Mysterious Patent Attacks: Policymakers Must Stand Up and Require Patent Membership Organizations Reveal Themselves

By Robert Stoll
March 19, 2021

“Congress did not intend for these parties to pursue their district court action unfettered while using a membership organization to make challenges at the PTAB…. These membership organizations should be required to fully disclose who they work for and who is funding them.”

https://depositphotos.com/33125311/stock-photo-call-to-action.htmlA strong and predictable intellectual property system is crucial to protecting and promoting American innovation around the globe. It allows American businesses of any size to compete globally, creating millions of American jobs. Strong intellectual property rights provide a strong foundation for America’s role as the world’s innovation and technological leader, powering our world with the next generation of technology to help kids learn, to connect remote workers, provide better access to healthcare and help make our planet more sustainable. The role of innovation (from vaccines to communication technology, content creation, etc.) has never been more crucial than during the ongoing COVID-19 pandemic. The ability to protect what one creates or invents grows our economy and GDP, generates incentives to continue the innovation process, and makes our country safer and more secure from foreign adversaries.

Under Attack

However, our patent system is under attack from entities that have taken advantage of an unintended loophole in the America Invents Act (AIA) to undermine patents protecting American businesses. The rise of so-called patent membership organizations, which have been allowed to operate for nearly a decade, is wreaking havoc on our IP system. These membership organizations have used the Patent Trial and Appeal Board (PTAB) to file multiple petitions against targeted patents, without being required to disclose their funding or who they work for, including – potentially – foreign adversaries.

This is bad. The PTAB was created with the intention of serving as a faster, cheaper alternative to district court litigation to determine the validity of a patent. Both Big Tech and small inventors can benefit from such a system. However, membership organizations distort the balance away from small inventors. Now, working through these membership organizations, Big Tech can swamp inventors with even greater costs. In addition to bearing the cost of a patent infringement lawsuit, small inventors must now bear the cost of multiple challenges of the same patent in multiple venues by Big Tech and membership organizations, sometimes even before the patent has ever been asserted in court.

Full Disclosure Should Be Required

This is not what Congress intended. The PTAB was created to allow parties who were sued in district court the option to seek relief at the PTAB within one year, with consequences in the district court action for doing so. Congress did not intend for these parties to pursue their district court action unfettered while using a membership organization to make challenges at the PTAB. This would only drive up the costs and increase litigation at the expense of small inventors and innovation generally. These membership organizations should be required to fully disclose who they work for and who is funding them.

The USPTO has taken steps to address this growing problem and recently made some welcome, and frankly long-overdue, changes. In early December, the Board issued a precedential opinion in RPX Corp v. Applications in Internet Time, LLC, outlining a more thorough inquiry and flexible analysis by the Board as to what is considered a real party in interest with respect to membership organizations that will hopefully help to shine more light on the real affiliations of these groups. This comes on the heels of a decision by the Federal Circuit which clearly recognized an issue here when reviewing the record of the relationship between these membership organizations and their activity in filing petitions at the PTAB on behalf of their members, who would otherwise be barred by the one-year limit imposed by Congress to file a petition at the Board. In drafting the AIA, Congress thought a one-year time limit was appropriate to prevent multiple, frivolous attempts against the same patent. Congress could have opted to not include a time limit, but they declined to do so because they recognized the danger to innovation of multiple, unlimited challenges to a patent. This is key, because while Congress thought that establishing the PTAB was important to address concerns about instances of possible poorly-issued patents, its intent was never to create unlimited, coordinated challenges to patents that in the vast majority of cases are examples of significant R&D investment by companies that are now simply viewed as impediments to the profits of Big Tech.

Another interesting question to ask is whether these membership organizations have standing to sue in district court on behalf of their members? If not, then why are they allowed to litigate at the PTAB? What’s been clear over the past several years is that these member organizations have been using a loophole in the law to circumvent the intent of Congress to do the bidding of some well-funded Big Tech clients. This strategy, while profitable to a few, has resulted in the undermining of U.S. innovation, American jobs and trust in the patent system, which should be standing as a beacon to the world on the importance and strength of American creativity, R&D, and ingenuity. The best way to achieve that goal, is to provide for more transparency and openness at the PTAB by requiring these membership organizations to fully disclose who they work for and who is funding their efforts.

Stand Up

As a proud former public servant and steward of the patent system for over 30 years, including serving as a former Commissioner for Patents at the USPTO, I have been disheartened to see the ongoing attacks on an agency that has as its sole mission the protection of American creativity, innovation, and prosperity. Patents allow inventors and creators of any economic background, creed, race and gender the ability to compete with more well-funded competitors – both foreign and domestic. Patents foster and protect the American dream. It’s about time Congress and our administrative agencies recognize the value of America’s patent, trademark and copyright systems and preserve and enact further policies to protect them so that we can continue America’s global leadership in technology and innovation. Policymakers in Washington, D.C. must stand up and the fight now to protect American innovation.

Image Source: Deposit Photos
Author: amanalang
Image ID: 33125311 

The Author

Robert Stoll

Robert Stoll is a partner at Faegre Drinker Biddle and Reath and a former Commissioner for Patents. Bob retired from the USPTO as Commissioner for Patents at the end of 2011 after a distinguished 34-year government career. He was instrumental in the passage of landmark patent legislation, the America Invents Act, and lauded for his efforts to reduce patent pendency and improve patent quality. Today he frequently acts as a testifying expert witness in federal district court, and also handles complex and procedurally challenging prosecution matters for select clients and law firms.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 40 Comments comments. Join the discussion.

