Patent Reviews Are a Sticky BlackBerry Patch

A law the U.S. Congress passed in 1999 in a bid to level the playing field for patents has helped drag out the dispute between Research In Motion Ltd. (RIM) and NTP Inc., according to patent attorneys and other observers.

The American Inventors Protection Act for the first time let multiple parties get involved in the patent re-examination process at the U.S. Patent and Trademark Office (PTO). It affects one of the three NTP patents that have recently undergone re-examination and is one of several factors leading to a procedural marathon that could continue long after a possible injunction is imposed against RIM, attorneys said.

Attorneys also cite the extraordinary number of re-examination claims in the case, the introduction of new evidence along the way, lack of coordination between courts and the PTO and even a shortage of funding at the agency.

In a hearing Friday, Judge James Spencer of the U.S. District Court for the Eastern District of Virginia, in Richmond, heard arguments on whether to force RIM to stop selling devices and shut down service in the U.S. because it infringed patents held by NTP.

The patent office has now issued “final actions” on all three patents saying they are invalid, which would seem to shut down NTP’s drive for an injunction. However, even those latest rulings are subject to a further appeal at the PTO.

Judge Spencer last year declined to put the case on hold for the re-examinations.

Doug Brady, chief information officer of accounting and consulting firm Plante & Moran LLP, is most concerned about the impending possible injunction but also irritated at the lengthy legal process.

“It’s a pain to sit here and wait, and wait, and wait,” Brady said. However, a PTO process that takes another two years would actually extend beyond his company’s IT planning period, so he’s not working out what to do if the patents are found invalid in the end.

The RIM lawsuit and patent re-examinations come at a time of heated debate over patents in the U.S. Other developments, such as Forgent Networks’ lawsuits over a patent on part of the JPEG (Joint Photographic Experts Group) standard, also are raising questions about how the country’s patent process affects innovation and industries. Some critics say it is being abused by companies that own patents only to extract licensing deals, while others say big companies use the patent process to bully small innovators.

NTP sued RIM in 2001 and after a long legal battle looks close to getting an injunction slapped on RIM. However, since the case was filed, new examples of “prior art” — supposed evidence that NTP wasn’t really the first to come up with the innovations in question — have been presented. Based on those new examples, both RIM and the PTO have initiated re-examinations of NTP’s patents. While the courts roll on using the evidence available at the time of the suit, the PTO is deciding whether the new facts mean NTP’s patents aren’t even valid.

The re-examination process was introduced in 1981 as a quicker and less expensive way to determine whether a patent is valid, said PTO spokeswoman Brigid Quinn. A patent holder, the PTO or a third party can initiate a re-examination it has apparent prior art on a patent, she said. If the agency decides to look at the patent, one of its examiners studies the evidence and makes an initial ruling, called an office action. The patent holder gets to review that action and respond, and the examiner may then make a second determination. This process may continue for another round or two in some cases, Quinn said.

In some cases, new prior art is introduced while a re-examination is in progress, Quinn said. This can lead to “non-final” actions, some of which came in the RIM case, that are issued pending examination of the additional evidence.

Even a final action by an examiner can be appealed to the Board of Patent Appeals and Interferences, part of the PTO, Quinn said. This process alone could take six to 12 months, according to James Wallace, an attorney for NTP at Wiley Rein & Fielding LLC, in Washington, D.C. Further appeal can be made to the U.S. Court of Appeals for the Federal Circuit, Quinn said.

The 1999 law allowed third parties to also respond to office actions, Quinn said. That process, which is available for more recent patents, made re-examinations more rigorous but also more time-consuming, according to Stephen Maebius, an attorney at Foley & Lardner LLP, in Washington, D.C.

“I think the patent office has been responding to criticism over the years that re-examinations were stacked in the patent owners’ favor,” Maebius said.

RIM is one of the few companies that has taken advantage of the 1999 law, attorneys said. Most are afraid that losing at the PTO will affect their prospects for success in court, according to Kent Richardson, vice president of intellectual property at Rambus Inc., the memory technology company that has sued several companies for patent infringement.

For small patent holders, the new process is a burden, according to Ronald Riley, president of the Professional Inventors Alliance, which represents small inventors.

“That increased the cost of re-examination by at least an order of magnitude,” Riley said.

The case is extraordinary in other ways, too, patent lawyers said. Because of the complexity of the technology, there are hundreds of individual claims covering various aspects of the five patents at issue, according to Jonathan Caplan, an intellectual property lawyer at Kramer Levin Naftalis & Frankel LLP, in New York. Under the circumstances, the agency is doing an admirable job, he said.

Several observers say the PTO needs more resources to do its job better. The government has been diverting the agency’s funds to other purposes for ten years, according to Rambus’ Richardson.

“You’re expecting them to do a job that takes 40 hours in 35,” Richardson said.

In recent years the agency has been allowed to keep the fees it charges and is beefing up its staff, according to Quinn. Its staff of more than 4,000 examiners grew by almost 1,000 last year and should gain 1,000 per year for the next four years or so, she said. The PTO has also made changes to speed up re-examinations, she said. Last July it formed a special unit of 20 specialized examiners to concentrate solely on re-examinations, which will take on all new requests for re-examination. All future re-examinations will be finished in a set time frame, expected to be two years, the agency said in July.

Check out BlackBerry on the Edge for CIO’s continuing coverage of the BlackBerry debacle.

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-Stephen Lawson, IDG News Service