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The PTAB creates another layer of inefficiency. Although Congress envisioned the PTAB as an alternative to litigation for elimination of “bad” patents, in fact when a patent is valuable enough to enforce in court the patent owner will often face a validity challenge before the PTAB as well. 52 This is because a patent may be challenged in both places. Moreover, nothing prevents someone — or multiple parties many acting in a coordinated attack — from subjecting a patent owner to the time, expense, and cost of multiple, serial petitions and proceedings at the PTAB.53

Patents that are economically valuable and will be enforced must go through multiple redundant layers of review. As Professor Greg Dolin explains, “[t]he perverse result is that the ‘best’ rather than the ‘worst’ patents . . . are subject to post-issuance review.” This is not surprising, he explains, because “it makes little sense for anyone to expend any time, money, and effort to invalidate [an economically invaluable patent] either through administrative or judicial proceedings.”54 In short, rather than providing a place where bad patents can be quickly eliminated, the PTAB has become an additional hurdle that inventors must clear before being able to stop another party from unlawfully using their inventions.55

Recently I was communicating with someone who characterized the Patent Trial and Appeal Board (PTAB) at the United States Patent and Trademark Office (USPTO) as “one of the most sophisticated adjudicative bodies ever fashioned by a civilized nation…” While that type of laudatory praise for the PTAB may be common in some corners of the industry, that feeling is most certainly not shared by everyone within the industry, which is an understatement to say the least.

As I chatted with this fellow who holds such a high opinion of the PTAB I pointed out that in many cases the Administrative Patent Judges of the PTAB have been appointed while still a senior associate, or perhaps a junior partner. The retort: “It might be an interesting study to come up with some way of objectively measuring the competence level of the APJ cadre and get more than an anecdotal gauge on its credentials.”

Gene Luoma is a prolific inventor with roughly a dozen patents. He grew up on a farm in rural Minnesota, where money was tight. If he wanted something, he often had to make it.

In his teens, Gene’s muscles started to weaken. He had muscular dystrophy, and it would worsen as he grew older. But Gene didn’t let his condition stop him. He found ways to adapt. Gene went to college and became an engineer. He developed inventions that helped the companies he worked for. He married, and he and his wife had three children.

Since its launch, however, PTAB has become something much different. In just a few years, the administrative tribunal’s rulings have given it a reputation as a place where good patents go to die. More than 82 percent of patents reviewed by PTAB are found to be defective, according to IP Watchdog.

“Our economy’s strength has relied on a patent system that has allowed innovators and entrepreneurs to thrive. Our current patent system, however, has been weakened to the point that it discourages research and innovation rather than supporting it. - U.S. Rep. Bill Foster (D-IL)”

The Patent Trial and Appeal Board (PTAB) harms U.S. competitiveness. It undermines secure, private property rights vital to our competitiveness in innovation.

PTAB has upended quiet title to patented inventions. This rogue body of the Patent and Trademark Office institutes proceedings against around 70 percent of challenged patents.

Not that long ago, replacing a heart valve required a complicated surgery. You had to have your chest opened, and your heart stopped. You had to be in pretty good shape to be allowed to receive this surgery, and even so, approximately 20% of the recipients died from the surgery. Things are quite different now because of Dr. Troy Norred.

Dr. Norred knew an individual who needed a heart valve replaced but wasn’t healthy enough for the surgery. There was no alternative for this individual, and his fate was the same as others who were deemed not able to survive the surgery – a slow death.

For any serious problem, a solution has usually been invented to fix it. One such problem is toxic gas leaks from oil pipelines, derricks, and refineries. These leaks are usually invisible to the naked eye and contain toxic, cancer-causing gases like Ethylene.

Until recently, the technology used to find these leaks was called a “sniffer.” This device required the user to be in close proximity to the gas leak to detect it. For a pipeline, the user would have to walk right next to the pipeline along its entire length, a very slow process. And even in close proximity, the technology had issues.

