US Patent and Trademark Office Director Kathi Vidal has transformed the scope of Arthrex director reviews since taking office.We expect her aggressive approach to reviews to intensify under the agency’s recently issued “revised interim guidelines”.
The US Supreme Court held in its 2021 decision in United States v. Arthrex that the director of the USPTO must have discretion to review decisions in inter partes proceedings of that agency’s Patent Trial and Appeal Board (PTAB). Initially, Acting DirectorDrew Hirschfeld used this power over PTAB decisions sparingly, granting review in only four cases—in three of which the PTAB decision had directly contradicted an earlier finding in a related proceeding at the Patent Office’s appellate court.
This all changed when Vidal became director in April 2022. She promptly announced upon taking office that review would be granted to address a much broader and more substantive range of issues. Indeed, to date she has reviewed or is now reviewing 22 cases. In most of her rulings, the PTAB’s decision was either modified in part or vacated completely.
Vidal’s aggressive approach to supervising the PTAB is likely to intensify under the new guidelines issued in late July, making grant of review requests more frequent. Under prior USPTO guidelines, a party to a PTAB proceeding could request review of only PTAB final written decisions.
Under the new guidelines, such review requests may be filed against the PTAB’s:
- initial decisions on whether to institute a trial;
- final written decisions; and
- decisions granting a request for rehearing.
Vidal’s resources for reviewing PTAB decisions will be increased: she will have the option of delegating review of PTAB decisions to a “Delegated Rehearing Panel”. These panels will comprise three members selected from among the chief judge, deputy chief judge, vice chief judges, and senior lead judges. The guidelines exclude judges who were on the original PTAB panel or otherwise have a conflict of interest. Further, all requests for review will be initially reviewed by an advisory committee which will include at least 11 members who are representatives of various USPTO business units and who will serve at the discretion of the director.
Significantly, Vidal will retain her current power to grant review of board decisions on her own initiative, a power she invoked inthree cases in the days immediately preceding promulgation of the new guidelines.
Since the beginning August, she has issued three new review rulings, each reflecting her willingness to insert herself into both procedural and substantive aspects of PTAB decisions.
In Vector Flow v. HID Global, the patent owner argued that there should be no inter partes review proceeding because the district court in a parallel proceeding had completed claim construction and fact discovery was nearing completion. This meant, the patent owner asserted, that a trial in court would likely occur before PTAB issues its final written decision. The opposing party challenging the patent’s validity asked the PTAB for permission to file a reply brief contesting the patent owner’s argument. The PTAB denied such permission and then denied institution of inter partes review.
Vidal disagreed with the PTAB, noting that the patent owner’s comments on the state of the district court action were merely superficial and that the challenger’s reply brief, not considered by the PTAB, addressed the factual questions in much greater detail. She therefore vacated the PTAB’s decision denying institution and instructed the PTAB to accept the patent owner’s replybrief and issue a new institution decision after evaluating on both parties’ arguments.
The PTAB’s decision not to institute post-grant review in Neurocrine Biosciences v. Spruce Biosciences was based on its disagreement with the challenger’s grounds for review. Specifically, the PTAB rejected, on their merits, the challenger’s assertions that the patent’s claims were invalid as anticipated by and obvious over the prior art, and that they lackedenablement and written description support in the patent’s specification.
Vidal took a deep dive into the disclosure of the prior art and the disclosure the patent’s specification and identified significant errors of fact and law in the PTAB’s institution denial. She therefore vacated that denial and remanded the case to the PTAB for it to reconsider whether the challenger’s invalidity arguments justify institution.
Patent Quality Assurance
Finally, in Patent Quality Assurance v. VLSI Technology, Vidal reviewed the PTAB’s decision to institute inter partes review, and in doing so she found in a 52-page decision that the party challenging the validity of the patent had misrepresented material facts, made misleading arguments, and failed to comply with mandatory discovery requests. She therefore ordered the challenger to explain why it should not be required to pay the patent owner’s attorney fees.
The director clearly has the authority to sanction parties for misconduct, but her willingness to take on this issue attests to her determination to defend the integrity of proceedings at the patent office.
It is probable some administrative patent judges consider director review to be annoying, and some practitioners find additional layers of review to be superfluous.
On the other hand, the patents addressed in post-grant proceedings at the PTAB are almost always of great commercial significance; determinations of whether those patents are valid therefore deserves our most careful consideration based on aconsistently applied jurisprudence.