A more permanent solution to inter partes review overreach is needed
A more permanent solution to inter partes review overreach is needed
Inter partes review is a primary tool used by defendants in litigation to invalidate patents, and the Director has helped to guard against its overreach. However, there is nothing to stop a future Director from taking a different approach
U.S. Patent and Trademark Office (USPTO) Director John Squires reportedly stated in his Senate confirmation hearing last year that “with born strong patents and robust quality marks, we can reclaim America’s primacy, revitalize industry and growth, proudly export our culture, boost national security and improve our lives.” He said that if the goal is to have “born strong patents”, we must be honest about what is born with patents and what is not. For instance, a credible mark of novelty is born with every patent—that much is clear. However, novelty is not just technical newness—it is also market impression. If novelty were only technical newness, people would own patents without their technology ever being used in the market. There would be no point to the patent system. This means that the rest of patents—their assertion power, damages recovery power, term limitation, claim bundling provision, inter partes review (IPR) fee requirement, and more—must also be part of the birth. This is how to create born strong patents.
Recently, the USPTO has taken two steps to help inventors. One step addresses claim bundling by accounting for market impression, while another addresses IPR overreach without accounting for market impression. While both steps should be applauded by inventors, only the step that accounts for market impression has the potential to survive different administrations. Several months ago, Director Squires issued an open letter to colleagues, inventors, and Americans, in which he reclaimed his statutory role to institute IPR and post grant review (PGR). He invoked 35 U.S.C. § 314, which provides that the “Director may not authorize an inter partes review to be instituted unless the Director determines that the information presented in the petition… shows that there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition.” The Director’s move here is a great one for inventors. IPR is a primary tool used by defendants in litigation to invalidate patents, and the Director has helped to guard against its overreach. However, there is nothing to stop a future Director from taking a different approach. This means that while the solution is great, it does not address the core issue when it comes to IPR, and likely does not have staying power.
Inventions that leave deep impressions on the market have greater need to guard against IPR overreach. Patent law today does not account for this because the right to require future defendants to pay for IPR is currently not born with patents. Instead, it is the same for all patents. Defendants in litigation all have to pay a fixed IPR request fee of $23,750 and a fixed IPR post-institution fee of $28,125. These fees are a nominal expense for many defendants, which is the real problem with IPR. The solution is simple—the right to require future defendants to pay fees for IPR must be variable by accounting for market impression. This would involve allowing inventors to increase these fees for future defendants in exchange for increased payment to the USPTO. The increases may be in filing fees, maintenance fees, or another form of payment.
