USPTO sued for $100m over post-grant proceedings
The US Patent and Trademark Office (USPTO) is being sued in a class action lawsuit over the introduction of post-grant proceedings.
The complaint, which asks for more than $100 million in damages, was filed at the US Court of Federal Claims on Wednesday, May 9.
Members of the class seek “just compensation for the taking of inventors’ and patent owners’ recognised patent property rights” under the post-grant proceedings created by the America Invents Act (AIA).
The class is led by Christy Inc, which owns US patent number 7,082,640, covering a vacuum cleaner. Claims of the patent were invalidated during a post-grant proceeding, and no attorneys’ fees or compensation were provided.
Members of the proposed class are owners of patent applications which were initially deemed to be valid but were later invalidated by the Patent Trial and Appeal Board (PTAB).
The AIA introduced the inter partes review and the post-grant review, which have been available since September 2012.
The suit claimed these proceedings have “completely decimated the value of issued patents” in a manner “detrimental” to inventors and patent holders. It said that the PTAB is “often referred to as the ‘patent death squad’”.
Class members described the costs of these proceedings to individuals and the economy as “staggering” and said they could not have reasonably anticipated such a change in the law.
“The most disturbing aspect of this, however, is the fact that those property rights were granted and they were later taken away, and this was done so without the just compensation that is required under law,” they said.
Class members claimed that a contract exists between them and the USPTO containing the agreement that the USPTO will issue a patent in exchange for payment of fees and the USPTO has a “duty” to keep patent claims in force as long as these fees were paid.
But according to the suit, because the USPTO has said that post-grant proceedings allow the correction of patents that it has issued in “error”, and therefore the proceedings should remedy the USPTO’s own mistakes, the office is in breach of contract.
Class members have asked for royalties and other payments related to the invalidated patents, damages for the breach of contract “by failing to maintain in force the subject patent claims for the term prescribed in the patent grants”, attorneys’ fees, and the return of fees paid to issue the patents.
The total amount owed to class members is greater than $100 million, the suit claimed.
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