“McBride said that the USPTO Director ‘should delegate the decision whether to institute a trial to different people than those who conduct the trial. The current arrangement…is vulnerable to confirmation bias and the perception that the trial has been prejudged.’”
Public comments on the United States Patent and Trademark Office’s (USPTO) Advanced Notice of Proposed Rulemaking (ANPRM) on Patent Trial and Appeal Board (PTAB) practices continued to be posted this week, following the June 20 deadline. The USPTO is currently processing the 14,000+ comments, many of which are duplicative, and periodically publishing them online.
The Office announced the ANPRM in April. Broadly, the ANPRM is part of a strategy from the USPTO to restructure patent proceedings in an effort to curb abusive actions.
A host of stakeholders, including IP law firms, academics, and advocacy groups, have weighed in on the various proposals in the rulemaking package, offering a mix of praise and criticism. We have covered several in two previous posts; here are some more.
Dose of Skepticism: Carmichael IP
Stephen McBride, Partner at Carmichael IP, submitted comments on June 20 outlining the firm’s position on the ANPRM.
Additionally, he wrote, “[a compelling merits analysis] practically guarantees the final written decision will kill the challenged claims.”
McBride added that, in the context of serial patent challenges, the proposed standard could open the door for abuse by petitioners.
The IP law firm also took issue with a proposal by the UPSTO to allow multiple entities to pool resources to challenge a patent when defending infringement claims based on their “related interests”.
McBride wrote, “we disagree with this proposal because it creates a loophole that will essentially swallow any rule meant to stop abuse by member organizations.”
The USPTO also proposed allowing a petitioner to pay an additional fee for a higher word limit to combine two parallel petitions into a singular, longer petition. However, Carmichael IP asked the USPTO to reconsider this proposal as it would reward wealthier parties by allowing them to buy their way out of limitations.
Finally, McBride said that the USPTO Director “should delegate the decision whether to institute a trial to different people than those who conduct the trial. The current arrangement…is vulnerable to confirmation bias and the perception that the trial has been prejudged.”
This latter point is also addressed in the PREVAIL Act, which was introduced this week by Senators Chris Coons (D-DE) and Thom Tillis (R-NC) to reform PTAB practices. The Council for Innovation Promotion (C4IP) has created a side-by-side comparison of the ANPRM and the PREVAIL Act (see below), illustrating where many of the proposals overlap.
Stopping Strategic Abuse: Adam Mossoff
Adam Mossoff, Professor of Law at George Mason University, wrote in his submitted comment that the current system is susceptible to strategic abuse that has destabilized the patent system and the U.S. innovation economy.
In order to address these issues, Mossoff proposed adopting the original, unmodified Fintiv factors and crafting rules to halt serial petitions. According to the law professor, this would stop strategic abuse by large companies and profit-seeking petitioning companies. Mossoff highlighted the need to stop well-capitalized firms like Microsoft, which filed 12 counter-petitions when it was sued by VirnetX.
He argued that the USPTO has the authority to determine when it will not institute a hearing. The Fintiv factors lay out the considerations the Office has to make before deciding not to hear a case.
And if the USPTO feels it does not have the adequate authority to make rules in this direction, Mossoff called on the Office to work with Congress to adopt rules that will reform these abuses.
Defending the Public Good: EFF
The Electronic Frontier Foundation (EFF), a nonprofit organization advocating for digital civil liberties, in its submission cited a 2018 Harvard Business School study that found that firms targeted by patent trolls reduced their R&D budgets by 20%. The nonprofit argued this incentive structure harms small businesses, everyday people, and the U.S. economy.
The EFF also claimed that “patent trolls also threaten Americans’ Constitutional rights to free speech.”
As far as the ANPRM, the EFF staunchly disagreed with proposed “discretionary denials,” which it argues limit the public’s ability to challenge patents. Rather than expanding discretionary denial practice, the EFF proposed repealing it altogether.
The EFF also opposed proposals that would increase divides between small and well-funded firms. “It is the small defendants, not necessarily the patent owners, who are bona fide inventors,” wrote the EFF.
What Won’t Make It
With the USPTO compiling the wide swathes of comments, the Office will be considering stakeholders’ various and differing opinions and potentially making changes to the proposed rules.
Scott McKeown of Ropes & Gray published a blog post on Wednesday on his Patents Post Grant blog detailing the firm’s expectations for ANPRM proposals that will be ditched or heavily revised. The majority of the ANPRM proposals that the law firm expects will not make the cut for the NPRM will be removed because the USPTO lacks the authority to rewrite America Invents Act (AIA) statutes.
The blog post highlights various discretionary denial rule changes that will not be included because they cut against the AIA. Additionally, the changes to guard under-funded patent owners are likely to be dumped because the Office does not have the power to act on this policy issue.
McKeown also wrote that a proposed “substantial relationship” test and a requirement that petitioners file a stipulation that they have and will not file prior post-grant proceedings on any of the challenged claims will not make the final cut.
Image Source: Deposit Photos
Image Source: Image ID:5437156