  1. TFCFM March 19, 2021 9:49 am

    Article: “These membership organizations should be required to fully disclose who they work for and who is funding them.

    I don’t have strong feelings either way on this issue (should we require corporations to disclose the identities of all shareholders, too, given that it’s the shareholders who fundamentally own/direct the corporation?). Nonetheless, the identity of the challenger(s) is immaterial to the validity of an issued patent claim.

    The relevant purpose of IPRs, PGRs, and like proceedings is to eliminate invalid patent claims, not to resolve individual infringement disputes (this is why there is no analysis of infringement in these proceedings). Whether or not an issued patent claim is invalid is not in any way dependent on the identity of a person(s) who asserts that the claim is invalid. For that reason, requiring patent-challenging MOs to disclose their members in these proceedings seems as useful as requiring fishermen to teach their catch to ride bicycles.

    Moreover, given the potential estoppel effects of one of these proceedings, you can bet your bottom dollar that owners of a patent that survives one of these proceedings and is later challenged in a district court proceeding will thoroughly investigate the challenger’s connection(s) with the failed post-grant proceeding (and that district court judges will require this discovery). For that reason, the potential risk of “phantom challengers” (or whatever it is the author worries about) seems to be borne more by patent challengers than by patent owners.

    Article: “Another interesting question to ask is whether these membership organizations have standing to sue in district court on behalf of their members? If not, then why are they allowed to litigate at the PTAB?

    These two questions appear to have EASY answers:

    1) Typically no, because an MO rarely, if ever, has any dispute with the patentee that would give rise to Article III jurisdiction.

    2) Because Congress specifically and deliberately designed IPRs not to require Article III standing. In effect, Congress designed these programs to simplify and accelerate the (party-independent) “patent-validity” parts of patent disputes — not the (party-specific) infringement parts of such disputes.

  2. Transparency March 19, 2021 10:11 am

    Greater transparency in the patent system is certainly a laudable goal.

    By that same token, non-practicing patent assertion entities should indicate the source(s) of “their funding or who they work for, including – potentially – foreign adversaries.” At present, they do not.

    And likewise, one would think that greater transparency would counsel towards disclosure of the sources of funding of Mr. Stoll’s advocacy and policy work, like this article.

  3. Pro Say March 19, 2021 11:35 am

    Thanks for the superb exposition Robert.

    Truer words have never been spoken.

    (psst . . . I hear there’s an opening coming up on the CAFC)

  4. ipguy March 19, 2021 12:56 pm

    Full disclosure all around. Parties in interest should not be able to hide behind a law firm and remain anonymous.

  5. Jonathan R Stroud March 19, 2021 2:52 pm

    I am very interested in full disclosure for anonymous patent attacks benefitting foreign companies—like the VLSI (Fortress IP, Softbank, NXP Semiconductors) filings. Or Seven Networks, or Divx, or Hitatchi/Maxell, or INVT SPE, or the 550 IP Edge cases filed last year (and where their funding came from). Or all of the investors in Magnetar Capital. Or Huawei’s prospective use of thousand of U.S. patents to demand $2.50 for U.S. companies who use any 5G technologies. Or Vector Capital, who is asserting semiconductor patents (through an anonymous LLC) against Qualcomm, forcing them to file IPRs to defend themselves against an anonymous and apparently foreign-funded suit. Or SISVEL. Or the list of investors providing funding to Starboard Capital in their $400 million dollar loan to Acacia for further assertions. Or Quarterhill (Canadian) and their various subsidiaries. I could go on, for some time.

  6. George March 19, 2021 4:07 pm

    “Patents allow inventors and creators of any economic background, creed, race and gender the ability to compete with more well-funded competitors – both foreign and domestic. Patents foster and protect the American dream.”

    Except that this is NOT true anymore! It is now far too expensive for inventors of ‘ordinary means’ (not to mention ‘poor’ inventors) to be able to effectively protect their inventions, or even to get ‘good’ patents that will not be deemed invalid shortly after they are issued (with no refunds given)!

    It is now almost IMPOSSIBLE for an ‘average American’ to be able to afford to get a ‘good’ patent, much less afford multi-million dollar litigation, or even ‘less expensive’ PTAB proceedings (which could still cost 10’s of thousands of dollars).

    Our system is totally broken when it comes to equality of protections! There is NO MORE equality when it comes to IP ‘rights’! Invention & ‘prospering from that activity’ has truly become “The Sport of Kings” (and now ONLY for Kings)! I don’t think our Founders would have liked THAT one bit! I think they would have been ASHAMED of what has happened to IP ‘rights’!

    It didn’t used to be this way 100 years ago! Bell, Tesla & many others would never have succeeded had it been that way in the past! Bell & Tesla would have already had to have lots of money to even have had a chance of succeeding. Indeed, under current PTO practices of conducting potentially ‘endless examination’ & REFUSAL to allow ‘broad claims’, Bell would have had to apply for at least 100 patents on his telephone invention and then at least half of those would later have been found invalid & the rest not sufficiently broad to prevent others from manufacturing the same thing! In other words, Bell, would’ve ALREADY had to have been ‘Bell Telephone’ to succeed!

    Indeed, because our patent system is now ‘easily proven’ to NOT BE EQUITABLE and to not provide equal protections to ALL Americans (regardless of ‘class’), it should also be possible to prove that it is now UNCONSTITUTIONAL as well! It now clearly discriminates against those of ‘ordinary means’ It USED TO to provide equal protections to even former poor Black slaves, like Ben Montgomery, but it DOESN’T do that anymore! It doesn’t give a damn about poor inventors anymore! Again, that can ‘easily’ be proven now!

