‘plagiarism of ideas’ too”
Those kinds of laws are truly the essence of freedom! Also the administrative state should be dismantled except for the part that hands out entitlements to “little” glibertarians, the part that prosecutes people for plagiarism of ideas, and the part that investigates people who document and write about rightwing disinformation campaigns.
Well, this is an interesting proposition:
“The regulations that Iancu promulgated and that Vidal is partially rescinded can always be reinstated. Indeed, not only can they be reinstated, they likely will be reinstated by the next Republican administration.”
What makes you think so?
Q1) Who likes IPRs?
A1) People who tend to be sued by NPEs (e.g., large tech cos. and big banks).
Q2) Who dislikes IPRs?
A2) NPEs.
Q3) What is the effect of the Fintiv rules?
A3) To limit one’s ability to file an IPR. The Fintiv rule, in other words, favors NPEs and disfavors big tech cos. and big banks.
Q4) Whom do the GOP perceive to be inside their coalition and whom to the GOP perceive to be outside their coalition?
A4) The GOP definitely perceive big tech and big banks to be outside their coalition. I am not sure that this is true, but this is definitely how the GOP purport to perceive their coalition. Meanwhile, the GOP loves grifters, and—while NPEs are not all grifters—the NPE community is definitely enriched in grifters.
Q5) Whom do the Democrats perceive to be inside their coalition and whom to the Democrats perceive to be outside their coalition?
A5) The Democrats perceive Silicon Valley tech workers and big time bankers (e.g., Jaime Dimon) as part of their coalition. Once again, I am not sure that this is correct, but that is the perception.
In other words, the Fintiv rules largely favor those who are perceived to be in the GOP coalition, and largely disfavor those who are perceived to be in the Democratic coalition. Perhaps not surprisingly, Fintiv was enacted by a GOP-appointee, and is being partially rescinded by a Democratic-appointee. I think, however, that it is fairly logical to expect that the next GOP-appointee will reinstate all of Fintiv, because the same logic that moved the last GOP-appointee to promulgate the rule will still apply in future. In fact, I expect Fintiv to be a less prominent analogue of the old Mexico City policy, which bounced back and forth every time control of the White House changed hands.
>perceived to be in the GOP coalition,
Trial lawyers are team red now?
Re: “Trial lawyers are team red now?”
That’s a suggestion for an interesting subject for an academic legal/economic study. Some continue to allege that IPRs do not reduce patent litigation costs. But that a self-interest-influenced position and not the view of many sued clients. A factual study is needed as to how many patent lawsuits have been ended by IPRs by now before the trial lawyers could collect large litigation billings, and/or the total litigation cost savings? [With the total number of adverse IPR decisions presumably being now more than 2 thousand , and average litigated patent suits reportedly more than $2 million]. [The “early ended” count needs to include low-cost settlements following IPRs.]
I enjoyed your 3.1 step by step analysis, but isn’t “A4 The GOP definitely perceive big tech and big banks to be outside their coalition” a rather drastic historic change projection even for the age of Trumpism, considering their major source of vital direct and indirect political contributions? [Not to be confused with verbal populism in Congressional committee hearings by recipients.]
The Efficient Infringers have captured Congress-critters on both sides of the aisle.
Nice summary!!! Main argument for getting rid of the AIA, drafted and PAID FOR by the same large corporations and wealthy infringers who don’t want to have to deal with the little guys, at all. They seem to have gotten their wish already, but want even more now. They want to ‘eliminate’ ALL independent inventors, ‘upstarts’ and startups, that could present them with litigation or even competition. They want NO competition – that’s what they really want!
I share your puzzlement and skepticism, Paul. I tried to get at that same point when I linked to the breakdown of political money by industry. Neither banking nor tech is all that visibly lopsided in its contributions. So, why should the GOP administrations enact a rule predicated on the perception of banks and tech as enemies?
I think that there are two possible explanations here, each one only partially sufficient to motivate the observed outcome, but sufficient in combination.
1) Fintiv is an agency regulation, not a Congressional enactment. One does not need to create a consensus among the whole federal GOP political class (Congress and Executive) that banks and tech are enemies. It is enough if the Executive end of the federal GOP political class believes this. As it happens, the leading GOP Executive politicians are all from the more populist wing of the party, so they are less swayed by the money that banks and tech give to the business wing of the Congressional GOP.
