Ethicon v. Covidien: Delegation of Institution Decisions to the PTAB

Ethicon has filed its expected petition for writ of certiorari challenging the USPTO’s delegation of IPR Institution Decisions to the Patent Trial and Appeal Board.  I wrote about the case earlier:

The newly filed petition argues pure statutory interpretation:

Whether the [AIA] permits the Patent Trial and Appeal Board instead of the Director to make inter partes review institution decisions.

The setup: The statute requires “The Director” to “determine whether to institute.” 35 U.S.C. § 314(b).  Under the statute, the PTAB picks up its role after institution in order to “conduct each inter partes review instituted under this chapter,” § 316(c).  Rather than making the determinations herself, the PTO issued a rule that the PTAB makes the institution decisions “on behalf of the Director.” 37 C.F.R. § 42.4(a).

Although the statute does not expressly prevent the Director from delegating her authority, Ethicon argues that the statute should be interpreted in light of the “longstanding policy of separation-of-functions whereby adjudicatory officers inside an agency (such as administrative law judges or, here, administrative patent judges) are insulated from discretionary executive functions.”  Of course, the Director does not have to personally do all the work – The idea here though is that it is impermissible to delegate policy issues to the administrative patent judges.  And, the AIA is clear that the institution decision is at least partially based upon policy and institutional competency determinations.

Read the Petition: Ethicon Petition for Certiorari 

In the background, patentees see the separation of institution from trial as a mechanism for getting two-bites at the apple.


28 thoughts on “Ethicon v. Covidien: Delegation of Institution Decisions to the PTAB

  1. 5

    One wonders why one would think that expensive and low odds cert efforts like this would actually help any clients? Does anyone seriously think that delegating the decision to institute IPRs to someone else in the PTO would reduce the percentage of IPR institutions?
    If anything, would not the APJs who have to do all the trial and decision work of the IPRs they declare logically have a stronger incentive to not declare them than some other Director delegate?

      1. 5.1.1

        Also, given the aim is to remove patents, your logic does not hold. The “directive” is opposite of the normal human tendency to avoid work.

      1. 5.2.1

        Not really, and why would someone else in the PTO who was hired just to declare IPRs [w/o having to do them] not have an even greater incentive to declare more of them?
        Note that the IPR declaration rate has considerably declined already [I.e., the IPR petition rejection rate increased] under the current IPR workload.


          Paul, having specialized courts that decided patent cases was much discussed in Europe. The primary argument against them was that they would favor patentees because the amount of work they received would depend upon having patent owners file cases in their courts. The Eastern District of Texas is proof that being favorable the patentees draws cases.

          It seems clear to me that the person deciding to institute should not have his job depend upon what he does. I would prefer that the institution decision be made in the first instance by a court of law. But to keep the matter completely fair, whoever is making the decision must either have a permanent job elsewhere in the patent office, or be a neutral party like a judge.



            I have to ask if you were listening when I explained to you the lack of objectivity problem with the USPTO and the fact that that agency’s “judicial” arm is directly under the authority of the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office.

            Were you listening?

            While you are at it, please read post 3.



              anon, I was bit disturbed by the allegation that IPR institutions were political calls, and legitimately so.

              Very disturbed, in fact.


            Ned, you know well that PTO APJs are civil service job protected, and that there is more than enough work for them all in the ex parte application appeals backlog, or elsewhere in the PTO, even if IPRs all went away. They do not need to increase IPRs to protect their jobs, and as noted the percentage of requested IPRs they are rejecting has significantly increased.

  2. 4

    I think they would have more luck trying to just persuade the Director to change the procedure on her (or his after the election) initiative to the system they are wanting. Directors are lawlyers, and they are typically quite willing to bend over backwards to give people procedural protections like this. That being said, I find it very unlikely that the 3rd branch will force the 4th branch into doing this.

    Either appeal directly to the Director in writing, or else try to “settle” the appeal that is currently in play with her and the solicitor’s office by getting them to agree to delegate the power to an entity other than the PTAB people that will decide the case.

    I mean, it seems reasonably to assign someone else other than the PTAB panel the decision to institute. If it seems reasonable to me, then surely a lawlyer like the Directors we have would be open to it.

    1. 4.1

      That being said, I find it very unlikely that the 3rd branch will force the 4th branch into doing this.

      Maybe the 1st branch should have done a better job…

  3. 3

    One – not so small – flaw in the inter-agency separation argument (from admin law) is that any such “separation” may run a spectrum of “separateness” – typically dictated by the charter of that agency.

    I’ve mentioned this previously that the agency that is the Patent Office has severe overlap (and thus a severe “lack of objectivity” problem).

    Heck – the Director can even take a case as the top “APJ” and hand-select any other APJs that he wants to hear the case with him.

    1. 1.1

      Not really – the distribution for conference won’t move anything until at least the Requested response is submitted Oct 11th. Since this request went out on Sept 9, before the distribution for conference, this just appears to be SOP…


          Did you look at the link? Square waived its response – the Court nonetheless ordered it to provide one.

          Seems significant, no?


            As I stated, I merely commented on the timing. So no, I did not see the waived response.

            However, I still don’t think too much of that. I do not think that Cooper’s “answer” is viable (it is certainly outside of the Court’s power to so restructure the work of Congress).


                It is not “contrarian” to make an observation and then clarify when a counter point is raised.

                But thanks.

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