Rules Governing Director Review of Patent Trial and Appeal Board Decisions

DEPARTMENT OF COMMERCE <SUBAGY>Patent and Trademark Office</SUBAGY> <CFR>37 CFR Part 42</CFR> <DEPDOC>[Docket No. PTO-P-2024-0014]</DEPDOC> <RIN>RIN 0651-AD79</RIN> <SUBJECT>Rules Governing Director Review of Patent Trial and Appeal Board Decisions</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> United States Patent and Trademark Office, Department of Commerce. <HD SOURCE="HED">ACTION:</HD> Notice of proposed rulemaking. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The United States Patent and Trademark Office (USPTO or Office) proposes new rules to govern the process for the review of Patent Trial and Appeal Board (PTAB or Board) decisions in America Invents Act (AIA) proceedings by the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office (Director). Specifically, the USPTO proposes these rules in light of stakeholder feedback received in response to a request for comments (RFC). The proposed rules promote the accuracy, consistency, and integrity of PTAB decision-making in Leahy-Smith America Invents Act of 2011 (AIA) proceedings. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> Comments must be received by June 17, 2024 to ensure consideration. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> For reasons of Government efficiency, comments must be submitted through the Federal eRulemaking Portal at <E T="03">www.regulations.gov</E> . To submit comments via the portal, one should enter docket number PTO-P-2024-0014 on the homepage and select “search.” The site will provide search results listing all documents associated with this docket. Commenters can find a reference to this notice and select the “Comment” icon, complete the required fields, and enter or attach their comments. Attachments to electronic comments will be accepted in Adobe® portable document format (PDF) or Microsoft Word® format. Because comments will be made available for public inspection, information that the submitter does not desire to make public, such as an address or phone number, should not be included in the comments. Visit the Federal eRulemaking Portal for additional instructions on providing comments via the portal. If electronic submission of, or access to, comments is not feasible due to a lack of access to a computer and/or the internet, please contact the USPTO using the contact information below for special instructions. <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Thomas Krause, Director Review Executive; Kalyan Deshpande, Vice Chief Administrative Patent Judge; or Amanda Wieker, Acting Vice Chief Administrative Patent Judge, at 571-272-9797. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> The United States Patent and Trademark Office proposes new rules governing the process for the review of Patent Trial and Appeal Board decisions in AIA proceedings by the Under Secretary of Commerce for Intellectual Property and Director  <SU>1</SU> <FTREF/> of the United States Patent and Trademark Office. <FTNT> <SU>1</SU>  In this notice of proposed rulemaking, references to the “Director” include the Under Secretary of Commerce for Intellectual Property and Director of the USPTO, an individual serving as the Acting Director or one performing the functions and duties of the Director, or an individual designated to fill the Director's role in case of a conflict of interest. See Procedures for Recusal to Avoid Conflicts of Interest and Delegations of Authority, available at <E T="03">https://www.uspto.gov/sites/default/files/documents/Director-Memorandum-on-Recusal-Procedures.pdf.</E> For example, if the Director has a conflict that requires the Director to be recused, the Deputy Under Secretary of Commerce for Intellectual Property and Deputy Director of the USPTO will take the required action. If the position of the Deputy Director is vacant, or if the Deputy Director also has a conflict, the Commissioner for Patents will take the required action, if no conflicts exist for the Commissioner. </FTNT> This Notice of Proposed Rulemaking (NPRM) provides that a party to an AIA proceeding may request Director Review in that AIA proceeding of any decision on institution, any final written decision, or any decision granting rehearing of a decision on institution or a final written decision. The NPRM also sets forth the timing and format of a party's request for Director Review. In addition, the NPRM provides that the Director may initiate a review of any decision on institution, any final written decision, or any decision granting rehearing of a decision on institution or a final written decision on the Director's own initiative. The NPRM addresses the impact of Director Review on the underlying proceeding at the PTAB, as well as the time by which an appeal to the U.S. Court of Appeals for the Federal Circuit must be filed. <HD SOURCE="HD1">Background</HD> <HD SOURCE="HD2">Development of This Notice of Proposed Rulemaking</HD> On September 16, 2011, Congress enacted the AIA (Pub. L. 112-29, 125 Stat. 284 (2011)). The AIA established the PTAB, <SU>2</SU> <FTREF/> which is made up of administrative patent judges (APJs) and four statutory members, namely the Director, the Deputy Director, the Commissioner for Patents, and the Commissioner for Trademarks. 