Patent Unfairness

On August 22, a federal appeals court severely criticized the Patent & Trademark Office for deliberately packing the number of administrative judges in a tribunal known as the Patent Trial & Appeal Board (PTAB) in order to get the preordained results they wanted to reach. Unfortunately, such abuses are common at the PTAB.

Congress created the PTAB in 2011 to address concerns about low-quality patents being mistakenly granted by the Patent Office. The PTAB would be staffed by technical experts and be more accessible, cheaper, and faster than federal courts in canceling these “bad patents.” This theory was not put into practice. The PTAB instead has imposed enormous costs on patent owners and created destructive uncertainty for the innovation economy.

For starters, the ease of filing a PTAB petition to challenge a patent’s validity has invited much mischief. Anyone can file as many petitions as they want in challenging the validity of any patent, and they can file it for any reason whatsoever, such as by an activist organization dedicated to eliminating all patents on computer software. Moreover, there is no harm in filing a petition, just the comparatively cheaper filing fee than the costs of litigating in federal court. The only person who can lose before the PTAB is the patent owner.

PTAB petitions have been filed by hedge fund managers seeking merely to profit from short selling a company’s stock when its price drops in response to the filing, by trade associations solely advancing the immediate commercial interests of their members, by activists and policy advocacy organizations, and even by people with personal vendettas against patent owners.

Read more of this Real Clear Politics article by Adam Mossoff by clicking here.