US patent death squad decision makes tech companies rejoice

Big tech companies such as Google, Apple, Samsung and several other companies file numerous lawsuits every year to protect themselves against trolls and others who file patent infringement lawsuits.

“Patent trolls” are individuals and companies that obtain a patent to profit from it, by licensing or litigation, rather than by producing their own goods or services.

The US Congress created the Patent Trial and Appeal Board in 2011 to handle the perceived high number of flimsy patents issued by the patent office in prior years.

The board has, through a process called inter partes review (IPR), reviewed and canceled all or part of some patents in about 80 percent of its final decisions – which gained it the name – “the patent death squad”.

In 2015, it canceled an Oil States International Inc. patent on protecting wellhead equipment after an IPR proceeding – which led to the company claiming that the board did not have the authority to do so and that it was overreaching.

On Tuesday, Justice Clarence Thomas called the IPR process an extension of the Patent and Trademark Office’s work. “Inter partes review is simply a reconsideration of that grant, and Congress has permissibly reserved the PTO’s authority to conduct that reconsideration,” said Thomas to Reuters.

In its review, the court upheld the IPR process. However, in a separate ruling, it faulted one aspect of how the reviews are carried out. It was ruled that when several parts of a patent are challenged, the office does not have the discretion to review only some of them.

Apple told Reuters that a ruling striking down the reviews could have diverted the bulk of disputes back to federal courts, where litigation is more drawn out and expensive. A review costs about $350,000 to litigate fully, whereas in district court it could be $3 million.