This week on IPWatchdog Unleashed I don’t have an interview or conversation. Instead, I want to talk about the Patent Trial and Appeal Board (PTAB), which was back in the news in a big way last week. You can listen to our full discussion about monetizing streams of revenue backed by intangible assets wherever you get your podcasts (links here) or visit IPWatchdog Unleashed on Buzzsprout. And if this topic interests you, please join us January 27-29, 2025, at IPWatchdog Studios for our 5th annual PTAB program.

On Thursday, one week after markup was postponed, the Promoting and Respecting Economically Vital American Innovation Leadership Act—otherwise known as PREVAIL—successful passed the Senate Judiciary Committee by a slim 11 to 10 margin. While some Senators still expressed concerns, enough agreed to vote yes with the caveat that they will push for further changes before committing to vote for the bill on the floor. Still, this is a long-awaited victory for Senator Chris Coons (D-DE), who first introduced the notion of reforming the PTAB nearly a decade ago, introducing what was then known as the STRONG Patents Act in 2015.

On the heels of this win in the Senate for those in favor of PTAB reform, the very next day, USPTO Director Kathi Vidal wrote on the Director’s Blog about how wonderful the PTAB has been, saying in part, and I quote… “Since AIA proceedings began over a decade ago, almost 70% of challenged patents have been upheld at the PTAB.”

Simply stated, she is wrong. It is absolutely false for anyone to say or suggest that 70% of challenged patents have been upheld at the PTAB. This claim is not true, it is pure fiction, and I personally know many within the USPTO well know that claim to be false. Unfortunately, these egregious and objectively false claims persist, presumably because if the truth were admitted the patent system would be exposed for being little more than a scheme to defraud patent owners.

Not only does the Patent Office handsomely charge for the acquisition and maintenance of a patent to the original innovator, but they also handsomely charge for the right to challenge those patents after issue. On its face, this creates a perverted incentive to actually issue low quality, bad patents. This arms dealer nature of how the Patent Office sells to both sides of the patent battlefield is not lost on those within the industry. Frankly, you would be hard pressed to have come up with a more conflicted structure or system that is more at odds with its stated purpose.

If you actually look past the extraordinarily misleading USPTO narrative about how patent owner friendly they claim the PTAB to be, you see a very different reality. The incontrovertible facts presented by the PTAB itself demonstrate that of those patents that reach a final written decision at the PTAB, 85% lose at least one claim and 70% lost all claims. This factual reality is exactly opposite of what Director Vidal claimed. The PTAB is not a friendly forum for patent owners—it has always been and continues to be an extraordinarily favorable forum for challengers.

The truth is that if the PTAB issues a final decision the patent owner is virtually certain to lose. And these statistics have largely remained unchanged, with only minimal fluctuation since the inception of the PTAB in 2012. So, exactly who is fooling who? The way the rules are structured, and the way we have actually witnessed the PTAB operate, confirms that no patent is safe ever. And this is not meant as any indictment of PTAB judges—they are just doing the job as defined in the statue passed by Congress and the rules created by the USPTO. It is, however, a scathing indictment of those laws and rules, which demonstrate an urgent need for PTAB reform.

Against this pitiful backdrop there is a growing understand in the U.S. Senate that the PTAB is being abused by big-tech giants using various tactics. Senator Chris Coons has for many years wanted to do something to make the PTAB a fairer tribunal that isn’t so stacked against patent owners, and which doesn’t allow for abuse by big-tech. The current iteration of his efforts is the PREVAIL Act.

Among other things, PREVAIL would change the standard of review to require the PTAB to only invalidate claims if there is clear and convincing evidence of a mistake, which is the standard that has long been applied in federal court.

If you can believe it, the law as it exists currently allows the PTAB to invalidate a claim if they merely disagree with the patent examiner and would have decided things differently themselves if they had been the front-line decisionmaker, which obviously means an issued patent isn’t worth much, if anything. This so-called preponderance standard means administrative judges can after the fact simply overrule the consideration of the examiner because they don’t think the examiner should have allowed the patent.

Despite the statute saying that patents are property, we all know they aren’t. No property regime could ever withstand such uncertainty and arbitrary after the fact application. And the fact that patents are realistically no longer property was confirmed several years ago by the Supreme Court, who said patents are just a government franchise that can be taken away at any time. At one point in time that ruling would have been scandalous, but can you really blame the Supreme Court for merely recognizing what patents have become? A patent isn’t property if it can be taken away whenever, and it ain’t property if challenges can be never-ending. Today a U.S. patent is more like an anchor or an albatross than a piece of property.

An end to abusive challenges by big-tech is absolutely necessary. We know based on petitions filed that 18 of the top 20 challengers at the PTAB are from big tech, and a review of PTAB filings show Apple, Google, Microsoft, Intel, and Cisco all in the top 10 most active patent challengers. Once upon a time these companies would purchase smaller entities that had innovated something exciting, and they would work to make it better and take it to the market to benefit consumers. Today, why buy what you can take? Why buy what you can have a friendly forum in the PTAB easily invalidate? Why buy when you can beat smaller entities into the ground simply by filing challenges and forcing them to spend $500,000 to $1 million each and every time to have any realistic opportunity to win the battle?

The reality is simple. The PTAB is harming innovation in America because it is making it untenable for individuals and small entities to even get started.