Guest Post: Challenging PTO Institution Policies (If Not Institution Decisions)

endrunThe following is a guest post by Oliver Richards (Fish & Richardson).  Mr. Richards is a NYU Law alum and a former clerk for Judge Dyk on the Federal Circuit. 

After several rounds at the Federal Circuit and a trip to the Supreme Court, the law surrounding what aspects of the PTAB’s decision to institute on a petition for inter partes review are reviewable remains unclear. In light of the Federal Circuit’s decision to again revisit this issue in the grant of a petition for rehearing en banc in Wi-Fi One, LLC v. Broadcom Corporation (No. 2015-1944, -1945, -1946), I wanted to share a few thoughts on what, exactly, should be reviewable under 35 USC 314(d).   I believe that the yes/no decision of the PTAB as applied to any particular petition should be unreviewable.  However, in my view, review of PTAB regulations should be available either through appeal from the PTAB, or (preferably) through an APA challenge in district court. [1]  The distinction between review of specific PTAB institution decisions and general review of PTAB regulations and policies, I believe, makes sense for at least three reasons:

First, this distinction comports with the language of the statute.  314(d) prohibits judicial review of “[t]he determination . . . whether to institute an inter partes review.”  The statute should be read to mean what it says.  A review of “the” decision to institute in any case is not allowed.  General review of any agency regulation is not review of “the determination . . . whether to institute” even if the result of that review overturns the decision in any particular case.

In McNary v. Hatian Refugee Ctr. Inc.498 US 479 (1991) the Supreme Court drew a similar distinction relating to reviewability of “special agricultural worker” (“SAW”) eligibility decisions of immigration officials under the provisions of the Immigration Reform and Control Act of 1986.  In McNary, the Supreme Court was asked whether 8 U.S.C. § 1160(e)—which prohibits “administrative or judicial review of a determination respecting an application for adjustment of status”—deprived a district court of jurisdiction over a suit challenging agency policies and procedures.

The Supreme Court allowed the challenge.  According to the Court, “[t]he critical words in § 210(e)(1) … describe the provision as referring only to review ‘of a determination respecting an application’ for SAW status. Significantly, the statutory reference to “a determination” describes a single act rather than a group of decisions or a practice or procedure employed in making decisions.”  McNary, 498 U.S. at 491–92.  Thus the language prohibiting review indeed prohibited “direct review of individual” determinations but did not prohibit “general collateral challenges to unconstitutional practices and policies used by the agency in processing applications.”    “[H]ad Congress intended the limited review provisions of § 210(e) of the INA to encompass challenges to INS procedures and practices, it could easily have used broader statutory language” such as by prohibiting “all causes arising under any of the provisions” of the immigration program as it had done in other places.  Id. at 494. [2]

In my view, the patent law’s statutory language – “The determination . . . whether to institute” similarly indicates that § 314(d) was intended to apply to only individual determinations, not to prohibit any and all review of PTO procedures and policies relating to institution.

Second, the distinction strikes a fair balance between making sure the PTAB is complying with its statutory mandate and maintaining the efficiency of the IPR system.  Perhaps wary of a flood of appeals clogging the courts and the corresponding slow down in IPR determinations, Congress choose efficiency in section 314(d) by prohibiting an appeal relating to every single IPR institution decision.  On the other hand, allowing parties to turn to courts to check potentially problematic regulations or practices by the PTAB is an important check on that body’s power.  Seee.g.Unwired Planet, LLC v. Google Inc., 841 F.3d 1376, 1382 (Fed. Cir. 2016) (concluding that the PTAB’s definition of a “covered business method patent” exceeded the statute.”)[3]   Prohibiting challenges to each and every institution decision but allowing general challenges provides for efficient review of PTAB regulations, policies, and procedures without slowing down the whole IPR system.

