- Chief Justice Roberts’ Ruling Allows PTO Director to Review PTAB Decisions
- Patent attorneys say director unlikely to wield broad power
- Biden has yet to appoint new PTO director
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(Reuters) – In a long-awaited decision on patents, the United States Supreme Court ruled on Monday that administrative judges on the Patent Trial and Appeals Board of the United States Patent and Trademark Office – who hears challenges to the validity of patents through the inter partes examination process (DPI) – were unconstitutionally appointed, but concluded that giving the PTO Director the power to review their decisions resolved the issue.
Patent attorneys say the director is likely to use this new power sparingly, if at all, and that the decision will not affect the day-to-day operations of the PTAB.
U.S. Chief Justice John Roberts’ majority decision in United States v. Arthrex Inc was a “surgical” way of “not throwing out the baby IPR with the bathwater,” said Aziz Burgy, patent partner at Axinn Veltrop & Harkrider.
“I don’t think you’re going to have a director who is kind of going to color outside the lines,” Burgy said.
Roberts noted in his opinion that “billions of dollars can depend on a decision of the board of directors.” The PTAB determines the validity of hundreds of patents per year and is often used by companies seeking to escape infringement cases.
Roberts said the PTAB judges had too much power without being subject to the scrutiny of an officer appointed by the president, and that the PTO director “does not need to review every PTAB decision,” but must “have the discretion to review decisions”.
The move was a blow to some critics of the PTAB who wanted to “basically bring down the whole system,” said Scott McKeown, a partner at Ropes & Gray and head of the firm’s PTAB practice group.
McKeown said that while the decision theoretically gives the PTO manager a greater role in influencing IPR proceedings, its actual impact on the process is likely to be limited.
According to McKeown, the decision would likely not favor one party in the “standoff” between parties considered largely pro-patent, such as pharmaceutical companies, and others with whom the IPR process is popular, such as technology companies. .
President Joe Biden has yet to choose a permanent PTO director to replace Andrei Iancu, who resigned in January and was widely seen as favoring patent owners. Drew Hirshfeld is the acting director of the office.
“If a director wanted to play the favorites, I think he would have to dive into the facts” for a reasonable justification that would stand up to the call of the Federal Tour, McKeown said. “Aside from the actual panel errors, I don’t really see much leeway for a director to have a real impact.”
Imron Aly, patent partner at Schiff Hardin, also said in an email that Arthrex “does not mean that the director will actually review any IPR decision” and that the director “in practice would not want to fit into individual cases very often. “
It is also unclear under Arthrex what a director’s review would look like – whether he would “make a decision along the lines of what the board would do” or whether he would just give “a thumbs-up or a thumbs down, ”McKeown said.
And “if you ask the manager to review hundreds, if not thousands of IPR decisions on his own per year, it will be very difficult, in practice, for the manager to do it on a case-by-case basis. “said Burgy.
The United States Court of Appeals for the Federal Circuit ruled in 2019 that PTAB judges were unconstitutionally appointed, but solved the problem by removing some job protections instead.
The case is United States v. Arthrex, United States Supreme Court, No. 19-1434.
For Arthrex: Jeffrey Lamken of MoloLamken LLP
For respondent Smith & Nephew Inc: Mark Perry of Gibson Dunn & Crutcher
United States Supreme Court rules power of patent court judges