USPTO  agreed with the recommendations and is working to address them. Patent Infringement Litigation

Patent owners can bring infringement lawsuits against anyone who uses,  makes, sells, offers to sell, or imports the patented invention without  authorization. More Than 350 Patents Have Been Challenged under the CBM Program, and About One-Third of These Patents Were Ruled Unpatentable

From September 2012 through September 2017, parties accused of  patent infringement filed 524 petitions challenging the validity of 359  distinct patents under the CBM program, resulting in rulings against about  one-third of these patents. Petitioners Have Challenged the Validity of 359 Patents under the CBM Program, but Use of the Program Has Declined Overall

Parties accused of patent infringement filed 524 petitions for patent  review under the CBM program from September 2012 through September  2017, with the number of petitions per month fluctuating but tapering off  over time (see fig. The Board Met Timeliness Requirements and Has Taken Steps to Analyze Decisions and Improve Proceedings but Does Not Have Guidance to Ensure Decision Consistency

The Patent Trial and Appeal Board has completed all trials under AIA- authorized proceedings within statutorily directed time frames, according  to board data, and the board has taken steps to review issues that could  affect the consistency of its trial proceedings and decisions and to engage  with stakeholders to improve its proceedings. In addition to roundtables, the board has engaged with stakeholders  through several other mechanisms, including webinars and judicial  conferences. District court litigation can take several years and cost several million  dollars, while CBM trials are limited to 18 months and generally cost  much less. However, there was no strong consensus  among stakeholders for how the AIA trials should be designed in the  future. Stakeholders  generally agreed that the CBM program has reduced lawsuits in the  federal courts involving business method patents, and many stakeholders  were in favor of maintaining aspects of the program. The board has a track record of issuing timely decisions that have largely  been upheld by the U.S. Court of Appeals for the Federal Circuit. However, the board does not have guidance, such as documented  procedures, for reviewing trial decisions and the processes that led to the  decisions. Without developing guidance, such as documented  procedures, that outlines the steps USPTO will take to review the Patent  Trial and Appeal Board’s decisions and the processes that lead to  decisions, USPTO cannot fully ensure that it is meeting the objective of  ensuring consistency of its decisions. (Recommendation 1)

	Agency Comments

We provided a draft of this report to the Department of Commerce for  review and comment. Appendix I: Objectives, Scope, and Methodology

Our objectives were to (1) describe the extent to which the Patent Trial  and Appeal Board’s Transitional Program For Covered Business Method  Patents (CBM program) has been used to challenge patents, and the  results of those challenges; (2) examine the extent to which USPTO  ensures timeliness of trial decisions, reviews decisions for consistency,  and engages with stakeholders to improve its administrative proceedings  for the program; and (3) discuss stakeholder views on the effects of the  CBM program and whether it should be extended past its scheduled  September 2020 sunset date. U.S. Patent and Trademark Office: Performance Management Processes.
Why GAO Did This Study

Patents can promote innovation by giving inventors exclusive rights to their inventions, and patent owners can bring infringement lawsuits against anyone who uses, makes, sells, offers to sell, or imports a patented invention without authorization. As GAO previously reported, such lawsuits can take years and cost several million dollars. USPTO's CBM program provides a trial proceeding to challenge a patent's validity at USPTO's board for, according to stakeholders, a fraction of the time and money that would be spent in the federal courts. The CBM program began in September 2012 and is slated to sunset in September 2020.
GAO was asked to examine the CBM program. This report (1) describes the extent to which the program has been used to challenge patents, and the results of those challenges; (2) examines the extent to which USPTO ensures timeliness of trial decisions, reviews decisions for consistency, and engages with stakeholders to improve proceedings for the program; and (3) discusses stakeholder views on the effects of the program and whether it should be extended past its sunset date. GAO analyzed CBM trial data from September 2012 through September 2017, reviewed USPTO documents, and interviewed 38 stakeholders, such as legal and academic commentators, selected for their knowledge of or direct involvement in such trials.

What GAO Found

From September 2012 through September 2017, entities facing patent infringement lawsuits filed 524 petitions challenging the validity of 359 patents under the U.S. Patent and Trademark Office's (USPTO) covered business method (CBM) program, resulting in decisions against about one-third of these patents. The CBM program provides entities facing infringement lawsuits an opportunity to challenge the validity of a business method patent by demonstrating that it did not meet requirements for patentability. Business method patents focus on ways of doing business in areas such as banking or e-commerce. The rate of filing petitions over this period has fluctuated but has generally declined since 2015, and none were filed in August or September 2017.
USPTO has taken several steps to ensure the timeliness of trial decisions, review past decisions, and engage with stakeholders to improve proceedings under the program:
Timeliness: USPTO regularly informs relevant parties about paperwork requirements and due dates throughout trials. According to program data, as of September 2017, all 181 completed trials were completed within statutorily required time frames.
Decision review: USPTO has taken several steps to review its decisions and has monitored the rate at which the Court of Appeals for the Federal Circuit affirms or reverses them. However, USPTO does not have guidance, such as documented procedures, for reviewing trial decisions, or the processes leading to decisions, for consistency. Without guidance, such as documented procedures, USPTO cannot fully ensure that it is meeting its objective of ensuring consistency of decisions.
Stakeholder engagement: USPTO judges have engaged with stakeholders by participating in public roundtables and webinars, and attending judicial conferences, among other things.
Stakeholders GAO interviewed generally agreed that the CBM program has reduced lawsuits involving business method patents in the federal courts. While many stakeholders favored maintaining aspects of the program, there was not strong consensus among stakeholders for how future trials should be designed.

What GAO Recommends

GAO recommends that USPTO develop guidance, such as documented procedures, for reviewing trial decisions for consistency. USPTO agreed with GAO's recommendation.