Tillis/Hirono Demand Answers on OpenSky

Barely on the job for a week, Director Vidal is already being politically pressured to address a festering issue of patent policy. That issue—the use of a recycled IPR petition as a means to collaterally attack large damage verdicts— is a self-inflicted wound for the agency. The OpenSky business model wouldn’t exist absent the ill conceived expansion of discretionary denial practices under former Director Iancu.

Senator Tillis (a vocal supporter of Director Iancu) sent a letter to the agency this past Wednesday demanding answers….gotta love politics.

With a Precedential Opinion Panel (POP) request outstanding in the instituted OpenSky IPR since this past January, and a heap of embarrassing publicity since then, there is no doubt that this issue is high on Director VIdal’s agenda. But with some early policy directions announced last week, and the OpenSky POP issue still pending, it seems some on the Hill want to see the issue moved forward ASAP.

The letter (here), seeks a response from the agency in 30 days, on the following suggestions questions:

We write to express our concern about the Patent Trial and Appeal Board’s (PTAB’s) recent decisions to institute inter partes reviews (IPRs) in OpenSky Industries, LLC v. VLSI Technology LLC and Patent Quality Assurance, LLC v. VLSI Technology LLC . . . .The PTAB’s decisions to endorse this scheme are troubling and undermine the USPTO’s recent efforts to ensure post-issuance proceedings are not used to harass patent owners. . . . ¶ These activities represent clear abuses of the IPR system. Yet, to date, it does not appear the USPTO has taken any steps to sanction those involved or otherwise act to deter future copycats. In fact, the PTAB has thus far granted two of the petitions filed by OpenSky and PQA. . . . .

To that end, please respond to the following questions no later than May 27, 2022

  • Does the USPTO consider filing an IPR petition for the purpose of profiting from a resulting decrease in the price of the patent owner’s stock a proper use of the IPR system?Why or why not?
  • Does the USPTO consider filing an IPR petition for the purpose of extorting money from the patent owner a proper use of the IPR system? Why or why not?
  • The America Invents Act gives the Director of the USPTO discretionary authority to deny IPR petitions. Do you consider it a proper use of that discretion to (1) deny an IPR petition filed for the purpose of profiting from the resulting decrease in the price of the patent owner’s stock; or (2) deny an IPR petition filed for the purpose of extorting money from the patent owner? Why or why not?
  • What sanctions can the USPTO impose on parties that file IPR petitions in bad faith? Has the USPTO exercised this authority to date? If so, please describe the circumstances.
  • What additional authorities, if any, does the USPTO require to ensure that parties do not file IPR petitions in bad faith and for reasons outside the intent of the America Invents Act?

(emphasis added)

So, now what?

First, the letter may be more political cover than pressure—typically such communications are coordinated efforts. Absent the necessary imprimatur from on high, taking on this practice and sanctioning filers may be seen as a bold move for a new Director. Likewise, the need to respond to the letter within 30 days has given the outstanding POP request an enhanced sense of urgency.

Interestingly, the letter strongly suggests making an example of these filers via sanction (which I thought made sense weeks ago). The only question remaining is whether terminating the proceeding will be the only sanction. The writing seems on the wall for the rest.

Stay tuned.