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« In re Aqua Products, Inc. -- CAFC Grants Rehearing En Banc to Consider PTAB Motions to Amend | Main | Netsirv v. Boxbee, Inc. (PTAB 2016) »

August 16, 2016

Comments

Hey Joseph,

More proof that IPRs are seriously flawed and should never have been part of the AIA (Abominable Inane Act).

Part and parcel of the AIA....

This just reflects the level of the (Citizens United) $tyle of "Voice" that permeates ALL of the AIA.

Perhaps it is a good thing that Congress explicitly rejected the separability clause...

There is no logical reason to "throw the baby out with the bath water." That is, the [very rare] cases of misuse of IPRs for settlement extortion can an should be legally delt with. It does not require using that rare activity as an illogical excuse to dump the entire IPR system. There has been vastly more such settlement extortion [and unnecessary legal costs] from D.C. suits on clearly invalid patents, which IPRs now frequently prevent. The extremely small percentage of Fed. Cir. reversals of numerous IPR decisions on patent claims in D.C.suits speaks for itself on that subject.

Once the IPR is instituted, if the parties settle, can't a new third party simply come along, pick up all the pieces left by the patent challenger, and start again?
I've never understood how the USPTO can institute an IPR because it determines that the patent may not be valid, and then allow the proceeding to end because the parties settle.

CW,

You have a good point, though if the proceeding continued after settlement, I think we'd see parties filing a petition, after institution settling for zero cost, and then letting the PTO sort it out. If would be a cheap way of harassing patent owners.

Perhaps requiring that petitioners already have a dispute over the challenged patent would solve some of these problems.

Mike

Mike,

Except that goes against the explicit rationale of the IPR NOT having a standing requirement....

Skeptical: I think Mike's point is that we can now see that not including a requirement for standing was a mistake. Several years before the AIA, SCOTUS lowered the bar for standing in DJ actions for patent invalidity/non-infringement, so that even a "non-threatening" invitation to take a license can confer DJ standing. Why not set a similarly low bar, but a bar nevertheless, for IPRs?

Atari Man,

There are many things with the AIA that can be seen to be mistakes - and many of these were noticed prior to its being signed into law (and yes, I actively contacted my government representatives with these points).

Standing in IPRs is rather low on my list of AIA mistakes.

@ Paul - why the need to emphasize the "extremely low" incidence of such shakedown attempts in IPR? For one, few patent owners make such letters public, so kudos to Power Integrations for lifting the veil. There are many instances where patent owners make passing reference to petitioner payment demands in their preliminary replies. Many more patent owners don't even try to bring this up, because the Board couldn't care less. And we will never know the universe of "dark IPRs" where a payoff was made and the threatened IPR was never filed. Patent owners have every interest in keeping payoffs confidential (once you start paying, others will show up wanting to be paid also). So no, don't assume that this kind of thing is vanishingly rare - it isn't.

These letters are so very illustrative of how defects in the IPR system create opportunities for abuse. Take the reference to joinder in the first letter. The PTAB is bending over backwards to allow time-barred district court parties back into IPR under the guise of joinder. If the Board didn't so happily offer litigants a second bite at the apple, maybe threats like these would be less effective. Or take the reference to lower standards of proof in IPR. The Board's willingness to re-decide district court cases on lower proof and broader claim constructions surely ramps up the threat here. Let alone the gleeful citation to careless and indifferent Panel statements on "profit motives." Maybe the PTAB should have been more careful when it signaled that shakedown artists are welcome. At the end of the day, though, people like Kevin Barnes are not really the problem; they are a symptom of what's wrong with IPR.

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