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A Look Ahead: Trends in PTAB Trials

In an increasingly evolving marketplace where exploiting patent rights is crucial to competitive survival, challenging your competitors’ patents—and defending your challenged patents—is more important than ever. Effective use of proceedings before the United States Patent and Trademark Office’s (USPTO) Patent Trial and Appeal Board (PTAB), the tribunal of administrative patent judges (APJs) at the USPTO, is now part of nearly every effective patent enforcement and defense strategy. But just as the marketplace evolves, so does the PTAB and its rules and procedures.

Brent Babcock is the chair of Loeb & Loeb’s PTAB Trials Practice Group. He represents high-technology clients in every aspect of intellectual property (IP) disputes, focusing on federal district court litigation throughout the country, trials and post-grant patent proceedings before the USPTO, ex parte appeals before the PTAB, and alternative dispute resolution proceedings, including domestic and international arbitrations. His practice also includes pre-litigation counseling, pre-interference and post-grant proceeding consulting, ex parte appeal briefing and oral hearings before the PTAB, and appellate briefing and oral argument before the Federal Circuit Court of Appeals from decisions of the district courts and the PTAB.

What major trends are you watching in this space?

Patent litigation is on the rise, and we’re seeing more companies investing in patents and asserting them—in both litigation and portfolio licensing—to gain a competitive advantage. This is a positive trend for those of us in the business of acquiring, enforcing and defending against patents. Increased patent litigation drives increased PTAB proceedings. We’re also seeing an increase in the filings of ex parte reexamination requests, again driven by more patent assertion activity. 

We do a lot of work in front of the PTAB, so we’ve been keeping a close eye on the leadership changes. The director of the USPTO is a presidentially appointed position, and he or she has considerable influence on how policy is made and how the USPTO’s procedures and rules are enforced. The former director, Andre Iancu, appointed by former President Trump, left his role when President Biden took office in 2021. Director Iancu was an avid believer in the patent system functioning as a driver of technological innovation and enabling the patent system to better facilitate companies investing in new technologies. He thus worked to shift the agency in general (and the PTAB in particular) to a very pro-patent posture, swinging the pendulum back from an earlier perception that the PTAB was somewhat hostile to patents. As a consequence, under his leadership, the PTAB’s patent “kill” rates dropped noticeably, albeit not dramatically. 

Currently, Commissioner of Patents Andrew Hirshfeld performs the duties of the USPTO director, but Biden has nominated Kathi Vidal to fill the role, and we expect to see her confirmed by the Senate in the spring of 2022. While we’re still waiting to see what her temperament toward the patent system will be, given that she is an experienced patent litigator, I expect her to have a reasonable and balanced perspective. Patent litigators typically handle “both sides of the v.” (patent assertion and defense), which gives a lawyer a well-rounded perspective and the ability to provide balanced guidance.

What’s the one development in this space that you think is going to have the biggest impact in the next 3 – 5 years?

The biggest impact on PTAB practice in the near term will be how the USPTO and the PTAB decide to handle discretionary denials of petitions challenging patents. Discretionary denials are a fairly recent “common law” development at the PTAB whereby a panel of three APJs may deny a petition challenging a patent for reasons other than the merits of the petition, frequently by evaluating co-pending litigation involving the patent. Such denials, which can be difficult to predict, have become a very controversial process, and some parties have even sued the USPTO in that regard (although unsuccessfully to date). 

As a result, the USPTO has sought comments from all stakeholders to assist the agency in promulgating formal rules for discretionary denials, in the hope of providing neutral rules that do not inject too much uncertainty in the PTAB process. The USPTO received voluminous comments (more than 800) about a year ago but has not taken any action on those comments yet. Presumably, the USPTO is still reviewing the issues and stakeholder comments, and we expect that draft rules will be issued after the new director has been confirmed and has had an opportunity to weigh in on the policies.

In the longer term, the Restoring the America Invents Act has the potential to significantly impact the patent field. The bill was introduced in 2021 by Sens. Patrick Leahy (D-Vt.) and John Cornyn (R-Texas), both members of the Senate Intellectual Property Subcommittee, with the stated goal of protecting small-business owners and average Americans from so-called “poor quality patents that stifle innovation.” This act builds on the senators’ original landmark legislation, the America Invents Act of 2012, to add more transparency to the USPTO’s patent review processes and decisions, including curtailing the PTAB’s ability to deny meritorious petitions on a discretionary basis. A companion bill in the House by Rep. Darrell Issa (R-Calif.) is expected to be introduced in the coming months.

The passage of this newly proposed legislation would have a major impact on PTAB practice. However, Leahy plans to retire in January 2023, and it’s unclear whether someone with his passion and gravitas will take over to champion the bill after he retires. And with many bigger issues on its plate, Congress may simply not have the time or focus to pass this legislation anytime soon.

What makes your practice unique?

I’ve been working with the PTAB since the mid-1990s, handling more than 35 patent interferences and more than 140 inter partes reviews, covered business method reviews, post-grant reviews, and derivation proceedings before the tribunal. I’ve also handled dozens of ex parte reexamination proceedings, reissue proceedings, ex parte appeals to the PTAB and appeals from the PTAB to the Federal Circuit. This longevity and breadth of practice has given me the opportunity to develop a depth of experience that most other practitioners can’t match. 

The PTAB tribunal is made up of a specialized bench of judges, and there are a lot of unspoken rules and nuances relating to what the judges want to see and hear and how to present a successful argument. Learning how to strategically navigate a PTAB proceeding can’t really be learned through books or classes, but only from a long history of handling many cases before the PTAB over the course of many years. 

This knowledge, combined with the experience of my practice and the practices of my colleagues in the Patent department, makes Loeb well situated to assist any client that has a matter to be handled in front of the PTAB.

What makes Loeb a leader in the industry?

One thing that attracted me to Loeb is the firm’s solid bench on the transactional side as well as in the litigation arena handling contentious matters. Many firms specialize in one or the other, but in order to provide our clients with a full-service approach to IP law, it’s crucial to have a good group of lawyers in each of these areas. Loeb’s Patent team is composed of lawyers who are highly trained technically, many having Ph.D.s and other advanced degrees. Having this strong technical bench, both on the litigation and transactional sides of the practice, sets Loeb apart from many other law firms.

Loeb has historically had a strong reputation in the entertainment and brand protection aspects of IP law, and our lawyers are widely considered leaders in the areas of trademark, copyright and privacy. Combined with our strong bench of patent lawyers, Loeb’s IP practice is well positioned to handle our clients’ most critical IP needs.