The U.S. Patent and Trademark Office just concluded a three-part listening session series on reforming the Patent Trial and Appeal Board (PTAB), bringing together stakeholders from across the innovation ecosystem to discuss the PTAB’s impact on life sciences, high tech, and the broader patent system. The sessions featured insights from numerous industry leaders and IP experts, including the Honorable Paul Michel, C4IP board member and former chief judge of the United States Court of Appeals for the Federal Circuit, and C4IP Chief Policy Officer and Counsel Jamie Simpson, who testified during the final panel.
Across the sessions, stakeholders made one thing especially clear: There is substantial support for meaningful PTAB reform — including the USPTO’s recent Notice of Proposed Rulemaking aimed at curbing serial and duplicative patent challenges in the PTAB’s inter partes review (IPR) proceedings. These proposed rules, announced last fall, reflect longstanding concerns that the board has drifted from its original purpose as a fair, efficient alternative to litigation.
Some have argued that the changes would make it harder to challenge low-quality patents and claim that most stakeholders oppose them. But that ignores the broad consensus in favor of PTAB reform and mischaracterizes the issues at hand.
PTAB Reform Is Necessary
Congress established the PTAB through the 2011 America Invents Act to create a streamlined mechanism for resolving patent validity challenges more efficiently than the court system. Unfortunately, over time, large companies have exploited loopholes in the board’s rules to misuse it against inventors.
Although meant as an alternative to district court litigation, the PTAB does not sufficiently prevent petitioners from levying repeated challenges or challenging a patent that is already being litigated in court. As a result, well-resourced companies accused of patent infringement often retaliate by repeatedly challenging the patent’s validity at the PTAB, engaging in a war of attrition rather than an assessment of the merits.
The consequences of this abuse affect all innovators, but it extracts a particularly costly toll on startups and small businesses. When these small innovators cannot reliably defend their patent rights, it becomes difficult for them to attract the investment needed to continue developing new products and technologies.
The USPTO’s proposed rules seek to close these loopholes to restore proportionality and balance to the number of times that the patent owner needs to defend the validity of its issued patent.
Support for Reform Is Broad
The USPTO’s recent listening sessions made clear that there is a wide coalition of smaller inventors, innovative companies, and others who support PTAB reform.
During the session on life sciences, Peter-Anthony Pappas, director of intellectual property policy to Senator Thom Tillis (R-NC), emphasized the need for PTAB reforms to ensure patent rights remain “strong, clear, reliable, and predictable.” In the high-tech session, Chris Israel, executive director of the Alliance of U.S. Startups and Inventors for Jobs (USIJ), urged the USPTO to finalize its proposed reforms, arguing that dominant technology companies have weaponized the inter partes review process against smaller innovators. And in the final session on PTAB administration and reform, C4IP’s own Jamie Simpson and Judge Paul Michel further testified that PTAB reform is necessary. Throughout, panelists from innovation-intensive industries raised concerns about how repeated and duplicative PTAB challenges can undermine patent reliability, investment, and commercialization.
Advocates for PTAB reform also include the board’s own architects. Former Congressman Lamar Smith (R-TX), a principal author of the America Invents Act, testified before Congress that the currently widespread use of the PTAB by large companies to harass competitors is “not how we wanted or expected the program to operate.”
“Inter partes review at the PTAB was never intended to operate as an addition to litigation or as a tool for those challenging patents to raise the cost for inventors seeking to enforce their patents against infringers.” — Former Congressman Lamar Smith (R-TX)
They include many groups representing independent inventors and startups. Alongside C4IP, the Inventors Defense Alliance (IDA), the Bayh-Dole Coalition, and USIJ were among the many organizations that submitted comments broadly supportive of the USPTO’s proposed rule changes. IDA warned that when patents can be “re-litigated repeatedly… their value erodes, as does investor confidence.” USIJ cited research showing that, despite the common claim that the PTAB primarily weeds out low-quality patents, the PTAB’s tolerance of serial challenges increases the risk that high-quality patents will be erroneously voided.
