PREVAIL Act and Its Potential Effects to Enhance Patent Fairness

PREVAIL Act and Its Potential Effects to Enhance Patent Fairness

By The Fatty Fish Editorial Team - June 24, 2023

The Patent Trial and Appeal Board (PTAB), a decision-making body located within the US Patent and Trademark Office (USPTO), is responsible for reviewing and resolving appeals brought against the rulings of patent examiners, as well as determining the validity of patents that have been challenged by third parties through post-grant proceedings. The PTAB is composed of both statutory members and administrative patent judges. The statutory members include the USPTO’s Director and Deputy Director, the Commissioner for Patents, and the Commissioner for Trademarks. Alongside the statutory members, the PTAB includes several administrative patent judges (APJs) who are appointed by the Secretary of Commerce, with consultation from the USPTO’s director. These APJs are legally required to possess both proficient knowledge of the law and scientific expertise. Therefore, each APJ must have a technical background, a law degree, and considerable experience in the legal field. Many APJs also boast distinguished careers in engineering or scientific disciplines, in addition to their extensive legal expertise.

According to patent experts, including prominent judges, scholars, practitioners, and former PTO heads, the PTAB’s practice of overturning the majority of patents under review significantly deviates from historical rates of patent reversals in the courts. This substantial reversal rate, they argue, indicates serious flaws in the PTAB process. They emphasize there is a need for the PTAB to be reformed and point out that the impact of PTAB rulings has been particularly harsh on small inventors, jeopardizing their capacity to attract seed capital and support their innovative endeavors.

Over the years, there have been several legislative bills proposed to address patent reform, with one that holds promise. The PREVAIL Act (“Promoting and Respecting Economically Vital American Innovation Leadership”) aims to bring significant reforms to PTAB practices. The PREVAIL Act proposes various changes to address concerns raised by patent owners regarding the PTAB’s inter partes review (IPR) process. The IPR process allows third parties to challenge the validity of existing patents. The proposed reforms seek to enhance fairness and balance in the IPR process.

Some key provisions of the PREVAIL Act include:

Shifting the burden of proof: The burden of proof in an IPR proceeding would move from the patent owner to the petitioner. This change would require petitioners to prove the invalidity of a patent through clear and convincing evidence.
Allowing claim amendments: Patent owners would be allowed to amend their claims in response to an IPR petition. This would enable patent owners to address issues raised during the review process, potentially strengthening the validity of their patents.
Limiting serial challenges: The same petitioner would be prevented from filing repeated challenges to the same patent. The proposal suggests restricting serial IPR petitions that target the same patent claims.
Ensuring a fair panel: New rules would ensure that PTAB panels have a balanced composition, including a mix of administrative patent judges with varying backgrounds and expertise.

The PREVAIL Act has garnered support from various industry stakeholders who believe that the proposed reforms would enhance patent protection and promote innovation. However, they believe the Act may face challenges and opposition during the legislative process. Here is an opinion piece we found of interest relating to the PREVAIL Act.

If Leahy’s PTAB bill was a dark night for patentees, Coons’ legislation is daylight

In an opinion piece, “If Leahy’s PTAB bill was a dark night for patentees, Coons’ legislation is daylight,” for IAM Media, Angela Morris, deputy editor, discusses two bills that aim to reform practice at the PTAB. The first bill is the above-described PREVAIL Act (“Promoting and Respecting Economically Vital American Innovation Leadership”), proposed by US Senator Chris Coons to make PTAB proceedings more accessible and efficient by addressing various concerns raised by stakeholders. She suggests that Coons’ bill seeks to strike a balance between patent owners and challengers and promote transparency and fairness in the patent system. According to Morris, the bill’s authors stress the importance of fully supporting inventors and American innovation.

Meanwhile, Morris argues that Senator Patrick Leahy’s PTAB Reform Act bill, if enacted, would significantly limit the ability of patent challengers to use PTAB proceedings, making it harder for them to invalidate patents. She highlights that the Leahy bill has drawn criticism from various stakeholders, who believe it would undermine the inter partes review process and tilt the balance in favor of patentees. Read the full article on IAM Media.

Disclosure: Fatty Fish is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.

The Fatty Fish Editorial Team

The Fatty Fish Editorial Team includes a diverse group of industry analysts, researchers, and advisors who spend most of their days diving into the most important topics impacting the future of the technology sector. Our team focuses on the potential impact of tech-related IP policy, legislation, regulation, and litigation, along with critical global and geostrategic trends — and delivers content that makes it easier for journalists, lobbyists, and policy makers to understand these issues.