Leahy Bill Seeks to Outlaw PTAB Fintiv Practice

As I predicted just this past Monday, Chair of the IP Sub-committee, today Senator Patrick Leahy proposed some noteworthy changes to PTAB practice. While a draft bill is yet to be released, as reported by IPLaw360, several high level goals of the forthcoming bill have been outlined.

Below is a list of the general proposals, and my thoughts on the prospect of passage of each.

Outlawing Fintiv practices – Certainly the Tech Lobby is in strong favor of this, as is Senator Leahy himself. While this may be seen as anti-patent by Bio/Pharma, as their suits are rarely in a jurisdiction such as WDTX or EDTX, I doubt this provision will see as much push back from that side as some of the other provisions below. Smaller plaintiffs and licensing entities will push back, but this is Leahy’s primary focus. This change might also allow Congress to indirectly address the explosion of patent suits in the WDTX. I predict it gets through in some form.

Codifying the SCOTUS holding in Arthrex Nothing controversial here, just putting the SCOTUS holding in statute form, this one is easy as it is already the law.

Overturning ReturnMail – Somewhat of a niche issue, I am not sure anyone will come out hard against this one. So the government can file IPRs….prior to ReturnMail they had filed maybe 1-2 per year. I think this gets through.

Encouraging district court stays – I imagine this will see a ton of pushback from Bio/Pharma (and any licensing entity for that matter) but then again it is not a requirement, just “encouragement.” I’ll wait to see the language.

Overturning Click-to-Call While perhaps a “want” of the Tech Lobby, this may fall out in a horse trade for more important issues like 314(a). I give this one 50/50.

Conferring Article III Standing for CAFC appeal by statute – I would expect this to see a fair amount of pushback here given past hedge fund filings on the Bio/Pharma side. This is another one that may shake out in mark-up. 50/50.

Overturn Aqua Products on (PO to carry burden for amended claims) – In practice this is pretty much meaningless, PO’s always have to argue for their claims. And, of course, amending will never be commonplace at the PTAB. I would expect some pushback from small entities that don’t understand this is a non-issue, and generally seeking to characterize the bill as anti-patent. Given this is not much of an issue in practice, I would give this 50/50 prospects as well.

Make clear that “winner” estoppel is not embraced – As some courts have oddly construed the estoppel provisions of the AIA as estopping successful PTAB arguments from being made outside the agency, clarifying the statute to make clear that such is not the case wouldn’t seem to be very controversial. I think this easily gets through.

Add deadlines for rehearings – Benefits both sides, and in my view, necessary given variable timing of such decisions. I think this gets through.

Add double patenting as a basis for an AIA trial – Ordinarily I would expect Bio/pharma to come out guns blazing on this one. But, with the current narrative in DC on high drug prices, and the argument that Double Patenting improperly extends drug monopolies (keeping prices high) this will have to be approached very delicately. I’m betting on lobbying to nix this one.

Clarify schedules of multiple proceedings – Another change that would seem to benefit both sides, but I’ll wait to see exactly what the bill proposes.

So, when is this all going to happen?

I would expect to see the draft bill shortly given the specific guidance as to its content. Of course, with the immigration and the debt ceiling crises distracting Congress for the foreseeable future, we might be looking at Spring of 2022 for passage, if not later.