On October 4, 2022, in a 52-page Director review decision in an inter partes review (IPR) proceeding involving recently-formed entity OpenSky Industries LLC, USPTO Director Katherine Vidal sanctioned OpenSky “to the fullest extent of [her] power” because of OpenSky’s abuse of the IPR process, including flaunting of the Director’s discovery orders. The Director applied negative inferences to find facts against OpenSky; demoted OpenSky to a subordinate role in the IPR; and ordered OpenSky to show cause why OpenSky should not be required to pay compensatory damages.

These actions, plus subsequent pronouncements in the past couple of weeks, signal the Director’s commitment to addressing allegations about systemic IPR abuse. Patent owners and patent challengers can expect more as the Director considers overhauling the Director review procedure, as well as the Patent Trial and Appeal Board’s (PTAB) processes for determining whether an IPR proceeding should go forward.…