Patents are property rights secured to inventors of new products or services, such as the software and other high-tech innovations in our laptops and smart phones, the life-saving medicines prescribed by our doctors, and the new mechanical designs that make batteries more efficient and airplane engines more powerful. Many Americans first learn in school about the great inventors who revolutionized our lives with their patented innovations, such as Thomas Edison (the light bulb and record player), Alexander Graham Bell (the telephone), Nikola Tesla (electrical systems), the Wright brothers (airplanes), Charles Goodyear (cured rubber), Enrico Fermi (nuclear power), and Samuel Morse (the telegraph). These inventors and tens of thousands of others had the fruits of their inventive labors secured to them by patents, and these vital property rights have driven America’s innovation economy for over 225 years. For this reason, the United States has long been viewed as having the “gold standard” patent system throughout the world.1

In 2011, Congress passed a new law, called the America Invents Act (AIA), that made significant changes to the U.S. patent system. Among its many changes, the AIA created a new administrative tribunal for invalidating “bad patents” (patents mistakenly issued because the claimed inventions were not actually new or because they suffer from other defects that create problems for companies in the innovation economy). This administrative tribunal is called the Patent Trial & Appeal Board (PTAB). The PTAB is composed of “administrative patent judges” appointed by the Director of the United States Patent & Trademark Office (USPTO). The PTAB administrative judges are supposed to be experts in both technology and patent law. They hold administrative hearings in response to petitions that challenge patents as defective. If they agree with the challenger, they cancel the patent by declaring it “invalid.” Anyone in the world willing to pay a filing fee can file a petition to invalidate any patent.

Inventors naturally solve problems that others have not. Tom Waugh had a successful business in Alabama, providing fittings and parts for utility poles and electrical systems. Utility poles must be strong and durable, especially tall ones with many lines. The metal utility poles that existed before Tom got involved required taking large sheets of metal and bending and welding them into poles. It worked but took a lot of time and money. Also, these poles had seams that were potential weak points.

Tom wondered if they could be cast in one piece by pouring molten metal into a rotating mold that would force the molten metal to the outside wall of the mold, where it would harden. Considering that the poles could be as long as 100 feet and weigh several tons, developing this into a workable invention wouldn’t be a simple project. There were also problems like the fact that the pole is wider at the bottom than at the top, so there would be a tendency for more metal to collect at the bottom of the pole.

On June 12, 2024, the House IP Subcommittee held a hearing called The U.S. Intellectual Property System and the Impact of Litigation Financed by Third-Party Investors and Foreign Entities. The hearing was about third-party litigation funding (TPLF) related to patent litigation and the perceived national security risks of hidden hostile foreign funders.

Some of the corporate lobbyists testifying at the hearing said that foreign actors, like China and Russia, may be using TPLF to gain access to sensitive information that could harm U.S. corporations and, by extension, U.S. national security. The witnesses relied on possible but unknown damage. In other words, they suspect a problem but cannot show it.

Whether one celebrates or decries the fifth anniversary of the America Invents Act, this much is clear: the law has had a dramatic impact on the value of U.S. patents and, in turn, the broader U.S. economy. Patent investors (be they innovators, implementers, or legal specialists) are no different than investors in any other asset class. They abhor uncertainty and charge a stiff premium for risk. In the wake of the AIA, the cloud of uncertainty hanging over patents is dark indeed. This uncertainty has depressed the value of patents and the returns to research and development, and may have broader ramifications that are yet to be seen.

Among its sweeping changes to U.S. patent law, the AIA transitioned the U.S. to a first-to-file system, expanded the definition of prior art, and most notably, created two new proceedings to challenge patents: the inter partes review (IPR) and covered business method (CBM) review. Both IPRs and CBMs are pseudo trials conducted by the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB). Congress hoped these proceedings would provide an efficient and inexpensive way to test the validity of a patent.

On August 22, a federal appeals court severely criticized the Patent & Trademark Office for deliberately packing the number of administrative judges in a tribunal known as the Patent Trial & Appeal Board (PTAB) in order to get the preordained results they wanted to reach. Unfortunately, such abuses are common at the PTAB.

