PTO changes to follow Supreme Court's Arthrex ruling, attorneys predict
2021 IPDBRF 0074
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By Patrick H.J. Hughes
WESTLAW Intellectual Property Daily Briefing
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June 23, 2021
(June 23, 2021) - The U.S. Supreme Court has decided to give the U.S. Patent and Trademark Office's director the power to review the decisions of administrative patent judges, and attorneys have offered their predictions of how future patent review will look.
Jason Romrell, an intellectual property attorney at Finnegan who was not involved in the dispute, said "it is likely that the PTO will soon issue guidance as to how this discretionary review process will be implemented."
"It remains to be seen how often the director will actually exercise this new discretionary review authority, and how often discretionary review will actually make a difference in the outcome," he said.
Since Congress created the Patent Trial and Appeal Board with the enactment of the 2011 Leahy-Smith America Invents Act, or AIA, APJs have been appointed by the secretary of commerce with input from the USPTO's director, unlike Article III judges who must be appointed by the president with Senate confirmation.
APJs, as adjudicators on the PTAB, issue inter partes review decisions, which the Supreme Court said the PTO director now has the discretion to review.
Jennifer Kurcz, who leads BakerHostetler's Chicago IP team and was also not involved in the dispute, explained the reasoning behind the Supreme Court's decision.
"The Arthrex majority reasoned that APJs are inferior officers, yet the power to make final decisions that are not reviewed by a principal officer exceeds the constitutional authority provided to inferior officers under the appointments clause," she said.
Kurcz added that, to cure the apparent "constitutional defect," the high court "divested APJs of final authority over decisions while providing that power to the director."
"It is expected that the USPTO will swiftly move to create a process to enable parties to petition the director to hear appeals to APJ rulings," she said.
The decision 'adds a new wrinkle'
Other attorneys who were not involved in the dispute offered their predictions.
Case Collard, an IP attorney at Dorsey & Whitney, said, "This limited remedy preserves the IPR process as we know it, but adds a new wrinkle, allowing APJ decisions to be reviewed by the director prior to appeal to the Federal Circuit."
"Patent challengers will be pleased with the result that keeps the PTAB's IPR process in their toolbox," he said. "There is some concern that by allowing a political appointee to oversee the decisions, it could inject an element of politics that had previously been absent."
In fact, several inventors and technology groups submitted amicus briefs to the Supreme Court in 2020, arguing for the system to be overhauled and made more political to make APJs more "accountable."
T.J. Mantooth, an IP attorney at Hall Estill, said the Supreme Court's decision curbs the APJs' authority and "redefines how patent validity can be determined in an IPR."
At the same time, the Supreme Court skirted the issue of "curing potential IPR abuse," he said. "By allowing general overview to the USPTO director, the Supreme Court maintains the status quo of patent IPRs."
Aziz Burgy, patent attorney at Axinn, Veltrop & Harkrider LLP, said the change will be minimal from a practical perspective.
"It is unlikely that the director will reverse a three-judge panel's determination too often," he said. "PTAB panels consist of seasoned patent practitioners that will have carefully applied the law to the facts of the case."
"Stakeholders should also take comfort that despite the director's vast discretionary power, the Federal Circuit will continue to serve as an appellate backstop for these IPR decisions," Burgy said.
By Patrick H.J. Hughes
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