A new federal watchdog study has re-upped long-simmering questions about the independence of judges at the Patent Trial and Appeal Board, amplifying calls to prevent politics from influencing internal judicial decisions at the board.
The Government Accountability Office’s preliminary findings, issued late last week, show that 75% of 234 surveyed judges believe that oversight by politically appointed leadership at the US Patent and Trademark Office has cramped their decision-making autonomy. The majority also said they felt pressure to “change or modify” aspects of decisions when dealing with certain patent validity challenges under the America Invents Act.
Those dynamics had been an open secret in the intellectual property world for years, and the report solidified what otherwise could have been dismissed as rumor, said Joseph Matal, a former PTO acting director and acting solicitor who is currently a partner at Haynes and Boone LLP.
“The report is still a bit of a shock as to how widespread it was,” he said.
It comes amid renewed legislative and regulatory efforts to reform the patent board reform and boost transparency. This includes patent office plans to gather public comments and hold a “boardside chat” on Aug. 11 to address various agency processes, including “internal circulation and review of” PTAB decisions.
The study points out room for improvement, said Emil Ali, a McCabe & Ali LLP partner who specializes in professional conduct standards.
“The PTAB system at the USPTO serves a very crucial purpose in speeding up the process of patent disputes,” he said. “However, beyond the speed issue, we have issues with making sure it’s fair and equitable to the parties.”
Much of the internal agency review that sparked transparency concerns was driven by the America Invents Act Review Committee, or ARC, a group of volunteer patent judges who reviewed AIA draft decisions before publication, said Scott McKeown, who leads Ropes & Gray LLP’s PTAB group.
The report also mentioned pre-publication decision reviews by PTAB management as a “key source of pressure.” Both types of reviews were phased out or tweaked in favor of a different quality control process in May.
McKeown said the report appears to be casting aspersions on an imperfect system that was still directed at a worthy goal.
“In order to have a coherent voice there needs to be some mechanism to smooth out those bumps,” he said. “That’s all that was really going on here.”
The report’s findings garnered criticism for the patent office from lawmakers at a July 21 House Judiciary Subcommittee hearing, where Rep.
The report only includes findings through February, two months before President Joe Biden’s pick for PTO director, Kathi Vidal, took the reins at the office. She was sworn in April 13, nearly 15 months after her Trump administration predecessor, Andrei Iancu, departed.
The GAO report reflects past practices, not the current state of PTAB oversight, a patent office spokesperson told Bloomberg Law in a statement. The PTO emphasized that Vidal has “prioritized providing clear guidance” regarding PTAB processes.
Charles Duan, a professor at the American University Washington College of Law and a member of the PTO’s Patent Public Advisory Committee, said that the agency’s actions under Vidal indicate that “transparency is very much on the mind of the patent office right now.”
“That’s something that people have been calling for, for quite a while,” he said.
Ali of McCabe & Ali helped codify the agency’s Rules of Professional Conduct, which apply to attorneys practicing before the board, but not the patent examiners and judges themselves. He suggested the results of the study point to a gap between practitioners and PTAB decision makers and show that the patent-evaluation system “suffers from management and control issues.”
Indeed, the study found that some stakeholders are “generally unaware of the methods PTAB management uses to oversee judges’ decisions.”
Former judges who represent parties before the board suggested that stakeholders are unlikely to “know the extent to which directors or PTAB management has influenced or changed” the outcome of proceedings—mostly at the stage when the PTAB decides whether to institute review of a patent.
It’s a delicate balancing act when PTAB judges have their work reviewed by peers who are tasked with interpreting often opaque laws and regulations for which more than one correct view could exist, said Jessica Silbey, a Boston University School of Law professor.
“This finding based on the survey doesn’t surprise me at all,” she said. “Patent and trademark processes are fundamentally governed by policy decisions.”
Silbey cautioned that “there is a difference between PTAB judges being told to apply a legal rule contrary to its clear application or to benefit a particular stakeholder” and judges “being advised to exercise their discretion by weighing certain factors or values more heavily than others.”
Kenneth Weatherwax, a founding partner at Lowenstein & Weatherwax LLP, emphasized that criticizing PTAB peer reviews as a general concept can be a “double-edged sword.” For example, it could be appropriate for a director to step in when a judge isn’t applying or following established precedent, he said.
Others similarly noted that the oversight structure itself isn’t concerning, but undisclosed interference is.
“The problem arises when the director is going in behind the scenes and changing the outcome of decisions, not on the record,” said Joshua Landau, patent counsel at the Computer & Communications Industry Association.
During the July 21 hearing, lawmakers and witnesses bandied about ideas to make the PTAB more transparent, ranging from creating an independent tribunal where the PTO director could appear as a party to abolishing the tribunal altogether.
Matal, the former acting PTO director, said if anything is clear, it’s that an appetite exists for reforming the patent board.
“There was a pretty broad consensus among all the witnesses and the members that this is wrong,” he said. “The only question is, what solution?”
More immediate potential actions include ensuring that all management communication is on the record, altering agency rules to allow for more transparency, and changing the regulatory structure that governs PTAB judges.
“It seems like something legislative is necessary,” Matal said.
As a top-line takeaway, Landau said it shouldn’t be surprising that the report highlights a need to update PTAB regulations.
“If the founding document had to be amended over time, there’s no reason to think that any other law is immune from the need for amendments,” he said. “What have we learned and what needs changing?”