"Fraud is not an acceptable part of the administrative patent challenge process. Congress never intended patent re-examination to be used by unprincipled competitors to destroy valid patents. The USPTO has acknowledged there are no remedies for victims of fraud in reexamination and post-grant review. The Alliance proposes a commonsense remedy that won’t burden the USPTO."

- Honorable Birch Bayh*, former United States Senator (D-IN) and co-author, the Bayh–Dole Act

 

“[Patent] reexamination procedures...are being abused today....in many cases.” "The potential for abuse is substantial today and it will increase hugely [with the passage of the America Invents Act].” "The effect will be that an issued patent cannot be enforced for many years after suit is commenced...What such delays would do to patent values and the legion of companies that depend on patents for investment and growth is horrible to contemplate, as are the ill-effects on American prosperity and job creation.”

- Chief Judge Paul Michel (ret.), United States Court of Appeals for the Federal Circuit

Fighting to Protect American Innovation

The "Integrity Loophole"

The Alliance to Prevent Fraudulent Attacks on Patents (APFAP) is a group of concerned citizens and organizations focused on deterring fraudulent attacks on patents and compensating victims of fraud. APFAP is proposing a straightforward legislative solution to this problem.

Nobody favors fraud in the patent system, the bedrock of America’s much-admired history of invention, investment and job creation. Yet recent court rulings have opened what is essentially an “integrity loophole,” effectively allowing fraud against patent owners during post-issuance proceedings (e.g., reexamination and post-grant review) without compensating the patent owner. More specifically, federal courts have ruled that a patent owner’s state court suit for damages against someone who unlawfully requests reexamination is preempted by federal laws governing the U.S. Patent and Trademark Office (USPTO).

Meanwhile, the USPTO has acknowledged that it offers no remedy to a patent owner victimized by fraud in reexamination and other post-issuance proceedings. Thus, the status quo immunizes from meaningful liability anyone who uses post-issuance proceedings wrongfully seeking to shorten a patent’s term, weaken its enforceability, and diminish its value. In effect, there is an incentive for using fraud as a strategy to attack patents.

All inventors must adhere to a duty of candor when they obtain patents, and they face material consequences for any wrongful conduct before the USPTO; for example, inequitable conduct can render one’s patent unenforceable. But once a patent issues, patent owners face an asymmetrical threat: almost anyone can challenge a patent in a post-issuance proceeding at the USPTO, yet the challenger faces no financial consequence for a dishonest or even fraudulent submission. A patent owner who is victimized by such harassment has no legal remedy for economic damages, and there is no viable deterrent.

Moreover, the scope of post-issuance patent proceedings was significantly expanded by the recently-enacted America Invents Act, which adds post-grant review and inter partes review to existing procedures. Expansion of these proceedings increases the opportunity and incentive for fraudulent attacks on patents.

The Solution

While APFAP strongly supports the reexamination process and other post-grant review, APFAP is petitioning Congress to create a carefully balanced, federal cause of action that would permit an aggrieved patent owner to assert a damages claim against someone who commits fraud in initiating a post-issuance proceeding or during the proceeding. Such a cause of action will help close the "integrity loophole" so that those who challenge patents at the USPTO can be held accountable for baseless or fraudulent use of these processes in much the same way as litigants in court.

Most importantly, such a cause of action will serve as a deterrent against abuse and will thereby protect the integrity of administrative patent challenges at the USPTO. This measure will improve the operation of the US patent system and strengthen the patent incentive, promoting economic development based on innovation.

About APFAP

The Alliance to Prevent Fraudulent Attacks on Patents (APFAP) is actively seeking supporters who are interested in addressing the problem of fraudulent attacks on patents. Once we have reached a critical mass of support, APFAP will form as a non-profit coalition based in the District of Columbia and begin bringing this important issue to the attention of Congress. For more information on APFAP, please contact us at info@apfap.org.

 

 

*Former U.S. Senator Birch Bayh is a partner with Venable LLP. Venable LLP has represented APFAP.