Vidal’s Solution to OpenSky Abuse Encourages PTAB Extortion

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“Clearly, the principles of fairness do not apply to the USPTO with respect to the PTAB, and neither does common sense.”

There is a reason why many stakeholders believe the Patent Trial and Appeal Board (PTAB) has been weaponized against patentees. Early on, the first Chief Justice of the PTAB famously, or infamously, said that if the court wasn’t making a “death squad,” it wasn’t doing its job; a rebuke to then Federal Circuit Chief Judge Randall Rader’s observation that the PTAB was nothing more than a patent death squad. But from those early days when patentees weren’t even allowed to submit evidence to refute a motion at the institution stage, to the incredible error in ethical judgment of a former PTAB judge, there were many reasons to question the court.

extortion pays

As of Tuesday, October 4, we have yet another reason why the PTAB is hopelessly broken and, in its current form, unable to be repaired. Straight from the “you must be kidding me” department, US Patent and Trademark Office (USPTO) Director Kathi Vidal found out yesterday that OpenSky was engaging in extortion, but decided to continue to allow them to participate as “silent understudy” in the inter partes review they filed. Additionally, Intel, the beneficiary of the extortion perpetrated by OpenSky, could not have filed an inter partes review (IPR) itself due to the statute of limitations. Nonetheless, the IPR against VLSI continues, with Intel now elevated to lead petitioner status. The moral of the story: extortion pays.

Legal interpretations that ignore the statute of limitations should be viewed with inherent skepticism. A legal ban exists for a reason, but in the PTAB world, a ban on contesting more than a year after a lawsuit is filed is much more akin to the manufacturer’s suggested retail price than anything really looks like a legal prohibition or law. of limits. And those who defend the PTAB wonder why sane people question the integrity and the very foundations on which the tribunal is built? They evidently feign indignation; they know injustice even if it is a strategic advantage for them and their customers.

As already mentioned, in the inter partes examination context, petitioners have one year to file a dispute after a court action, but of course the USPTO ignores this requirement by allowing a party otherwise barred from filing a dispute to file a dispute as what is called a joining part. The theory, I suppose, is that there will be no harm in allowing the party legally barred from challenging to challenge because someone else is already challenging. Forget the obvious potential for strawman abuse, what’s particularly offensive is when the unbanned party sets up or drops the challenge, and then the banned party is allowed to continue. Thus, the forbidden party could not have started the case themselves, but somehow they are the ones who remain as the challenger. This is precisely what Director Vidal ordered in the OpenSky/VLSI fiasco, with OpenSky allowed to remain a nominal party but not to file documents or run the challenge, and Intel being moved to the position of main challenger.

So, following her Director’s review decision, we now know that even when the Director concludes that a challenge was brought by a party solely for the purpose of extortion – her conclusion, not merely a hyperbole – a party who could not have filed a DPI is authorized to continue in place of the extortionist even when this party could not have filed a request himself because of the statute of limitations. Obviously, the principles of fairness do not apply to the USPTO when it comes to the PTAB, and neither does common sense.

Wrong—Miserably wrong

Manager Vidal’s decision is wrong, we all know that, and I’m sure she is too. She even foreshadows her own criticism by acknowledging that some will be upset by the decision, but she doesn’t think Intel has done anything wrong. But that is not the question. Intel was legally prohibited from challenging, and the predicate underlying the challenge that VLSI currently faces was an act of extortion. Whether Intel did something wrong is irrelevant or should be.

By focusing on Intel and not the patent holder, Vidal shows his bias. His decision makes a farce of basic legal process, fairness and violates all notions of fairness. Allowing Intel to profit from OpenSky’s misdeeds, which may well be criminal (or should be), is beyond comprehension and defies reasonable explanation. Of course, the unreasonable (or at least tacit) explanation can only be that although Intel is unable to file its own independent challenge, it needs a way to challenge the 2 billion infringement verdict dollars it lost to VLSI.

There was a good answer here. It was easy. Director Vidal got it wrong, miserably wrong. Wrong to the point that there’s really no deterrent to the next petition that might want to try to extort a patent holder for the benefit of a large multinational facing a mega verdict.

This whole episode illustrates precisely why innovators think the PTAB has been weaponized against patentees. To hell with credibility and sanity, patentees must lose, even if it means excusing, or even rewarding, the filing of an IPR claim by an extortionist.

Image Source: Depot Photos
Image ID: 20121639
Author: 72soul

Image by Gene Quinn

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