USPTO Comments: ANPRM on Potential Reforms to PTAB

By at 20 June, 2023, 10:29 am

The Honorable Kathi Vidal

U.S. Patent and Trademark Office

600 Dulany Street

Alexandria, VA 22314


Dear Director Vidal:

On behalf of the Small Business & Entrepreneurship Council (SBE Council), I am providing comments in response to the United States Patent and Trademark Office’s recently issued Advance Notice of Proposed Rulemaking (ANPRM) on potential reforms to Patent Trial and Appeal Board (PTAB) proceedings.[1]

SBE Council is an education, advocacy, and research organization dedicated to protecting small businesses and promoting entrepreneurship. Our members include small business owners, entrepreneurs, state and local business groups, corporate partners and associations. Intellectual property protection has long been a core issue for SBE Council at home and abroad since our founding nearly 30 years ago, as it is critical to a startups and business growth, and therefore a vibrant and competitive economy.

The ANPRM lists as two of its aims: 1) the application of “clear, predictable rules” for challenges to patent validity; and 2) protection from petitioner harassment of “under-resourced inventors,” like “startups, small businesses and independent inventors,” which USPTO rightly recognizes as vital to the health of American innovation.[2] While these objectives are laudable, it is crucial to approach them in a grounded manner that avoids inadvertently exacerbating uncertainties faced by small businesses, innovators and their investors.

Of particular concern are recent and ongoing efforts to override an important safeguard helping to prevent misuse of the patent review system. Before USPTO officials put this safeguard in place, large companies were routinely able to fight their disputes with smaller patent-holders in two venues at once – the federal courts and the PTAB. This enabled big players to entangle less-well-resourced patent holders in costly concurrent proceedings assessing the same patents where courts would be addressing the issues.

Larger technology firms make especially frequent use of PTAB, and duplicative petitions are the rule, not the exception.[3] A 2018 study found that nearly half of the petitions filed by the PTAB’s five most active large-tech petitioners were redundant.[4] Even in cases where a patent has been found valid by a district court, it was still subject to challenge at PTAB.[5]

To prevent this kind of costly entanglement, in 2020, the USPTO devised the so-called Fintiv factors, clarifying that PTAB does not need to hear a challenge if the petitioner is concurrently litigating the validity of the patent in federal court. But in 2022, the USPTO issued a memo stating that PTAB would no longer rely on Fintiv factors to deny a petition involving parallel litigation if the petitioner provides “compelling evidence of unpatentability.”[6] The USPTO later clarified that the “compelling merits” test was not intended to substitute for a Fintiv analysis, but various petitioners had already jumped through this new loophole.[7] With the broader new “compelling merits” standard, PTAB has since become more favorable toward petitioners, instituting review for approximately 70% of challenges.[8]

Small businesses drive American innovation, producing 16 times more patents per employee than large firms.[9] Some larger entities appear to have embraced a hyper-litigation strategy, which undermines small business innovation and is harmful to the U.S. startup ecosystem – this is a strategy that is unfortunately abetted by our current patent review framework.

As USPTO considers changes to PTAB trial proceedings, it must right the balance between small and larger players, between innovators and implementers, preventing multiple, harassing challenges to patent validity by well-funded petitioners. Those accused of patent infringement or seeking to invalidate a patent should retain the right to press their case either at PTAB or in district court – but they should not be allowed to contest a patent more than once or in multiple venues or through privies that mask their true relationship with other petitioners. USPTO should also cease allowing Fintiv analysis on duplicative proceedings to be reversed on the basis of the “compelling merits” test.

The intention when Congress created PTAB was to provide a faster, less expensive alternative to litigation. Misuse of the system has instead allowed larger, implementer companies to essentially double costs, forcing their smaller rivals to defend patents on two fronts. USPTO must return PTAB to its original purpose as a fair forum for both petitioners and patent-holders, devoted to protecting intellectual property and promoting innovation.


Karen Kerrigan, President & CEO





[4]–+Oct+17+20181.pdf, p. 12

[5], p. 7





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