Ten years ago, Congress enacted a highly destructive law undoing important elements of the wildly successful, property rights-based, two-century-young U.S. patent system. Bipartisan congressional majorities wreaked havoc upon inventors and patent owners through the mislabeled America Invents Act. A decade later, the verdict is in, and it isn’t pretty.
Among its many poison daggers, the AIA denied de novo judicial review of patent office decisions made after a patent is granted. It set up adversarial, quasijudicial administrative proceedings for canceling patents far more easily than in real courts — the sacred province of all U.S. property rights matters until the AIA.
Other AIA changes replaced patent rights going to the original inventor with IP rights going to the first to file for a patent. AIA eliminated a one-year grace period and created an ersatz “provisional” patent.
This law dramatically expanded “prior art,” which is inventions, disclosures and publications, to encompass anything anywhere in the world — an outrageously impossible trove to dredge and irrelevant to U.S. invention and U.S. patent rights. There’s also “prior user rights” assertion for anybody anywhere to claim to have been using an invention for which an inventor tries to assert exclusivity under his or her patent.
Consider an example of what the AIA hath wrought: Patent owner Low Temp Industries in May 2020 filed a complaint in federal district court against Duke Manufacturing for patent infringement and sought preliminary injunction. The court issued an injunction in June 2021 following discovery and witness testimony. The court upheld the validity of LTI’s patent and cleared the way for trial.
Alleged infringer Duke is taking full advantage of the AIA’s weaponry. Duke appealed the ruling to the Federal Circuit and also requested interpartes review proceedings at the Patent Trial and Appeal Board, AKA “patent death panels.”
PTAB is one of AIA’s malicious assaults on private property rights in one’s inventions. To the contrary, the Constitution itself provides patents to secure private property rights in inventors’ discoveries.
Abominably, PTAB instituted the requested proceeding in what should have been a straightforward denial. LTI points out how this decision warrants scrutiny as to “whether the Board should institute an IPR where the district court has already heard and decided the same invalidity issues between the same parties and institution would guarantee duplication of effort between tribunals.” Moreover, Duke “appealed the district court’s injunction, thereby guaranteeing duplicate parallel proceedings in the Federal Circuit.”
For PTAB to allow a postgrant proceeding when a federal court has determined patent validity and granted an injunction pours salt in the wounds presumably infringed patent owners such as LTI have already suffered. It injects great uncertainty around patents, disrupts patent reliability and disquiets title in inventions, which are critical to our economic security.
The AIA has caused plights such as the one LTI finds itself in to happen on far too regular a basis. PTAB death panels have used adversarial proceedings more than 3,000 times. It’s demolished some 84 percent of the patent claims it’s reviewed.
Parallel proceedings. Duplication of effort and expense. Ignoring the law (35 U.S.C 316(b)) by instituting IPR when it threatens the "economy and the integrity of the patent system.”
Worst of all, setting the table yet again for an administrative tribunal of inferior, unconstitutionally appointed “judges” to second-guess and even overrule constitutionally appointed, real judges in real courts in the judicial branch. It makes Alice's Wonderland seem logical and rational.
Such destruction of the rule of law emerges from the slime of the Administrative State. And the U.S. Supreme Court feeds this monstrosity.
The high court legitimized PTAB in its 2018 Oil States ruling. That misguided opinion further harmed patent rights by opining that patents grant something like a public franchise. Talk about a property rights error on the cusp of a slippery slope!
This summer, a divided Supreme Court ruled in Arthrex that PTAB “judges” aren’t constitutionally appointed. But then the fractured justices fashioned a fig leaf so these administrative hacks can continue exercising judicial powers in the executive branch. Excuse me, what don't you understand about the Separation of Powers?
Not all of Capitol Hill is asleep. The Republican Study Committee in the U.S. House has introduced the Countering Communist China Act. Mainly geared to address China’s aggressive grabbing for the global innovative lead in critical emerging technologies, this legislation includes STRONGER Patents Act provisions to rein in PTAB’s excesses and force on it standards of fairness and due process akin to those of federal court.
The RSC bill also fixes the Supreme Court’s eBay decision that’s resulted in a steep barrier against patent owners winning injunctions. The legislation puts the United States on the side of the TRIPS agreement’s protections of intellectual property, currently under threat at the World Trade Organization and by the Biden U.S. Trade Representative. The bill allows inventor-patent owners to opt out of PTAB when infringers challenge their patents there.
Bottom line: The AIA, aided and abetted by cockeyed jurists, takes away important, constitutionally guaranteed private property rights. This law, compounded by rudderless judges, represents a victory for the Administrative State — the leviathan that gobbles up property rights, due process, fairness, the rule of law and spits out innumerable quasijudicial rulings, regulations and red tape.
Just ask inventors and patent owners like Low Temp Industries if the AIA’s 10th anniversary is reason to celebrate.