“So obviously the patent claims VirnetX has used to pursue infringers such as Apple and Microsoft are not the weak patents that opponents of the patent system claim are the scourge of the system. Well — not so fast! Just because an Article III federal district court confirms the validity of a patent doesn’t mean anything anymore. Indeed, federal courts have become subordinate to the PTAB, which is as ridiculous as it sounds but sadly true. A patent is not valid until an Article I executive tribunal says so, and absolutely no deference is paid to Article III judges of the United States federal courts.”
“There’s been a great deal of discussion in recent years on whether the PTAB is a death squad for commercially viable patents. At least in the case of VirnetX, this definitely appears to be the case. The “patent as piñata” metaphor also seems fitting in this case. It’s as if Apple, Microsoft, RPX and others are children sitting at a birthday party, each of them getting a turn to take a crack at the VirnetX piñata (Apple getting the most cracks because let’s remember, this is Apple’s party at the end of the day). Those patents which were so valid and valuable in district court proceedings are simply mounds of papier-mâché at the PTAB, cracking every time with enough swings of the bat.
“The PTAB has always been touted as an alternative venue to U.S. district courts, which would lower the costs of fighting patent infringement cases. Increasingly, however, the PTAB does not lower the cost of patent infringement litigation but instead increases the cost in many situations, such as here where these patents had already thoroughly been litigated and even confirmed valid all the way up to the Federal Circuit.
“The PTAB gives efficient infringers a great alternative, which can be used to extricate themselves from jury verdicts awarding hundreds of millions of dollars in reasonable royalties. Of course, the inverse is true for VirnetX, which had to deal with the costs of almost 70 PTAB proceedings sprung from 8 district court cases and saw incredibly valuable and previously confirmed valid property rights ripped away.
“It’s clear that the PTAB is far more useful for massive entities who are found to have willfully infringed valid patents and highly detrimental to firms who are working to commercialize the inventions of individuals and small entities.”
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