Renewed Efficiency in Administrative Patent Revocation

AuthorSaurabh Vishnubhakat
PositionAssociate Professor, Texas A&M University School of Law; Associate Professor, Texas A&M University Dwight Look College of Engineering; Fellow, Duke Law Center for Innovation Policy; former Expert Advisor, United States Patent and Trademark Office
Pages2643-2677
2643
Renewed Efficiency in Administrative
Patent Revocation
Saurabh Vishnubhakat*
ABSTRACT: Administrative patent revocation in the U.S. is poised to enter
a new period of efficiency, though ironically it will be an efficiency that the
America Invents Act originally put in place. The Court’s recent approval of
the constitutionality of Patent Trial and Appeal Board (“PTAB”)
proceedings was blunted by the Court’s accompanying rejection of partial
institution. This Patent Office practice of accepting and denying validity
review petitions piecemeal had been a key part of the agency’s procedural
structure from the start. As a result, the Court’s decision in SAS Institute v.
Iancu to require a binary choice—either fully accepting a PTAB petition or
fully denying it—is already being criticized for sacrificing efficiency on the
altar of wooden statutory interpretation, including two dissents from the
decision itself. Starting from the premise that SAS Institute was rightly
decided, however, this paper makes two contributions. The theoretical
contribution is to contrast PTAB estoppel with ordinary principles of res
judicata and collateral estoppel. This important context is lacking in the
literature, and the profound effect of SAS Institute on PTAB estopp el makes
this evaluation especially timely. The empirical contribution is to marshal
new data and guide the difficult structural choices that the agency must now
make in order to comply with SAS Institute. Notably, though Justice
Ginsburg’s dissent suggested that the agency could comply with the Court’s
decision through a few empty gestures, her mock proposal is actually a sound
plan of action. By reinvigorating Congress’s view of efficiency, one that is
more systemic than merely minimizing short-term agency workload, the Court
has enabled the Patent Office to resolve open questions about the maturing
*
Associate Professor, Texas A&M University School of Law; Associate Professor, Texas
A&M University Dwight Look College of Engineering; Fellow, D uke Law Center for Innovation
Policy; former Expert Advisor, United States Patent and Trademark Office. The arguments in
this writing are the author’s and should not be imputed to the USPTO or to any other
organization. Sincere thanks to Bryan Choi, John Duffy, Brian Holland, Dmitry Karshtedt, Jay
Kesan, Meg an La Belle, Ma rk Lemley, Ada m Kelly, Adam Mo ssoff, David O ’Brien, Lisa O uellette,
Tanya Pierce, Arti Rai, Josh Sarnoff, Stefani Shanberg, Jonathan Stroud, Chris Walker, and
participants at the 2018 Iowa Law Review Symposium, the Ohio State Law Faculty Summer
Workshop Series, and the 2018 Intellectual Property Scholars Conference for helpful comments.
2644 IOWA LAW REVIEW [Vol. 104:2643
system for resolving patent validity through administrative, rather than
judicial, process.
I.INTRODUCTION ........................................................................... 2644
II.THE PRECLUSION PARADOX IN PATENT OFFICE REVOCATION ... 2647
A.PTAB ESTOPPEL AND ITS ABERRATION .................................. 2647
B.WHY PTAB ESTOPPEL IS PROBLEMATIC ................................. 2649
III.SAS INSTITUTE AND ITS AFTERMATH ........................................... 2651
A.PARTIAL INSTITUTION AND ESTOPPEL .................................... 2651
B.FUTURE PETITIONS AFTER SAS INSTITUTE ............................. 2654
C.CURRENTLY PENDING CASES .................................................. 2657
D.LITIGANT INCENTIVES ........................................................... 2658
IV.TOWARD MORE EFFICIENT PTAB ADMINISTRATION .................. 2659
A.CASELOAD EFFECTS OF PARTIAL INSTITUTION ......................... 2659
B.INCENTIVES OF THE AGENCY .................................................. 2666
C.UPCOMING QUESTIONS FOR THE FEDERAL CIRCUIT ................. 2668
1.Inter Partes Review’s One-Year Time Bar .................... 2668
2.Judicial Stays Pending PTAB Review.......................... 2673
V.CONCLUSION .............................................................................. 2677
I. INTRODUCTION
More than six years since Congress empowered the Patent and
Trademark Office (“Patent Office”) to reevaluate and revoke issued patents
through administrative trials, the agency continues to seek an efficient
structure for its system of review. Although administrative review of patent
validity has existed in other forms since 1980, the 2011 America Invents Act
(“AIA”) created the first truly adversarial agency trial proceedings that could
act as credible substitutes for the federal courts in adjudicating patent
validity.1 Court-agency substitution is a central feature of all three AIA
proceedings: inter partes review, covered business method review, and post-
grant review.2 What makes these substitutes attractive are several salient
differences from judicial process.