    So, you are wrong about that Mr. Stoll. It’s NO LONGER an ‘equitable’ patent system anymore! It’s now completely ‘rigged’ in favor of large existing businesses & ‘monopolies’!

  7. Anon March 19, 2021 7:49 pm

    Rare that I can say this:

    These two questions appear to have EASY answers:

    TFCFM is absolutely correct in his two provided answers.

  8. TishaWashington March 20, 2021 10:27 am

    Jonathan@5: I doubt you would you be in favor of any scenario in which Unified Patents would have their funding members recognized as RPIs by the PTAB.

    Or am I wrong? Would you be in favor of having your members recognized as RPIs in return for Plaintiffs having to fully disclose all parties that stand to benefit from a successful lawsuit?

  9. Night Writer March 20, 2021 10:50 am

    @1 TFCFM

    It is obvious that you are a paid blogger TFCFM.

  10. Night Writer March 20, 2021 11:04 am

    @1 TFCFM >>For that reason, requiring patent-challenging MOs to disclose their members in these proceedings seems as useful as requiring fishermen to teach their catch to ride bicycles.

    No. The real parties in interest should be known. For one thing if you are a patent owner and have to withstand an IPR, you should have the right to know who it was that made you defend the patent for at least the reason that now you know you can sue them for infringement with estoppel provisions.

    And actually Bob, your article is great but I think the real key here is the institution of an IPR and the prior art used. What happens with 103 is that it is a roll of the dice with any patent claim whether it is deemed valid under 103. The fact finder is like a sovereign in that they can invalidate any claim under 103.

    What is need to moderate IPRs is a showing of why the prior art cited in the IPR is significantly different than the prior art that was used in the examination. IPRs now are effectively just second, third, and fourth bites from the apple.

  11. Curious March 20, 2021 6:22 pm

    What is need to moderate IPRs is a showing of why the prior art cited in the IPR is significantly different than the prior art that was used in the examination. IPRs now are effectively just second, third, and fourth bites from the apple.

    That’s the problem with IPRs. They are rife for abuse, which is particularly detrimental to solo inventors and small businesses who own patents but cannot afford the never-ending trips to the PTAB.

    Assuming that IPRs are here to stay, these are my recommendations for reform:

    A) Limit the institution to those parties who have been sued or have been threatened to be sued (something akin to the standard for a Declaratory Judgment Action).
    B) Limit review to 102 rejections only. As NW pointed out, “[w]hat happens with 103 is that it is a roll of the dice.” Patents should enjoy a presumption of validity.
    C) Prior art should be limited to substantially different than (i) prior art cited during prosecution, (ii) prior art cited during prior litigation, and (iii) prior art cited during a prior IPR. The PTAB shouldn’t be wasting its time addressing issues already decided.
    D) A party that requests an IPR against a particular patent should be precluded from asserting prior art against that patent in any subsequent forum (whether before the USPTO or before a Court).

    Right now, a “win” by a Patentee at the PTAB provides exceptionally little. Very little prevents another party (based upon a wink, wink, nod, nod) from filing an IPR on the same patent based upon similar prior art to that previously filed. There is nothing to stop it from going on and on and on.

    Under the system I propose, an accused infringer gets one chance to cite the best prior art that they can find — either before the PTAB or in Court. Not both. If Patentee prevails, then that should mean something. The accused infringer had their opportunity, and if they mess that up, that’s on them.

    The benefit of the IPR regime we were sold on was that it would provide an less-expensive alternative to District Court to address prior art patentability issues. However, this proposed benefit is frustrated if an accused infringer can surreptitiously have other parties continue to file IPRs so as to avoid the current estoppel provisions. If the PTAB refuses to institute an IPR, then estoppel should still apply. Accused Infringers should get one bite at the apple. If an issue is raised, there should be some finality attached to the resolution of that issue.

    A patent owner doesn’t get a second bite of the apple if their patent is invalidated the first time around based upon the excuse that “we could have made different/better arguments than we made the first time — can we get a second shot at it?” If the patent owner doesn’t get a second bite of the apple, then neither should the accused infringer.

  12. Pro Say March 20, 2021 9:27 pm

    Superb treatise, Curious.

    Fair and reasonable recommendations all.

    Such reform would provide what Congress actually intended with IPRs.

    Either PTAB or Court — but not both.

  13. Anon March 20, 2021 10:21 pm

    Such reform would provide what Congress actually intended with IPRs.

    Why in the world would you say that?

    There is no credibility in that statement.

    In fact, it shows a level of Pollyanna that is downright a detriment to the level of realism necessary to make any meaningful change by way of Congress.

    You cannot root out the problem unless you are willing to admit that the problem is there in the first instance.

  14. Curious March 21, 2021 2:13 am

    You cannot root out the problem unless you are willing to admit that the problem is there in the first instance.
    This is an instance in which I find your comments both annoying and downright unhelpful. All you are doing is berating somebody (ON OUR SIDE) with YOU ADDING NOTHING to the conversation. You don’t explain why you think Pro Say is wrong — you just say he is wrong.

    Try to be PRODUCTIVE with your comments — instead of just being antagonistic. Anyone reading your comment would have little idea as to what your position was and/or what you are supporting.

  15. Anon March 21, 2021 8:56 am

    Curious,

    Perhaps you find it ‘annoying’ that I berate anyone “on our side” as if that alone was THE offense.

    You jump too quickly from “he said something AGAINST our side” to “he said nothing that helps.”

    Slow down.

    Read my post again.

    THINK.

