PTAB’s inefficient---financial motives distorts decisions made and causes redundant patents review.

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

Finally, there are reasons to be concerned that bias has been built into the decision whether to institute review. The PTAB exists to review reviewing previously granted patents, and the positions and salaries of the administrative patent judges are justified only to the extent they grant petitions for these reviews. A predisposition to grant petitions creates the impression the legislation was warranted, and consistently denying the petitions would surely result in calls for abolishment of the Board. It is hard to avoid the conclusion that all other things equal a panel of judges would incline to grant review, and the high grant rate of petitions — the PTAB grants 2.5 petitions for IPR review for each one that it denies56 — suggests this is a concern.

Moreover, the fee structure has the potential to distort decisions because the amount paid to the USPTO depends on the outcome of the decision. A petitioner for inter partes review (IPR) pays $9,000 up front — but an additional $14,000 if the PTAB institutes review.57 We have no reason to think this has affected any particular individual administrative patent judge’s decision whether to institute a proceeding, and of course institution of the proceeding significantly increases the agency’s costs. Nevertheless, in almost any other area of the law, an indirect financial interest in the outcome of a decision of this sort would be viewed as a conflict of interest. It should come as no surprise then that nearly 80% of reviewed petitions are granted.58