PTAB has more lenient patent acceptance policies than district courts

The most persistent structural reason for duplicative litigation in the PTAB is its weaker burden of proof. Petitioners must prove claims of unpatentability by a preponderance of the evidence. 120This is in contrast to the more stringent burden of clear and convincing evidence that a litigant must meet to overcome the statutory presumption of patent validity 121and prove unpatentability, both in the U.S. district courts 122and in the ITC. 123The doctrinal effect of this disparity is significant, as it permits open disregard by administrative patent judges not only to disregard the decisions of Article III judges even with respect to the same patents but also to reach altogether conflicting judgments of their own in the PTAB (though the conflict in underlying standards themselves means that these contrary judgments are not inconsistent in the legal sense). Meanwhile, the origins of this disparity in the legislative history and in the underlying assumptions of the AIA have also been a point of considerable confusion. It is useful to consider these issues separately.

The doctrinal effect of these divergent standards became clear immediately. After the AIA trial proceedings went online in September 2012 and as the earliest final written decisions began to issue in June 2013, the PTAB observed in SAP America, Inc. v. Versata Development Group, Inc. that neither the statutory presumption of validity nor the burden of clear and convincing evidence applied to petitioners in the PTAB. 124The PTAB in Google, Inc. v. Whitserve LLC put it even more clearly, explaining that "[g]iven these differing evidentiary standards, the same evidence that the jury found insufficient could meet the burden of proof in an inter partes review." 125The PTAB further observed that even conclusions that the Federal Circuit [*80] reached about patent validity under the clear and convincing evidence standard would not foreclose a contrary PTAB conclusion about the same patent under the preponderance standard. 126

The Federal Circuit has largely agreed as a descriptive matter, though the implications of this divergence remain contested. The court in Novartis AG v. Noven Pharmaceuticals, Inc. agreed that the differing burdens of proof mean "that the PTAB properly may reach a different conclusion based on the same evidence." 127Writing separately in Smartflash LLC v. Apple Inc., Judge Newman further recognized that district court judgments about patent validity are also often "accompanied by the deferential standard applied to jury verdicts." 128 The similarly deferential standard of substantial evidence review that the Federal Circuit applies to final written decisions of the PTAB 129entrenches the divergent burdens even further and leaves little likelihood that appellate correction might close the gap between conflicting judgments from the PTAB and the courts. Judge Newman also elaborated on this concern in dissenting from the denial of rehearing en banc in Merck & Cie v. Gnosis S.P.A. 130There, she urged that the substantial evidence that can support an agency determination under the judicial review standards of the Administrative Procedure Act is inapt for the purposefully trial-like structure of AIA proceedings, especially in light of the increased risk to settled rights and future investments from, among other things, the PTAB's more lenient burden of proof. 131

The origins of this disparity reflect the need for reconsideration and reform as well. The use of a weaker preponderance-level burden saw strong opposition throughout the years-long legislative debate that would lead to the AIA. 132Notably, this opposition was closely tied to the same concerns about duplicative litigation that now confront the PTAB. 133To this, one may fairly respond that regardless of what substantive preferences were sought during the legislative debate, the final legislative choice is what controls. Yet the problem goes deeper. The heart of the issue is summarized well in Joe Matal's authoritative two-volume Guide to the Legislative History of the AIA: "there simply is no requirement in the [*81] law that the USPTO give any deference or weight to a district court's decision with respect to a patent." 134This point arose in the context of precluding the USPTO, as a matter of formal collateral estoppel, from reconsidering the same issues in its administrative proceedings that courts have already decided. 135Strikingly, the reason was that administrative proceedings in the USPTO were not merely subject to different standards and burdens but were also fundamentally different in kind: unlike civil litigation, the argument went, "the examiner [or reexaminer] is not attacking the validity of the patent but is conducting a subjective examination of the claims in light of prior art." 136

This supposed qualitative difference is starkly at odds with the prevailing view of the AIA proceedings as adjudicative in nature rather than:

One important structural change made by the present bill is that inter partes reexamination is converted into an adjudicative proceeding in which the petitioner, rather than the Office, bears the burden of showing unpatentability. . . . In the present bill, section 316(a)(4) gives the Office discretion in prescribing regulations governing the new proceeding. The Office has made clear that it will use this discretion to convert inter partes into an adjudicative proceeding. This change also is effectively compelled by new section 316(e), which assigns to the petitioner the burden of proving a proposition of unpatentability by a preponderance of the evidence. 137

In short, the AIA's burden of proof reflects a poorly designed attempt to have it both ways. The statutory text is clear about the preponderance standard, but the policy behind it arises from a conflicted understanding about the purpose of AIA proceedings as adversarial trial-type substitutes for traditional litigation. This confusion does not merely mean that a patent that would have survived Article III court review may fall to a weaker evidentiary showing in the PTAB. It means that even a patent that actually did survive Article III review may nevertheless be relitigated in a duplicative PTAB trial on the same evidence and be struck down.