    The statement of “…what Congress actually intended…” is CLEARLY what is Pollyanna.

    Congress KNEW full well what it intended (in part BECAUSE of those like me that INFORMED Congress at the time of formation of the AIA what exactly the outcomes were going to be).

    To pretend (or worse, to actually believe) that Congress did not intend the results that we see now is an impediment to moving forward and having Congress meaningfully address the problems that it has become complicit with.

    FIRST — after you have slowed down, and gotten your undies out of their bunch, and realized that I did more than merely antagonize — recognize WHAT could possibly BE wrong with a Congress that HAS obtained what it desired to obtain.

    Could it be that Congress – in obtaining what it wanted – BE wanting the wrong thing?

    Why in the world COULD Congress be wanting the wrong thing?

    THINK.

    When YOU get to this step, THEN reply and we can continue a dialogue.

  16. Anon March 21, 2021 8:59 am

    … I am reminded of a helpful adage:

    Not everyone that agrees with you is your friend.
    Not everyone that disagrees with you is your enemy.

    Do not be upset that someone “on your side” has taken a disagreement with something said. Realize that when such happens, that there is quite possibly something OFF with what that person HAS said to which the disagreement is being taken.

  17. Curious March 21, 2021 12:04 pm

    Thank you again for adding little to the conversation.

    There is, of course, this gem:
    Congress KNEW full well what it intended
    I would be surprised if just 10% of the Congress knew what they were voting on. Oh please … and you accuse other people of being a Pollyanna? LOL. Congress is a bunch of lemmings.

    Also, many of the negative issues associated with IPRs are how they were implemented by the USPTO. Congress could not know the precise implementation of the process.

    Not everyone that agrees with you is your friend.
    Not everyone that disagrees with you is your enemy.

    Again, if you are going to criticize somebody, at least point out WHY you think they were wrong instead of merely declaring that they were wrong. Try to be productive in your comments.

    THINK.
    That, by far, is probably the biggest problem you have. You believe people are going to read your comments and spend 5 minutes contemplating what you wrote. If you written more than a handful of sentences, you’ve got maybe 30 seconds to stake out a position and support it. If you cannot do it in that time, the reader moves on. If you are making obtuse comments about sovereigns, Kavanaugh scissors, Gordian knots, and fire-hosed apes among the whole host of Anon-isms, you are going to lose the reader who doesn’t have the time to figure out what the heck you are talking about.

    Your best posts are those in which you get to the point with plain English. Your worst posts are those in which you beat around the bush and the average reader is left wondering … what the &^%$ was he talking about? I know Anon-isms as well as anybody out there. However, there are many times I’m left asking my self — what was the point he was trying to make? If I cannot figure it out, then there is little hope for the casual reader.

    People in the community read ipwatchdog. People in the community will also read the comments. This is an opportunity for you to advocate for a particular position. Don’t waste it.

  18. Anon March 21, 2021 2:50 pm

    As you yourself waste your opportunity trying (in vain) to mislabel my admonitions?

    Tend to yourself before you preach, son. Pro Say definitely means well, but does have a habit of taking errant views that diminish and not strengthen “our side.” It simply is better that he be corrected – in this forum, in these comments – then to be misled that his errant views are straight and true. He is not a little wallflower or snowflake and won’t melt away with a little criticism.

    You have now spent far more time on me than the actual underlying issue – and you want to lecture me on wasted opportunity?

    Please stop embarrassing yourself.

  19. Pro Say March 21, 2021 3:45 pm

    Appreciate the support Curious.

    Your points regarding our “friend-in-the-IP-trenches” Anon’s comments are on the mark.

    To insure clarity (though I hadn’t thought it necessary given the audience of Gene’s blog), when I said:

    “Such reform would provide what Congress actually intended with IPRs. Either PTAB or Court — but not both.”

    . . . I was simply referring to the intent by Congress for IPRs / PRGs / CBMs to be quicker, easier, and less-expensive for both patent challengers and patent owners . . . including the resultant material reduction in our courts needing to adjudicate these issues.

    Though the process has become an factual, procedural, and indeed unconstitutional mess, Congress meant well.

    Anon is a great advocate for the fair, reasonable, and constitutional protection of innovation (and I’m thankful that we’re all on the same side).

    But, how he sometimes goes about advocating for such protection . . .

  20. Night Writer March 21, 2021 5:18 pm

    @10 Curious

    Great comments. I think people that were well intentioned could reform the IPR system so that it was reasonable.

    anon, stop harping on the same issues. We know and understand the issue you are bringing up. But we also live in a real world and have a life that is limited. I agree that the Constitutional challenge to the IPRs should continue but reforming them to work should also be pursued.

  21. Dmitry Karshtedt March 21, 2021 6:48 pm

    @ Jonanathan Stroud: Are any of the practices you’re referring to stratagems to get around the doctrines of finality and preclusion (which is what Mr. Stoll’s post is compliaining of), or are you just unhappy that foreign entities are using US courts? I ask because I’m pretty sure that foreigners are allowed to use our court systems, and in fact courts in other countries have in the past been criticized for showing bias toward domestic litigants.

  22. Anon March 21, 2021 9:38 pm

    anon, stop harping on the same issues.

    Coming from you, Night Writer, that’s pretty rich. And it’s not even that I would say ‘heed your own advice,’ as much as I would say: shut the F up.

    I do NOT tell you what to discuss as to your never ending posts, nor would I.

    Any time I take issue, it is with a specific point.

    You can have the courtesy of responding in kind.

    Pro Say,
    Thank you for your kind words, but note my statement at post 15. Not everything you state is stated well. I bear you NO ill-will (no matter the tone of my words), as I do understand the nature of your moniker and that you simply are not likely to be an attorney.

