Chief Patent Judge Discusses Board's Growing Pains

Chief Patent Judge Discusses Board's Growing Pains Photo: Diego M. Radzinschi/NLJ James Smith.

Faced with an enormous caseload and a damning inspector general’s report, James Smith, the chief administrative patent judge of the new Patent Trial and Appeal Board, on Thursday said the court was focused on building a “more efficient and effective structure” and issuing “high-quality legal decisions.”

Speaking during the Patent Public Advisory Committee quarterly meeting at the U.S. Patent and Trademark Office (PTO) headquarters in Alexandria, Va., Smith said the board continues to be inundated with cases, including a record 190 new petitions in June and about 125 in July. In total, 1,793 cases have been filed since the board, which was created by the America Invents Act, opened for business in September 2012—three times more than anticipated, Smith said.

Despite the workload, the Commerce Department’s inspector general in a July report said board paralegals did not have enough to do and filled their days working at home by reading magazines, doing chores and watching television.

The inspector general’s report does not seem to have come as a surprise. Smith said the PTO had already conducted its own investigation, then hired an independent consulting firm to do a second investigation.

Many of the inspector general’s recommendations are “already underway or implemented,” he said, including hiring a new paralegal management team and “changed practices to eliminate the underutilization” of paralegals. Smith said the PTO would provide a “full and substantial” response to the report within 60 days.

The board now stands at 213 judges, with plans to hire 17 more by Oct. 1, Smith said. “We want judges, but we want judges of the highest quality,” he said.

Another goal is to issue more precedential opinions. To date, the board has issued just one decision that’s binding on all board judges, Securebuy LLC v. CardinalCommerce Corp., on April 25.

Issuing precedential opinions is “a fair amount of work,” Smith said, requiring a vote by all 213 judges. But cases “continue to percolate that might become precedential,” he said, promising “many more” such decisions.

In fiscal year 2014, which ends Sept. 30, three-judge panels have conducted 449 inter partes trials and 142 cases have settled, compared to 167 trials and 38 settlements in fiscal year 2013. The judges decide whether patents are valid, but not whether they’ve been infringed.

The board doesn’t automatically agree to hear every case filed, and seems to be getting fussier about saying yes. In fiscal year 2013, the board denied 13 percent of inter partes review petitions because the petitioners failed to show they were “more likely than not” to prevail. To date in fiscal year 2014, the board rejected 24 percent of petitions.

In cases involving business-method patents, the board accepted 82 percent of petitions in 2013 compared to 72 percent this year to date.

Smith also provided detailed statistics on the kind of cases before the board. The bulk of the disputes—1,292 cases, or 72 percent—involve electrical or computer patents, followed by mechanical patents at 274 cases, or 15 percent. Chemical patents are 7 percent, or 126 cases, bio/pharma stands at 5 percent, or 93 cases, and design patents are less than 1 percent, or 8 cases.

Contact Jenna Greene at jgreene@alm.com or on Twitter @jgreenejenna.

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