A litany of problems with the PTAB outweigh their solvency.

What’s worse, the America Invents Act (AIA) of 2011 established a “Patent Trial and Appeals Board” within PTO to review already issued patents at the request of third parties. A key justification for the board was that it could help eliminate “bad quality” patents that should not have been issued in the first place. Moreover, it was supposed to be a “fast track” alternative to sluggish and costly court challenges to patent validity. In reality, however, the vast majority of board reviews occur concurrently with federal court challenges. Thus, the hoped for saving in litigation costs has not occurred. Indeed, the administrative costs of lawsuits plus board challenges may be higher than before the AIA.

Even more seriously, the board reviews have been handled in a way that undermines fundamental rights of patent holders — regardless of whether their patents are strong or questionable. This is because, as a result of PTO regulation, the board reviews are designed to make it harder to uphold patents. The board reviews also fail to meet standards of fundamental fairness employed by the federal courts. The Patent Act states that “a patent shall be presumed valid” and that “the burden of establishing invalidity of a patent or any claim thereof shall rest on the party asserting such invalidity.”

Consistent with this clear statutory dictate, federal trial courts provide a great deal of protection to patent owners whose patent rights are under challenge. To overturn patents, they require “clear and convincing evidence.” This means that a patent will be struck down only if it is substantially more likely than not that it is invalid. The courts also assess the “ordinary and customary meaning” of patent terms in determining patent validity, a well-established neutral standard.

The board, however, determines patent validity based on a mere “preponderance of the evidence” standard — a standard imposed by PTO regulation, not by the Patent Act itself. It means that a patent will be overturned if the panel believes that there is more than a 50 percent chance the patent is invalid. In application, this “fifty-fifty” test means that panels are far more likely to strike down patents than trial courts. Thus the statutory presumption of patent validity means less than it did before the Patent Trial and Appeals Board system existed.

Perhaps even more significantly, panels apply a “broadest reasonable interpretation” standard to patent claims. This test makes it much easier to strike down patents as “overly broad” compared to the federal courts’ “ordinary and customary meaning” standard.

It gets worse. Board review raises serious due process problems, as well. These include: conflicts of interest by panel members; PTO’s “stacking” of panels to produce desired results; abuses in the consideration of supplementary evidence; denial of the opportunity to respond to arguments against patent validity; and arbitrary and capricious denial of the patent holder’s right to amend claims. It all adds up to “a meaningful risk … [of] unfairly stripping inventors of their property rights, which are protected under the Constitution, without the proper safeguards provided in courts to all owners of property rights.”

Randall Rader, a former Chief Judge of the Federal Circuit, likened the Patent Trial and Appeals Board to a “death squad, kind of killing property rights.” John Whealan, PTO’s former chief lawyer (and now a professor at George Washington University Law School) recently stated that board review “is not fair… The PTO doesn’t presume what it does is right.”