‘Restoration’ of 2011 patent reform bill faces headwinds

By Michael Rosen

History buffs may recall that The Restoration took place nearly 400 years ago, heralding the return of King Charles II of England from his continental exile and restoring the rule of the Stuart family. In 2021, two key lawmakers are seeking to restore the 2011 America Invents Act (AIA), the most significant reform of the patent statute in decades, but they appear to be meeting more resistance than the Stuarts did.

Last month, Sens. Patrick Leahy (D-VT) and John Cornyn (R-TX) introduced the Restoring the America Invents Act (RAIA) in an effort to revitalize the 10-year-old legislation, update it for contemporary times, and “protect the gains” it fostered. “High-quality patents are essential for spurring innovation,” Leahy and Cornyn declared in a press statement, “but poor-quality patents can be abused, costing start-ups, small businesses, American manufacturers, and nonprofits huge sums every year.” Specifically, the measure aims, per Cornyn, to “improv[e] the mechanism” for challenging patents and “ensuring there is a less expensive and more transparent option than drawn-out litigation.”

Sens. Patrick Leahy (D-VT) and John Cornyn (R-TX) exchange greetings during a Senate Judiciary Committee hearing on Capitol Hill in Washington, DC, September 29, 2021, via Reuters

RAIA would empower the director of the US Patent and Trademark Office (USPTO) to review decisions of the Patent Trial and Appeal Board (PTAB) — the administrative court within the USPTO deputized by the AIA to weed out bad patents — and, if appropriate, modify or set aside those decisions, but only in a written opinion setting forth the director’s reasoning. This provision appears consistent with the Supreme Court’s recent ruling, explained here a few months ago, requiring board decisions to be subject to review by the director.

The bill would also modestly expand the legal grounds for potential invalidation of patent claims to include “admissions in the patent specification, drawings, or claims” and so-called “double patenting.” And it would suspend the one-year grace period for PTAB filings when a district court litigant voluntarily dismisses their patent infringement complaint without prejudice.

More controversially, the legislation would also sharply limit the PTAB’s discretion to deny institution of an invalidity proceeding, thereby effectively overruling the board’s own decision in Apple v. Fintiv. That ruling identified numerous factors for the PTAB to consider, including the overlap of issues between a district court litigation and the parallel USPTO proceeding, the amount of investment in the parallel litigation, and the timing of the PTAB filing. But RAIA would permit the board to decline to initiate a proceeding only when “the same or substantially the same prior art or arguments previously were presented to the Office.”

Finally, the measure would compel district courts to consider certain factors when deciding whether or not to suspend litigation when a PTAB petition has been filed while also providing for the immediate appeal of such decisions.

These last elements of the Leahy-Cornyn bill have provoked a significant backlash.

In a press release, the Innovation Alliance, which comprises technology companies like Qualcomm, AbbVie, and Dolby Laboratories, fretted that RAIA would “reestablish PTAB trials as a parallel avenue, as opposed to an alternative to district court trials” as the AIA originally intended. “The most frequent users of the PTAB process are the same Big Tech companies that many in Congress believe are already too powerful,” the Innovation Alliance continued. “We believe this bill would help make them more powerful by giving them additional tools to game the PTAB process,” to “increase the cost of enforcing valid patents,” and to “place an often insurmountable burden on smaller companies and inventors who don’t have the resources to continue fighting to enforce their rights.” Gene Quinn of IP Watchdog was more blunt, assessing that RAIA would “open[] the floodgates for fresh, new rounds of patent owner harassment by challengers and without any consideration for whether another judicial officer has or will soon consider the same issue.”

Other interest groups expressed support for the measure. Josh Landau, who writes for Patent Progress and serves as patent counsel for the Computer & Communications Industry Association, which strongly backed the original AIA, praised the new bill as “overwhelmingly positive for the patent system and for innovation.” He asserted that RAIA “would roll back changes introduced by former USPTO Director Andrei Iancu and by the courts, restoring the America Invents Act (AIA) to what it was always intended to be — a cost-effective alternative to litigation, providing a way to accurately determine whether a patent should have been issued in the first place.” Judging from these and other reactions, RAIA appears to have energized both proponents and antagonists, which likely means that passage in its current form is highly uncertain. The AIA may not retake its crown quite so easily as Charles II.

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