Sunday, June 07, 2015

The debate on IPRs: "The negatives I've heard are hypothetical or theoretical"??

The Daily Herald published Patent Death squad causes a ruckus , picked up from Bloomberg, which included the text

"I can't see how it's anything but an overwhelming success," said Dana Rao, associate general counsel for Adobe Systems Inc., which has been on both sides of petitions before the agency. "The negatives I've heard are hypothetical or theoretical and all the positives are real."

The idea that the "negatives" are hypothetical is false.

**Acorda stock did drop around 10% after Kyle Bass filed an IPR against patent claims related Acorda's MS drug Ampyra (active ingredient 4-amino pyridine).

**As to the impact on smaller companies defending against multiple IPR filings, see the IPBiz post

Gevo suffers losses to Butamax at PTAB
with the text

In a decision filed March 3, 2015 on an IPR filed by Butamax against Gevo's US patent 8,273,565, the PTAB found contested claims invalid. Butamax wins. Part of the decision involved a lack of support in provisional applications for later-filed claims. See IPR 2013-00539. The decision was written by Judge Kerry Begley.

Of relevance to this loss by Gevo, note the document at

which suggests Gevo may not have the resources to continue fighting.

The price of an IPR may be at a "sweet spot" that is not too expensive for big companies but far too expensive for little companies.

**Of the Bloomberg text

An alliance of tech companies and retailers, meanwhile, argued in a letter Monday [1 June 2015] to top Republicans and Democrats on the House and Senate judiciary committees that the reviews help winnow bad patents by having the agency scrutinize its own original work and correcting mistakes.

--> As to "correcting mistakes," Judge Newman has noted how rare it is for amendments to be made in IPR contexts, so IPR is NOT about correcting mistakes.

--> As to a patent quality issue, recall the earlier IPBiz post
Demise of the (anti-)Doughnut campaign: a parable of patent reform?

An AP story notes that doughnut selling lawyers were partly to blame for the demise: A county commissioner who owns a doughnut shop and two lawyers who own a new Dunkin' Donuts on Panama City Beach turned against him ... After the lawyers threatened to sue, his bosses at the Florida Health Department made him remove the anti-fried dough rants and eventually forced him to resign, [Newsom] says.

This little story evokes themes in the story of patent reform, although the patent reform saga has added complexity. In patent reform, the big doughnut sellers (eg, IBM, Cisco) are complaining about the little doughnut sellers ("trolls") and are trying to implement "reform" to favor the big doughnut sellers, rather than to get rid of the doughnuts. The popular press would have the public believe that the little doughnut sellers are the only ones selling doughnuts, and that "reform" will get rid of the doughnuts. Anybody who actually advocated getting rid of the doughnuts would meet the same fate as Dr. Newsom, likely from doughnut selling lawyers. Furthermore, the position of the big doughnut sellers would do significant harm to smaller vendors, who aren't selling doughnuts at all.


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