    Do not confuse brusqueness or directness with animosity. I have always believed in the power of sharp words, and use them as I please – but I do use them regardless of the nature of the person I am addressing.

    You would do well to pay heed.

  23. Dmitry Karshtedt March 22, 2021 1:27 am

    @ Jonathan Stroud: Are any of the practices you’re referring to stratagems to get around the doctrines of finality and preclusion (which is what Mr. Stoll’s post is compliaining of), or are you just unhappy that foreign entities are using US courts? I ask because I’m pretty sure that foreigners are allowed to use our court systems, and in fact courts in other countries have in the past been criticized for showing bias toward domestic litigants.

  24. Night Writer March 22, 2021 3:04 am

    @20 anon >I do NOT tell you what to discuss as to your never ending posts, nor would I.

    You DO tell me what to discuss constantly. And this is another case where you want us all to stick with the threshold issue. We get it that IPRs are unconstitutional and so is Alice. But we need to also discuss reforms. We can discuss reforms and believe they are unconstitutional. It can be a two front battle.

    Alice is another example where it could be easily cabined if the CAFC cared to. The “well-known” element is enough to force a 102 reference to hold that it is “well-known”. The problem is the intent of the judges is to weaken patents.

  25. Curious March 22, 2021 8:53 am

    anon, stop harping on the same issues. We know and understand the issue you are bringing up.
    And my point is that many people don’t “know and understand” the issue(s) that Anon is attempting to raise. His posts are oftentimes akin to some serialized novel — some are revealing, some are confusing. Referencing plot points made elsewhere (e.g., Kavanaugh scissors and fire-hosed apes) just leaves the reader bewildered.

    We get it that IPRs are unconstitutional and so is Alice.
    See — this is a great example of getting to the point. No one misunderstands the point attempting to be made here.

    But we need to also discuss reforms. We can discuss reforms and believe they are unconstitutional. It can be a two front battle.
    This is another great point. I recall, for example, making a suggestion as how to deal with 101 rejections based upon the current law and be set upon by Anon for not addressing the big picture. There is a time and place for address the big picture, but there is also a time and place for address the immediate problems at hand. In this instance, figuring the best way to approach a 101 rejection (that doesn’t involve Congress rewriting the law and/or stripping the Supreme Court of original jurisdiction) is a point worthy of discussion here.

    Alice is another example where it could be easily cabined if the CAFC cared to.
    Alice could have easily been cabined if they looked at two things: (i) how the Supreme Court cozied up the to abstract idea originally identified in Bilski and (ii) the idea that “preemption” should be part of the analysis. Right now, the question of whether an invention effectively preempts an identified abstract idea (or judicial exception) is almost entirely ignored at the Federal Circuit.

  26. TFCFM March 22, 2021 10:45 am

    NW@#10: “The real parties in interest should be known. For one thing if you are a patent owner and have to withstand an IPR, you should have the right to know who it was that made you defend the patent for at least the reason that now you know you can sue them for infringement with estoppel provisions.

    IPR estoppel provisions apply to parties that can be shown to have be a “real party in interest.” That an IPR is filed in the name of a separate organization does not change this fact. This is what I referred to in my post when I wrote

    TFCFM@#1: “…you can bet your bottom dollar that owners of a patent that survives one of these proceedings and is later challenged in a district court proceeding will thoroughly investigate the challenger’s connection(s) with the failed post-grant proceeding (and that district court judges will require this discovery).

    If a company is genuinely involved in an organization’s IPR, the evidence will be available and almost always discoverable. On the other hand, when the organization is genuinely acting on its own (and without significant input from its subscribers) to advance what it sees as the “general interests” of its subscribers’ interests, it will likely be accurate that none of those subscribers is a “real party in interest.”

    It does not seem to me objectionable either
    – that the non-subscriber-specific organization might be able to invalidate an invalid patent; or
    – that if the organization fails to invalidate a patent in an IPR, neither the organization nor any of its subscribers will normally have standing to appeal that adverse IPR outcome.

    It seems to me socially, legally, and economically efficient for Congress to permit — as it has with IPRs — industry-common-organizations to act as “private attorneys general” to hunt and kill invalid patents before the purveyor of such a patent can tie up multiple federal courts with lawsuits asserting such a patent. Holders of valid patents seemingly have little to fear and much to gain by withstanding such a challenge.

  27. TFCFM March 22, 2021 10:57 am

    Curious@#25: “…my point is that many people don’t “know and understand” the issue(s) that Anon is attempting to raise. His posts are oftentimes akin to some serialized novel — some are revealing, some are confusing. Referencing plot points made elsewhere (e.g., Kavanaugh scissors and fire-hosed apes) just leaves the reader bewildered.

    I have largely ignored this squabble (better things to do with my time).

    Nonetheless, let me offer the following to Anon, with me having no skin in [whatever this squabble is about]:

    Anon, you do, not uncommonly, appear to reference little more than hot air, and I think this really gets in the way of having any sort of meaningful discussion with you. (I’m happy to see this isn’t just with me.) To cite two specific examples:
    – You’ve several times leapt away from the crux of discussions by crying, “Oh yeah?!? Whaddabout Ladders of Abstraction?!?!!!” and then refused to explain whatever(s) it is you mean by this.
    – You’ve also several times ceased discussions by merely claiming, “I told you before why X is wrong!” and refusing to give any hint as to the time, place, context, substance … of what you propose to have “told” me.

