As the US digests the election, why “it’s the PTAB stupid” for IP policy in the next Congress

As the United States digests the election result, Apple and Google’s assault on the USPTO shows where the patent policy battle lines have been drawn

As we near the end of President Trump’s first administration, it is clear that his term has not produced the same kind of legislative IP landmark as President Obama’s first four years brought in the form of the America Invents Act. Whether you think that the act is good or bad news may come down to your view on its principal progeny – the PTAB. Nevertheless, Trump’s time in the White House has hardly been quiet in terms of intellectual property and policy.

While allegations of IP theft have underpinned discussions around a new trade agreement with China and contributed to heightened geo-political tensions between the two, patent rights have lurked in the background over discussions to lower drug prices. Plus, there has been the series of reforms from the USPTO under Director Andrei Iancu and a shifting of the goalposts around SEPs from the Department of Justice and activist antitrust chief Makan Delrahim. These changes have generally been welcomed by many patent owners who did not feel quite as positive about those introduced under Obama.

It would be safe to assume that attempts to reform Section 101 will re-surface, despite the difficulties that various stakeholders have had in finding consensus on a possible bill. IP theft and patent rights in general will also presumably remain in the picture when it comes to China trade relations and attempts to lower prescription drug prices – particularly those that apply to covid-19 treatments and a vaccine.

Beyond this, it seems that the PTAB’s workings are going to loom ever larger in the policy landscape. Iancu trumpeted early on in his tenure that it was a “new day” at the PTAB and a series of reforms and string of precedential decisions have certainly brought about plenty of change.

However, this new day has drawn some strong opposition from Big Tech. At the end of August a quartet from Silicon Valley comprising Apple, Cisco, Google and Intel filed a lawsuit against the USPTO in an attempt to block the application of a relatively new rule, which governs when an inter partes review can be denied where there is a parallel district court case in play.

As we reported earlier this year, there has been a sharp uptick in the use of discretionary denials at the PTAB handing patent owners a rare bright spot at the board. For serial inter partes review filers (eg, Apple and Google), the approach of many district court judges to stay an infringement suit when a review has been filed has clearly worked in their favour. The PTAB’s new rule and the approach of a few judges – most notably Judge Alan Albright in the Western District of Texas – not to stay a suit therefore represents a marked turning of the litigation tide.

The fact that these four tech giants have taken the very public step of filing suit in the Northern District of California underlines the depth of feeling in parts of the valley. Shortly after the case was filed, Cisco’s general counsel Mark Chandler turned to the company blog to explain more about the thinking behind the case. Here, he claimed that the use of discretionary denials at the PTAB went against Congress’s intentions when it created the post-issuance regime. “Congress wanted timely IPRs to proceed, regardless of the pendency or pace of parallel district court litigation,” he wrote.

The case has come amid plenty of speculation in Washington DC patent circles that the approach to discretionary denials is about to be enshrined in a new rules package. Whether this now materialises with the Northern California suit in motion remains to be seen, but the case points to where some of the giants of Silicon Valley are going to be placing their patent policy chips in the next four years.

Should we have a new USPTO director in the next 18 months, the focus will shift to how they handle the case and the growing use of discretionary denials. This may also mean that IP issues move up the policy agenda for Big Tech as they did in the run-up to and in the aftermath of the America Invents Act.

If we are facing the prospect of a new USPTO head then the valley will no doubt be using its considerable influence and lobbying dollars to have its say on who leads the agency.

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