United States: Revised Interim Director Review Process In AIA Proceedings

On July 24, 2023, the United States Patent and Trademark Office (USPTO or Office) revised its interim process for the review of decisions of the Patent Trial and Appeal Board (PTAB or Board) by the Director of the USPTO in America Invents Act (AIA) proceedings.

Following the Supreme Court's decision in United States v. Arthrex, Inc., on June 29, 2021, the Office set forth an interim process for the Director to review final Board decisions. 141 S. Ct. 1970, 1986 (2021). After further updating that guidance on May 25, 2022, and June 17, 2022, the Office issued a Request for Comments on July 20, 2022, seeking public feedback on the interim Director Review process. The Office received 4,377 comments.

According to the Office, the revised interim Director Review process is in "response to those comments and as the Office works to formalize the Director Review process" and "furthers the USPTO's goals of promoting innovation through consistent and transparent decision-making, and the issuance and maintenance of reliable patents."

Notably, under prior guidance, parties were limited to requesting Director Review of final written decisions (and decisions granting a request for rehearing of a final decision). Under the revised interim process, Director Review requests are now available for other areas of Board jurisdiction, namely review of Board's decisions to institute review (and decisions granting a request for rehearing of an institution decision). To be sure, under prior guidance, the Director would occasionally review, sua sponte, Board institution decisions. But until now, parties were unable to specifically request Director Review of Board institution decisions.

Another significant update under the revised interim process is the Director's option to delegate, at his or her discretion, the review and adjudication of a Board decision to a newly formed Delegated Rehearing Panel (DRP), consisting of a panel of judges delegated by the Director.

Finally, concurrently with the revised interim Director Review process, the Office also established a newly formed Appeals Review Panel (ARP), which the Director may convene sua sponte to review Board decisions in ex parte appeals, re-examination appeals, and reissue appeals.

Together, the revised interim Director Review process and the ARP replace the Precedential Opinion Panel process, which was created in 2018 before Arthrex and the interim Director Review process to rehear matters in pending trials and appeals of exceptional importance and assist determining whether a previously issued decision should be designated as precedential or informative.

Provided below is a more in-depth overview of the Director Review process under the Office's revised interim guidance.

Availability of Director Review

According to the revised interim guidance, "[i]n Arthrex, the Supreme Court exclusively addressed the Director's ability to review final decisions of the Board in inter partes review proceedings. 141 S. Ct. at 1987. The Court did not address the Board's other areas of jurisdiction. Id. Nonetheless, for consistency and uniformity, Director Review requests are available for other areas of Board jurisdiction."

Accordingly, under the revised interim Director Review process, a party to a Board decision may now request Director Review of the Board's institution decisions, in addition to final written decisions, and decisions granting a rehearing request. The Director also retains unilateral discretion to initiate Director Review of Board decisions sua sponte.

Regarding the issues suitable for Director review, the revised interim process clarifies that requests for Director Review of a Board's decision whether to institute an AIA trial (and decisions granting a request for rehearing of an institution decision) are limited to decisions presenting: (a) an abuse of discretion or (b) important issues of law or policy. And Director Review requests of a Board's final written decision (and decisions granting a request for rehearing of a final decision) are limited to decisions presenting (a) and (b) as discussed above, in addition to: (c) erroneous findings of material fact, or (d) erroneous conclusions of law.

Requesting Director Review

Like with the prior guidance, under the revised interim Director Review process, a party may submit a Director Review request by concurrently: (1) filing a Request for Rehearing by the Director in the PTAB Case Tracking System (P-TACTS); and (2) emailing the Director at Director_PTABDecision_Review@uspto.gov, copying counsel for all parties to the proceeding. Also consistent with prior guidance, a party is limited to requesting Director Review or rehearing by the Board, but cannot request both.

According to the revised interim process, "[t]o ensure thorough and timely consideration of each Director Review request," the requesting party shall provide, in the notification email, a priority-ranked list of the issues for which the party seeks review, and should include an express identification of the alleged issues, as appropriate to the type of decision for which review is sought. The parties may also provide a brief explanation of the issue(s) in the notification, and a brief explanation of the rationale for the prioritized ranking of the issue.

Director Review and the Delegated Rehearing Panel

The revised interim process explains that, for each Director Review request, the Director reviews the underlying decision including the associated arguments and evidence, and the recommendation of an Advisory Committee to determine whether to grant or deny Director Review. The Advisory Committee includes at least 11 members and representatives from various USPTO business offices and meets periodically to evaluate each request and provide a recommendation to the Director as to whether review should be granted. The Director may also ask the Advisory Committee to make recommendations on decisions that the Director is considering for sua sponte Director Review.

In response to a request for Director review, the Director may issue an initial order granting review and identifying the issue(s) to be addressed. Alternatively, the Director may issue a singular decision, which both grants Director Review and resolves the identified issue(s) in the first instance based on the record. The Director may, in whole or in part, affirm, reverse, modify, vacate, or remand the decision to the Board for further proceedings. The Board's decision whether to institute trial in an AIA proceeding, or a decision granting rehearing of such a decision, is reviewed for abuse of discretion unless the review engages important issues of law or policy, which are reviewed de novo. All other decisions are reviewed de novo.

New to the Director Review process under the revised interim process is the Director's option to delegate, at his or her discretion, review of a Board decision to a Delegated Rehearing Panel (DRP). When the Director determines to delegate review of a decision to the DRP, the Director will issue an order identifying that review has been delegated to the DRP. If the Director delegates a decision to the DRP to conduct review, including when the Director delegates review of a decision sua sponte to the DRP, the DRP panel will determine whether to grant rehearing

Finally, Director Review decisions may be issued as precedential, informative, or routine decisions, although by default Director Review decisions are routine decisions, as set forth in Standard Operating Procedure 2 (SOP 2). As further set forth in SOP 2, routine Director Review decisions may be nominated for precedential or informative designation.

Review of Director Review Decisions

Director Review decisions of Final Written Decisions in AIA trial proceedings are appealable to the United States Court of Appeals for the Federal Circuit using the same procedures for appealing other Board decisions. 35 U.S.C. §§ 141(c), 319. Director Review decisions of Board decisions on institution are not appealable. 35 U.S.C. § 314(d).

A party dissatisfied with a Director Review decision (or a DRP decision) may file a single request for rehearing without prior authorization, and that party carries the burden of showing the Director Review decision (or DRP decision) should be modified.

At bottom, the revised interim Director Review process implements some significant changes to the Director Review process, including providing Director Review of Board's institution decisions, formation of the Delegated Rehearing Panel and Appeals Review Panel, and retirement of the POP. It will be interesting to see how these new aspects of the Director Review process are received and implemented in practice as the Office continues to formalize the Director Review process.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.