Written by: Mark Terry

PART ONE
           

The USPTO and Congress have been looking for ways to reduce the damage done by patent trolls and their often-times frivolous lawsuits. One way of doing this has been by restructuring the inter partes reexamination procedure into an inter partes review (IPR) process. This seemingly minor change may have some major implications on the future of patent litigation.

The mix of players that fight for the billions at stake in federal patent infringement cases include inventors, manufacturers, patent trolls, patent consulting firms and investment firms. Each can derive a profit from a patent based on their strategy and their role. Inventors and companies like Apple obtain patents to protect innovative products sold to consumers. Copycat manufacturers look to invalidate patents to profit from already successful products, of which most are in the electrical, computer and drug industries. Patent trolls buy or obtain patents purely for financial gain, without having any intentions of selling a product on the process. Patent consulting firms can help companies protect their inventions or patents or can help their clients challenge a competitor’s patents. Lastly, “investment” firms can use the process by investing in it and hoping for a payday at the end. Each of these entities can either fight their case in Federal Court or through the USPTO’s Patent Trademark and Appeals Board. Going through the Federal Court system can be costly and time consuming. Thus, more and more entities are using the USPTO’s reexamination process, which includes ex parte reexamination and a newly implemented inter partes review (IPR) process. The reexamination process is much faster and more cost effective than using the Federal Courts, but the process may actually be helping those entities that some are trying to push out.

The new processes are aimed at ensuring that rulings on a patent’s validity during the post grant and IPR processes are upheld in court. Thereby limiting an opposing party from re-challenging the validity/in-validity of a patent in Federal Court after the Board’s decision. By eliminating the ability to re-litigate in Federal Court an issue that was already decided at the Patent Office, efficiency prevails. This also restricts similar or identical lawsuits in other forums, thus making it more difficult to protract a fight for years on end. This seems to be a good idea, but the good intentions because this new process, may actually have made it easier for entities to challenge patents through the USPTO’s process, by avoiding the high costs of a civil law suit. Thus, the new IPR process has actually attracted the attention of many. To wit, the USPTO has actually received twice the amount of review requests than it originally expected. Furthermore, the review process seems to be favoring the challenging third party over the inventor or patent owner. The data shows that more patents are being cancelled than being upheld. Is this because these patents are poorly written or is it because the process makes it too easy to challenge a patent? Time will tell as to whether this process will achieve its intended goal.

Mark Terry is a Board-Certified Specialist in the area of Intellectual Property Law and operates a patent and trademark practice in the City of Miami. Contact Mark Terry if you have any questions regarding enforcement of patents, trademarks and copyrights.