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Part 2 of 2: Supreme Court and Inter Partes Review

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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.[1] 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.

Looking Forward

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.

PTAB Guidance

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.

Conclusion

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.


[1] 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.”

Source: https://www.bioloquitur.com/part-2-2-supreme-court-inter-partes-review/

Blockchain

‘Bitcoin maxis’ like Solana, but is there sound logic to that

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Recent changes in cryptocurrency market dynamics have fueled the popularity of altcoins like Solana [SOL]. It recently became one of the most trending blockchain platforms around on the back of its surging price.

The cryptocurrency, in fact, had a 1-year ROI of over 4,200%, despite dropping by 34% since its peak in early September. Despite the latest hiccup in value, however, market observers believe the project has managed “winning over a significant number of Bitcoin Maxis or near-maxis.”

Ikigai Funds’ Travis Kling offered this observation on Twitter when he said,

“After talking to a bunch of folks over the last couple months, it’s pretty clear that SOL is successfully winning over a significant number of BTC Maxis or near-maxis, which have previously owned zero ETH or very little ETH.”

While the crypto-space is competitive, the tech-twist to the age-old saying – “competition of your competition is your ally” also holds true. Solana is not competing with Bitcoin. Instead, it is competing with Ethereum’s position in decentralized finance, NFTs, and smart contract offerings. Given the fact that transacting on Ethereum is still a pain for some users, Solana’s cheap and fast transactions provide a better alternative to many.

Solana’s DeFi projects recently crossed $3 billion, despite Ethereum hosting the maximum number of DeFi and NFT projects. While Bitcoin “maxis” are also opting-in for smart contracts, they prefer SOL over ETH, according to Kling.

Why? According to the exec,

“I think maxis look at ETH vs SOL and think –

Well as long as its not going to be all that decentralized, might as well have a smart contract platform that can actually handle enough throughput with cheap enough fees where it can really scale, instead getting choked up like ETH.”

However, not everyone agrees with Kling’s opinions. Many believe the decentralization narrative to be wrongly used by Kling, with another Twitter user @mikemcg0 noting that Ethereum is “more decentralized than BTC.” Anyone can run an Ethereum validator,” he said, “but only a select few oligopolies can mine BTC.”

Even so, Bitcoin mining has spread out even more after the recent China crackdown. Although the process is extensive in terms of effort, time, and money, according to another user, “anyone can” mine BTC “if they have the entrepreneurial mindset.”

Now, the latest outage faced by Solana did raise questions about the level of centralization. However, that has not really discouraged those who want to indulge in DeFi, NFTs, and smart contracts. As Solana forges new contracts with Hacken Foundation and Gate.io, others institutions like Osprey Funds and Grayscale are in a race to include Solana in their respective bouquet of products.

In fact, Osprey Funds has already registered Osprey Solana Trust with the SEC.

‘Ethereum killer’ or not, Solana is en route to gaining more interest from the booming crypto-market. Even turning so-called BTC maxis in the process.

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Source: https://ambcrypto.com/bitcoin-maxis-like-solana-but-is-there-sound-logic-to-that

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‘Rich Dad’ Author Robert Kiyosaki Predicts ‘Giant Stock Market Crash’, Keeps HODLing Bitcoin

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The highly successful author behind the “Rich Dad Poor Dad” series of personal finance books, Robert Kiyosaki, has predicted a “giant stock market crash” is coming in October, and while he noted the price of bitcoin may crash too, he is not selling his BTC holdings.

According to a tweet Kiyosaki published, the best-selling author believes that the stock market crash will take down with it not only equities but also the price of precious metals like gold and silver. Cryptocurrencies like bitcoin will also be affected, with cash being “best for picking up bargains after crash.”

The author added he will not be selling his gold, silver, or bitcoin, but maintains “lots of cash for life after stock market crash,” before noting he believes the stock market is currently dangerous for investors.

Kiyosaki has over 1.7 million followers on the microblogging platform, partly thanks to the success of his “Rich Dad Poor Dad” books. The main book of the series of one of the top 10 personal finance books of all time, “advocates the importance of financial literacy (financial education), financial independence and building wealth through investing in assets, real estate investing, starting and owning businesses, as well as increasing one’s financial intelligence (financial IQ) to improve one’s business and financial aptitude.”

The best-selling author has been predicting a stock market crash for some time now. In June, he recommended buying bitcoin ahead of what he believes was going to be the “biggest crash in world history.” The crash, he revealed, was coming after the “biggest bubble in world history” popped.

In August, he revealed BTC had the “greatest upside” while the value of the U.S. dollar was dropping. Earlier this year, the author said the price of bitcoin was “going to $1.2 million” in five years. Kiyosaki has also recently commented on China’s crackdown on cryptocurrency.

Per his words, China is “about to launch its Government crypto coin,” and as such outlawed cryptocurrency mining and trading to crackdown on privately issued competitors.

DISCLAIMER
The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.

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Source: https://www.cryptoglobe.com/latest/2021/09/rich-dad-author-robert-kiyosaki-predicts-giant-stock-market-crash-keeps-hodling-bitcoin/

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Blockchain

Europe Now World’s Biggest Crypto Economy: Boasts Over $1T Worth of Transactions

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Central, Northern, and Western Europe (CNWE) has grown into the world’s largest cryptocurrency economy since July 2020. The region experienced a massive increase in trading activity since then– particularly in the DeFi space.

The European DeFi Boom

Data from Chainalysis shows that CNWE received over $1 trillion in cryptocurrency over the last year alone. This represents 25% of global trading activity. Furthermore, it is responsible for at least 25% of all crypto value received by other regions, including 34% of the value received in North America.

This makes the EU the most concentrated in the world in terms of cryptocurrency trading volume. This is partially due to increases in all forms of trading activity over the past year, coming mostly from institutional investors.

Large institutional transaction value grew from $1.4B in July 2020 to $46.3B in June 2021, coming to take up half of all CNWE trading activity. The most pronounced increases were seen on DeFi protocols, where over 80% of these large institutional transactions were sent in June.

The impact of DeFi is further established when ranking coins in terms of transaction activity in the region. Despite being the largest cryptocurrency by market cap, Bitcoin heavily trails Ethereum in transaction volume among large institutional investors. Additionally, DeFi protocols took up a majority share of funds received by cryptocurrency services in CNWE in June 2021.


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The Decline in Eastern Asia

CNWE has seen significant absolute increases in its crypto trading volume. However, its new place as the world’s largest trading hub is partly due to a sharp decline in market share held by Eastern Asia– the previous world leader.

In early 2019 the region held over 30% of global transaction volume. This figure has since fallen sharply to about 15% – less than CNWE, North America, and even Central and Southern Asia.

This may be related to China’s continued push to prevent and discourage crypto trading within its borders. China re-announced their ban on crypto trading in the country days ago, and have been moving to prevent all access to exchanges within the country.

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Source: https://cryptopotato.com/europe-now-worlds-biggest-crypto-economy-boasts-over-1t-worth-of-transactions/

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