dddd
PublishedSeptember 17, 2024

The Inherent Illogic of Discretionary Denials

As the Senate Judiciary Committee gets ready to consider PREVAIL, which would restrict access to inter partes review, a decision out of the PTAB illustrates why PREVAIL is unneeded.

Earlier this month, the Patent Trial and Appeal Board doubled down on their earlier decision to deny patent validity challenges brought by Honda Motor Co., General Motors LLC, Nissan North America Inc, and Ford Motor Co. This time they denied review on the merits rather than relying on discretionary factors. The patent, held by Neo Wireless, involves a type of 4G wireless technology used by the car manufacturers.  Review of the patent was discretionarily denied by the PTAB back in December because the companies were thought to have had a “significant relationship” with Volkswagen AG, which had previously challenged the same patent. 

The initial decision to deny review came from the Valve precedent, a 2019 PTAB decision that determined that a review could be denied regardless of the quality of the patent, including if – as was determined in this case – the two petitioners are found to have a “significant relationship.” 

In March, however, the USPTO Director Kathi Vidal vacated the denial decision, explaining that the board should not have ruled that Honda and Volkswagen had a “significant relationship” that warranted denying review. As Vidal explained, “there is no evidence that they had any interactions or agreements regarding the accused wireless standard or the accused products.” Director Vidal ultimately sent the case back to the PTAB because they failed to consider the merits of Honda’s invalidity positions.

In the most recent chapter of this saga, the PTAB ruled that Honda’s petition did not warrant instituting a review based on the challenge’s merits, explaining that the, “Petitioner has not demonstrated a reasonable likelihood of prevailing with respect to any [claims of the] patent under any of its proffered challenges… For the reasons given, it is hereby ordered that the petition is denied.” Once questions of discretionary denial were put aside, the PTAB still did not institute review because the patent withstood scrutiny. In the end, the patent owner had nothing to gain from a discretionary denial because of their patent’s quality—in fact, it wound up costing them more money as they litigated the discretionary denial.

This case demonstrates the inherent illogic of discretionary denials. Advocates for discretionary denials argue that they are necessary in order for patent owners to avoid repeat validity challenges. As shown in this case, even when discretionary denials are taken off the table, owners of novel, useful, nonobvious patents have nothing to fear from petitions to the PTAB. Any challenge to those valid patents will not be instituted, nevermind ultimately successful. The only time discretionary denials shield patents are when the patents in question would not otherwise withstand scrutiny on a petition’s merits and have at least reasonable likelihood of being invalid.  

The irony is, of course, that those are the patents that most need review.

Josh Landau

Patent Counsel, CCIA

Joshua Landau is the Patent Counsel at the Computer & Communications Industry Association (CCIA), where he represents and advises the association regarding patent issues.  Mr. Landau joined CCIA from WilmerHale in 2017, where he represented clients in patent litigation, counseling, and prosecution, including trials in both district courts and before the PTAB.

Prior to his time at WilmerHale, Mr. Landau was a Legal Fellow on Senator Al Franken’s Judiciary staff, focusing on privacy and technology issues.  Mr. Landau received his J.D. from Georgetown University Law Center and his B.S.E.E. from the University of Michigan.  Before law school, he spent several years as an automotive engineer, during which time he co-invented technology leading to U.S. Patent No. 6,934,140.

Follow @PatentJosh on Twitter.

More Posts

Sen. Coons, RESTORE This Bill to the Shelf

On Tuesday, Sen. Chris Coons introduced the RESTORE Act.  This bill tries to overturn the Supreme Court’s eBay v. MercExchange decision.  Justice Thomas, writing for a unanimous court in e...

Patent Trolls in Hot Water (Again)

It’s been more than two years since Delaware Chief District Judge Colm F. Connolly introduced a standing order requiring that all parties appearing in his court disclose any third-party funding they...

RESTORE Act Leaves District Courts Vulnerable to NPE Abuse

As I discussed in Patent Progress back in July, the RESTORE Act, introduced in July by Senators Chris Coons and Tom Cotton, would bring back automatic injunctions to U.S. district courts. RESTORE is ...

Failed Disclosure Request Shows the Lingering Threat of Undisclosed Litigation Finance

In August, Delaware Chief District Judge Colm Connolly denied Apple’s request for access to details on the litigation funding arrangement between the Finnish company MPH Technologies, which is suing...

Subscribe to Patent Progress

No spam. Unsubscribe anytime.