SAS Institute Inc. v. Iancu
As we recently noted in our companion piece Part 1 of 2: Supreme Court and Inter Partes Review, the Supreme Court issued decisions in two intellectual property appeals relating to inter partes review (“IPR”) before the U.S. Patent and Trademark Office. In Oil States Energy Services LLC v. Greene’s Energy Group LLC, No. 16-712, the Court decided 7–2 that the inter partes review process does not violate Article III of the Constitution or the Seventh Amendment. In SAS Institute Inc. v. IANCU, No. 16-969, the Court decided that the Patent Trial and Appeal Board (“PTAB”) must decide the patentability of all of the claims the petitioner has challenged rather than selectively picking and choosing which claims to review. In response to the Court’s decision in SAS, the PTAB has already issued new guidance regarding the institution of IPRs.
This blog addresses the SAS decision.
The Supreme Court Decision
Having finally put to rest the question of whether IPRs are constitutional (for now at least), the Court moved on to decide the extent of the PTAB’s authority in determining whether to institute such a proceeding. The question the court addressed is whether the PTAB “must resolve all of the claims in the case, or may it choose to limit its review to only some of them?” Slip Op. at 1 (italics in original). The Court, relying on a plain language interpretation of the statute, held that the statute has a “mandatory and comprehensive” requirement that if the PTAB decides to institute an IPR, the PTAB must decide the patentability of all the claims in the original petition. In other words, the PTAB has a “binary choice—either institute review [on all claims in the original petition] or don’t.” Id. at 8.
In reaching this conclusion, the Court made a series of arguments. First, the Court decided that the language of the statute was clear, “[t]he text says only that the Director can decide ‘whether’ to institute the requested review-not ‘whether and to what extent’ review should proceed.” Slip Op. at 8 (citing 35 U.S.C. § 314(b)). Second, the Court explained that the policy argument of allowing the PTAB to focus on the most promising challenges to avoid wasting time on others was a question for Congress and not one that the judiciary could decide. Third the Court explained that Chevron is not relevant because, according to the Majority, the “statutory provisions . . . deliver unmistakable commands” and there is “no room in this scheme for a wholly unmentioned ‘partial institution.’” Id. at 12. Finally, the Court disposed of the argument that the judiciary lacks power to review a PTAB’s institution decision under § 314(d), including whether that institution decision can restrict the claims under review. The Court explained that § 314(d) pertains to the substantive analysis by the PTAB of whether there is a “reasonable likelihood” that claims are unpatentable while the question at issue pertains to whether the PTAB is acting outside of its statutory limits, a question which the Court may in fact review.
The Court highlighted that the Director (through his delegate, the PTAB) still has discretion in deciding whether to institute an IPR—the PTAB can decide not to institute even if there is at least one claim upon which the petitioner has a reasonable likelihood of prevailing.
The Court’s SAS decision upends years of common practice at the PTAB. While the Court has settled the question of partial institutions, it has opened up many questions that will likely lead to future litigation.
More questions than answers remain after the SAS decision, and almost certainly more litigation. The PTAB has been quick to take action, issuing new guidance in response to SAS on April 26, 2018, two days after the decision. However, more than just the PTAB will be affected. The effects of SAS will be felt by the courts and will likely alter petitioner and patent owner practice.
On April 26, 2018, the USPTO published Guidance on the impact of SAS on trial proceedings (the “Guidance”), in response the Supreme Court’s SAS decision. The guidance, like the SAS decision itself leaves many questions that will need to be answered.
The PTAB will review all challenges in a petition
The Guidance clearly states that the “PTAB will institute as to all claims or none,” thereby complying with the SAS decision. The Guidance goes further, however, and also states that it will institute on “all challenges raised in the petition” (italics added). This additional step as to “challenges” goes beyond the requirements in SAS, which only explicitly required the PTAB to institute as to all claims. This step by the PTAB to review all challenges, which was not always the practice at the PTAB, is likely anticipatory and a move to avoid future litigation on a similar matter. Patent holders will likely benefit as they will no longer have to worry about challenges that the PTAB decided not to review popping back up in district court.
