Last week, the USPTOUnited States Patent and Trademark Office. See also PTO. issued a Notice of Proposed Rulemaking (NPRM) containing major changes to the institution process for inter partes review. Combined with other changes made by the USPTOUnited States Patent and Trademark Office. See also PTO., including the illegal “settled expectations” doctrine effectively barring review of a patent more than six years after issue, the net impact of the NPRM if adopted as proposed would be to effectively render the inter partes review (IPRIntellectual Property Rights. Usually associated with formal legal rights such as patent, trademark, and copyright. Intellectual property is a broader term that encompasses knowledge, information, and data considered proprietary whether or not it is formally protected.) process a dead letter.
What’s in the NPRM?
The NPRM has three main provisions. I will refer to them as the stipulation, estoppel, and abandonment provisions.
Stipulation
By far the least offensive of the three provisions, which is faint praise, is the stipulation provision. This requires a petitioner to bind themselves not to bring any § 102 or § 103 invalidity challenges in any other forum if the USPTOUnited States Patent and Trademark Office. See also PTO. grants institution of their petition, which includes challenges that the IPRIntellectual Property Rights. Usually associated with formal legal rights such as patent, trademark, and copyright. Intellectual property is a broader term that encompasses knowledge, information, and data considered proprietary whether or not it is formally protected. process is barred from considering, such as product prior artPrior art is the knowledge in the field of a patent that was publicly available before the patent was filed.. Only if the petitioner makes this stipulation will the USPTOUnited States Patent and Trademark Office. See also PTO. even consider instituting IPRIntellectual Property Rights. Usually associated with formal legal rights such as patent, trademark, and copyright. Intellectual property is a broader term that encompasses knowledge, information, and data considered proprietary whether or not it is formally protected..
So in order to take advantage of the Congressionally-created IPRIntellectual Property Rights. Usually associated with formal legal rights such as patent, trademark, and copyright. Intellectual property is a broader term that encompasses knowledge, information, and data considered proprietary whether or not it is formally protected. process, petitioners are required to prospectively give up their ability to defend themselves in other fora. The NPRM justifies this by noting that patent owners “spend substantial funds defending their rights against multiple or duplicative challenges, which would be avoided under the proposed rule.” But nowhere does it require a patent owner to make a similar stipulation in order to have the petition denied—the patent owner remains free to assert their patent in multiple courts without any restrictions.
If duplication is truly the essence of the concern, then the patent owner should also be required to stipulate that they will bring infringement claims in only a single court, and that they will agree to a litigation stay if institution is granted. But that’s not the rule being proposed—it binds, but does not benefit, petitioners, and benefits, but does not bind, patent owners.
Estoppel
The second provision bars consideration of a petition if any challenged claim—or an independent claimA claim that does not refer back to or depend on another claim. See dependent claim. from which a challenged claim depends—has been found not invalid in a court case, an ITCInternational Trade Commission decision, or another USPTOUnited States Patent and Trademark Office. See also PTO. review. But this provision fundamentally misunderstands patent law.
That’s because patents are never found valid. Instead, they are found “not invalid” over a particular combination of prior artPrior art is the knowledge in the field of a patent that was publicly available before the patent was filed.. Even if a patent is not invalid over the Fu and Barr prior artPrior art is the knowledge in the field of a patent that was publicly available before the patent was filed., that fact has no bearing on whether it is not invalid over the Einstein and Rosen prior artPrior art is the knowledge in the field of a patent that was publicly available before the patent was filed.. The questions are completely unrelated—but this provision treats them as meaningfully linked, to the point where petitions would be denied because someone else, at some point in the patent’s life, challenged it and failed. Your access to a Congressionally-designed process would be revoked because of someone else’s actions—actions you had no involvement with or control over.
Just as problematic, it applies to petitions where even a single challenged claim overlaps with any previously reviewed claim—or with an independent claimA claim that does not refer back to or depend on another claim. See dependent claim. from which the challenged claim depends. Even if your challenge is meritorious as to nineteen claims, a single overlapping claim would prevent the PTABPatent Trial and Appeal Board. Reviews adverse decisions of examiners on written appeals of applicants and appeals of reexaminations, and conducts inter partes reviews and post-grant reviews. The Board also continues to decide patent interferences, as it was known as the Board of Patent Appeals and Interferences (BPAI) before the AIA. from even considering reviewing the other nineteen. This is flatly contrary to Congressional intent as summarized in the Supreme Court’s SAS decision, which states that the AIAAmerica Invents Act of 2011. AIA made modest reforms, most notably moving the U.S. to a first-inventor-to-file system more aligned with foreign practice, but also including expanding prior user rights to all patent-eligible subject matter, and instituting a post-grant review proceeding. “anticipates a regime where a reasonable prospect of success on a single claim justifies review of all.” Here, the inverse is true—a single claim with prior review is claimed to justify reviewing none.
What’s worse, this provision seems to be designed to incentivize abusive litigation tactics in order to obtain immunity from IPRIntellectual Property Rights. Usually associated with formal legal rights such as patent, trademark, and copyright. Intellectual property is a broader term that encompasses knowledge, information, and data considered proprietary whether or not it is formally protected.. In a 1791 letter to Hugh Williamson, who was working on early patent legislation, Thomas Jefferson discussed the problem of who should be allowed to contest a patent. Jefferson notes that if you “make the first trial against the patentee conclusive against all others who might be interested to contest his patent” then the patent owner “will always have a collusive suit brought against himself at once.” (This was not considered to be a good thing.)
