Balancing Purpose, Power, and Discretion Between Article III Courts and the Patent Office.

Date22 June 2021
AuthorWeber, Emily N.

    The function of the United States Patent and Trademark Office ("USPTO") is to promote the industrial and technological innovation of the nation and strengthen the economy through the preservation, classification, and dissemination of patent information. (1) The America Invents Act ("AIA") prescribed a multitude of supporting goals to best promote innovation, such as preserving "quality patents," (2) "timely consideration" of issues, (3) maintaining "cost-effective" methods, (4) preventing "frivolous litigation," (5) and preventing "uncertainty." (6) The AIA ensures the "efficiency, objectivity, predictability, and transparency" of the patent system. (7) Part of this act included revamping the adjudicatory forum located within the USPTO, the Patent Trial and Appeal Board ("PTAB"), a body that decides patentability questions via AIA trials. (8) One type of is Inter Partes Review ("IPR"), a post-grant review proceeding. (9) IPR has the potential to promote innovation and support the many goals of the AIA. However, that potential is unrealized. This is in part because the policies surrounding IPR are heavily influenced by the discretion of the acting USPTO Director ("the Director"). (10) This discretion has allowed external factors, such as trial dates of district court litigation, to greatly affect the effectiveness of IPR. (11) In the past decade, institution of IPR has been inefficient, subjective, unpredictable, and not transparent. This Note explores the relationship between IPR and the discretion of the Director, the consequences of that relationship, and how that relationship is influenced by external factors.


    Federal patent laws are rooted in the United States Constitution, which grants Congress the power to "promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries." (12) The United States Patent & Trademark Office derives its authority from this provision and is responsible for granting and issuing patents. (13) U.S. patent laws are codified in Title 35 of the United States Code, which governs all AIA trials in the USPTO. (14)

    A patent must describe an invention in "full, clear, concise, and exact terms as to enable any person skilled in the art" to be able to recreate and use the invention as well. (15) The patent should conclude with patent claims, the portion of the patent that confers patent protection. (16) The language of the claims must be "definite" to ensure that the scope of the claims is clear, the public is informed of the boundaries of what constitutes infringement of the patent, and the USPTO is provided a clear measure of what an applicant regards as the invention so that it can be determined whether the claimed invention meets all the criteria for patentability. (17) Patent quality increases when the patent accurately conveys the scope of the invention. (18) Ensuring a patent complies with all relevant statutes, including [section] 101 eligibility, [section] 102 novelty, [section] 103 obviousness, and [section] 112 specification requirements, ensures the quality of the patent. (19)

    Patent applications submitted to the USPTO are reviewed by patent examiners--skilled scientists and engineers who determine whether a patent should be granted. (20) Examiners must determine if an invention is worthy of patent protection; that is, the invention is new, useful, and nonobvious. (21) The USPTO employs over 8,300 patent examiners. (22) In 2019, there were 669,434 patent applications filed at the USPTO. (23) Patent examiners are allocated a pre-determined number of hours to review each application based on the complexity of the subject matter and the seniority of the examiner. (24) Their pay is a pre-determined calculation based on these factors. (25) On average, a patent examiner will spend nineteen hours reviewing an application, which includes reading the application, performing a prior art search, drafting and responding to office actions, and conducting an interview should the patent applicant request one. (26) Examiners are compensated under the assumption that this calculation of pre-determined hours accurately reflects the time spent on review. (27)

    Two critical components of maintaining the efficiency, objectivity, predictability, and transparency of the patent system are to ensure "the timely consideration of patent applications and the issuance of quality patents." (28) Patent quality improves when the most relevant prior art is available for consideration. (29) Prior art is any evidence that an invention was already available to the public, which precludes the availability of a patent. (30) Patent protection is only available for "new" inventions; if the invention has already been described publicly, then it is not "new." (31) Unfortunately, due to the time constraints imposed on patent examiners, the most relevant prior art of an invention is not always available for consideration, leading to the issuance of low-quality patents. Patents of low quality enable extortion of "unreasonable licensing fees from legitimate businesses," sparking a "perverse form of patent litigation innovation." (32) Too many problematic patents "cast doubt on truly high-quality patents." (33)

    This is not a new problem and there is no simple fix. The USPTO has hired more patent examiners in an effort to combat this problem. (34) However, it is almost impossible to prevent all low-quality patents from slipping through the cracks. What is important is what can be done after a low-quality patent is issued; this is where IPR shines.

