Patent and Trademark Office Director Andrei Iancu wanted to make a mark on the agency, and the surge in the number of patent appeal decisions considered precedent setting has become one of his hallmarks.
In 2019, the agency’s Patent Trial and Appeal Board has designated 11 decisions as precedential, compared to 14 total over the previous six years. The increase fits into Iancu’s effort to make PTAB processes more consistent and transparent, a mission he’s laid out in both speeches and actions since taking office in 2018.
Under Iancu’s leadership, the PTAB ended the prior practice of expanding judge panels without notifying the public or parties, and the PTO gave patent owners new options in amending patent claims during PTAB patent challenge proceedings. The PTO has also changed the process for designating decisions precedential, leading to a surge.
“The aim is to do more of the same—to really try to bring more uniformity and predictability to our case law,” said Scott Boalick, whom Iancu tapped to be the PTAB’s chief judge. “We need to speak with one voice.”
Attorneys and their clients turn to PTAB when they want to challenge the validity of an existing patent’s claims. And precedential designations turn decisions into guideposts for attorneys trying to navigate PTAB trial proceedings. The PTAB is popular among defendants in federal court litigation, who often go to the board to challenge patents they are accused of infringing.
Practitioners have said there had been a dearth of precedents, and the changes over which Iancu has presided are helping to change that. But they’re also consolidating Iancu’s influence, making the question of who serves in the director role that much more important.
“It puts a lot of power in the hands of the director,” Trenton Ward, partner at Finnegan, Henderson, Farabow, Garrett & Dunner LLP and a former PTAB judge, said of the changes to the precedential designation process. It’s “supposed to bring about consistency, but if you had a new director come in that wanted to change the direction on many issues, it could actually end up leading to less.”
Yet practitioners say the changes were needed. Previous PTAB decisions have led to splits on important issues, leading to uncertainty among practitioners.
“Practitioners have been complaining to the board now for quite some time about not having any precedential informative decisions,” Craig Kronenthal, a patent attorney at Banner Witcoff Ltd., said. “The board realized they probably need to be issuing those, and I think they wanted it to come from one source.”
“We have now increased those designations, and we have a pipeline of cases which we plan to designate as precedential,” Iancu said May 2 at the quarterly meeting of the PTO’s Patent Public Advisory Committee. “So look for more such decisions in coming weeks.”
The changes are having the intended effect. The 11 precedential decisions in the first four months of 2019 compare to one each in 2013 and 2014; zero in 2015, eight in 2016, four in 2017 and zero in 2018, the PTO said.
And the PTAB, when possible, tries “to group decisions together by topic or issue so you don’t just have a hodgepodge of random subject matter coming out,” Boalick said. For example, the PTAB in March designated precedential DePuy Synthes Prods., Inc v. Medidea, L.L.C. and K-40 Elecs., LLC v. Medidea, L.L.C., both of which address live testimony during oral argument.
Likewise, three decisions designated precedential in April, regarding real parties in interest, along with another designated in May denying review, can be seen as “trending toward fewer petitions with more parties,” Kayvan Noroozi, IP lawyer at Noroozi PC, said.
Precedential designation previously required majority support from all voting PTAB judges. This “worked okay when there were fewer judges,” Boalick said, but became “rather cumbersome” as the PTAB reached its current size of 267 judges.
Practitioners found it problematic, too.
It “was a bit unwieldy and really lent itself to disparate results,” Marcella Bodner, intellectual property special counsel at Cole Schotz P.C., said. PTO directors, as now, had to sign off on a precedential designation, but may have not had their eyes on decisions “in any consistent or influential way,” she said.
Last September, the PTAB changed that. Decisions can still be nominated for precedential designation from the public or within the agency, but now a screening committee composed of Iancu, Boalick, commissioner for patents Drew Hirshfeld, or their designees reviews and recommends cases.
From there, there are two ways to designate a decision precedential. Nominations from the public, agency employees and board members of routine decision go through the screening committee, which then decides whether to hand the decision to a five-member Executive Judges Committee. The committee then sends its recommendation to Iancu for the final call.
The other way is the Precedential Opinion Panel, or POP, established in September, which Iancu has said “will help to increase consistency on issues of exceptional importance at the agency.”
POP convenes in a pending trial or appeal, and, like the screening committee, is made up of Iancu, Boalick, Hirshfeld, or their designees. It doesn’t take recommendations from the public, though it accepts them from parties in pending trials or appeals, as well as PTAB judges. It also doesn’t review “run-of-the-mill cases,” Boalick said. The director can expand POP or replace its members and has final approval over designations and convenings.
POP, which has issued one decision so far, looks for significant cases like those involving the meaning of statutory provisions in the 2011 patent law overhaul, PTAB rules interpretations, or areas “where board panels have gone in different directions on an issue,” Boalick said. He said there’s also public interest in the agency issuing precedential decisions regarding subject matter eligibility for patenting and factors considered in agreeing to review a patent, whether via POP or the Executive Judges Committee.
There were 40 requests in total for POP review as of May 6, the PTO said, with nine still under consideration. Denied requests were ones where parties “didn’t really talk about the importance” of an issue, or were “just trying to argue the panel got it wrong the first time, which isn’t really the intent” of this process, PTAB deputy chief judge Jacqueline Bonilla said.
‘Only Time Will Tell’
Still, POP review is “definitely establishing that the administrative patent judges’ judgments are subject, to review, approval and potentially veto by the director,” Finnegan’s Ward said.
There’s value to be had in the director to tackle tackling head-on problems that are “hard to appreciate” in the abstract, Ward said. And Iancu is making his mark, at least for now.
“We’re seeing so many cases in a relatively short period of time being designated as precedential,” Ward said. “But only time will tell as to what level of consistency and transparency it will bring about.”
While hopeful about the changes, practitioners raised concerns about the director’s ability to change POP members.
“Depending on how they exercise that delegation authority, from director to director, that’s going to introduce some variability,” Bodner said.
Another concern: who eventually succeeds Iancu.
“Like any consolidation of executive power, it makes the choice of director of the agency even more impactful,” Noroozi said. “While parties may face less risk as to inconsistent or different decisions between panels at the PTAB, we don’t know to what degree a future director will abide by and hold the sorts of precedents set by a previous director.”