35 U.S.C. 6(a). The Director is appointed by the President, by and with the advice and consent of the Senate. 35 U.S.C. 3(a)(1). APJs are appointed by the Secretary of Commerce in consultation with the Director. <E T="03">Id.</E> 6(a). The PTAB hears and decides ex parte appeals of adverse decisions by examiners in applications for patents, applications for reissue, and reexamination proceedings, and proceedings under the AIA, including inter partes reviews (IPRs), post grant reviews (PGRs), covered business method (CBM) patent reviews, <SU>3</SU> <FTREF/> and derivation proceedings, all in panels of at least three members. <E T="03">Id.</E> 6(b), (c). Under the statute, the Director designates the members of each panel. <E T="03">Id.</E> 6(c). The Director has delegated that authority to the Chief Judge of the PTAB. See PTAB Standard Operating Procedure 1 (Rev. 15) (SOP 1), Assignment of Judges to Panels, available at <E T="03">www.uspto.gov/sites/default/files/documents/SOP%201%20R15%20FINAL.pdf.</E> <FTNT> <SU>2</SU>  The PTAB was previously known as the Board of Patent Appeals and Interferences. </FTNT> <FTNT> <SU>3</SU>  Under section 18 of the AIA, the transitional program for post grant review of CBM patents sunset on September 16, 2020. AIA 18(a). Although the program has sunset, a few existing CBM proceedings, based on petitions filed before September 16, 2020, remain pending, for example, on appeal to the United States Court of Appeals for the Federal Circuit. </FTNT> 35 U.S.C. 6(c) states that “[o]nly the Patent Trial and Appeal Board may grant rehearings” of Board decisions. In <E T="03">United States</E> v. <E T="03">Arthrex, Inc.</E> (“ <E T="03">Arthrex”</E> ), the Court held that the Appointments Clause of the Constitution (art. II, sec. 2, cl. 2) and the supervisory structure of the USPTO require the Director, a principal officer of the United States, to have the ability to review the PTAB's final written decisions in IPR proceedings. See <E T="03">United States</E> v. <E T="03">Arthrex, Inc.,</E> 141 S. Ct. 1970, 1986 (2021). The Court determined that “35 U.S.C. 6(c) is unenforceable as applied to the Director insofar as it prevents the Director from reviewing the decisions of the PTAB on [the Director's] own.” <E T="03">Id.</E> at 1987. The Court added that: <EXTRACT> <FP>this suit concerns only the Director's ability to supervise APJs in adjudicating petitions for inter partes review. We do not address the Director's supervision over other types of adjudications conducted by the PTAB, such as the examination process for which the Director has claimed unilateral authority to issue a patent. </FP> </EXTRACT> <E T="03">Id.</E> The Court thus held that “the Director has the authority to provide for a means of reviewing PTAB decisions” in IPR proceedings and “may review final PTAB decisions and, upon review, may issue decisions [ ] on behalf of the Board.” <E T="03">Id.</E> (citations omitted). Additionally, the Court in <E T="03">Arthrex</E> made clear that “the Director need not review every decision of the PTAB,” nor did it require the Director to accept requests for review or issue a decision in every case. <E T="03">Id.</E> at 1988. Instead, “[w]hat matters is that the Director have the discretion to review decisions rendered by APJs.” <E T="03">Id.</E> See <E T="03">Arthrex, Inc.</E> v. <E T="03">Smith & Nephew, Inc.,</E> 35 F.4th 1328, 1338 (Fed. Cir. 2022) (noting same); <E T="03">CyWee Group Ltd.</E> v. <E T="03">Google LLC,</E> 59 F.4th 1263, 1268 (Fed. Cir. 2023) (“ `[T]he Appointments Clause was intended to prevent unappointed officials from wielding too much authority, not to guarantee procedural rights to litigants, such as the right to seek rehearing from the Director.' ” (quoting <E T="03">Piano Factory Grp., Inc.</E> v. <E T="03">Schiedmayer Celesta GmbH,</E> 11 F.4th 1363, 1374 (Fed. Cir. 2021)). Following the <E T="03">Arthrex</E> decision, in June 2021 the USPTO implemented an interim process for Director Review of final written decisions in AIA proceedings and published <E T="03">Arthrex</E> Questions and Answers (Q&As), which was available on a USPTO web page. On April 22, 2022, the USPTO published two web pages to replace the <E T="03">Arthrex</E> Q&As. Specifically, the USPTO published an “Interim Process for Director Review” web page, <SU>4</SU> <FTREF/> setting forth more details on the interim process and additional suggestions and guidance for parties who wish to request Director Rev ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 51k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━