Third, the distinction is consistent with most Federal Circuit decisions on the topic.  Although the distinction I suggest was not provided as the reasoning, the CAFC has notably found many PTAB regulations/policies relating to institution reviewable.  See, e.g.Ethicon Endo-Surgery, Inc. v. Covidien LP, 812 F.3d 1023 (Fed. Cir. 2016) (hearing a challenge to 37 C.F.R. § 42.4 – “Institution of trial.  The Board institutes the trial on behalf of the Director”); Synopsys, Inc. v. Mentor Graphics Corp., 814 F.3d 1309 (Fed. Cir. 2016) (hearing a challenge to 37 C.F.R. § 42.108, titled “Institution of inter partes review”).  The cases where the Federal Circuit has found issues not to be reviewable are typically cast in case-specific ways.  Seee.g. Achates Reference Publ’g, Inc. v. Apple Inc., 803 F.3d 652 (Fed. Cir. 2015) (reviewing “whether Apple’s petition was time barred”); Cuozzo, 793 F.3d at 1272 (“Cuozzo argues that the PTO improperly instituted IPR on claims 10 and 14 because the PTO relied on prior art that Garmin did not identify in its petition as grounds for IPR as to those two claims.”)

Any resolution of the reviewability issue must comply with the statute, must put teeth to Congress’s embrace of efficiency, and at the same time must make sure that the rights of patent holders are adequately protected.  The approach I have outlined above, in my view, adequately balances efficiency with appropriate supervision of the PTAB.   I’m curious to see what you all think, and I look forward to reading the comments.

Note: The views views expressed here are solely my own and do not necessarily reflect the views of my firm or any clients.


[1] The CAFC left open the question of whether the APA allowed for challenges to PTAB regulations in district court in Synopsys, Inc. v. Lee, 812 F.3d 1076 (Fed. Cir. 2016).   From a practical standpoint, an APA challenge in a district court would seem to be a better option–the parties will have an opportunity to develop a fuller record removed from the facts of any particular IPR, and a district court may well provide a better first look than than the agency that promulgated the challenged regulation.

[2] NcNary follows other Supreme Court decisions distinguishing between specific challenges to a particular determination and general challenges to regulations.  See Bowen v. Michigan Acad. of Family Physicians, 476 U.S. 667, 675 (1986).

[3] For individual determinations where the PTAB clearly exceeds its statutory authority, mandamus remains available.  See, e.g.In re Cuozzo Speed Techs., LLC, 793 F.3d 1268, 1274 (Fed. Cir. 2015),  aff’d sub nom. Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131 (2016).


49 thoughts on “Guest Post: Challenging PTO Institution Policies (If Not Institution Decisions)

  1. 11

    Well, thanks for your analysis Oliver. But to me, this is like demanding a rule that a last cigarette and blind fold be offered in the name of process. This quote jumped out at me: Ethicon Endo-Surgery, Inc. v. Covidien LP, 812 F.3d 1023 (Fed. Cir. 2016) (hearing a challenge to 37 C.F.R. § 42.4 – “Institution of trial. The Board institutes the trial on behalf of the Director”). OK, so the implementing regulation as read by CAFC says that the “Board” is doing something for the ‘Director’ — instituting trial. But the statute says that the ‘Director’ is the Board.

    35 USC 6, in part,
    (a)In General.—
    There shall be in the Office a Patent Trial and Appeal Board. The Director, the Deputy Director, the Commissioner for Patents, the Commissioner for Trademarks, and the administrative patent judges shall constitute the Patent Trial and Appeal Board. The administrative patent judges shall be persons of competent legal knowledge and scientific ability who are appointed by the Secretary, in consultation with the Director. Any reference in any Federal law, Executive order, rule, regulation, or delegation of authority, or any document of or pertaining to the Board of Patent Appeals and Interferences is deemed to refer to the Patent Trial and Appeal Board.

    Sort of like saying – the judge charges the jury with instructions. But the statute says it’s a bench trial.

    Meh, guess it’s just my pet peeve, that the entire construct of the ‘Board’ on it’s face, specifies it is stacked with political appointees – the unitary Executive – as if the President himself were invaliding patents. To me, all this APJ, administrative procedure, here is when you can get some review of some order, is just ignoring the elephant in the room. The ‘Board’ is a political ‘court’ antithetical to the guarantee of an independent judiciary.

