We’ve all heard this colloquial phrase from time-to-time.But what exactly is a Kangaroo Court and how does it relate to patent law?A generally accepted definition of a Kangaroo Court is a court that ignores recognized standards of law or justice and often carries little or no official standing in the territory within which it resides. A kangaroo court may ignore due process and come to a predetermined conclusion.
In the world of patent law, there are unfortunately two distinct worlds of Kangaroo Courts, namely the USPTO Patent Trial and Appeal Board (PTAB), as well as the Federal Circuit Court of Appeal (Federal Circuit). Each of these institutions have their own bounce, but there are aspects of both institutions that are reminiscent of the Kangaroo’s ability to punch and kick its opponents as well.We will leave the Federal Circuit for another article.
So, let’s start with PTAB.What is this thing anyway?PTAB is a quasi-judicial panel of “experts” created under the so-called American Invents Act (AIA), which was brought into full effect in March of 2013.PTAB is comprise of agency appointed individuals who function as “judges” and who are appointed to their positions.Of course, most of you reading this article will readily appreciate the difference between a judge who is elected and accountable to their constituents, and one who is not.Nevertheless, the AIA created a mechanism, referred to as Inter-Party Review (IPR) which allows one or more parties to challenge the validity of a patent.You see, prior to the creation of the IPR process, the main way of invalidating a patent in the US was through a lawsuit in Federal Court. Moreover, if you were granted a patent, your patent was, with very, very narrow exceptions, protected from attack from a third party.That is, your patent remained safe until you as the owner chose to assert that patent in court.Those safeguards no longer exist for patent owners.Now, if a third party wishes to challenge your patent, they have an avenue through the IPR process to decimate your patent or patent portfolio of their own volition.
Now, instead of having the choice to protect your patent and have the merits of its validity heard by an Article III Federal Court, with all the protections provided by two hundred years of common law and civil procedure, you can have your patent challenged at PTAB.This is when the Kangaroo becomes more apparent.The PTAB has developed its own set of procedures and rules for conducting IPRs.Unfortunately, many of these early procedures were anti-patent holder.For example, the rules of evidence that govern lawsuits in Article III courts did not apply in IPRs.Moreover, your patent could be challenged not once, but over and over and over again, on the same or marginally different grounds by many parties.Thus, if a handful (or more) competitors of yours wanted your patent invalidated, they could file serial IPR petitions.Many companies cannot afford to pay their legal counsel to defend and endless string of IPRs and decided simply to abandon their applications.
Another punch from the Kangaroo came in the form institutions and decisions.Often, in the early days of PTAB, the same individuals who reviewed the IPR petition (the document asking PTAB to institute an IPR proceeding), was the exact same set of individuals who presided over the IPR.Would it surprise any of the readers to find out that in the beginning, PTAB invalidated over 95% of the patents for which it instituted IPR?I’m certain this has surprised no one.In fact, the statistics were so bad that former Chief Judge of the Federal Circuit Randall Rader coined PTAB as the “death squad”.Also, one must keep in mind that PTAB is a branch of the USPTO, the exact same entity that issues the patents it is killing.
Suppose you work for a company that has been producing widgets for over 100 years.The company continues to succeed and produces more widgets year-over-year.The company hires a new CEO and he believes that what the company has been missing for the last 100 years is a hardcore Quality and Assurance department.So, the CEO hires the most aggressive Q&A department ever assembled.Would anyone be surprised when they found out that the new Q&A department began rejecting more than 90% of the widgets coming off the factory assembly line?Probably not.The question then becomes: are the widgets really defective or is there a problem with Q&A?Based on company growth and customer happiness with the widgets, it’s safe to assume the issue is with Q&A.What would be your reaction if someone was to tell you that the Q&A department was bonused according to how many widgets it rejected.Would that further increase your skepticism?Probably so.That topic will also have to be saved for another time, but I’ll save you the suspense and tell you that a similar bonus system has been uncovered at the USPTO. Now, what to do about these Kangaroos?As part of our Patent Blueprint, we can assist you in drafting and procuring IP assets, which may or may not include patents, in order to protect your inventions from not only infringers, but also Kangaroos.The best defense against a Kangaroo is to not enter the ring with one at all.If you are concerned about entering Kangaroo court, drop us a line and we’d love to chat with you about protecting your intellectual capital.
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