LINDSEY 0. GRAHAM, SOUTH CAROLINA, CHAIRMAN
`
`CHARLES E. GRASSLEY, IOWA
`JOHN CORNYN, TEXAS
`MICHAEL S. LEE, UTAH
`TED CRUZ, TEXAS
`BEN SASSE, NEBRASKA
`JOSHUA D. HAWLEY, MISSOURI
`THOM TILLIS, NORTH CAROLINA
`JONI ERNST, IOWA
`MIKE CRAPO, IDAHO
`JOHN KENNEDY, LOUISIANA
`MARSHA BLACKBURN, TENNESSEE
`
`DIANNE FEINSTEIN, CALIFORNIA
`PATRICK J. LEAHY, VERMONT
`RICHARD J. DURBIN, ILLINOIS
`SHELDON WHITEHOUSE, RHODE ISLAND
`AMY KLOBUCHAR, MINNESOTA
`CHRISTOPHER A. COONS, DELAWARE
`RICHARD BLUMENTHAL, CONNECTICUT
`MAZIE K. HIRONO, HAWAII
`CORY A. BOOKER, NEW JERSEY
`KAMALA D. HARRIS, CALIFORNIA
`
`Via Electronic Transmission
`April 9, 2019
`
`United *tates senate
`
`COMMITTEE ON THE JUDICIARY
`
`WASHINGTON, DC 20510-6275
`
`The Honorable Andrei lancu
`Under Secretary of Commerce for Intellectual Property and
`Director of the U.S. Patent and Trademark Office
`U.S. Patent and Trademark Office
`600 Dulany Street
`Alexandria, VA 22314
`
`Dear Director lancu:
`
`We write to raise an ongoing concern regarding our patent system. We continue to hear from
`patent stakeholders about abuse of the inter partes review process in the form of "serial"
`petitions. We have heard from both large companies with tremendous innovation pipelines as
`well as small companies and patent-intensive startups that they are facing extensive serial attacks
`on their patent portfolios. Rather than addressing "bad patents" as was Congress's intent during
`the development of the IPR process, these serial petitions appear to reflect coordinated efforts by
`certain organizations to undermine the strength of our patent system.
`
`You previously committed to Congress and the public to "assess potential improvements to the
`AIA trial standards and processes" on issues including "the institution decision, claim
`construction, the amendment process, and the conduct of hearings."1 As you evaluate and make
`improvements to the IPR process, we urge you to prioritize solutions to the problem of abusive
`serial petitions—multiple follow-on petitions attacking the same patent claims and asserting new
`or modified arguments—either by the same petitioner or different petitioners. These petitions
`impose an undue burden on patent owners and harm innovation.
`
`The IPR process was envisioned as a second window to evaluate patents and an inexpensive
`alternative to district court litigation. Abusive serial petitions were not part of that vision. They
`rob the process of its efficiency and consume resources that inventive companies could otherwise
`devote to research and development. As we seek to catapult American innovation ahead in the
`future. we must ensure that abuses in the IPR process are addressed and that duplicative
`proceedings are avoided.
`
`The USPTO already has authority to combat the problem, and we hope that you will use it.
`Making the factors in General Plastic precedential was a step in the right direction, but the
`General Plastic factors only 'are not sufficient.2 We have continued to hear concerning reports
`of abusive serial petitions even after General Plastic became precedential, as well as overlapping
`
`Oversight of the U.S. Patent and Trademark Office Before the S. Comm. On the Judicialy, 115th Cong. (Apr. 18,
`2018) (statement of Andrei Iancu at p. 4), available at https://www.judiciary.senate.goviimo/mediaidoc '04-18-
`18%201ancucv020Testimony.pdf.
`See Gen. Plastic Indus. Co. v. Canon Kabushiki Kaisha, IPR2016-01357, Paper 19 (PTAB Sept. 6, 2017).
`
`PayPal Inc. v. IOENGINE, LLC
`IPR2019-00906 (US 9,059,969)
`Exhibit 2045
`
`

`

`instituted proceedings that have not been joined. This not only allows petitioners to have
`multiple bites of the apple. but also allows them to modify and refine their evidence and
`strategies after learning the initial arguments of the patent owner.
`
`Given that the USPTO has the authority to address the issues presented by abusive serial
`petitions, we ask—by no later than May 9, 2019—that you answer the following questions:
`
`1. Will you adopt a presumption that. when the PTAB has already issued a decision on
`institution with respect to a particular patent, further petitions, whether by the original
`petitioner or different petitioners, will not be entertained in the absence of compelling
`circumstances?
`2. Will you modify the first General Plastic factor to also ask whether a different petitioner
`previously filed a petition directed to the same patent?
`3. Will you consider affiliates of a prior petitioner to be the "same petitioner" for all intents
`and purposes?
`4. Will you require an executive management member or owner of the petitioner entity to
`provide by sworn affidavit a list of all parties that any person in the petitioning entity has
`collaborated or coordinated with, directly or indirectly, regarding IPR petitions filed
`against the challenged patent?
`5. Will you designate as precedential your recent decision in Valve Corp. v. Electronic
`Scripting Products, Inc., IPR2019-00062 (PTAB Apr. 2, 2019), which held that "serial
`and repetitive attacks," even by different petitioners, weigh against institution?
`
`We look forward to your answers to these questions. We believe they offer a roadmap to some
`possible solutions to this very important issue.
`
`Regardless of your answers to these questions, we urge you to work with stakeholders to further
`develop and implement meaningful solutions. We look forward to continuing to work with you
`to improve the AIA trials and procedures, and we welcome your perspective on the specific
`issues we have cited and the potential remedies that we havq,suggested. As always, we stand
`ready to work with you and the entire team at the USPTO to improve the U.S. patent system and
`the environment for innovation and economic growth in the United States.
`
`If you have any questions, please do not hesitate to contact either Brad Watts with Senator Tillis
`at 202-224-6342 or Philip Warrick with Senator Coons at 202-228-1993.
`
`Sincerely,
`
`Thom Tillis
`United States Senator
`
`Christopher A. Coons
`United States Senator
`
`PayPal Inc. v. IOENGINE, LLC
`IPR2019-00906 (US 9,059,969)
`Exhibit 2045
`
`