    Speaking at least for myself, I think you will find that discussion remains substantive if you will resist the temptation to refer to obscurities that only you (if even you) understand. (Also, there’s no shame in simply ceasing a discussion if you don’t want to pursue it — dragging it down to a mere “declaration-of-Discussion-Victory!!!-because-no-one-can-understand-what-I’m-talking-about” neither informs nor impresses anyone.

    Please consider whether wasting the time and keystrokes of folks willing to discuss issue with you benefits anyone.

  28. Curious March 22, 2021 11:53 am

    On the other hand, when the organization is genuinely acting on its own (and without significant input from its subscribers) to advance what it sees as the “general interests” of its subscribers’ interests, it will likely be accurate that none of those subscribers is a “real party in interest.”
    This is what I referred to as the “wink, wink, nod, nod” and it is root source of the exception that swallows the rule.

    as it has with IPRs — industry-common-organizations to act as “private attorneys general” to hunt and kill invalid patents before the purveyor of such a patent can tie up multiple federal courts with lawsuits asserting such a patent.
    You mean you want non-interested parties (wink, wink, nod, nod) to have the ability to continually bleed money from patent owners to no end. You cannot bleed well-heeled parties. However, if you have a small company with great technology that the big guys want to use (without a license), they can find ways to file so many IPRs that it will effectively bankrupt a smaller company.

    A small company might spend (in legal fees) $20K to obtain a patent and be forced to pay millions and millions of legal fees to defend serial IPRs. And what do they get for their time and money? Exceptionally little — especially if it is one the “private attorneys generals” who are petitioning because they wouldn’t be sued for patent infringement and it is exceptionally easy to find another “private attorneys general” to file the next IPR.

    Holders of valid patents seemingly have little to fear and much to gain by withstanding such a challenge.
    First, anybody who has experience at the USPTO knows that nearly ANY patent could be invalidated under 103 with a sympathetic fact finder/judge (e.g., the PTAB). With that in mind, no patent owner goes into an IPR confident of a victory regardless of the strength of the patent. Second, there is LITTLE TO GAIN by winning. All one gets under 35 U.S.C. § 315(e)(2) is estoppel to real party in interest/privy petitioner as to any ground that the petitioner raised or reasonably could have raised during that inter partes review. However, that supposedly excludes your so-called “industry-common-organizations” and only applies in which “a final written decision” was issued. If Patentee is going to prevail, they’ll more likely prevail at the institution phase, an a denial of institution isn’t a final written decision. In essence, there is very little to stop another IPR from being filed. As I have written before, a patentee winning an IPR is merely an invitation for that patentee to go back again (and again and again) until such time as the petitioner (or new petitioner — wink, wink, nod, nod) gets a sympathetic panel at the PTAB. There is no winning for patentee — only a chance to get IPR’d again.

    The current implementation of IPRs is rife for abuse and the system has been gamed for the benefit of infringers.

  29. Anon March 23, 2021 7:32 am

    Quick question (but better with a slow and thoughtful answer):

    What’s the difference between an echo chamber and a critical thinker?

  30. TFCFM March 23, 2021 12:19 pm

    TFCFM@#26: “On the other hand, when the organization is genuinely acting on its own (and without significant input from its subscribers) to advance what it sees as the “general interests” of its subscribers’ interests, it will likely be accurate that none of those subscribers is a ‘real party in interest.’

    Curious@#28: “This is what I referred to as the “wink, wink, nod, nod” and it is root source of the exception that swallows the rule.

    How so? No one questions that such a membership organization (MO) seeks to advance the interests of its members (at least, if it is doing what its members are paying it to do). That alone is not (and should not be) a basis for each member to be estopped by whatever the MO does or does-not-do. What gives rise to estoppel (and rightly so) is when a member itself is controlling a post-grant proceeding. If a member is actively assisting an MO, that fact will generally be discoverable and will generally give rise to estoppel. If the MO is acting on its own (even, admittedly, in the general service of one or more members, but without their input), only the MO ought to be estopped.

    Your gripe that patentees are subject to validity challenges is nothing new — this has always been the case. What Congress did by setting up post-grant proceedings is make such challenges separable from the requirements that jurisdiction also exist for an infringement action or DJ action. If anything, this “leveled the playing field” by removing the ability of owners of (invalid, or ridiculously invalid) patents to threaten to inflict millions of dollars of legal costs upon companies to defend meritless infringement suits — and thereby coax unjustifiable nuisance-value settlements instead. Owners of valid and credibly-arguably-valid patents still retain their ability to threaten infringement proceedings (whether they fund such proceeding themselves or through litigation funders — again, the same as ever.)

    Thus, it seems to me that Congress took an important step toward removing costs inflicted by holders of invalid patents, while not-or-little affecting the rights of holders of legitimate patents. Human nature being what it is, I wouldn’t bet the farm that the current system is “perfect” (whatever perfection might look like in this context), but the state of affairs seems to me better than what predominated previously.

  31. Curious March 23, 2021 2:54 pm

    How so?
    I thought I laid out the ‘how so’ fairly clearly. These membership organizations allow their members to skirt the one benefit a patent owner might obtain from a successful defense in an IPR — namely estoppel. Without the estoppel provisions, there is nothing to prevent a patentee from facing unending, money-draining IPRs.

    In District Court, if the plaintiff prevails, they are entitled to an injunction and/or damages. If the defendant prevails, then they cannot be sued again on that patent. However, in an IPR, there is no such symmetrical benefits associated with winning and losing. If Petitioner prevails, the patent (or at least some of the claims are dead). However, if the Patentee prevails, they get nothing more than what they started out with because there is a huge loophole associated with the estoppel provision.