The PTAB has discretion for already instituted IPRs
The Guidance provides that for pending trials with a partial institution, the PTAB may issue an order supplementing the petition. The Guidance does not require that all pending partially instituted IPRs be supplemented, instead leaving discretion to the panel for each IPR. It is likely that this issue will be litigated, however, due to the time requirements for IPRs proceedings, this will only remain an issue for a short period of time.
The PTAB has discretion to extend deadlines
The Guidance provides that the PTAB may extend deadlines and allow for additional briefing and other time extensions where it deems necessary. Under 35 U.S.C. § 316, once an IPR is instituted, the IPR proceeding should be completed and a final written decision issued within one (1) year, with a six (6) month extension possible for good cause. The change in practice required by the SAS decision will undoubtedly qualify as “good cause,” but there is a potential for litigation where a proceeding is extended beyond the six month extension period.
An additional issue raised is how discovery will be affected by the PTAB supplementing institution decisions. It is possible that depositions will need to be retaken, more production requested, and other similar issues that will delay the proceedings.
IPR parties will have to meet and confer
The Guidance provides that parties to an IPR shall meet and confer as to scheduling requirements. Although not mandatory, it is recommended that the parties take advantage of a meet and confer as the PTAB may not extend deadlines without a request.
Other effects at the PTAB
It is unclear at this time how the SAS decision will affect petitioner practice before the PTAB, but it clear that for the near future, the PTAB has a lot more work in front of it.
The PTAB has an increased workload
The PTAB has an increased workload in at least its final written decisions, which will surely be longer as the PTAB can no longer weed out claims it deems unmeritorious at the preliminary stage. For any instituted IPR, the PTAB must now include a written decision to all claims even where it initially believed some claims were without merit.
Conclusory Institution Decisions?
To balance the increased workload, it is entirely possible that the PTAB may drastically shorten its institution decisions, perhaps to a single word—instituted or denied. Another option for the PTAB is to explain the reasonable likelihood that the petitioner would prevail to the one (1) claim required by statute for institution. The panel for each PTAB proceeding will continue to have the prerogative to include as much or as little information in the institution decision, as permitted by the statute.
First, the statute merely requires that the Director (i.e., PTAB) notify the parties, in writing, of the institution determination. 35 U.S.C. 314(c). The statute does not require an explanation of its decision. Instead, the statute requires only a notification of the decision and the date on which the review shall commence.
Second, the PTAB’s determination on whether to institute an IPR is final and nonappealable—if, of course, the issue is substantive, i.e, the PTAB’s determination of a reasonable likelihood that the petitioner would prevail as to at least one claim. Again, the PTAB appears to have discretion to drastically shorten its institution decisions.
If the PTAB does take this route, petitioners and patent owners will lose early insight into the PTAB’s position early on in the proceeding.
Denial of more petitions; Telegraph which claims warrant reexamination (Ginsburg’s Dissent)
The Director/PTAB still has complete discretion in whether to institute an IPR. Thus, as Justice Ginsburg notes in her dissent, it is entirely possible that the PTAB can deny any petitions containing challenges that have no “reasonable likelihood” of success and explain or note in its decision what claims the PTAB feels warrant review. The petitioner would simply need to amend its petition (and likely pay a new filing fee) to include only those claims that the PTAB has telegraphed as warranting review.
The Majority noted Justice Ginsburg’s dissent in a footnote and acknowledged the PTAB’s ability to act in such a way. Slip Op. at 11. However, the Majority provides some indication that such a practice by the PTAB may constitute “shenanigans” which the Court might not deem allowable if it gets the chance to review such a question. It seems that if the PTAB does take this path, litigation will follow shortly thereafter.
One issue that would complicate this approach is the one year time bar that runs from the date that a civil complaint is served. 35 U.S.C. § 315(b). Where IPR petitions are filed in response to civil litigation, it is unlikely that the PTAB would be able to deny a petition quickly enough to telegraph what claims are worth pursuing without foreclosing the opportunity for a petitioner to refile.
Changes at the courts
This decision will not only affect the PTAB, but also the district courts and the Federal Circuit.
