As US Patent and Trademark Office Director Kathi Vidal gets settled in, she is leading the agency to establish new methods to handle inter partes review decisions – both before and after they come out.

The USPTO recently issued two new interim processes for review of final decisions at the Patent Trial and Appeal Board. The US Supreme Court’s 2021 ruling in US v Arthrex prompted the agency to establish a process for its director to review PTAB panel decisions, while the other follows processes used by the US Court of Appeals for the Federal Circuit for circulation and internal review of final decisions before panels issue them.

These processes are intended to promote innovation through consistent, clear, and open decision-making, and present significant changes concerning how PTAB decisions are reviewed both prior to and after issuance.

In improving internal review and establishing director oversight of PTAB panel decisions, the new interim processes are an important step toward building the public’s trust and confidence in proceedings conducted at the PTAB. These processes will be formalised after a period of public comment, which should lead to more consistency and provide greater transparency and guidance to stakeholders regarding PTAB decision making.

Arthrex director reviews

According to the Leahy-Smith America Invents Act:

Each appeal, derivation proceeding, post-grant review, and inter partes review shall be heard by at least three members of the Patent Trial and Appeal Board…Only the Patent Trial and Appeal Board may grant rehearings.” Section 7(c).

In Arthrex, the court found that the AIA-defined rehearing process at the PTAB violated the Appointments Clause of the Constitution because the decisions of the administrative patent judges (APJs) acting for the executive branch of the US government are not subject to review. Writing for the court, Chief Justice John Roberts set forth that the APJs are inferior officers and based on the powers and duties vested in the USPTO director by Congress, the director has the authority to review final PTAB decisions.

When the court issued the ruling, then-Interim USPTO Director Drew Hirshfeld immediately created an interim director review process. Vidal has now amended it somewhat. Most importantly, she is pledging to issue a call for public comments as part of a formal rule-making process before finalising the director review procedures.

The new interim process for director review defines how any party to an AIA proceeding may request review of a PTAB final decision by the director. The director also has discretion to review a decision whether review was formally requested by a party. As proposed, director review only applies primarily to decisions of IPR and post-grant proceedings.

An advisory committee of director-appointed members from various USPTO business units first considers the review requests. The director reviews the request, the associated arguments and evidence, and the recommendation of the advisory committee, to determine whether to grant or deny the request. If requests are granted, the resulting review decision can be precedential, informative or routine.

The process for director review provides a new opportunity for stakeholders to request rehearing of the final decision by someone other than the original panel. This is a stark distinction over prior USPTO procedures, where only the PTAB had authority to grant a rehearing. If under this new process a rehearing is granted, stakeholders should expect an impartial review of the panel decision.

The advisory committee is likely to closely scrutinise requests for director review such that only a small percentage will be granted. Moreover, because the requestor gets one shot at a rehearing, it is imperative that the request meet the objective and subjective requirements to increase the probability that the request is granted. For example, the request should be timely filed, acutely focused on the issues for which review is requested, and only rely on arguments and facts which are part of the existing record.

Circulation Judge Pool

The new interim process for PTAB decision circulation and internal PTAB review provides that certain categories of PTAB draft decisions be subject to review by a Circulation Judge Pool made of up at least eight non-management peer judges. Importantly, the duties of the judge pool are insulated from direct oversight and influence by the director.

The circulation judges review draft decisions prior to issuance and provide feedback regarding potential conflicts or inconsistencies with relevant court decisions, director guidance and USPTO policy. Draft decisions which include inconsistencies may be flagged for further review and discussion with PTAB executive management. Based on these discussions, the PTAB executive management may consult with the director to determine whether new polices are required or existing policies need an update.

Despite the efforts of the circulation judges, each hearing panel has the final authority for the content of a decision and may use discretion on whether and how to incorporate that feedback into the panel’s final decision.

One major distinction between the new interim process for PTAB decision circulation and internal review and the previous process is the lack of involvement or oversight by management. The new process establishes clear demarcation and insulation of panel decisions from influence by the director.

Moreover, the interim process for PTAB decision circulation and internal review expands the list categories of panel decisions which can be reviewed by the Circulation Judge Pool. The prior review process did not cover ex parte appeal decisions or reexamination appeal decisions. However, the new interim process provides for certain categories of ex parte appeals, ex parte reexamination appeals and reissue appeal decisions designated by PTAB management as being eligible for review. As a result, stakeholders should also see improvement in the quality and consistency of decisions involving these newly covered proceedings.

Over time, this procedure should build confidence in the quality and legitimacy of AIA proceedings and panel decisions because stakeholders can have more assurance that a final decision is based on the strength of the record and prior precedent. If the process works as proposed, circulation judges should be flagging any cases that do not align with prior precedent for further review by PTAB management or for review by the director.

Shawn Cage

Buchanan Ingersoll & Rooney