Congress created the PTAB in 2011 to address concerns about low-quality patents being mistakenly granted by the Patent Office. The PTAB would be staffed by technical experts and be more accessible, cheaper, and faster than federal courts in canceling these “bad patents.” This theory was not put into practice. The PTAB instead has imposed enormous costs on patent owners and created destructive uncertainty for the innovation economy.

Twelve years ago, there were about 700,000 new start-up firms every year in the United States, according to the Ewing Marion Kaufman Foundation, but that number has fallen 30% to 500,000 firms and continues downwards. 1In a study conducted by the Chronicle of Higher Education, more than half of the 11,000 researchers surveyed across the nation had abandoned projects central to their labs due to economic pressure. 2In the study entitled The Future Postponed, MIT delivered a shocking list revealing that none of the notable scientific highlights in recent years were U.S.-led achievements. 3The data confirms a new reality that not many care to acknowledge: innovation in the United States is dwindling. 4Several key reasons for this dire situation stem from the multiple and pervasive attacks on innovation. Most startlingly, the attacks are often in disguise as benefiting innovation. 5As a result, there has been an almost universal [*1690] silence in legal scholarship on how law and policy have discouraged innovation, which has led to the current innovation crisis. This Article breaks that silence.

First, there has been a fierce attack in patent law, where strong patents were once considered incentives for innovation. 6The attack on the patent system cloaked itself in the hysterical "patent troll" narrative that patent owners behave like trolls to extort innovative companies, 7without any consideration of the fact that these infringers are using others' patented technologies without [*1691] reciprocating compensation. 8Heeding the hysteria, the Supreme Court and the 2013 America Invents Act ("AIA") Patent Trial and Appeal Board ("PTAB") have become forerunners in creating a weak and uncertain patent system. 9Innovations are deemed ordinary, or not worthy of receiving legal protection, 10or just simply categorically ineligible for patent protection. 11This has resulted in important sectors of the economy shutting down. 12Furthermore, without [*1692] patent protection for inventions, investors are inclined to either reduce their investments in innovation and invention or shift attention to other jurisdictions where strong patent protection and certainty reign. 13

Finally, companies and organizations may use the PTAB in order to manipulate the market and reap huge financial rewards — imposing unjustified costs on patent owners, who are simply collateral damage in their profit schemes.

Using PTAB petitions to profit in the financial markets works because investors pay close attention to patent disputes. A court decision about patent validity or infringement can shift the stock price of a winning or losing firm even more than the initial grant of a patent can.88 Investors also know that the PTAB applies looser standards than the courts, which means that filing a petition at the PTAB creates a significant risk of patent invalidation. As a result, challenging a patent before the PTAB can cause significant harm to a patent-owning company’s stock price. To exploit this, a challenger can short-sell the patent owner’s stock just before filing its petition at the PTAB, knowing that the stock price will tumble and it will yield a profit on the short sale — even if the challenger knows its claims have no merit.

Another tactic used by some companies in abusing the PTAB to harass patent owners is in filing of a PTAB petition by a defendant in a previously filed patent infringement lawsuit solely for the purpose to extract a quick settlement in the lawsuit, regardless of the merits of the actual PTAB challenge. This strategy works because there are no legal risks for a company filing a petition, but the risks for the patent owner are very high. The petitioner faces no legal consequences whatsoever — if it loses, it only loses the relatively low cost of filing the petition and (potentially) of the hearing before the tribunal itself. By way of contrast, the risk to the patent owner is enormous: its patents can be invalidated and thereby destroying the property rights it is using in licensing or manufacturing in the marketplace. Given the very high “kill rates” at the PTAB, this risk is very real. Thus, as recently confirmed by an empirical study, the PTAB has quickly become a tool used defendants in seeking leverage against patent owners who sue them for infringement.78 In these cases, defendants are essentially asking for a premium from patent owners in settling lawsuits in exchange for the defendants not to seek to invalidate the patents at the PTAB.

