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No Quiet Title for Innovators

The injustice Centripetal Networks has found itself facing at the Patent Trial and Appeal Board—AKA patent death squad—proves several things about PTAB. Clearly, with PTAB lurking, there will never be “quiet title” for any patent.

Quiet title is essential to property rights—whether you’re talking about land where the Environmental Protection Agency asserts unconstitutionally broad “navigable waters” regulations or by unfair eminent domain without just compensation, financial assets unduly taxed (again) at death or taken without due process through civil asset forfeiture.

With any property, including patents and copyrights, quiet title, access to justice, due process and just compensation are hallmarks of meaningful property rights.

PTAB is a quasijudicial administrative body that runs unbridled, adversarial proceedings that “efficient infringers” weaponize on a regular basis. Sold as a faster, cheaper alternative to judicial litigation, PTAB epitomizes unsecure property rights.

Centripetal is an innovator of highly valuable, highly effective cyber protection technology. The innovator has seen its patents willfully infringed, their validity repeatedly challenged in multiple forums and the very nature of PTAB’s threat to quiet title and property rights.

Cisco feigned interest in legitimately using Centripetal’s cybersecurity technology, then used the proprietary knowledge it obtained to infringe Centripetal’s patents. Cisco challenged patent validity in PTAB and federal court.

The district court considered and upheld the Centripetal patent’s validity and ruled willful infringement against Cisco. Cisco did not contest the court’s validity ruling, which evidences patent validity.

After the court ruled for Centripetal, Palo Alto Networks sought PTAB challenge of the patent. PAN was not a party in Cisco’s court litigation, and Centripetal hadn’t asserted its patent against PAN.

PAN appeared intent on gaining leverage against Centripetal in separate litigation. But Cisco would also benefit if PTAB wipes out Centripetal’s patent on which willful infringement was found.

Such third-party gamesmanship and harassment is standard fare for owners of proven valid and infringed patents. That’s because PTAB invalidates 84 percent of patent claims before it.

Next, the threat to secure rights really got ugly. The nearly $3 billion judgment got thrown out on a technicality. The trial judge’s wife held less than $5,000 in Cisco stock, which the judge learned just as the case was concluding with the opinion practically written. The Federal Circuit Court of Appeals ruled that the stock should have been sold instead of placed in a blind trust.

Administrative patent judge Brian McNamara, on the panel voting to grant PAN its bite at the already bitten apple, owns around $15,000 in Cisco stock and collects payments from his old law firm, which is also Cisco’s firm. McNamara has gone to bat for Cisco, sitting “on every single panel deciding the fourteen IPR [interpartes review] petitions Cisco filed against Centripetal” in 2018 alone.

Given the potential bias, Centripetal asked that McNamara recuse himself and PTAB vacate the decision giving PAN its IPR. McNamara and company denied Centripetal’s request contesting PAN’s IPR grant. Cisco and Keysight—both past their time allowed for PTAB challenge—were joined with PAN—like letting expelled players rejoin the game.

The PTAB board circled wagons around their conflicted colleague. It threatened Centripetal for raising issues about potential conflict of interest and partiality.

Instead of safeguarding its integrity, PTAB assaulted Centripetal’s motion as “frivolous,” “glaringly deficient,” “lacking in substance,” lacking “competent, good faith argument,” and “highly inappropriate.” PTAB then denied Centripetal its lawyer. After the damage was done, McNamara and another PTAB judge exited the case.

Centripetal sought relief from the Federal Circuit, asking for expedited consideration, but the appellate court has allowed PAN’s parallel patent challenge to proceed while Centripetal awaits a new trial in real court.

There’s also the fact PTAB “judges” are held to the same standard of ethics and conflict of interest as other bureaucrats—basically, a standard that something questionable doesn’t trigger criminal liability.

There’s a rule that adjudicatory executive officials recuse themselves when the appearance of partiality exists. That’s what PTAB scoffed at and the Federal Circuit let the PTAB clowns off the hook of in ignoring Centripetal’s mandamus request.

Article III judges abide by a higher ethical standard that clearly doesn’t operate at PTAB. Yet, PTO Director Kathi Vidal told Congress, “When I perform that role [of director review], I hold myself to the same standard of any Article III judge.”

Soon before the Federal Circuit ignored the facts so thoroughly, Centripetal’s attorney brought Vidal’s assertion to the court’s attention. “The Director’s representation to a coordinate branch is wholly inconsistent with the PTO’s position here that the ethical considerations at play in proceedings before APJs are ‘just different’ from the standards for Article III courts. . . . The PTO should not be assuaging Congress’s concerns about politics and ‘ex parte contacts,’ while telling patent holders something quite different.”

In short, Centripetal’s situation well illustrates the vast uncertainty overshadowing patents and patent rights. With PTAB, there is no quiet title for patents. Ever.

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