Precedential Opinions & Trial Guide?

The Federal Circuit’s en banc opinion in In re Aqua Products was as massive as it was unfulfilling. This was due, in part, to the court’s struggle with how to weigh policy of the agency that was not based upon the traditional notice-and-comment rule making of the Administrative Procedure Act (APA). Given the significant hurdles in issuing such rules (especially under the Trump administration’s 2-for-1 cancellation requirements) it is certainly understandable that an increasing amount of the agency’s guidance on AIA trial practice is provided by way of precedential Board decisions, and such documents as the Trial Practice Guide.

Yet, when the public is held to standards that were not promulgated in accordance with traditional APA practices, the Federal Circuit is left to decide what if any deference should be applied to such policies.

As the plurality explained in Aqua Products relative to features of Patent Trial & Appeal Board’s (PTAB) amendment practice:

If an agency purports to rest its authority to act on an express grant of rulemaking authority—as the PTO suggests it may do here—then it may only act consistently with its obligations under the APA.

. . . . .

Section 316(a)(9) is a narrow grant of rulemaking authority to carry out an express congressional goal: to allow the patent owner to move to amend the patent as authorized by § 316(d). In the face of that grant of rulemaking authority, the Director may only set forth such “standards and procedures” through the rulemaking identified in § 316(a)(9), with all of the requirements and obligations that accompany the exercise of that authority.

Seizing upon this guidance, an Appellant has challenged the PTAB’s practice of considering subject matter eligibility (35 U.S.C. § 101) for amended claims of an IPR proceeding. While the PTAB has cemented this practice in precedential Board decisions, and again in the Trial Practice Guide, the question becomes whether such practices comport with APA requirements to be entitled to deference.

In Uniloc 2017 LLC., v. Hulu LLC; Netflix Inc., Uniloc argues (here) that there is no statutory or rule-based authority for such 101 review practices. And, even if Chevron deference were considered in relation to the general policy, such would not apply to such non-APA compliant practices

Given the similarity in fact patterns to Aqua Products, it is not surprising that the brief relies heavily on the reasoning of that decision.

Until the agency begins codifying some of its recent guidance, I expect challenges such as these to continue.