This provision makes the first trial against the patentee conclusive against all others. It will be abused in exactly the way Jefferson predicted. (And if you think patentees would never pay someone to behave in ways that manipulate the law in order to protect their patents, I invite you to read about pay-for-delay.) And while the rule claims it will allow institution in the case of a collusive petition, in practice it will be impossible for a petitioner to prove this to be the case. They will have no ability to obtain evidence of this sort of behavior in the timespan that IPRIntellectual Property Rights. Usually associated with formal legal rights such as patent, trademark, and copyright. Intellectual property is a broader term that encompasses knowledge, information, and data considered proprietary whether or not it is formally protected. is available within. And so this provision will effectively operate to bar a second review even if the earlier review was collusive and intentionally weak.
Abandonment
The final provision says that the USPTOUnited States Patent and Trademark Office. See also PTO. will not institute a petition if a district court or ITCInternational Trade Commission trial, or another IPRIntellectual Property Rights. Usually associated with formal legal rights such as patent, trademark, and copyright. Intellectual property is a broader term that encompasses knowledge, information, and data considered proprietary whether or not it is formally protected., will occur before the final written decision date for the IPRIntellectual Property Rights. Usually associated with formal legal rights such as patent, trademark, and copyright. Intellectual property is a broader term that encompasses knowledge, information, and data considered proprietary whether or not it is formally protected..
This is effectively codifying the NHK/Fintiv decisions—but only the trial date factor. The Fintiv factors are named after the Fintiv precedential decision. That decision denied the institution of an IPRIntellectual Property Rights. Usually associated with formal legal rights such as patent, trademark, and copyright. Intellectual property is a broader term that encompasses knowledge, information, and data considered proprietary whether or not it is formally protected. petition, in large part because the trial was scheduled to occur before the date of the final written decision. This has numerous problems.
First and simplest: trial dates are simply not reliable. The Fintiv petition was filed in 2019. The USPTOUnited States Patent and Trademark Office. See also PTO. denied it in 2020. The trial was finally supposed to occur in 2025, four years after a final written decision would have been issued. (Following a negative ruling from the trial judge, Fintiv dropped the case entirely, only to refile it in a different court.) But the USPTOUnited States Patent and Trademark Office. See also PTO. denied hearing the petition based on… the trial date occurring first.
Second: there’s no requirement that the other matter involve the petitioner. As with the estoppel provision, this creates an incentive for abusive litigation. Sue a small company first and allow that lawsuit to block any IPRIntellectual Property Rights. Usually associated with formal legal rights such as patent, trademark, and copyright. Intellectual property is a broader term that encompasses knowledge, information, and data considered proprietary whether or not it is formally protected. attempts coming from your real, deeper-pocketed targets. And that approach doesn’t even require the sort of collusive behavior that the NPRM claims would justify institution. The rule just incentivizes patent owners to target small businesses first.
Third: Congress always intended IPRIntellectual Property Rights. Usually associated with formal legal rights such as patent, trademark, and copyright. Intellectual property is a broader term that encompasses knowledge, information, and data considered proprietary whether or not it is formally protected. to operate in parallel with district court litigation. In fact, the House Report on the AIAAmerica Invents Act of 2011. AIA made modest reforms, most notably moving the U.S. to a first-inventor-to-file system more aligned with foreign practice, but also including expanding prior user rights to all patent-eligible subject matter, and instituting a post-grant review proceeding. states that the bill is intended to “limit unnecessary and counterproductive litigation costs.” In other words, Congress intended the IPRIntellectual Property Rights. Usually associated with formal legal rights such as patent, trademark, and copyright. Intellectual property is a broader term that encompasses knowledge, information, and data considered proprietary whether or not it is formally protected. process to be a first choice over litigation, not one that was only available in the event litigation wasn’t happening.
So why “abandonment”—what’s being abandoned? The USPTO’s Congressional obligations to operate an effective IPRIntellectual Property Rights. Usually associated with formal legal rights such as patent, trademark, and copyright. Intellectual property is a broader term that encompasses knowledge, information, and data considered proprietary whether or not it is formally protected. program. Instead of providing the efficient and accurate alternative to litigation that Congress intended, this provision would allow the USPTOUnited States Patent and Trademark Office. See also PTO. to say ‘not my problem’ and defer to courts based purely on timing.
Cui Bono?
So who benefits from destroying IPRIntellectual Property Rights. Usually associated with formal legal rights such as patent, trademark, and copyright. Intellectual property is a broader term that encompasses knowledge, information, and data considered proprietary whether or not it is formally protected.? Primarily, it’s patent trolls. About two-thirds of all IPRs in the technology industry target patents owned by, and already asserted by, trolls. (Trolls bring approximately 85% of all district court litigation in high technology.) Eliminating this effective and efficient route for review of patent validity benefits trolls by making invalidation of weak patents more difficult and making patent cases more expensive. But secondarily, it’s the private equity and hedge funds that engage in litigation funding—treating patent litigation as a financial instrument to be exploited for profit, rather than as a form of industrial policy aimed at encouraging innovation. That practice gins up litigation that wouldn’t otherwise exist purely for the profits of the funder, a practice known as champerty—a practice which used to be illegal.
And who’s hurt by it? The productive, innovative companies that are emblematic of American leadership in technology.
Why is the USPTOUnited States Patent and Trademark Office. See also PTO. siding with the trolls and hedge funds whose sole innovation is in abusing the U.S. legal system, instead of the manufacturers, designers, and developers whose innovation really drives the economy?
