Patent Lawyers Conflicted Over Agency Head’s Growing Review Role

Several attorneys who practice before the US Patent and Trademark Office conveyed measured optimism, while others expressed concerns, after the agency announced Director Kathi Vidal would take on an expanded role overseeing patent validity disputes.

Since 2021, following the US Supreme Court’s decision in US v. Arthrex, the director has had the clear authority to review final written decisions issued by the Patent Trial and Appeal Board.

But starting this week, Vidal announced, patent owners and challengers have the right to seek director review of threshold PTAB decisions on whether to institute proceedings in the first place, including of “inter partes” reviews often sought by companies after getting sued in district court for patent infringement.

“With these changes, we are enhancing and streamlining the Director Review and related processes, thereby making our procedures more efficient and effective for America’s innovators,” Vidal said in a July 24 news release. “Director Review has been an important way for parties to request another look at certain PTAB decisions with which they may disagree, and I’m excited to expand and refine that process based on feedback we received from our stakeholders.”

The expanded director review process comes as the agency retires its precedential opinion panel, a group made up of senior PTO officials and formed in 2018 while Andrei Iancu served as director. The POP was designed to address thorny legal issues and create more consistency across PTAB proceedings.

Attorneys React

The news received a range of reviews from practitioners.

Traditionally,"if you’re a petitioner and your petition is denied” at the institution stage, “your only real recourse is to ask for rehearing by the PTAB panel, and the chances of the same panel reversing themselves has historically been very, very low” said Michael Rosato who leads Wilson Sonsini Goodrich & Rosati’s PTAB practice.

“It’s not like every panel is perfect and gets every case right, and of course no one expects that,” Rosato said, but there’s “comfort” if you can “ask for a new set of eyes and have another decision maker looking at it.”

Alison Aubrey Richards, a partner at Global IP Law Group LLC, said that, generally, having “more opportunities for rehearing and appeal lead to more fairness.”

However, she cautioned that PTO directors are political appointees and the agency’s “actions have varied an enormous amount depending on who the USPTO Director is.”

The agency noted in its announcement that Vidal and future directors would have the option to delegate IPR review decisions to “a new independent panel called the Delegated Rehearing Panel.” Separately, the agency announced a new Appeals Review Panel that can be convened by the director to hear appeals of PTAB ex parte, reexamination, or reissue decisions.

Richards said the use of these new panels “will be important to avoid the perception that PTAB outcomes depend on only one person.”

Joe Matal, a former PTO acting director and now a partner at Haynes and Boone LLP, said the change is effectively codifying existing practice, as Vidal has in some instances reviewed institution decisions independently and without any formal request in the past.

“This kind of cleans up the lines of authority,” he said, since “de facto we’ve had review of institution decisions.”

What’s Next

Under the new process, a litigant who asks for director review has to forgo seeking rehearing by the panel of PTAB judges assigned to a particular petition or IPR.

In the past, Rosato said, a party contesting certain board decisions could do both—which he compared to trying to convince your sibling to stop some form of bad behavior while also telling on them to a parent.

He predicted that “the decision of whether to seek director review will become a more thoughtful and informed one” under the new procedures.

The changes are likely not going to be the final word on director review.

The agency has indicated it will seek input from practitioners on its new processes, which have been designated “interim,” according to its news release.

“The USPTO will engage in a public notice and comment rulemaking process on these interim updates in the near future to allow stakeholders to weigh in on the changes.”