OPINION: Big Tech is abusing the U.S. patent challenge system

by Judge Paul R. Michel | United States Court of Appeals
Friday, 18 February 2022 10:25 GMT

The Supreme Court building exterior seen in Washington, U.S., January 21, 2020. REUTERS/Sarah Silbiger.

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Big tech companies are fighting to change the meaning of a decades old bipartisan law - weakening the patent protections that underpin our economy in the process

Paul R. Michel served on the United States Court of Appeals for the Federal Circuit for 22 years, and as its chief judge from 2004 until his retirement in 2010.

Apple, Google, Cisco, and Intel recently suffered a major legal defeat. Their loss is America's gain.

In November, a district court judge in Northern California dismissed a lawsuit those firms had filed against the U.S. Patent and Trademark Office. They were trying to strip away USPTO's discretionary authority to consider - or not consider - a certain type of patent challenge.

The Big Tech firms are appealing this ruling, but they face long odds in the circuit courts and Supreme Court. So they're pursuing a parallel attack, with the help of their allies in Congress. Tech lobbyists are urging legislators to revamp a decade-old bipartisan law to weaken the USPTO - and the patent protections that undergird the American economy.

There are various legitimate ways to challenge a patent. One avenue is the courts. Another way, which takes place within the USPTO, is known as an inter partes review. An individual, organization, or company can request an inter partes review, essentially asking the USPTO to take a second look at whether a patent should have been granted. Before issuing a patent in the first place, USPTO officials must determine that the invention in question is novel, non-obvious, and useful. The same standard applies to all inventors, regardless of their industry.

Inter partes reviews, which Congress created in 2011 through the America Invents Act, can serve a valuable purpose. Lawmakers envisioned them as a quicker - and thus cheaper - alternative way for companies to challenge patents that should have never been granted, rather than going through the judicial system.

But lawmakers also recognized that inter partes reviews weren't appropriate for every situation and could be abused to harass patent owners - which is why, in the America Invents Act, they gave the USPTO discretion over when and whether to conduct these reviews. And the office has determined that it'd be inappropriate to launch an inter partes review when a patent challenge is already underway in court, with a ruling expected imminently.

Otherwise, patent holders would have to defend their intellectual property in two different forums at once - which would impose a significant administrative burden and make an already expensive legal process even pricier. Plus, such a duplicative challenge would serve little purpose, since a court will decide whether the patent is valid before the patent office can.

In May 2021, in Apple, Inc. v. Fintiv, Inc., the USPTO determined that it did not have to go forward with an inter partes review while a district court was actively considering the case. The office set forth a six-factor test for exercising its discretionary authority not to institute such a proceeding.

It makes sense for USPTO to retain this discretion. As the USPTO has explained, starting an inter partes review while a separate legal challenge is ongoing - or worse, after a court challenge has already concluded - would be unfair to the patent holder.

If courts, having examined all the relevant facts, have upheld patents, the losers shouldn't be able to hop over and start again in another forum. That would be analogous to a violation of the prohibition on double jeopardy, whereby the state is barred from bringing the same charges against an individual more than once. The principle prevents the state from harassing an individual acquitted of a crime by trying that person again (and again) until it gets the verdict it wants.

Big Tech isn't concerned about fairness, though. And when sued for infringement, those firms file the most IPRs, sometimes repetitively. They've been seeking to limit USPTO's discretion and force the office to ramp up the number of inter partes reviews it conducts -- partly in a cynical bid to impose costly, duplicative legal burdens on smaller firms defending their patents. These increased legal fees -- and the risk that a patent gets overturned in one of the reviews -- means small firms would be under greater pressure to sign lopsided licensing agreements with Big Tech firms, rather than steadfastly defend their intellectual property against Big Tech encroachment.

It'd be a mistake for lawmakers to heed Big Tech lobbyists and give patent challengers two (or more) bites at the apple. Nothing could be more unfair than a legal version of "heads you lose, tails we play again in a different forum."

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