“The PTAB trial is itself very abbreviated. While a federal district court trial involving patent infringement takes several days or weeks, PTAB “trials” – which consist merely of attorney oral arguments – take a few hours.”

A Review of PTAB Procedures

The key to understanding the absence of due process in PTAB lies in identification of the procedures applied in IPRs. The PTAB procedures for IPRs include:

• Application of the “broadest reasonable interpretation” (BRI) review standard;

• No realistic opportunity to amend claims;

• No real estoppel procedures, including ignoring estoppel of prior art previously reviewed;

• Supplying an institution decision (that cannot be appealed) using the same panel that reviews the matter;

• Application of the lower evidentiary standard of preponderance of evidence (POE) rather than the “clear and convincing” (C&C) standard applied in courts;

• Stacking panels by the PTO director with a clear bias of judges to infringers;

• Application of a broad interpretation of “obviousness”;

• Allowing a group of companies to cooperate to successively attack patents;

• Removal of federal district courts from review of PTAB decisions;

• Allowing forced settlements in PTAB between the parties on unfair terms;

• Allowing an appeal only to the CAFC with an effect to prolong determinations;

• Requiring high asymmetric costs to defend a patent for the patent holder;

• Failure of panels to supply a final determination on all challenged claims;

• Failure of panels to consistently supply reasoning for their determinations;

• Allowing any third party, including parties without standing or not involved in a dispute, to challenge a patent; and

• Ignoring the presumption of validity in a patent.

The sum of these procedures shows a clear lack of due process, enabling a systematic attack on patents in an Article I tribunal that sabotages a fair playing field for the parties. It is argued that PTAB requires “parental oversight” in the federal district courts so as to prevent abuses.

The burden is on those arbitrators or adjudicators to show that they are free from conflicts of interest. A judge must recuse himself if there may be “a direct, personal, substantial, pecuniary interest” (Tumey v. Ohio, 273 U.S. 510 (1927)) in a matter that shows a tendency to be biased. The Fifth Amendment guarantees immunity from bias.

In addition to procedural due process, elements of substantive due process may apply to common law cases as well. For instance, IPRs have demonstrated a clear government agency intrusion on private property rights by compelling involuntarily the expenditure of great costs to defend a patent after its issuance by a government agency. The AIA appears to disrupt the right to privacy in a patent by the patent holder by instituting patent validity review in a government agency against the will or interest of the patent holder. Patent holders have the liberty not to be relentlessly attacked by typically large technology company infringers employing asymmetric economic advantages in IPRs. The existence of IPRs transform a patent from an asset to a liability, forcing patent holders to incur a great cost (of six to seven figures) to defend. In brief, IPRs constrain the patent holder’s liberty to own a patent without molestation by a government entity. Consequently, substantive due process protects patent holders from undue incursions by the legislature to establish Article I tribunals to attack patent validity. The profound adverse effects of IPRs on the economy, viz., substantial declines in technology investment and the consequent declines in productivity growth, show that IPRs are illegitimate.