I have a post coming up tomorrow on the tremendous support Samsung has received from industry, the legal community and non-governmental organizations for its cert petition relating to design patent claim construction and damages. For now, suffice it to say that Apple will have a hard time trying to persuade the Supreme Court next month that there's nothing to see (or review) here. I will publish and discuss all those third-party submissions tomorrow, Friday.
Today I received a really interesting Lex Machina press release. Lex Machina, a LexisNexis company, operates the Legal Analytics platform and claims that companies such as Microsoft, Google, Nike and eBay as well as various top-notch law firms are among its clients. Its new "Patent Trial and Appeal Board 2015 Report" provides lots of insight about last year's trials before the United States Patent and Trademark Office's (USPTO) Patent Trial and Appeal Board, i.e., the USPTO's in-house court system. The following two bullet points are particularly relevant to the topics covered by this blog:
"Apple has filed 252 PTAB trials (making it the leading filer of PTAB petitions with 197 IPRs and 55 CBMs) but has never appeared as a patent owner.
Samsung Electronics, the second most active petitioner, has filed a total of 155 PTAB trials (141 IPR and 14 CBM), and has appeared as a patent owner in 11 petitions."
IPR means inter-partes review and CBM means covered business methods, i.e., a category of subject matter with respect to which a challenge before the USPTO can be particularly effective when defending against patent infringement lawsuits.
Here are my observations:
The report comes at a time when the Supreme Court has just decided to review a key principle underlying many patent invalidation decisions by the PTAB: the broadest reasonable claim construction principle. As Bloomberg notes, PTAB challenges have a very high rate of success, with at least part of a disputed patent getting invalidated in 87% of all PTAB cases. The Bloomberg article I just referred to mentions former Chief Judge Rader's derogatory remark: he called PTAB panels "death squads" for patents. I disagree with Mr. Rader. Most patents, at least in this industry here, are invalid as granted. It's a form of hygiene, or one might call it garbage collection, to shoot those junk patents down. The appropriate conclusion is to downsize the patent system and prioritize quality over quantity.
Lex Machina describes communications and semiconductors as the "most litigious sectors." It's widely known that no one gets sued as often over patents as Apple these days, and Samsung is also a defendant in countless patent infringement cases. I consider it unfortunate that the two are still embroiled in a long-running patent infringement dispute instead of teaming up to promote reasonableness in patent enforcement, which as a side effect would benefit app developers.
In the U.S. patent reform debate, one of the most controversial questions--though in my view it should not be controversial at all--is a proposed expansion of the Covered Business Method (CBM) review program. It was originally created to help banks fend off lawsuits by patent trolls over financial services-related patents. For the reason stated above--hygiene or garbage collection, or whichever other term you may prefer--this program should be extended. It's very interesting that Apple is a big-time utilizer of CBM proceedings (more than 20% of its PTAB trials, as compared to approximately 10% of Samsung's cases). I just don't understand why Apple doesn't actively promote an expansion of the CBM program. It would certainly be in the interest of Apple's shareholders to do so.
In a nutshell: there's way too many bad patents out there; some of them are unbelievably stupid, as the Electronic Frontier Foundation regularly highlights; the PTAB process enables especially deep-pocketed litigants to strike down such bad patents; and Apple and Samsung, though they are fighting each other in court, are the top two utilizers of that kind of proceeding. It would be great if the Supreme Court could affirm the PTAB's approach to claim construction once and for all. I'm keeping my fingers crossed.
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