Weaponizing IPRs

• Author: Steven C. Carlson
• Position: Steven C. Carlson is a partner at Robins Kaplan LLP in Silicon Valley, specializing in intellectual property and high technology litigation. He can be reached at scarlson@robinskaplan.com. The views reflected herein are not necessarily those of Robins Kaplan LLP.
• Pages: 38-42

Published in Landslide® magazine, Volume 12, Number 1, a publication of the ABA Section of Intellectual Property Law (ABA-IPL), ©2019 by the American Bar Association. Reproduced with permission. All rights reserved.

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36 LANDSLIDE n September/October 2019

Weaponizing IPRs

Patent reform was heralded as a way to clean out

bad patents and ght “patent trolls.” In 2011,

Congress passed the America Invents Act (AIA)

and thereby created a tribunal within the U.S.

Patent and Trademark Ofce (USPTO) for evalu-

ating challenges to patent validity called the Patent

Trial and Appeal Board (PTAB). The PTAB and its

proceedings (inter partes reviews, or IPRs, among

others) were envisioned as an efcient vehicle for

challenging the validity of issued patents. And in many ways,

the PTAB has delivered on this promise.

PTAB Standing Rules Open Patent Portfolios

to Liability

Petitioning the PTAB has the barest of standing requirements.

As long as the petitioner (and its privies and other real parties

in interest) divulges its identity, any person other than the pat-

ent owner may petition to invalidate a patent. The petitioner

can le separate petitions against different claims of a pat-

ent. Moreover, the PTAB’s practice has been to allow a single

petitioner to le multiple petitions against a single claim

(Samsung, for example, has led six petitions against a single

patent claim). The impact of this open standing require-

ment is that a party that wants to unleash a torrent of actions

against a patent owner has the ability to do exactly that.

Unsurprisingly, given the open standing rules in the PTAB,

companies have discovered that the PTAB provides potent

leverage. Well-funded petitioners have adopted the PTAB as

a favored jurisdiction for putting pressure on smaller patent

owners, particularly those that have potentially troublesome

intellectual property positions.

Innovative companies with burgeoning patent portfolios may

nd that their portfolio is as much a liability as an asset. If an

innovative company nds that one of the “tech giants” is exploit-

ing the technology that the innovator developed and patented,

and dares to confront this infringement, the innovator may be

threatened with an onslaught at the PTAB. That is, the tech giant

may respond with the prospect of ling petitions, and often mul-

tiple petitions, against each and every patent in the innovator’s

portfolio. The bigger the portfolio, the bigger the campaign that

the tech giant can launch against the innovator.

The harm to the innovator is immense. An innovator with a

modest patent portfolio may nd itself on the receiving end of

dozens of PTAB petitions, regardless if it ever led suit or threat-

ened to enforce the patents. Defending against this barrage could

easily cost several million dollars. The entire patent portfolio

would be tied up in the PTAB for 18 months or more. Attempt-

ing to countersue in district court would likely result in a stay,

meaning there would only be pressure against the tech giant if

and when the patents emerge from the PTAB (presuming that the

innovator itself is able to survive the dispute, including appeals).

Securing funding to weather this war, whether it be funding for

the litigation or just basic operations funding, when under a hail-

storm of litigation from one of the tech giants is precarious at

best, and more likely impossible for a nascent company without

a large and established revenue stream.

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