On January 13, the Senate Judiciary Committee voted to send President Joseph R. Biden Jr.’s nominee for USPTO director, Kathi Vidal, to the full Senate. The move all but ensures Vidal’s confirmation, coming shortly after announcements by two of the committee’s top Republican members—Senators Thom Tillis (NC) and Chuck Grassley (IA)—that they would vote in her favor. If confirmed, Vidal will take the helm of the agency amid robust stakeholder debate over the policies of her predecessor, Andrei Iancu, as detailed in RPX’s recently released report on the state of patent litigation, the patent marketplace, and patent policy at the close of 2021.
Discretionary Denials Take Center Stage in Vidal’s Confirmation Process
One of the greatest sources of criticism faced by the USPTO has been the Patent Trial and Appeal Board’s (PTAB’s) practice of discretionarily denying institution in AIA review trials for reasons other than the merits. Most notable among the growing list of criteria for wielding that discretion is the NHK-Fintiv rule, under which the Board may deny institution based on the status of a parallel district court case. Arguably the most impactful of the NHK-Fintiv factors is one allowing the PTAB to reject a petition if the district court’s scheduled trial date falls too close to the deadline for the Board’s final validity decision.
As noted in RPX’s fourth-quarter review, this can be problematic for defendants sued in venues that tends to schedule trial dates as early as possible—among them the Western District of Texas—as it can force those defendants to file petitions as early as possible to avoid discretionary denials. Moreover, for efficiency’s sake, a defendant must typically wait to file an AIA review until it knows what the asserted claims are, and a plaintiff typically does not disclose them at the outset of litigation—further compressing the defendant’s one-year statutory window for filing a PTAB petition. In addition, a frequent point of contention has been the Board’s reliance on scheduled trial dates, which can often be unrealistic and often get pushed back for one reason or another—delays that were far from uncommon in the early days of the COVID-19 pandemic.
Unsurprisingly, NHK-Fintiv was among the most frequent topics of questioning during Vidal’s confirmation process. Among those who raised the topic was Senator Tillis, who has stated that he supports the vast majority of the reforms implemented by Iancu and informed Vidal that his vote was conditioned on her commitment to uphold them. Yet Senator Tillis has been critical of the PTAB’s reliance on scheduled trial dates, asserting that the practice departs from the “policy underpinnings of the Fintiv rule” and “has also created harmful incentives for forum shopping and inappropriate judicial behavior”. Senator Tillis asked Vidal if she would commit to “undertake a study and review of this matter and consider whether Fintiv should be modified to account for unrealistic trial scheduling”, and she agreed to do so if confirmed.
Vidal Flags Alice Uncertainty as Supreme Court Rejects Another Section 101 Appeal
Another significant topic raised during Vidal’s confirmation was Section 101, including the increasingly complex body of caselaw applying the Supreme Court’s Alice decision. Some of the most notable questions Vidal received on this topic came from Senator Tillis, who in one written question called the current state of Section 101 jurisprudence an “abysmal shambles” and sought the nominee’s views on that body of decisions.
In response, Vidal noted that in her work as a litigator she has “been on all sides of this issue[,] including arguing the SAP v. InvestPic appeal (supporting a finding of unpatentability) for which certiorari was sought and petitioning the Supreme Court for certiorari in Chamberlain v. [Techtronic Industries] (opposing a finding of unpatentability)”. (Indeed, Chamberlain—a controversial Federal Circuit decision commonly known as the “garage door case”—has been a point of contention for Senator Tillis, who has said that “nothing better demonstrates the madness” of how courts have applied Alice than that ruling.) Vidal further agreed with Senator Tillis that “the current jurisprudence provides neither clarity nor consistency”.
Senator Tillis, a longtime proponent of patent eligibility reform, also pressed Vidal on whether she would support the use of legislation to alleviate concerns over Section 101. While Vidal stated in response that she approved of efforts by the Supreme Court to seek the views of the Solicitor General on a proper vehicle for revisiting Alice, she acknowledged that finding a suitable case could be a difficult proposition—and noted that “Congressional action may be the most efficient and effective way to impart clarity and certainty into this area of law”.
Indeed, as noted in prior RPX coverage, the Supreme Court has consistently declined to revisit the topic of patent eligibility since Alice despite the ongoing debate over its application by lower courts, and has regularly continued to deny lower-profile petitions for certiorari challenging various aspects of the Alice test. That happened once again on January 10, when the Court denied a petition filed by inventor-controlled NPE WhitServe LLC in litigation against Dropbox, challenging the Federal Circuit’s affirmance of a 2019 ruling that invalidated a data backup patent.
However, one particularly high-profile Supreme Court petition remains pending: the appeal of the Federal Circuit’s controversial decision in American Axle & Manufacturing v. Neapco, which has ignited a heated debate over the bounds of Section 101 jurisprudence. In May 2021, the Supreme Court issued a Call for the Views of the Solicitor General (CVSG) in American Axle, usually a sign that the Court is giving an appeal particularly close consideration. Solicitor General Elizabeth Prelogar, who began serving in her position in October 2021, has not yet filed that brief. See here for more on that case and an overview of stakeholder divisions over Section 101.
See here for more on Vidal’s written responses to questions from the Judiciary Committee on patent eligibility and other topics, including additional issues related to the PTAB—among them, certain procedural issues related to NHK-Fintiv, concerns over PTAB filing practices, and the compensation of PTAB administrative patent judges—as well as Vidal’s commentary on “judge shopping” and SEP licensing issues. As noted above, further analysis of various other trends that shaped patent litigation in the past year can also be found in RPX’s fourth-quarter report.