More stays at the district court
The removal of partial institutions at the PTAB may result in more district courts deciding to stay their case pending the outcome of an IPR. The statute does not require a district court to stay a proceeding once an IPR is instituted, however courts have been amenable to such an idea. Issues arise, however, where the claims included in a partial institution at the PTAB do not encompass all claims at issue at the district court. With the removal of partial institutions, it is possible that more IPRs will encompass all the claims at the district court, which may lead the district court to order stays more often.
The Federal Circuit has an increased workload
The Federal Circuit will have an increased workload in reviewing longer decisions by the PTAB that includes more claims than it has in the past. It is possible that the Federal Circuit will continue its current practice of summarily affirming close to half of the appeals that it receives. However, with the increased number of claims making their way through the PTAB, it is possible that the Federal Circuit will take a closer look at more cases and on more issues. In addition to reviewing more claims at the Federal Circuit, it is also likely that the Federal Circuit will have to deal with more procedural issues.
Petitioner Practice and estoppel
Petitioners, real party in interest, or those privy of petitioner are estopped from asserting in a civil action or an action before the ITC that a claim is invalid on any ground that the petitioner raised or could have raised during an IPR and that resulted in a final written decision. Estoppel will be more prevalent with the PTAB having to review all claims in a petition.
Therefore, Petitioners should spend more time analyzing their arguments and ensuring that they are choosing only those claims that they feel have a good chance of being invalidated at the PTAB, else they lose their chance to argue the same in another proceeding.
An alternative option for petitioners is to file more petitions. Where possible, a petitioner may want to split up what would normally be included in a single petition and file as entirely separate petitions. In this way, the petitioner would have a greater chance of preserving arguments where the PTAB denies certain petitions and not others. This would, however, require additional filing fees.
The Supreme Court has shaken up the patent world once again with little guidance on how to move forward. This slight change in IPR practice will have large effects at the PTAB and the courts. Issues in response to this decision will undoubtedly show up in the courts in the future.
We will continue to monitor these development and will keep you informed of changes.
 35 U.S.C. § 314(d) states that the “determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.”
DeFi surge, rising TVL and new partnerships underpin Ren’s 100% rally
Interoperability between blockchains is rapidly becoming one of the buzz phrases being thrown around when discussing decentralized finance and the coins most likely to rally during an altcoin bull run.
The rapid growth of DeFi, its ever expanding total value locked and soaring ETH gas fees further highlight the sector’s need for a layer 2 option that also supports the ability to transact value across different networks.
REN’s open protocol is designed specifically to fill this need by providing interoperability and liquidity between the top blockchains including Bitcoin, Ethereum and Zcash.
Over the past three weeks the price of REN has increased by more than 200%, going from $0.251 on Dec. 27 to a new all-time high of $0.778 on Jan. 20 driven by a record $369 million in 24-hour volume.
Three reasons for the recent price surge in the price of REN include the announcement of a collaboration with Google, the continued increase in total value locked on the platform and the ability to earn passive income in multiple cryptocurrencies through the operation of a darknode.
Google software pivot boosts sentiment, addresses RENvm scaling issues
On Jan.19 the REN team tweeted:
Ren has been researching & building on @Asylodev, an open and flexible framework by @Google. @GCPCloud confidential computing relaxes RenVM’s economic constraints, allowing for an unbounded scaling solution. #RenVM.”
Not long after the tweet, REN price began to rally to a new all-time high. As mentioned in the tweet, Asylo is an open and flexible framework from Google designed to help build portable applications that run on Secure Enclave hardware.
The secure enclave hardware allows users to run general-purpose applications in a secure environment where both the data, and the application itself, cannot be compromised by anyone, including the user. This makes for a more secure experience for all parties involved and helps protect against malicious code and backdoor attacks.
Asylo also makes it possible to port an application from one type of hardware to the next, meaning that developers can support multiple implementations with relative ease, including Intel implementations, AMD implementations, and any others that appear in the future. The diversity of choice this allows is an important feature to ensure decentralization on the network.
Total value locked soars to a new high
Community engagement and added value are key factors when it comes to the long-term success of a blockchain project.