    If a member is actively assisting an MO, that fact will generally be discoverable and will generally give rise to estoppel.
    You mean that unless the member is an idiot by actually creating something discoverable, there is nothing stopping the scenarios I have described. Again, all it takes is a “wink, wink, nod, nod,” which is very unlikely to be discovered.

    If the MO is acting on its own (even, admittedly, in the general service of one or more members, but without their input), only the MO ought to be estopped.
    Herein lies the exception so large that it swallows the rule.

    What Congress did by setting up post-grant proceedings is make such challenges separable from the requirements that jurisdiction also exist for an infringement action or DJ action.
    What Congress did was remove the case or controversy requirement for getting into Court and allow patentees to be harassed at the PTAB merely for their ownership of a patent.

    If anything, this “leveled the playing field” by removing the ability of owners of (invalid, or ridiculously invalid) patents to threaten to inflict millions of dollars of legal costs upon companies to defend meritless infringement suits
    Rule 11 already addressed the issue of meritless infringement suits. If Rule 11 cannot be invoked, then perhaps the patent wasn’t as “ridiculously invalid” as you thought. Also, its not like ex parte reexaminations haven’t been available in the past — for truly “ridiculously invalid” patents, they are a much cheaper option.

    it seems to me that Congress took an important step toward removing costs inflicted by holders of invalid patents
    You think an IPR is cheap? What is much cheaper is an ex parte reexamination — again, a great approach for addressing “ridiculously invalid” patents. An IPR is a tool employed by large companies to grind small companies into submission.

    while not-or-little affecting the rights of holders of legitimate patents
    This statement is laughable on its face. Holders of legitimate patents are actually in worse shape. A “ridiculously invalid” patent is invalidated the first time around. A legitimate patent can be subject to a multitude of different IPRs … each draining cash away from the owner thereof. And to what end? What do the owner of the legitimate patent get from this harassment? The answer is absolutely nothing because organizations know that they get can companies, such as the one associated with Mr. Stroud or MOs, to do the dirty work for their them.

    but the state of affairs seems to me better than what predominated previously.
    Of course it is — in your time here on this blog you have been notoriously anti-patent. Anything that weakens the patent system is “A-OK” is your book.

  32. Anon March 23, 2021 5:45 pm

    What Congress did was remove the case or controversy requirement for getting into Court and allow patentees to be harassed at the PTAB merely for their ownership of a patent.

    Not just that – there is the serious element (a stick in the bundle of patent property rights) that is removed at the institution decision point – quite apart from any actual decision on the merits.

    (cue the Takings discussion)

    This statement is laughable on its face.

    … in your time here on this blog you have been notoriously anti-patent

    Bingo.

    But please, do not ask me to reiterate every single occurrence (I notice that you do not, but I am not going to accuse you of anything untoward)

  33. TFCFM March 24, 2021 10:27 am

    Rather than tap in an unreadably-long counterpoint to every point you raise, I’ll address what appears to be the heart of your response — non-estoppel of members of an MO:

    TFCFM@#30: “If a member is actively assisting an MO, that fact will generally be discoverable and will generally give rise to estoppel.

    Curious@#31: “You mean that unless the member is an idiot by actually creating something discoverable, there is nothing stopping the scenarios I have described. Again, all it takes is a “wink, wink, nod, nod,” which is very unlikely to be discovered.

    Genuine assistance (materially supporting a particular patent challenge) made by a member to an MO will (in most, if not all, circumstances) be discoverable — certainly in any subsequent district court litigation to which estoppel may be applicable, and likely in any post-grant proceeding as well. As much as in any other litigation, deliberate evasion of discovery obligations opens a litigant to potential adverse consequences, including sanctions.

    The extent to which an MO’s member assists the MO in a post-grant proceeding for a given patent will generally be discoverable. If such assistance meets the threshhold, the member will be estopped from certain subsequent challenges of that patent; if not, not. The mere fact that a member assisted the MO regarding a *different* patent in an unrelated challenge, for example, is immaterial to estoppel regarding an unrelated patent. Even more obviously, a member which has provided no assistance beyond mere MO-funding (i.e., no advice, no legal or technical assistance regarding a challenged patent) ought not to be estopped by whatever the MO might do/say/argue regarding the challenged patent). This is precisely what “real party in interest” analysis is supposed to analyze.

    Validity challenges have always been part and parcel of owning a patent, and owners of invalid patents have always and rightly been disadvantaged by such challenges. Uncoupling the ability of patent owners to threaten others from ability to de-fang invalid patents is a positive development, particularly where — as here — the owners of valid patents are unaffected.

    There is nothing the least bit “anti-patent” about wishing invalid patents to be dispatched with as little expense as possible while upholding valid ones.

  34. Curious March 24, 2021 12:21 pm

    Genuine assistance (materially supporting a particular patent challenge) made by a member to an MO will (in most, if not all, circumstances) be discoverable — certainly in any subsequent district court litigation to which estoppel may be applicable, and likely in any post-grant proceeding as well.
    Again, “unless the member is an idiot by actually creating something discoverable” nothing is going to be found. A meeting of members of the MO in which one of the members approaches someone in the MO and points to a particular article that mentions the patent at issue accompanied by the “wink, wink, nod, nod” is unlikely to be discoverable. If the MO is filing petitions for the benefit of the members, I assume they’ll be smart enough not to leave any discoverable trace of being directed to do so or any trace of receiving “[g]enuine assistance.” The MO is receiving financial support from its membership. That all the “assistance” they need.

