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Federal Circuit braced for PTAB “tsunami”

Concern is growing about how Patent Trial and Appeal Board (PTAB) trials will affect the relationship between the USPTO and Federal Circuit, according to speakers on a panel at the US Patent Forum in Washington DC on March 25

The PTAB was spawned by the America Invents Act (AIA). But Judge Sharon Prost of the Federal Circuit noted that the effect of the act was much less than it could have been had some proposals been kept in.

“Everyone talks about the AIA having an impact on us,” she said on the panel. “But at the end of the day, my take on the AIA was it did nothing relative to what it could have done, because we started off with damages, wilfulness, and everything in the AIA in terms of proposals. But when push came to shove it’s really more or less a process bill. So I was relieved.”

But the contested proceedings at the USPTO as a result of the AIA could change the relationship between the USPTO and Federal Circuit. Chief Justice Randall Rader referred to the PTAB as “death squads killing property rights” last year.

Todd Dickinson, executive director of the AIPLA, who was moderating the panel at the US Patent Forum, noted: “Things are changing. People refer to what is coming as a tsunami of work from the post-grant process. [The AIA] was a process bill but the process it has put in place is going to have a major effect on workload.”

Judge Prost was calm in her outlook but agreed that the Federal Circuit’s caseload would increase as a result of the post-grant proceedings. She noted that the USPTO had about 70 judges when the AIA was passed, but this figure has risen to about 180 judges.

“That kind of workload is inevitably going to hit us,” she said. “We’ll take it when it comes; we are not seeing it yet. It’ll come. Unfortunately you can’t go to Congress and say: ‘We anticipate this many cases coming in two years from now so in a rational way we are going to manage this place the way we ought to and get the resources in at the front end so we don’t have that backlog.’ Eventually we will get some relief if the problem gets bad enough. But the problem in Washington is nothing in happens until it is bad enough.”

Blair Jacobs, partner at McDermott Will & Emery, said clients are looking for predictability in the PTAB trials but it is too early to draw conclusions.

“People are going to be looking at the standards of review that are applied, and the level of deference that is provided to PTAB in these decisions,” he said. “There have been about 20 decisions. That is not a large grouping to look at. So looking two years from now is going to provide a much better window into where it is going.

By the beginning of March the PTAB had issued final written decisions in 19 proceedings. The board cancelled all claims for which the trial was instituted in 16 of those cases. It cancelled 95% of all claims for which the trial was instituted and cancelled 82.9% of all claims that were initially challenged by the petitioner. These statistics were described on the IPWatchdog blog as “draconian statistics for IP owners”.

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