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The U.S. Patent Office Should Not Let Itself Be Used for Litigation Gamesmanship
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Over a decade ago, I co-authored the bipartisan Leahy-Smith America Invents Act to modernize our patent system. One of its key reforms was the creation of a streamlined panel inside the U.S. Patent and Trademark Office (USPTO) called the Patent Trial and Appeal Board (PTAB) to resolve patent disputes more quickly and affordably than drawn-out court battles.
Some patent infringers have figured out how to use the PTAB as a backchannel for relitigating resolved disputes, draining American innovators of resources, and giving competitors a second shot after losing in court.
The PTAB's recent ruling against Efficient Power Conversion Corporation (EPC), a California-based semiconductor firm, in favor of a Chinese infringer is a prime example.
United States Capitol building is pictured.
United States Capitol building is pictured.
Getty Images
EPC holds patented technology for a next-generation power chip, the kind of high-efficiency semiconductor used in electric vehicles, data centers, and aerospace systems. When a Chinese-based competitor named Innoscience began importing products into the United States EPC believed copied its technology, EPC filed a petition with the U.S. International Trade Commission (ITC) asking the U.S. government to block those copycats imports.
The ITC responded with a full investigation, including depositions, expert testimony, and a trial before an independent administrative law judge. After months of briefing, the judge ruled that EPC's patent was valid and infringed. When the full bipartisan commission composed of presidentially appointed, Senate-confirmed officials upheld that decision, Innoscience's copycat products were blocked from being imported into the U.S. market.
That should have been the end. An innovator company followed the ITC's rigorous, multilayered process, proved its case, and won.
Instead, as the ITC was concluding its own investigation, with post-trial briefing underway, the PTAB granted Innoscience's request to institute a brand new review of EPC's patent. Mere weeks after the ITC's order blocking Innoscience's products took effect, the PTAB issued a contradictory decision invalidating key patent claims the ITC had just found valid and infringed.
This kind of inconsistent outcome was never what Congress intended when we created the PTAB. The board was meant to resolve disputes efficiently, not reopen cases already settled by another expert agency. And it certainly wasn't meant to undermine the ITC by creating conflicting rulings that foreign infringers can exploit to re-enter the U.S. market.
These repeated challenges drain inventors' time and money. Deep-pocketed large corporations—foreign as well as domestic—can wear down smaller firms through sheer volume and cost. Defending just one PTAB challenge can cost patent owners $500,000, and challengers often file multiple challenges against a single patent if they think it poses a competitive threat. Just 10 companies account for nearly a quarter of all PTAB petitions.
The consequences are impossible to ignore. An American company that successfully defended its patent in court is still struggling to defend its rights. Meanwhile, a Chinese infringer has been handed another chance to potentially re-enter the U.S. market.
In an effort to prevent this kind of overreach, a bipartisan group of lawmakers recently introduced the PREVAIL Act. One of its key provisions could stop duplicative patent challenges by preventing the PTAB from undermining cases already decided by other forums like the ITC. That change would reaffirm that the PTAB exists to streamline justice, not undermine it, and safeguard inventors from facing endless litigation loops after winning in court.
I knew when we passed the America Invents Act that we were creating a program with the potential to be used for gamesmanship through repeated litigation and administrative attacks on the validity of a patent. That is why I wrote at the time that the Judiciary Committee I chaired "intend[ed] for the USPTO to address potential abuses and current inefficiencies under its expanded procedural authority."
Acting USPTO Director Coke Morgan Stewart could exercise her expanded procedural authority to reverse the PTAB's decision in the EPC case. USPTO policy is that the PTAB should not relitigate cases already nearing resolution in another forum. That safeguard seems to apply here. The ITC had already fully tried and decided this case.
Reversing the PTAB's ruling would mark an important step toward restoring accountability within the board and reaffirming that the U.S. patent system exists to protect American innovation.
America's patent system should not give deep-pocketed infringers multiple chances in different forums to invalidate patents. The PTAB was created to resolve patent disputes more quickly and at less cost, not encourage infringers.
Lamar Smith represented the 21st Congressional District of Texas in the U.S. House from 1987 to 2019 and served as chairman of the Judiciary Committee.
The views expressed in this article are the writer's own.