    1. The Development of the Post-Grant Proceeding Known as Inter

      Partes Review

      The patent process does not end after a patent has been issued. One may challenge a patent in civil litigation. (35) In 2011, Congress noted a "growing sense that questionable patents [we]re too easily obtained" and "too difficult to challenge" through the methods available at the time. (36) To address these concerns, Congress passed the America Invents Act. (37) The AIA gave the PTAB the power to review patentability in a proceeding known as inter partes review. (38)

      Congress created IPR proceedings to provide an alternative to litigation over the validity of previously granted patents by "establish[ing] a more efficient and streamlined patent system that will improve patent quality and limit unnecessary and counterproductive litigation costs, while making sure no party's access to court is denied." (39) IPR allows petitioners to challenge the validity of one or more patent claims before the PTAB without the need for civil litigation. (40) By far the most popular of the post-grant proceedings, IPR has become a significant tool for challenging patent validity. (41)

    2. Inter Partes Review on the Basis of Necessity

      For many alleged infringers, defending an infringement claim in civil litigation is out of reach financially. (42) Alleged infringers, the defendants, often agree to settle or license the patent as the lesser of two evils compared to the costs of civil litigation. (43) Typically in a patent settlement, the accused infringer will agree to pay the patent owner, stipulate to the patent's validity, and promise not to challenge the patent in the future. (44) A sweeping number of patent lawsuits settle before trial--roughly 90% are abandoned or settled. (45) The patent cases that are most likely to settle involve patents that have been the subject of eight or more lawsuits. (46) Trial courts encourage settlement through pressure by individual trial judges, court-ordered settlement conferences, and the pro-settlement jurisprudence developed by the Federal Circuit. (47) An alternative to litigation thus became necessary to prevent defendants from pigeon-holing themselves into settlements. (48)

      As evidence of this necessity, when cases involving litigation-weathered patents are adjudicated rather than settled, the patents experience a higher rate of being invalidated. (49) This higher rate of invalidation is attributable to entities referred to as "patent trolls," who abuse the civil litigation process with low-quality patents. (50) A patent troll is a person or company that attempts to enforce patent rights against accused infringers beyond the actual value of the patent through frivolous or vexatious litigation. (51) Patent trolls are sometimes referred to as non-practicing entities ("NPE"), as they often do not manufacture products or provide services related to the patents at issue. (52) Congress addressed the issue of patent trolls during arguments concerning the AIA. (53) Congress acknowledged the existence of a "trolling situation" in which low-quality patents became the basis of a whole legal industry, creating a "huge nuisance value," flooding the courts with unnecessary litigation. (54) While high-quality patents are necessary for innovation, low-quality patents damage the economy by granting protection over products and processes that were not inventive. (55)

    3. Inter Partes Review in Context

      The Framers of the Constitution were aware of the dangers of an invalidly issued patent, fearing that such patents would not reward innovation but instead impede commerce. (56) The Patent Clause of the Constitution is "both a grant of power and a limitation," and Congress has a duty to enforce the balance between encouraging innovation and stifling competition through the awarding of patents that do not "promote the Progress of Science and useful Arts...." (57) Part of preventing stifling competition includes decreasing the number of "defectively examined and therefore erroneously granted patent[s]." (58) At the same time, property rights and the presumption of validity on behalf of issued patents are at the core of a patentee's (the innovator's) interest. (59) IPR contains several procedural limitations to enforce a balancing act on behalf of patentees and...

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