    1. 10.2

      Sorry for the delay, my firm does expect me to bill some hours today. I don’t see a below–perhaps it was moderated? Can you give me the gist of what it said?


          No problem. It seems to me that that your question is delving into metaphysics :). If the director decides to institute, but doesn’t ever look at the petition, is that really a decision? If a tree falls in a forest….

          I personally don’t find the argument to be that persuasive, as even a hasty or automatic decision is still a decision. For example, if my significant other asks me whether I want to go to dinner on X night, even though I’m always going to say yes because I know what’s best for me, I am still “deciding” to go.

  2. 9

    As a practical matter, if the USPTO determines that a “reasonable likelihood” is established then that “determination” is not final vis-a-as the patent’s validity has not been declared invalid or valid by the USPTO and as such is not (should not be ) reviewable – it is interlocutory. Similarly, if the USPTO determines that there is no “reasonable likelihood” then having that determination not reviewable is not a bad thing. It is like a request for reexamination being denied. It that reviewable? Of course the validity of the patent can always be challenged in a district court by, inter alia, a dj action. Just my 2 cents. Steve

    1. 9.1

      And, since any decision to not institute cannot be appeal, they can be denied for any reason.

      Just say no.

  3. 8

    Just so we can be all caught up here: what Oliver is saying isn’t exactly new. We spent quite a few threads here over the years discussing the fact that there is due process coming out the ears for patentees in the IPR system, all of their incessant whining notwithstanding.

    As has been the case for many years, applicants and patentees remain the favorite children of the system, at least as administered by the PTO. Almost every applicant gets a patent out of the PTO eventually, no matter how worthless or invalid or ineligible the subject matter. The public is forced to pay the cost of cleaning up the PTO’s mess.

    The entire point of IPRs is to lower that cost, particularly when every reasonable person knows (and is unafraid to admit) that — thanks largely to Kappos but also thanks to Director Lee’s active helping hand in undermining 101 — the sea of junk out there is vast and deep.

    Assuming that there is an actual patent-worthy invention that was described in plain English in the application, Applicants have pretty much 100% control of over the validity and eligibility of the resulting claims. The biggest whining is over the lack of breadth that Applicants can obtain beyond the thing that is, in fact, inventive, or beyond the thing that is, in fact, being marketed. This whining usually boils down to a complaint over having to compete with others in the same area of endeavor. It’s evidently not enough to protect the cool thing you made and want to sell. You have to own the world or else … why bother? You need a house to live in and three investment properties and an underground bunker filled with ammo and ten years of food. Everyone else is a lazy l o ser copyist.

    1. 8.1

      Adding: challenging a patent in an IPR is still incredibly bankruptingly expensive for the average business owner.

      Don’t forget it.

  4. 7

    “the law surrounding what aspects of the PTAB’s decision to institute on a petition for inter partes review remains unclear”

    This sentence remains unclear!

    1. 7.1

      Oops! Sorry–should read “the law surrounding what aspects of the PTAB’s decision to institute on a petition for inter partes review *are reviewable* remains unclear.

  5. 6

    As we all know, IPRs have a lower standard of proof and use BRI that are not found in law courts. Thus tweaking IPRs around the edges will never solve the basic problem of the damage they do to the patent system.

    Everybody that actually favors a patent system needs to understand that the validity of an issued patent has to be founded on somewhat certain grounds for the patent system to work. Thus IPRs have to be ended.

    To the extent that the patent office continues to issue patents that read on the prior art, contain indefinite claims or cover subject matter that is clearly not eligible for patenting, that is a job best corrected at the front end. But poor performance by the patent office should not be the basis for wrecking the patent system by undermining the reliability of patents generally.

    Pharma, recognizing that IPRs lowered the standard of proof and use BRI, are desperately trying to get a legislative carve out. They seem to understand that IPRs are intolerable to any business that needs to rely upon patents to succeed. The actions of Pharma tell one everything they need to know about whether IPRs good for the patent system.

