By: Thomas Lingard
The Supreme Court has a paralyzing fear of “bad patents.” With the recent case Thryv v. Click-to-Call Technologies, the Court has given the USPTO, and IPRs in particular, broad powers to remove this scourge from the nation. What’s more, the Court has weakened its own power by making the decision to institute IPR virtually unreviewable by an Article III court. Rather than encourage inventors and patent attorneys to pursue “good patents,” this decision incentivizes defendants to continue to attack an unfavorable patent until it is invalidated.
In Thryv, the Supreme Court held that, under 35 U.S.C. § 314(d), a district court may not review a decision to institute an inter partes review (IPR), even if the request for IPR comes outside of the one-year time bar present in 35 U.S.C. § 315(b). 590 U.S. __ (Apr. 20, 2020). The majority opinion, authored by Justice Ginsberg, focused on this specter of “bad patents,” and determined that the AIA’s “statutory scheme  consistently elevat[es] resolution of patentability above a petitioner’s compliance” with procedural requirements such as § 315(b). Justice Gorsuch, joined by Justice Sotomayor, offered some light to inventors in dissent, narrowly interpreting § 314(d) to limit unappealable issues to § 314 only, and not the rest of the AIA.
SUMMARY OF THE CASE
In 1998, the USPTO awarded Stephen DuVal U.S. Patent No. 5,818,836 (“the ‘836 patent”), related to systems and methods for anonymizing telephone calls, which he licensed to InfoRocket.com. Id. at __ (slip op., at p. 2, Gorsuch, J. dissenting). In 2001, InfoRocket.com sued Thryv’s predecessor company for patent infringement. After, InfoRocket.com and the predecessor merged, and the judge dismissed the case without prejudice. Id. After the merger, Thryv, the newly merged company, sought review of the patent ‘836 patent through ex parte reexamination, which lasted four years and resulted in some canceled claims, some amended claims, and some newly added claims. Id.
Despite reassurances of validity from the ex parte reexamination, Thryv terminated its license of the patent and continued to use the product. Mr. DuVal assigned his patent to Click-to-Call, sued Thryv in district court. Within a year of Click-to-Call filing the lawsuit, but over 12 years after InfoRocket.com filed the initial patent infringement complaint, Thryv petitioned the USPTO to institute IPR. The Board invalidated the ‘836 patent in the IPR.
Click-to-Call argues on appeal to the Federal Circuit and to the Supreme Court was that the institution of IPR was improper based on § 315(b)’s time bar, because the 1998 patent infringement case was dismissed without prejudice, and therefore a lawsuit had been filed more than one year before the request for IPR. Thryv argues that § 314(d)’s unappealable provisions, based on Cuozzo Speed Techs., LLC v. Lee and subsequent cases, apply to § 314(b), and that therefore the district court cannot review the decision to institute IPR.
MAJORITY’S FOCUS ON THE PURPOSE AND DESIGN OF THE AIA
Justice Ginsberg’s majority opinion focused on the “AIA’s purpose and design . . . to weed out bad patent claims efficiently.” 590 U.S. at __ (slip op., at p. 8). Under this scheme, any argument that supports the goal of eliminating “bad patents” will carry great weight. Indeed, Justice Ginsberg states that “because a patent owner would need to appeal on §315(b) untimeliness grounds only if she could not prevail on patentability, § 315(b) appeals would operate to save bad patent claims.” Id. at __ (slip op., at p. 9).
In this and other recent opinions interpreting the AIA, the majority has consistently invalidated patents. However, the Court rarely reaches the merits of the cases, and relies on the supposed “purpose and design” of the AIA to allow the USPTO to “weed out” bad patents. Combined with the lack of clear direction on subject matter eligibility and other substantive issues, the Court simply states that there’s a problem, but is unwilling to help solve it. These actions show an immobilizing terror of an excess of bad patents in the system.
This fear is evident in their somewhat Machiavellian attitude. Under the majority’s opinion, the end of rounding up bad patents justifies the means of circumventing judicial review. If the USPTO makes a mistake instituting an IPR, then hopefully the patent gets a fair review, because the patent owner has no choice but to accept their decision to review.
It is worth noting that the majority opinion does not mention (or apparently even consider) the ex parte reexamination of the ‘836 patent. Because the AIA did not do away with ex parte reexamination, it is still a valid mechanism to review validity of granted patents. However, the majority apparently thinks that, if a patent has been through ex parte reexamination, it is still possibly a “bad patent.” This then begs the question: if we trust the USPTO to institute IPRs without judicial review, then why do we not trust the USPTO to successfully review patents in ex parte reexamination? The Supreme Court does not answer this question.
DISSENT PROVIDES (SOME) HOPE
Justice Gorsuch’s dissenting opinion provides some hope, unhelpful as it may be, that the entire Supreme Court is not immobilized by the fear of bad patents. In essence, Justice Gorsuch’s arguments boil down to the fact that “[p]atents typically last 20 years; what happens to the incentive to invent if litigation over them last even longer?” 590 U.S. at __ (slip op. at p. 4, Gorsuch, J. dissenting). This is an important question. Justices Gorsuch and Sotomayor acknowledge that, if inventor confidence in patent validity and enforceability is continually eroded by decisions such as Thryv, inventors may simply stop inventing, or sell their inventions overseas. While it is just a dissent, perhaps legislators will use it to reduce the specter of the bad patent in future revisions of 35 U.S.C.
POTENTIAL IMPACTS ON PATENT LAW
Patent law has been in flux for several years, and this decision adds to the instability. Many inventors feel concern about the validity of their patents, especially in light of IPRs. With this case, the Supreme Court strengthens the IPR process, making it easier for accused infringers to challenge the validity of a patent. This case further strengthens the power of administrative patent judges, by giving them power to make unreviewable decisions regarding the institution of IPRs. The Supreme Court apparently does not think that a “good patent,” as determined by ex parte reexamination (the only option available to Thryv at the time), is always good. Under this same logic, a good patent, as determined by an IPR, may not always be good.
Additionally, this decision further lengthens the divide between the large corporation and the small inventor. With a wink and a nod, the Supreme Court endorsed Thryv’s blatant infringement of and incessant attacks on the ‘836 patent. A company now has incentive to model their behavior after Thryv’s, who attacked the ‘836 patent until it received a favorable result (invalidity). Unfortunately, Mr. DuVal and Click-to-Call do not have a similar option – they are stuck with the decision of the USPTO.
PATENT PORTFOLIO TIPS
While this case is frustrating to inventors and some patent practitioners, we still have to live with it. Moving forward, and from a practical standpoint, this ruling underscores the value of continuing prosecution of patents long into its life. Because continuation claims are often different in scope and breadth, they can increase the scope of protection for the invention. Furthermore, the change in breadth and scope may help some of the claims to survive IPR, even if it is instituted more than 12 years after filing of an infringement complaint. Patent practitioners should also explain to their clients the value in providing a detailed disclosure, with many different embodiments and practical benefits. While initially more expensive, a fully fleshed-out disclosure can help prove patentability, as well as provide support for valuable dependent claims and continuations.
Thomas Lingard is a registered patent attorney. His practice focuses on preparing and prosecuting domestic and foreign patent applications in a variety of technological areas. Mr. Lingard has experience in identifying products that potentially infringe his client’s patents, as well as preparing patentability and patent infringement opinions.