Since the release of the Ren virtual machine mainnet (RenVM) in May 2020, engagement on the platform has steadily increased as Bitcoin holders now had another way to bring their BTC to Ethereum and the growing DeFi space.
As seen in the chart below, the total value locked on the Ren platform reached a new all-time high of $653.6 million on Jan. 20 and a total of 14,670 BTC are locked on the platform to create renBTC.
The list of assets that RenVM supports continues to grow with BTC, Bitcoin Cash (BCH), Zcash (ZEC), Filecoin (FIL), Terra (LUNA), Dogecoin (DOGE) and Digibyte (DGB) currently available to transact on the Ethereum and Binance blockchains.
Development is currently underway to make it possible to interact on the Polkadot (DOT), Solana (SOL) and Cosmos (ATOM) networks as well, which would further enhance the interoperability provided.
Darknodes, passive income and a decreasing supply
The third driving force behind the recent price appreciation of REN relates to the Ren token use case and how it can help users earn passive income. RenVM is a network of virtual computers that make up a virtual machine, which are also referred to as Darknodes.
REN token holders who wish to operate a darknode need to lock up 100,000 REN which wiil enable them to process transactions on the network and earn a fee in the form of the token transacted. Thus, a darknode operator has the opportunity to earn passive income in the form of multiple different cryptocurrencies from one location.
As can be seen in the above graphic, 17.13% of REN’s total supply is currently bonded on the platform and supports the operation of darknodes.
During the most recently completed cycle, the network as a whole earned $839,128 in fees in the form of BTC, ZEC, FIL and BCH. The total network fees collected since the launch of the RenVM equals $2.975 million.
The continued addition of new tokens and interoperability with new blockchains will likely see increased usage of the network and an increase in the amount of fees earned. At the current price of $0.6157 it costs $61,570 to operate a darknode.
As activity on the network increases, the amount of fees generated will also increase, making it even more lucrative for token holders to operate a darknode. This has the potential to lead to further price appreciation from REN as every new darknode results in a direct decrease in its circulating supply.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Denarius Announces Beta of Kronos Wallet and Private Decentralized Chat
Kronos, a new application beta from the developers of Denarius (D), provides people a way to socialize and transact without a central authority. This new proof of concept takes decentralization, blockchain and privacy to the next level.
“Blockchains like Bitcoin and Ethereum have paved the way of innovation for cryptocurrencies and new applications like Denarius (D): Kronos, to bridge the gap for a faster and cheaper way to transact and utilize cryptocurrency.” — James R. (Cryptocurrency User)
Kronos, a new application beta from the developers of Denarius (D), provides people a way to socialize and transact without a central authority. This new proof of concept takes decentralization, blockchain, and privacy to the next level. “Users” are able to freely join the Kronos Chat platform, as it is redundantly available due to it using peer-to-peer technology. Kronos has no downtime or possible banning of the platform. Examples of this in current history include, Amazon Web Services (AWS) taking down the Parler app’s platform hosting . Google Play Store and Apple App Store removing the Parler application . Signal App going offline . Whatsapp invasion of privacy …the list goes on.
Kronos is a secure cryptocurrency wallet but also chat reinvented. With the Kronos Chat you can chat and send cryptocurrency across the world in seconds. End-to-end encrypted messages and no storage of your chats, anywhere. Kronos Chat is powered by YOU by leveraging the latest peer-to-peer technologies. Censorship is everywhere and increasing daily. Kronos Wallet allows you to be truly free, with “self-moderation” you finally have the power to choose your own censorship while you socialize. Kronos stores only required data securely and locally, not on an unknown centralized server in the cloud. Kronos supports optional Two Factor Authentication (2FA) and One-time Password (OTP) Yubikey authentication and uses BIP39 technology for your cryptocurrency wallet with the most advanced and leading encryption technologies available today.
Bitcoin was the first cryptocurrency to solve the Byzantine Generals Problem, but transactions are slow. Ethereum created a smart contract platform, but transaction fees are expensive. Denarius stayed true to its roots by forking the original Bitcoin Satoshi code and modified the coin to become a faster and cheaper alternative to Bitcoin. Now Denarius with Kronos changes things. BTC, ETH, and D coins can be sent using the Kronos Wallet with more cryptocurrencies and tokens being added soon, possibly USDC, USDT, Namecoin (NMC), Devault (DVT), Primecoin (XPM), etc. Interplanetary File System (IPFS) integration and file uploading directly inside of the Kronos Chat also allows the user to upload files such as documents, images, and media directly inside of Kronos, ready to be shared via the plethora of IPFS public gateways available.
