Public Policy Disfavors the Issuance of Unexamined Patent Claims

Last November, the PTAB ordered Precedential Opinion Panel (POP) review of the final written decision in Hunting Titan, Inc. v. DynaEnergetics GmbH & Co. KG, Inc., IPR2018-00600. The rehearing request in Hunting sought review of the Board’s denial of a Motion to Amend based upon an alleged sua sponte modification of a petitioner’s anticipation ground by the panel (here). That is, the POP is reviewing the Board’s role in the amendment process where a petitioner either decides not to challenge an amended claim, or does so in a deficient manner that is apparent to the expert agency.

Does the PTO owe a duty to the public from issuing amended claims that have not been adequately examined/reviewed for patentability?

As the bar awaits the POP’s guidance in Hunting, some Patent Owners are leveraging the amendment process as a settlement tool. In operation, a Patent Owner proposes an amendment that would satisfy a petitioner as to non-infringement, but is still a viable claim against others. In turn, the petitioner does not challenge the amended claims, and there is a clear path to success. But in doing so, unexamined/unreviewed claims exit the agency for later assertion against the public.

This “settlement by amendment” scenario is detailed over at patentprogress.org as currently playing out in ZTE USA Inc., & LG Electronics Inc. v. Cywee Group LTD. (IPR2019-00143). Interestingly in this case, the potential harm is immediately apparent as there are two joined petitioners. The original petitioner driving the proceeding is seemingly satisfied with the amended claims, and has decided not to challenge them, or even request oral argument. The joined petitioner on the other hand has alleged collusion (i.e., de facto settlement) and sought to step in and challenge the claims. But, in an Order last week (here) the Board has denied the request, explaining:

As the active Petitioner, it is [] within ZTE’s purview to determine whether to oppose CyWee’s Revised Motion to Amend. ZTE’s decision not to challenge the patentability of the proposed claim amendments is likewise a reasonable strategic choice, and does not indicate that ZTE has abandoned the proceeding. Because claim amendments must “respond to a ground of unpatentability involved in the trial,” and may not “enlarge the scope of the claims,” 37 C.F.R. § 42.121(a)(2); § 316(d)(3), the public is generally likely to benefit from claim amendments during an inter partes review.

(emphasis added)

While it is true that amended claims are narrower than original claims in IPR, the same narrowing happens in patent reexamination and patent reissue — but the primary public benefit is the expert patentability review of the agency. In this way, the presumption of validity accorded such claims against the public makes perfect sense; not so in a scenario where amended claims are issued without any examination or meaningful patentability review. Whether these new claims are narrower than originally issued is of little comfort to someone that may infringe the newly issued claims, such as, presumably, the joined petitioner here (who may now also face an estoppel argument).

The above scenario could also foster anti-competitive practices. Settlement documents must be filed with the agency, in part, to ensure that such behaviors are not occurring (PTAB settlements documents may be reviewed by the Justice Dept.) Such “settlements” would appear to effectively side-step these important safeguards.

Perhaps Hunting will bring some much needed clarity into these troubling scenarios.