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Restore American Inventing? Or Gut American Invention?

Let’s get one thing straight: The “Restoring the America Invents Act” will further weaken U.S. patent reliability and certainty. This as China is eyeing strong IP.

This bill will diminish real courts (those with presidentially appointed, Senate-confirmed jurists in the Article III branch of government in which our Constitution places judicial powers) while empowering the Administrative State at the Patent & Trademark Office.

In doing this, RAIA, sponsored by Sen. Patrick Leahy, assaults property rights. It disquiets title to the intellectual fruits of one’s labor — title the Constitution says will “secure” exclusivity for a limited duration over the property one created or discovered.

Rip Van Leahy finds himself chairing the Senate Intellectual Property Subcommittee. It’s as if he awoke after a deep sleep, still captive to the myths and false impressions that hoodwinked him in the 2000s about the state of patents. Thus, Big Tech’s lies about “weak patents,” patent trolls, etc. still grip Leahy. They feed his resolve to “restore” the weak-patent-rights regime he stoked in the Leahy-Smith America Invents Act.

AIA’s decade of performance has faced much scrutiny and produced unfair, unjust consequences: parallel reviews, serial administrative proceedings, proceedings in other tribunals (i.e., federal district court, U.S. International Trade Commission) on the same patents and the same patent claims but with different outcomes; notoriously stacking Patent Trial and Appeal Board panels to obtain desired outcomes; PTAB’s lack of basic rules of fairness, due process, conflict of interest.

Over time, these ugly developments led to judicial constraints and PTO’s mitigation measures. The Supreme Court in Cuozzo v. Lee and Thryv v. Click-to-Call affirmed the PTO director’s broad discretion to decline PTAB petitions. The high court ruled in SAS v. Iancu that PTAB’s discretion doesn’t include cherry-picking challenged patent claims.

PTO took reasonable steps to address some of the AIA’s poisonous fruits. PTO designated several denial cases, such as General Plastic, NHK Spring and Fintiv, as precedents whose factors help guide case-specific analysis for discretionary denials.

The fact is the AIA itself authorizes discretion to deny requested PTAB proceedings. The law specifies these decisions aren’t appealable. And it directs PTO to “consider the effect . . . on the economy, the integrity of the patent system, the efficient administration of the Office, and the ability of the Office to timely complete proceedings instituted . . . .” The latter considerations have been largely missing.

The chances of PTAB instituting a proceeding have been consistently high, even with a modest increase in discretionary denials that’s gotten Leahy and the Infringer Lobby in a huff. PTAB instituted 73 percent of petitioned inter partes review proceedings in FY 2014, 70 percent in FY 2019 and 65 percent the first seven months of FY 2020. Once instituted, PTAB cancels 84 percent of patent claims reviewed.

These biased proceedings destroy valuable IP and innovation (and the underlying investments in developing these inventions) in computer-implemented inventions, biomedical inventions and inventions of many types by independent inventors and others.

At its heart, RAIA aims to tilt PTAB so it grants even more requests for administrative proceedings challenging patent validity. This bill also “encourages” Article III courts to defer to PTAB — i.e., Leahy wants federal district courts to halt their judicial proceedings on patent validity so PTAB (AKA patent “death squads”) gets first (even sole) whack at invalidating the same patent’s claims. This is disgusting. Never should federal courts defer to administrative quasicourts that expropriate judicial powers.

What’s really going on, Reuters reports, is that “IPRs before the board have become a relatively quick and cheap way for companies often targeted by infringement suits, such as Apple Inc. and Google LLC, to try to invalidate patents.” The Infringer Lobby, which includes Big Tech, prefers unstable patent property rights. RAIA does its bidding.

A better course to advance American inventing would be eliminating PTAB, as the “Restoring American Leadership in Innovation Act” would do. At a minimum, Congress should impose on PTAB the same rules, legal standards and constraints that federal courts operate under, as the "STRONGER Patents Act" and provisions of the Republican Study Committee’s “Countering Communist China Act” (H.R. 4792) would do. Another step in the right direction would require inventors’ consent, as the “Inventor Rights Act” and H.R. 4792 would do, before being hauled before PTAB to wipe out their patents.

Want to restore American invention? Try restoring secure, reliable, enforceable patents and patent rights. The choice has repercussions not only for “America invents,” but for U.S.-China competitiveness.

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