PREVAIL Act: Will Congress Succeed in Curtailing IPRs?
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On November 8, 2023, the Senate held its first subcommittee hearing on the Promoting and Respecting Economically Vital American Innovation Leadership (PREVAIL) Act, which aims to dismantle public access to inter partes review (IPR) and curtail invalidation of patents by the Patent Trial and Appeal Board (PTAB). This follows introduction of the PREVAIL Act on June 22, 2023, by Senators Chris Coons (D-DE), Thom Tillis (R-NC), Dick Durbin (D-IL), and Mazie Hirono (D-HI).
The hearing provided witness testimony from Joseph Matal (Clear IP), Michelle Armond (Armond Wilson), Joe Kiani (Masimo), and the Honorable Lamar Smith (Akin Gump). Mr. Matal opposes the PREVAIL act, because “the PTAB is doing a good job” and “produc[ing] accurate and reliable results,” under existing law. The other three witnesses were generally supportive of the bill, but if history tells us anything, the PREVAIL Act is unlikely to succeed.
Little, if anything, in the PREVAIL Act is being considered by Congress for the first time. Nearly a decade ago on March 3, 2015—less than two years after the very first final written decision in an IPR—Senators Coons, Durbin, and Hirono introduced the STRONG Patents Act of 2015, containing largely the same proposed changes to IPR procedure. That bill never made it out of committee. On June 21, 2017, Senators Coons, Durbin, and Hirono introduced the STRONGER Patents Act of 2017, again seeking substantively the same changes, and the bill died in committee. On July 10, 2019, the same bill was reintroduced as the STRONGER Patents Act of 2019, which also died in committee.
Going one step further than the PREVAIL Act, Representative Thomas Massie (R-KY) has repeatedly introduced the Restoring America’s Leadership in Innovation Act (2018, 2020, 2021) to abolish IPR practice altogether. But that bill, too, has never made it out of committee. Thus, the PREVAIL Act is a continuation of a few politicians’ decade-long effort to abolish IPRs completely, or if that cannot pass, to radically reduce public access to IPRs and the probability of patent invalidation by the PTAB.
Former Federal Circuit Chief Judge Randall Rader called PTAB judges “death squads” in 2013, even though only a single IPR had reached a final decision up to that point. The PREVAIL Act begins from the same premise, and seeks to reduce the number of IPR filings, as well as the risk of invalidation, through several changes, including:
- Limits IPR filers to entities sued or threatened with a patent infringement lawsuit, as in the standing requirement for declaratory relief from a district court (and provides discovery for establishing the real parties in interest). Moreover, the PREVAIL Act’s standing requirement would outlaw the petitioning organizations that arose through AIA as a check against nuisance-settlement plaintiffs and the collective action problem they exploit—filing hundreds of infringement actions irrespective of the merits and seeking settlements far less than the cost of legal defense. It has been argued that the nuisance-settlement strategy makes it irrational for any single defendant to litigate, but through IPR procedure, petitioning organizations have filled that critical gap.
- Institutes the same “clear and convincing evidence” standard used in district court, instead of the lower “preponderance of the evidence” standard currently applied in IPRs.
- Applies estoppel at the time of the IPR filing, instead of after the final written decision.
Like previous bills proffered by Senators Tillis and Coons, supporters indicate that the PTAB frequently errs by invalidating patents that would be upheld in district court litigation. The remarks in the subcommittee hearing, from supporters and opponents alike, emphasized incentives for innovation, support for startup companies, and America’s role in the next generation of tech products.
That ultimate end-goal is undisputed on either side of the debate, but the history of bills like the PREVAIL Act dying in committee each session since 2015 suggests that these specific IPR changes should not materialize.