What is the point of examination if patents are not presumed valid?

If you get a patent that won’t make anyone any money, including yourself, the government seems perfectly willing to presume that your worthless patent is valid. However, if you get a commercially valuable patent covering an invention that becomes ubiquitous, the government will not presume your patent to be valid. To call that backward doesn’t begin to scratch the surface, but that is where we find ourselves today.

The Patent Office will tell you that patents have never been presumed valid when they return to the Office for review, so they simply shouldn’t be considered valid when challenged in an administrative trial. What they conveniently leave out, however, is that prior to the creation of the Patent Trial and Appeal Board (PTAB), when a patent returned to the Office for further consideration an examination occurred, not a litigious challenge. The post grant procedures are substitutes for litigation in federal court, yet the Patent Office applies examination standards while nearly universally refusing to allow patent owners the ability to amend their patents.

In short, when creating the administrative trial proceedings the Patent Office created a mongrel mixture of examination and litigation, taking the elements of examination that are least favorable to the applicant and the elements of litigation that are least favorable to patent owner. What you get is an extraordinarily speedy trial with limited procedural rights commonly associated with trials in federal court, but you also get the burdens and standards associated with a patent examination procedure but without any of the rights. Whether the original intent was to railroad patent owners is no longer relevant – that is what has transpired.

Not giving patent owners the right to amend patent claims is particularly instructive. The inability to amend patent claims isn’t fair and doesn’t comply with the statute. For example, 35 U.S.C. 316(d) specifically gives the patent owner the right to “file 1 motion to amend the patent…” Indeed, ignoring the straightforward language of the statute has become a recurring theme at the PTAB. In fairness, in this case the PTAB will tell you they are not ignoring the statute, they do give patent owners the right to file a single motion to amend, which they then nearly universally deny. This intentional misinterpretation of the statute and open disregard for the clear terms of the legislative history has alarmed many within the industry.

Sadly, rather than operate as a check on this unfettered executive power, the United States Court of Appeals for the Federal Circuit has largely been a rubber stamp on the interpretations from the PTAB. The Supreme Court will soon step into this fray in Cuozzo Speed Technologies v. Lee. See Supreme Court Accepts Cuozzo. Regardless of the outcome of that case, which will be decided sometime before the end of June 2016, given the Federal Circuit’s abdication of oversight one can only anticipate that there will be many more opportunities for the Supreme Court to weigh in on PTAB practices and procedures in the coming years.

But why did the Patent Office adopt rules of procedure that were slanted so noticeably toward the challenger and against the property owner who is supposed to own a patent that is presumed valid? Why have PTAB interpretations of the rules and PTAB decisions lead to such obvious procedural unfairness that even a first year law student would notice the obvious lack of due process?

The answers are easy, although hardly satisfying. The Patent Office has only 12 months to complete these reviews so corners have been cut in order for the administrative proceedings to be conducted in lighting-like expedited fashion. Of course, lightening-like proceedings are not always associated with conventional notions of substantial justice and fair play. This is perhaps best exemplified by the PTAB ruling you have a right to file motions but that any and all motions can be denied, even if authorized by rule.

The one rule that doesn’t seem to fit with the speed-at-all-costs modus operandi employed by the Patent Office is the failure to presume issued patents are valid as required by 35 U.S.C. 282. Given the necessity of conducting these proceedings so quickly you might be inclined to think the Patent Office would have erred on the side of supporting the decision previously reached, which would make sense and comply with the statute. You would, however, be wrong.

Those that support the Patent Office rules and PTAB interpretations will tell you that the standards applied are not outcome determinative. Whether patents are presumed valid is also irrelevant, apparently. Likewise, also irrelevant is whether the PTAB applies the district court standard for claim construction or the broadest reasonable interpretation standard applied during examination. It is conceivable that newly discovered prior art could create a problem for a particular patent claim such that the standard applied would not matter, but to say or suggest that it would never matter seems extraordinarily convenient, and not entirely accurate.

Of course, if the standard applied is not outcome determinative, what is the harm in presuming patents are valid like the statute demands? Not only would patents being presumed valid actually comply with the statute, but if the Patent Office actually presumed the patent examiner was correct and placed the burden on the challenger the Patent Office would save itself from the backlash of an anxious industry of patent owners who feel the Office is engaging in a game of bait-and-switch that grants patent applicants a patent after a long, arduous and costly patent prosecution only to have those that are commercially viable challenged in post grant proceedings where none of the work previously done is assumed to be correct.

What exactly was the point of the long, costly and arduous patent examination in the first place if the PTAB simply refuses to apply the presumption of validity? The patent examination process easily takes 4-5 years under the best of circumstances, but in many technology areas the examination process can and routinely does last for more than a decade. What good is an examination process that ends with a patent that isn’t presumed valid by the agency that granted it in the first place? If the Patent Office refuses to presume the work product of patent examiners is solid why should anyone else? What an incredible waste of time and money.

Without substantial reforms to either the patent examination process or to post grant administrative proceedings the Patent Office will create lasting damage to the U.S. patent system. We can only hope that damage won’t be irreparable.