    If such assistance meets the threshhold, the member will be estopped from certain subsequent challenges of that patent; if not, not.
    Again, you are describing the loophole that swallow the rule. No member will provide assistance that meets that threshold. Rather, they will pay their dues (which will adequately fund the MO) and will identify the targets in undiscoverable ways. This isn’t rocket science here.

    Even more obviously, a member which has provided no assistance beyond mere MO-funding (i.e., no advice, no legal or technical assistance regarding a challenged patent) ought not to be estopped by whatever the MO might do/say/argue regarding the challenged patent).
    Here is the BIG, FAT LOOPHOLE in all of its glory. All an organization has to do pay its MO dues and the MO does the rest of the work. The attorneys hired by the MO are going to do all the real work in attempting to invalidate the patent anyway — who needs the legal or technical assistance. The attorneys will have their own technical experts that they deal with. Everything of what you described is a great big SHAM in order to get around the estoppel provisions. It is an workaround to the estoppel provisions out that is mostly available to the BIG GUYS — another example of why the IPR system is a giveaway to the large efficient infringers of the world.

    particularly where — as here — the owners of valid patents are unaffected
    Have you been reading anything of what I have written? Owners of valid patents are terribly affected. Instead of being IPR’d just once, they can face multitudes of IPRs. Not a big deal when the patent owner is a huge company (or even a large NPE) — however, each unsuccessful IPR to a small company is a hugely negative financial event that can impact the viability of the company. Having a “valid” patent just means that the patent owner gets to do it over and over and over again until they capitulate.

    There is nothing the least bit “anti-patent” about wishing invalid patents to be dispatched with as little expense as possible while upholding valid ones.
    Except IPRs do not dispatch invalid patents “with as little expense as possible” and “valid ones” (particularly those held by small companies) are negatively impacted by the IPR process while receiving no attendant benefit from the process.

    NOTHING of what you have written has explained away how large companies and their MOs can easily sidestep the estoppel provisions despite their collective intent that the MOs stand in the place of the large companies in petitioning the PTAB in order to invalidate patents. NOTHING of what you have written has explained away how owners of valid patents can be subject to abusive IPRs with the current system.

    Seriously, how dumb do you think the rest of us are?

  35. Anon March 24, 2021 12:55 pm

    Seriously, how dumb do you think the rest of us are?

    This has been routinely noted (even if you have an aversion to “serialized” formatting, there IS incredible value there).

  36. TFCFM March 25, 2021 9:17 am

    Curious@#34: “Here is the BIG, FAT LOOPHOLE in all of its glory. All an organization has to do pay its MO dues and the MO does the rest of the work. The attorneys hired by the MO are going to do all the real work in attempting to invalidate the patent anyway — who needs the legal or technical assistance.

    What this explanation demonstrates is merely your misunderstanding of what a “party in interest” is. “Everybody who dislikes an issued patent” is not a single party in interest, the actions of any of which party members estops all others.

    If two parties (say, a company that makes products and an MO that “polices” patents in that company’s area, the company and other companies funding the MO) both dislike a patent, it takes more for ONE of those parties to be a “party in interest” to a post-grant action than the mere fact that THE OTHER party initiated a post-grant action.

    That a patentee merely wishes that a challenge by one party who dislikes the patentee’s patent precludes challenges by all others does not make it so.

  37. Curious March 25, 2021 12:30 pm

    What this explanation demonstrates is merely your misunderstanding of what a “party in interest” is. “Everybody who dislikes an issued patent” is not a single party in interest, the actions of any of which party members estops all others.
    You are a piece of work. There is no misunderstanding on my part. We are both describing the same thing.

    The company that makes the product (i.e., the one who would subject to a claim of infringement) pays dues to the MO. The MO (“that ‘polices’ patents in that company’s area”) files the IPR — using the money from the dues paid by the company that makes the product. For you, that is not enough to make them a “party in interest.” There is no misunderstanding here as to what is happening.

    What we disagree on is whether this is a good thing or not. My point is that this is NOT A GOOD THING for the reasons discussed above. It is a GIANT LOOPHOLE that EVISCERATES the estoppel provisions. Under these circumstances, there is no need for the company that makes the product to ever get their hands dirty (and be estopped) when they can have the MO do their dirty work for them. Moreover, if the MO fails with the first IPR, there are other organizations out there that will also take the company’s “dues” and file subsequent IPRs.

    The important point is that since the estoppel provisions can easily be avoided, the patentee (who is successful defending against an IPR) gets NOTHING out of it. Instead, they are worse off. You keep ducking addressing that issue — not surprising given your past comments, but worth noting nevertheless.

  38. TFCFM March 31, 2021 10:20 am

    Curious@#37: “There is no misunderstanding on my part. We are both describing the same thing. The company that makes the product (i.e., the one who would subject to a claim of infringement) pays dues to the MO. The MO (“that ‘polices’ patents in that company’s area”) files the IPR — using the money from the dues paid by the company that makes the product.

    What you misunderstand is what the LAW (rather than your imagination) considers a “real party in interest.”

    By your imagination’s standard, anyone and everyone who has paid or received a single penny into the global economy is estopped by a first IPR (assuming the filer has received at least a penny from that same global economy).

    The law takes a slightly more-focused view.

  39. Anon April 1, 2021 10:05 am

    TFCFM,

    Your attempt at infinite link of causality is pretty, well, lame.

    Again, these tricks of yours may impress your non-attorney friends, but here, they have the opposite effect.

    Why you insist on not recognizing this is a bit of a mystery.

  40. Patent Princess April 9, 2021 11:56 am

    Membership organizations, more like new age Mafia ?

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