In June 2021, the USPTO created an interim Director review procedure in response to the U.S. Supreme Court's decision in United States v. Arthrex, Inc., 141 S.Ct. 1970 (2021). In Arthrex, the Supreme Court held that the USPTO Director must have the authority and opportunity to review a PTAB final written decision before it becomes the final decision of the agency.

Under the Director review procedure, parties to an IPR may request the Director to review the PTAB's final decision, rather than request the original PTAB panel to rehear the final decision.

The original Director review procedure was limited to requesting review of the PTAB's final written decision. A party dissatisfied with an institution decision could not seek Director review under the original Director review procedure. Notably, the AIA specifies that the PTAB's decisions whether to institute trial are final and non-appealable. Consequently, the only avenue for reconsideration of an institution decision was the original PTAB panel that decided to institute trial.

In July 2023, the USPTO announced a "Revised Interim Director Review Process" (https://bit.ly/3Orn6O8) in which the scope of Director review was expanded to include the PTAB's "(1) decision whether to institute a trial, (2) final written decision, or (3) decision granting a request for rehearing."

The expansion of Director review to include institution decisions is a big deal. Practitioners should be aware, however, that parties may not seek Director review of erroneous findings of material fact or erroneous conclusions of law in an institution decision.

The Director has actively used Director review to address issues of importance. In 2023, the Director granted Director review (https://bit.ly/3QL4KKK) in 18 post-grant proceedings before the PTAB.

In April 2023, the Office issued an "Advanced Notice of Proposed Rulemaking" (https://bit.ly/3RRbiId) (ANPRM) (88 Fed. Reg. 24503) identifying several modifications the Office was "considering" making to the rules of practice in IPR proceedings. The ANPRM addressed a wide variety of topics from building on or codifying existing PTAB precedent or other guidance on the Director's discretion to deny institution of an IPR petition for reasons other than the merits, minimizing the number of IPR challenges that may be filed against a patent, whether to allow for separate briefing on discretionary denial issues, etc.

The ANPRM was intended to solicit public feedback on a wide variety of issues. Indeed, the public responded. The Office received thousands of comments (https://bit.ly/3NBtUJI) from a broad cross-section of individuals, companies, industry groups, bar associations, etc. USPTO and PTAB leadership have indicated that they are reviewing the comments and will issue a Notice of Proposed Rulemaking (NPRM) in view of the public's feedback.

The PTAB has authority to exercise its discretion to deny institution of an IPR petition for reasons other than the merits. For example, the PTAB may exercise its discretion under Fintiv if the district court in a parallel district court proceeding would go to trial before the PTAB would issue its final written decision and resolve validity issues before the PTAB would. Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020) (precedential). The PTAB's Fintiv policies have been controversial and led to numerous legal challenges.

The PTAB continues to evolve its discretionary denial practices. Shortly after being sworn in, the Director issued an interim procedure that provides guidance on the application of Fintiv when there is parallel district court litigation. For example, the Director's guidance specifies that the PTAB may not discretionarily deny an IPR petition under Fintiv if the petitioner makes a broad stipulation to avoid overlap between IPR grounds and invalidity grounds in district court, or if the petition presents compelling merits of unpatentability, a standard that exceeds the statutory standard for institution.

In February 2023, the Director designated CommScope Techs. LLC v. Dali Wireless, Inc., IPR2022-01242, Paper 23 (PTAB Feb. 27, 2023) as precedential. CommScope provides that PTAB judges must determine whether grounds of challenge in an IPR petition meet the higher compelling merits standard only when all other Fintiv factors weigh in favor of discretionary denial.

The Director's interim procedure on discretionary denial has significantly reduced the number of Fintiv denials in 2023. However, parties should continue to plan for the potential application of Fintiv. In 2023, the PTAB denied at least 30 IPR petitions under Fintiv when a parallel district court proceeding was expected to go to trial before the PTAB would issue a final written decision.

In October 2023, the Office issued a "Notice of Proposed Rulemaking" (https://bit.ly/3RQtrWC) (88 Fed. Reg. 69578) that would bar Office management such as the Director from directly influencing or being involved with PTAB panel decisions before they are issued. The proposed rules would also bar PTAB management (e.g., the PTAB's Chief Judge) from being involved in panel decision-making unless a PTAB panel member requests their input, and the adoption of any feedback received by the PTAB panel is entirely optional and solely within the direction of the panel.

In addition, the proposed new rules set forth that no management shall participate in the review of any internal pre-issuance circulation of decisions. The Office received comments in response to the NPRM in December 2023, and will issue new rules in due course.

IPR practice continued to evolve in 2023 as the Director and PTAB management seek to refine the conduct of trials based on past procedures and public feedback. In 2024, practitioners should expect the PTAB to continue to refine its discretionary denial policies, including proposing rules in response to the public's feedback on the many issues raised in the ANPRM.

This article reflects only the present personal considerations, opinions, and/or views of the authors, which should not be attributed to any of the authors' current or prior law firm(s) or former or present clients.