The Supreme Court recently heard arguments that involved the validity of the Patent Trial and Appeal Board (PTAB), which, as Bloomberg explains, has been described as the patent “death squad”. In fact, PTAB is responsible for killing some 2,000 patents since its founding in 2012. The conservative justices on the court have been pondering whether PTABs existence is even legal, as it is a body authorized to make major decisions that is not accountable to any presidential appointee, unlike federal courts, for example. This is a big deal. A patent case can mean millions or even billions won or lost.
Basically, the PTAB is responsible for accepting appeals about the validity of patents. In many cases, it invalidates them. But who is submitting these appeals? After reviewing a list of recent appeals and consulting with some IP lawyers, it seems that PTAB appeals, known as IPRs (inter partes reviews) are mostly filed by a company being sued for patent infringement. This makes sense. If I own a patent for a widget and find that another company, even one of the so-called Big Tech companies, is allegedly infringing on that patent — ie using it without license or permission — I can enforce my property rights. I might demand that the infringing party pay a licensing fee or take legal action to be compensated for damages.
Efficient Infringement — A Worthwhile Bet?
There are many instances, however, when the infringing party willfully ignores patent holders’ entreaties and continues to profit from the unlicensed use of the patent. Big companies with deep pockets and large legal departments can afford to bet on the chances that they will get away with infringement with few consequences. This is called “efficient infringement”. Although they may sometimes not be aware that the patent exists, they may also not make any serious effort to license it once they do learn of its existence. This is a good bet to take if you are efficiently infringing. The court might rule in your favor, something that has become more commonplace in recent years.
Moreover, as part of their strategy, infringing parties have taken to filing IPR petitions with the PTAB to invalidate the patent ahead of the trial. No patent — nothing to get sued over. This has become an almost reflexive action in recent years among infringing parties.
Who Goes to PTAB Most Often?
The intellectual property website, ipwatchdog.com, reports on recent PTAB filings and cases. Many of the plaintiffs in the weekly list are fairly recognizable — Walmart, Dropbox, Blackberry, Sony, Panasonic, Microsoft, Motorola, Warner Bros, Cisco, Uber, Intel… to name a few. However, there were a few names that were less recognizable. One of these that seemed to be popping up from week to week is Unified Patents.
According to its website, Unified Patents brings together over 200 member companies who seek to protect themselves from patent lawsuits. It bills itself specifically as being able to protect member companies from lawsuits by holders of SEPs (Standard Essential Patents) and NPEs (Non-Practicing Entities). It claims to provide deterrence against patent suits but states that it does not represent its members. “Unified acts independent of its members or any other company… is not a law firm and does not have an attorney-client relationship with members. Unified’s activities are not based on the interests of any particular member or members.”
So, Who is Unified Patents?
Try researching something about Unified Patents. I did. Outside of its own website and IP Watchdog, it isn’t easy. And yet, IP Watchdog identified it as one of the top PTAB petitioners in 2020. Unified describes itself on its website as having successfully neutralized more patents than any other third party, with a success rate of 95% in 2020 in some 212 challenges.
This all then begs several questions: Who is behind Unified Patents and what exactly is its business model? Why is it submitting so many PTAB appeals? It would be one thing if one of the prominent Big Tech companies were submitting an invalidation request after being sued for infringement. After all, a good offense is the best defense. However, it is not entirely clear what Unified’s connection is to the patents that it succeeded in bringing down.
The IP Watchdog Hypothesis
IP Watchdog (again, because there is so little else independently written about this company) describes Unified Patents in one article as a “war profiteer” hired by big tech firms to go after patents and patent owners. In this regard, Unified claims it goes after NPEs. But, if IP Watchdog is putting the dots together correctly, it does not seem implausible that Unified may be secretly working for many of Silicon Valley’s biggest companies to launch third-party attacks on competitors and opponents. This would be interesting to say the least. If true, would this be legal? Moral?
Questions that Remain Without Answers
Whatever the case, why are the parties with most obvious standing in so many of these IPR petitions not submitting them on their own? Do they not want to be seen as doing the “dirty work”? Do they not want to be seen as slowing innovation by going after patents and other forms of IP?
Many questions arise when looking into Unified Patents and its business model, with few answers yet to be found. If it is a third-party hit-man for Big Tech to allow such firms to more easily infringe on patent rights, as some writers for IP Watchdog seem to claim, then it seems this should be a bigger story than it is.