Patent Protection: Should Third Parties Be Able To Request PTO Director Review Of PTAB Decisions?
Executive Summary
Agency asks stakeholders to weigh in on the process for director review of decisions by the Patent Trial and Appeal Board. PTO questions whether review should be limited to final written decisions and if the precedential opinion process should remain in effect.
The US Patent and Trademark Office is seeking input from the public on the process being established for USPTO director review of final written decisions of the agency’s Patent Trial and Appeal Board. The outcome could determine who has a chance to request a review and whether reviews will extend to other PTAB actions.
The USPTO implemented an interim process for director review of PTAB decisions in June 2021 in response to the US Supreme Court’s decision in United States v. Arthrex, Inc. The court held that PTAB administrative judges were unconstitutionally appointed and that their decisions were not subject to review by any presidentially appointed officer.
To overcome this problem, the court held that the director has the discretion to review the board’s decisions in inter partes review (IPR) proceedings and issue decisions on behalf of the board. (Also see "US Supreme Court Gives PTO Director Chance To Impact Outcome Of Patent Disputes" - Pink Sheet, 21 Jun, 2021.)
Under the interim procedure, a party to a final written decision must enter a request for rehearing by the director. The party may only request director review of a final written decision issued in an IPR or post grant review (PGR) proceeding or rehearing of the original board panel. The director may also initiate review of any PTAB decision, including decisions to institute a proceeding and decisions on rehearing, without a formal request.
An advisory committee reviews each request for director review and makes a recommendation as to whether to grant or deny the request.
In a Federal Register notice scheduled for publication on 20 July, the USPTO requests public comments on the director review process to inform its finalization of the process through rulemaking. The agency also seeks input on the precedential opinion process, which decides issues of exceptional importance to the PTAB, and on the current interim process for PTAB decision circulation and internal PTAB review.
Comments are due within 60 days.
Breadth And Standard Of Director Review
The director review process is one of several features of the PTAB proceedings that has gotten Congressional scrutiny. Last month, a bipartisan group of Senators introduced the Patent Trial and Appeal Board Reform Act of 2022. It would require the USPTO director to issue a separate opinion following review of a PTAB decision.
Another provision would prohibit the director from declining to institute a PTAB proceeding because there is ongoing parallel district court litigation. (Also see "Will USPTO’s PTAB Undergo A Makeover? Senators Push Reform Bill, Patent Office Tweaks Policy" - Pink Sheet, 6 Jul, 2022.)
The questions posed in the Federal Register notice indicate possible changes to the interim director review process. Currently, the USPTO does not accept requests for director review on institution of PTAB proceedings or appeal decisions. Parties may request review of those decisions by the precedential opinion panel.
The USPTO asked for comments on whether requests for review should be limited to final written decisions in IPR and PGR and it not, how requests should be expanded and why.
The office also asks if only parties to a proceeding should be permitted to request director review, or if third-parties should be allowed to do so.
Stakeholders are also asked to address whether any changes should be made to the interim director review process, what criteria should be used in determining whether to initiate director review, the standard of review the director should apply, and considerations the director should take given that her decisions are not precedential by default.
In addition to questions about director review, the USPTO also asks whether the precedential opinion panel review process should remain in effect, be modified, or be eliminated in light of the director’s review.
The office also asks if any changes should be made to the interim PTAB decision circulation and internal PTAB review processes.
The USPTO has been using an interim process for both since May 2022. Under this process, certain categories of PTAB decisions are circulated to a pool of non-management judges prior to issuance. They include all PTAB institution decisions, final written decisions, decisions on rehearing, and decisions on remand from the Federal Circuit. The Circulation Judge Pool (CJP) provides the panel with information regarding potential conflicts or inconsistencies and identifies notable draft decisions.
Five Reviews Have Been Granted
The USPTO has updated the interim process for director review three times, on 25 May, 17 June and 6 July. The first update noted that although the office does not accept requests for director review of decisions to institute an IPR or PGR proceeding, the director continues to retain the authority to review decisions sua sponte (without a request from a party) after issuance. The second update specified that a requesting party should indicate whether the issue presented for review is one of first impression.
The most recent update noted that decisions made on director review are not precedential by default, but only upon such designation by the director, and the final written decisions by the director after director review are appealable to the US Court of Appeals for the Federal Circuit using the same procedures for appealing PTAB final written decisions.
As of 5 July, the USPTO had received 204 requests for director review under the interim process. Of these requests, the review process was completed for 198 requests, of which five were granted, one request was withdrawn, and the remaining requests were denied. Eleven requests did not meet the requirements for director review and were not considered. None of the granted requests involved biopharma companies.