Modern Patent Office review is intended to make it systematically easier
to invalidate patents generally—so that patents of questionable quality will be
more likely to fall. For example, patent validity review under the AIA has no
1. See Saurabh Vishnubhakat et al., Strategic Decision Making in Dual PTAB and District Court
Proceedings, 31 BERKELEY TECH. L.J. 45, 50–64 (2016) (summarizing the history of ex post
administrative review prior to, and under, the AIA).
2. Id. at 64–81 (discussing court-agency substitution through AIA proceedings).
2019] RENEWED EFFICIENCY 2645
standing requirement, unlike court proceedings under Article III.3 AIA
reviews also allow patents to be revoked by a preponderance of evidence
rather than by clear and convincing evidence, as courts demand.4 And before
deciding whether a patent is so broad as to be invalid, AIA reviews assumed
until recently that the patent has broader scope than it would in litigation.5
Indeed, AIA proceedings have been so successful at their intended purpose
that the very idea of supplanting the primacy of Article III courts has provoked
fundamental constitutional disputes about who can properly revoke vested
patent rights.6 Last Term, the Supreme Court resolved the major
constitutional dispute in favor of allowing Patent Trial and Appeal Board
(“PTAB”) review to continue.7
Amid the grander debate, however, a quieter structural struggle has also
been unfolding. Its focus is the efficient administration of Patent Office
proceedings under the AIA and the agency’s control over its own docket as
both a policy lever and a case management lever. The agency’s PTAB, which
conducts all three types of reviews,8 has important institutional features that
reflect how the agency has tried to fulfill its mandate from Congress and what
normative choices it has made along the way. And in this more specific
controversy, the Court in SAS Institute v. Iancu upended a cornerstone of
PTAB administration—partial institution.9
Before SAS Institute, the PTAB did not always just institute or deny a
petition for review. It routinely chose a third way, instituting petitions in part
and denying them in part. The Patent Office view on this matter was
straightforward. The authorizing statute was ambiguous about the criteria for
instituting review, and the ability to pick and choose among patent claims
arguments in a petition was a commonsense lever for efficiency. The power
of partial institution let the PTAB focus on the most relevant and meritorious
arguments, dispense up front with unavailing arguments, and proceed to trial
3. See 35 U.S.C. § 311(a) (2012); Consumer Watchdog v. Wis. Alumni Research Found.,
753 F.3d 1258, 1262 (Fed. Cir. 2014).
4. Compare 35 U.S.C. § 316(e) (allowing patents to be revoked after an inter partes review
proceeding upon a showing of preponderance of the evidence), with Micr osoft Corp. v. i4i Ltd.
P’ship, 564 U.S. 91, 95 (2011) (holding that asserting patent invalidity as a defense to
infringement requires clear and convincing evidence).
5. See 37 C.F.R. § 42.100(b) (2012); Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131,
2136 (2016). The Patent Office in late 2018 changed this broader standard for claim
construction and aligned it with the interpretive approach that governs in infringement
litigation. See 37 C.F.R. § 42.100(b) (2018).
6. See generally Oil States Energy Servs., LLC v. Greene’s Energy Grp., LLC, 138 S. Ct. 1365
(2018) (questioning whether the PTAB has the authority to revoke a patent through inter partes
review); see also generally MCM Portfolio LLC v. Hewlett–Packard Co., 812 F.3d 1284 (Fed. Cir.
2015) (rejecting the argument that inter partes review violates the Constitution), cert. denied, 137
S. Ct. 292 (2016).
7. Oil States, 138 S. Ct. at 1379.
8. 35 U.S.C. § 6 (including reexaminations, derivation proceedings, and inter partes reviews).
9. SAS Inst. Inc. v. Iancu, 138 S. Ct. 1348, 1359–60 (2018).

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