by Dennis Crouch
In a 10-1 decision, the Federal Circuit has rejected Ethicon’s petition for en banc rehearing on the question of whether the USPTO Director improperly delegated IPR institution decisionmaking. Ethicon will likely petition the Supreme Court for its views. The case raises interesting, but ones that I expect will ultimately fail. Chief Judge Prost likely held the decision release to await the Cuozzo affirmance that implicitly supports the court’s ruling here.
- En Banc Denial Decision: Ethicon Endo-Surgery, Inc. v. Covidien, LP (Fed. Cir. 2016) (en banc denial).
- Original Federal Circuit Decision: Ethicon Endo-Surgery, Inc. v. Covidien, LP (Fed. Cir. 2016).
- Patently-O Discussion: Dennis Crouch, What Powers Can the Director Delegate to the Patent Trial & Appeal Board?, Patently-O (February 8, 2016).
- Patently-O Discussion: Dennis Crouch, Due Process and Separating Powers Within an Agency, Patently-O (January 13, 2016).
Inter Partes Reviews (IPRs) can be broken down into a two step process. At the institution stage, the Patent Office Director is tasked with determining whether to institute the proceeding. 35 U.S.C. § 314. Once instituted, the Patent Trial and Appeal Board (PTAB) holds trial and makes a final determination of merits. 35 U.S.C. § 316(c). Despite the statutory separation, the Director has delegated the entire procedure to the PTAB – including the institution decision. In its failed petition, Ethicon questioned this delegation – asking: “Does the Patent Act permit the [PTAB] to make inter partes review institution decisions?”
The decision in Cuozzo does not directly address the challenge issues here, but the court’s loose language does suggest that it would side with the Federal Circuit. In particular, the court repeatedly refers to actions by the “Patent Office” regarding institution and other decision rather than using the statutory language “Director.” Although not as consistent, the court also repeatedly refers to actions by the PTAB as by the “Patent Office.” In his dissent, Judge Alito addresses the issue directly and without criticism, although failing to note that Director Lee is a woman:
The Director of the Patent Office has delegated his authority to institute inter partes review to the Patent Trial and Appeal Board (Board), which also conducts and decides the inter partes review. See 37 CFR §§42.4(a), 42.108 (2015); 35 U. S. C. §§316(c), 318(a). I therefore use the term “Patent Office” to refer to the Director, the Board, and the Patent Office generally, as the case may be.
Alito dissent at footnote 2.