By Benjamin R. Ostapuk, Vice President, Director of Intellectual Property Legal Group, Intel
Today, Intel and several other innovators filed a lawsuit under the Administrative Procedure Act against the United States Patent Office (USPTO) in an effort to overturn policies put in place by the USPTO that are undermining American innovation.
As a leading U.S.-based manufacturer, Intel depends on the quality of America’s patent system for protecting intellectual property to innovate new products for customers. Intel invested over $13 billion on R&D last year and is one of the top annual U.S. patent filers. The U.S. patent system plays a key role in our ability to grow, contribute and develop groundbreaking new technologies.
Unfortunately, when vague, low-quality patents ‘slip through the cracks’ and are granted by the USPTO, they can have very harmful effects. These low-quality patents trade widely on the secondary market, and fuel abusive litigation that inhibits innovation and takes away resources from investing in research and product development.
In 2011, Congress passed the America Invents Act (AIA) to address this problem. In doing so, Congress designed a way to enhance the quality of patents, while also offering a less expensive and more efficient way to eliminate bad patents.
Under the new law, patents of questionable merit could be challenged in an inter partes review (IPR), where a trio of USPTO experts could determine whether the patent should have even been granted. These judges sit on a Patent Trial and Appeal Board (PTAB) and until recently, the system had worked well based on the declining number of patent lawsuits and the fact that the AIA helped grow the U.S. economy by $3 billion since 2014.
Unfortunately, the USPTO Director has adopted a new rule that cuts off access to the inter partes review process based on vague discretionary factors while sidestepping evaluation of the merits of these petitions.
Over the past twelve months, the number of discretionary denials under the new rule, denying access to inter partes review without regard to a petition’s likelihood of success on the merits, has more than doubled. Recently, the denial of access to the IPR process is becoming customary as the PTAB leaves suspect patent claims in force by declining to review them based on vague discretionary factors and asserting that those denials are not even subject to judicial review. These policies were adopted without any official rulemaking or opportunity for public comment and are at odds with Congress’ clearly stated goals in the America Invents Act.
An almost immediate result of this behavior by the PTAB is patent litigation rising to levels not seen in nearly a decade. Additionally, the number of those lawsuits being filed by patent licensing entities, meaning entities that do not manufacture products but purchase patents only to sue and tax successful operating companies like Intel, is exploding.
Ultimately, no government agency should be able to create policies that run counter to the will of the Congress that created them.
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