Bitcoin (BTC) created by Satoshi Nakamoto
Ethereum (ETH) created by Vitalik Buterin
Denarius (D) created by Carsen Klock
Bitcoin (BTC): https://bitcoin.org
Ethereum (ETH): https://ethereum.org
Wen? Now! BadgerDAO’s synthetic rebasing Bitcoin, DIGG, goes live
After weeks of anticipation and a closely-watched series of preparatory steps, BadgerDAO’s synthetic rebasing Bitcoin, DIGG, is now live and claimable for qualified addresses on Ethereum mainnet.
The release will be eagerly welcomed by a perhaps-overzealous community, one which has been lighting up Twitter with “wen DIGG” for weeks. For all the memes and excitement, however, there’s some serious technical heft behind both the distribution and the maintenance of the newest Bitcoin asset on Ethereum.
Ultimately, however, now that DIGG is in the wild market forces are what will determine the long-term success of the synthetic Bitcoin asset — success that might not be assured.
Fair, flat launch
According to core BadgerDAO contributor and distribution architect Jon Tompkins, the amount of claimable DIGG for each eligible account was determined using a formula centered on an Ethereum address’ activity in the BadgerDAO app. Factors such as total native platform Badger tokens earned, the Badger earned to Badger staked ratio, and total stake days were taken into consideration.
In order to prevent an overallocation to deep-pocketed “whales,” however, the DAO approved an application of a 1.75 root to smooth the distribution between addresses. As Tompkins wrote in the original DIGG distribution proposal, this root means that, while in a linear distribution the top 100 addresses would have been eligible to receive over 70% of DIGG, they instead will be able to claim just 33%.
Tompkins said that of the 600 DIGG tokens currently available the top address will receive 8.75 DIGG, while the average of the 8517 eligible addresses will be able to claim .07 of a token.
The goal of this distribution was to allow the project to “reward the little guys that are strong badger supporters but not fully disadvantage the whales,” said Tompkins.
Keeping a peg
Now that the token is live, the rebase games begin.
Algorithmic stablecoins have been a hot topic in DeFi circles over the past few months as one of the most popular trading vehicles. The assets, which are primarily meant to track the price of the US dollar, have “rebasing” features that dynamically expand or contract the total supply of the asset based on preset parameters such as price or time.
So far, however, they’ve proven to be far more effective at enriching users who know how to play the rebase parameters than they’ve been at creating truly stable assets.
DIGG will be possibly the first-ever synthetic rebasing Bitcoin, and certainly the first to feature this distribution method. Out of the gate users will be able to stake their DIGG in a yield-bearing vault, use it to provide liquidity to DIGG/WBTC Sushiswap and Uniswap pairs, hold the core asset in anticipation of a positive rebase, or sell the tokens on the open market.
While there has been speculation as to how DIGG will perform and what the best strategies might be, it’s ultimately unclear to what degree the asset will be able to hew to its intended peg given BTC’s volatility and DIGG’s unique launch.
In a previous interview with Cointelegraph, BadgerDAO founder Chris Spadafora expressed hope that additional forthcoming stabilization mechanisms will be able to help DIGG better track BTC, however.
“What we want to do with our vault system is really at large-scale be the… let’s call it the ‘buy-and-sell’ dictators. So through automated strategies we’re able to buy when the time is right and sell when the time is right to optimize return for the users,” he said.
Forthcoming vaults designed to programmatically play the rebase games are designed to do just that, but given the uncharted game-theoretical landscape it’s impossible to say if the vaults will be sufficient to stabilize DIGG — or what happens after vault incentives dry up.
In the end, after weeks of anticipation, instead of “Wen DIGG?” BadgerDAO participants lining up to take a spin at the latest rebase casino now must ask themselves, “What’s next?”
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