Settlements at the PTAB and elsewhere are typically not public records, and so we must often infer the existence and terms of a settlement. Professor Dolin has detailed examples in which this has occurred for patent owners working throughout the innovation economy.79 In addition to Professor Dolin’s examples from the pharmaceutical sector, Professors Erik Hovenkamp and Jorge Lemus have also theorized that pharmaceutical companies are settling lawsuits to avoid the specter of being forced before the PTAB tribunal in review the validity of their patents.80 For example, they infer that this occurred in a patent dispute between Metrics Inc. and Senju Pharmaceutical Company.81 After Senju sued Metrics for patent infringement of Prolensa, a drug used to treat side effects from cataract surgery, Metrics filed a PTAB petition challenging the validity of Senju’s patent. After the PTAB granted the petition and instituted an official proceeding to review the patent’s validity, the parties settled the patent infringement lawsuit.82 Although the settlement order does not mention any payment from Senju to Metrics, its terms lead Hovenkamp and Lemus to conclude that a settlement payment was very likely.83 If so, any lawyer or economist can reasonably conclude that Metric’s successful filing of the PTAB petition against Senju’s patent played a role in this additional payment by Senju to Metric.

The PTAB system allows for repetitive challenges of the same patent — whether within the PTAB or in combination with lawsuits in the court system. These duplicative challenges are prevalent and include either multiple parties attacking the same patent or multiple challenges brought by the same party. These duplicative challenges impose immense burdens on patent owners and on the PTAB itself.

Recent research reveals both types of duplicative challenges within the PTAB: (1) multiple parties attacking the same patent and (2) multiple challenges brought by the same party. For inventions in the chemical, electrical, and computers and communication fields, for instance, most of the patents subject to petitions for review at the PTAB are in fact challenged multiple times again and again in filing after filing.60 In extreme cases, some patents are subjected to dozens of PTAB attacks in these serial petitions. One recent study illustrated this by comparing the share of petitioners who were previously sued (for patent infringement) with the share of petitions with at least one petitioner who had been sued on the patent. For patents related to drugs and medical technology, for instance, 48.5% of the petitioners had been previously sued on the patents they challenged, but 70.8% of the petitions had at least one already-sued petitioner.61 As a practical matter, this means petitioners who are not defendants (in court) are joining petitions that have been filed by prior defendants.62 At the very least, there are multiple petitioners challenging the same patent, and many were serial filings of petitions. Multiple challenges have real costs. When a company must spend financial resources to repeatedly defend the same patent again and again, it cannot invest those resources in additional innovation, recruitment of talent, or operational expansion, among other things.

This card is part of the card above, but I don’t have this part highlighted in the previous card because I’ve turned this claim into a separate card designed to only be about the amount of PTAB invalidations.

The USPTO classifies patent invalidations into two categories: mixed and all. Mixed refers to final written decisions in which one or more claims are invalidated, but not all. All signifies the invalidation of all claims within a patent.

The invalidation rate of patents in America Invents Act (AIA) proceedings, such as inter partes reviews (IPRs), has been high since the inception of the PTAB. Just one year into the AIA, Chief Judge Randall Rader famously referred to the PTAB as a “death squad” at the 2013 American Intellectual Property Law Association (AIPLA) annual meeting because the invalidation rate was so high.

This article focuses on the “total invalidation” rate where all challenged claims are found invalid such that the patent is effectively killed off. (For convenience, we refer to “invalidation” with the understanding that the PTAB adjudicates claims as “unpatentable”).

The United States needs a secure supply of critical minerals to protect its national security.

Minerals like cobalt, gallium and rare earths are vital elements in superalloys, semiconductors and permanent magnets. These components, in turn, are essential for advanced technologies such as jet engines, quantum computing and military radars.

Of the many ways that the Patent Trial and Appeal Board (PTAB) works to the detriment of the U.S. innovation economy, one of the most nefarious is the Chinese government’s use of patent validity review to advance its national interests. Recent briefing filed at the PTAB suggests that the Board is quietly helping China win the war for technological supremacy during the 21st century, mainly by destroying the economic interests of American small businesses innovating in industrial sectors critical to American national security.

The PTAB Helps China Destroy Patent Rights in ‘Made in China 2025’ Critical Sectors