2) Neither grifters nor nationalists are super-fussed by intellectual consistency. One should not be too surprised to see them take actions that are not altogether consistent with each other.
In any event, setting aside the theory that I elaborated at 3.1, one can simply observe the reality. Which president implemented Fintiv? Trump. Which is pulling back from Fintiv? Biden. Do the people around these boards who are most volubly eager to express vexation with tech cos. (e.g., Night Writer) tend to favor Trump or Biden? Evidently, then, Fintiv is empirically a piece of coalition service for the Trumpist coalition, and pulling back from Fintiv is empirically a piece of coalition service for the Democratic coalition, regardless of whether my theory above is correct as to why each coalition favors or opposes Fintiv.
Well, personally, I think the difference in Fintiv deference to sometimes imaginary early jury trial dates versus IPRs has far more to do with the views of individual PTO Directors and their own prior client and litigation experiences, and their degree of active involvement, than the views [if any] of those further up the political food chain on such a minor legal subject now involving only a very small percentage of litigated patents.
Ha! Well, to be sure, you could be right. I guess that we will see whether control of the White House next changes hands.
“y”ou…. Because that central planning ideology of “price controls” has worked so well for all those communist and socialist systems…
Oh wait, no, Adam Smith’s invisible hand has FAR outpaced Greg’s hidden signaling.
(No one should be shocked)
More Greg OMB-TDS (channeling here through Marshall)…
“ the GOP loves grifters, and—while NPEs are not all grifters—the NPE community is definitely enriched in grifters.”
“Enriched” is an understatement but you are on the right track.
Q1) Who likes IPRs?
Those with a large patent portfolio/large budget.
Q2) Who dislikes IPRs?
Those with a small patent portfolio/small budget.
This very much goes hand in hand with the background of the Efficient Infringer.
Such tend most always to be those entities of such scale (and establishment) that they would prefer to compete on non-innovation grounds.
This is also why it is critical to NOT fall prey to the “Game of Kings” aspect of simply making the patent process more expensive “for quality.”
Portfolio Too Small ™
I doubt that anyone has larger portfolio budgets than big pharma companies, and yet I am here to tell you that pharma does not like IPRs. For example, see the amicus brief that PhRMA filed in Oil States.
link to scotusblog.com
“pharma does not like IPRs.”
Yea; they should have thought of that before they decided to support the America Invalidates Act.
If you recall, they DID try to sequester themselves from the process….
True. Thankfully they were unsuccessful … leaving them in the same sinking boat we all find ourselves in …
Affirmative – it would have been (and continues to would be) a disaster to partition patent law by art unit.
“Divide and Conquer” is an apt adage.
SJM,
Could you be a little more precise in that link to a 45 page document?
The SCOTUS has shown a fondness of late for admin law cases—especially admin law cases involving the PTO—so I will not be shocked if they take this case. That said, I am betting against cert. on this one. They should not want to set themselves the task of having to set a mechanism for reviewing the PTAB’s denials when the statute makes the denials so unreviewable.
O-tay….
Accuracy of the hidden links – can’t have that.
Would another reason not to take cert at this point be an argument that the adoption of the pending PTO Rules would render some or all of the dispute over IPR discretionary denials moot?
Maybe. If the Court denies cert., they will simply issue a denial. They will not give reasons, so we will never know how much of the decision is attributable to this cause or that.
The regulations that Iancu promulgated and that Vidal is partially rescinded can always be reinstated. Indeed, not only can they be reinstated, they likely will be reinstated by the next Republican administration.
If I were on the Court (heavens forfend!), I would not let the regulations’ current status affect my thinking overmuch. I am not (thank God!) on the Court, however, so my thinking does not matter much. I really could not pretend to know how much the current status would enter into the thinking of any of the actual justices.
th”i“s
is a lovely example of plenty of those George Carlin filtered out items (but let’s let them in through those hidden hyperlinks…)
Let’s just face it, the USPTO is now plainly corrupt and cares nothing about the ‘little guy’ or any American inventors and entrepreneurs working outside of large corporations. They just cause those corporations headaches and cost them money. They can also end up causing them to just ‘look bad’. Can’t have that! Our corporations and monopolies must be protected at all times and at all costs!
>then sued the USPTO in the N.D. Cal.
Sounds like an inconvenient forum vs. EDVA.
The PTO has a regional office in N.D. Cal.
pretty sure Vidal (the named party) does not work out of that regional office….
(not that this means anything in a post-COVID world, mind you)
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