Many small innovators themselves have also spoken out about the need for PTAB reform. Chuck Hong, founder of Netlist, published an op-ed in Fortune detailing how Google and its allies had used the PTAB to repeatedly attack Netlist’s patents. Before the Senate Judiciary Subcommittee, Masimo founder and CEO Joe Kiani described how, after allegedly infringing Masimo’s patents, Apple filed dozens of PTAB petitions to invalidate them, amounting to 33 IPR petitions on only 22 patents.
“I say with great confidence that Masimo would not be here today if the current PTAB had been in place 30 years ago.” — Joe Kiani, Masimo founder and CEO
Opponents of PTAB reform often object to the notion that there is broad support for reform, highlighting the number of negative public comments submitted in response to the proposed rule. But while every comment deserves consideration, not all comments are equal in quality, originality, or relevance. In fact, there are structural reasons why opposition to the proposal may appear deceptively strong when measured by comment volume alone.
For one, there are typically far more companies that use and license patented technologies than companies that invent them. Take telecommunications: A relatively small group of companies develops foundational technologies like 5G, which are then implemented by a much larger set of companies, from smartphone manufacturers to automakers. If every stakeholder comments in their own self-interest, implementers — who benefit most from the status quo — will naturally outnumber the innovators seeking reform.
In addition, opponents of PTAB reform include some of the world’s largest and most powerful companies. Virtually all of the most frequent petitioners at the PTAB are Big Tech firms. These companies often have a much larger megaphone than the startups, small businesses, and independent inventors whose patents they may use or challenge. But that does not make their concerns more important, nor does it mean their position better serves the long-term health of the innovation economy.
Policymakers should be careful not to assume the loudest or most numerous voices offer the best path forward. While there are undoubtedly powerful interests that oppose PTAB reform, small inventors and innovators have made clear that the board, as it currently operates, is failing them.
Policymakers Are Ready to Act
The USPTO’s proposed rule changes, which would put a stop to duplicative and serial petitions, are a promising step toward restoring balance at the PTAB. But rulemaking should only be considered a first step, given that agency rules are susceptible to change under different agency leadership.
Fortunately, rulemaking is not the only path forward. The bipartisan PREVAIL Act, now under consideration in Congress, offers a more durable solution. The legislation would prohibit serial petitions and duplicative proceedings while ensuring that the PTAB functions as a fair and efficient alternative to district court litigation. By codifying these protections into law, PREVAIL would provide greater long-term predictability than agency rules alone.
Notably, several lawmakers who weighed in on the USPTO’s proposed rules — Sens. Chris Coons (D-DE) and Thom Tillis (R-NC) and Reps. Deborah Ross (D-NC) and Nathaniel Moran (R-TX) — emphasized in their joint comment that the PREVAIL Act would achieve many of the same objectives as the USPTO’s proposal, but in a more stable and lasting manner.
Whether through refined agency rules, bipartisan legislation like the PREVAIL Act, or a combination of both, policymakers have both an opportunity and a responsibility to restore balance and predictability to the PTAB — and ensure it fulfills its original promise to protect inventors’ rights and strengthen American innovation leadership.
Further Reading
- USPTO Notice of Proposed Rulemaking: Revision to Rules of Practice Before the Patent Trial and Appeal Board
- C4IP Public Comment Re: Revision to Rules of Practice Before the Patent Trial and Appeal Board
- Comments from the Inventors Defense Alliance on the USPTO’s Notice of Proposed Rulemaking Regarding the Patent Trial and Appeal Board
- USIJ Comments Re: NPRM
- Bayh-Dole Coalition Comments on Revision to Rules of Practice Before the Patent Trial and Appeal Board
- Senate IP Subcommittee Hearing: Reforming the Patent Trial and Appeal Board (Nov. 2023)
- IPWatchdog: Current, Former Lawmakers Lock Horns Over USPTO’s Proposed PTAB Changes
- Council for Innovation Promotion Applauds the Reintroduction of the PREVAIL Act
- Why C4IP Supports the PREVAIL Act