    1. 6.1

      Once again, Ned, you quibble at the edges without embracing exactly why such quibbling really is meaningful (hint: sticks in the bundle of property rights).

      If you do not think (or grasp) that sticks in the bundle of property rights are taken at the initiation decision point, then you have no right to quibble about what happens immediately after that decision point AND that taking.

      1. 6.1.1

        anon, AFAIK, very few people even understand what you are talking about, and to the extent they think they understand, they disagree, I would suggest that it behooves you to better articulate your theories on this topic.


          The problem is not my articulation, Ned, but is captured by the “AFAIK” part of your post.

          If you are ready (and willing, this time), I can lead you through the steps.

          Step one: understanding what the property law maxim of “sticks in a bundle” means.

          Do you understand what this maxim means?


              You try too hard with “connection to letters patent.”

              Do you understand the concept straight away?

    2. 6.2

      In this regard — cleaning up indefinite claims, I would offer two small amendments to 112: amending clause “b” to the effect that it overrides clause “f” (means plus function) and that clause “f” be limited to old and well known structure, materials or acts.

      This would in effect overrule In re Donaldson and require that the claim itself particularly point out the invention as opposed to being simply a cross reference to novel structure, materials or acts described in the specification.

  6. 5

    Thanks for this interesting essay Oliver.

    Your framework will become even more powerful if the Senate pushes through the Regulatory Accountability Act of 2017. The Bill has already passed the House and is awaiting Senate. The bill would require de novo review of all PTO rulemaking and statutory interpretations.

  7. 4

    Seems generally wise to not stake separate law (administrative or otherwise) for patents wherever it’s practical to coordinate general doctrine and procedure.

    However, when one attempts to correct a distorted system it’s easy to fall into a pattern of increasing distortion that can become very attenuated from the initial misalignment. Because the PTAB can only look at obviousness, both the decision to institute and the result of trial may not properly locate a purported invention.

    To me, it would be smarter if the common route to an IPR would be during a litigation; if/when questions of obviousness arise, the case would be stayed, the IPR conducted, and the case resumed with the results in hand. As it is, motion after motion deals with IPR’s already started, or waiting for determination, or actually completed, and naturally the thought of any unreviewable body is obnoxious to justice.

    Having two systems of justice on the single question of obviousness does not seem like “efficiency”, but then again, black is white and freedom is slavery in this world….

  8. 3

    There is a slight circularity that needs to be addressed.

    In order to be IN court in order to challenge policy, one needs a present case or controversy. In order to have that present case or controversy, one must need to be challenging the actual institution decision.

    You cannot get to the “just challenge policy” location without that first step of NOT “just challenge policy”

    1. 3.1


      Note 314(a) stipulates: “The Director may not authorize an inter partes review to be instituted unless the Director determines that the information presented in the petition filed under section 311 and any response filed under section 313 shows that there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition”

      What if the policy (as found in an explicit memo) were to “always institute an inter parties review 314 (a) notwithstanding”. If such was policy, and the “determination” to institute so “delegated” by the Director, and duly obeyed by the delegate(s), would each “determination” (which is clearly outside of the statute) really be unreviewable?

      Does statutory interpretation admit the possibility that Congress would have written a law directed specifically to limit the Director’s determination while at the same time implicitly permitting the law to be ignored by the Director as regards that determination because it is final and unappealable?

      1. 3.1.1

        Anon2, thanks for the comment.

        Two things. First, no, I don’t think the Director ought to be able to just ignore the enabling statute. In the hypothetical you described above, I do believe there should be judicial review of the “policy,” but not necessarily the application of that policy in any particular case. We are left with the statute Congress wrote, and, in my view, that statute seems pretty clear that individual determinations are “final and non-appealable.” However, I do agree that it is important for there to be judicial review of policies and procedures that affect many cases.


          My hypothetical is not a good one…

          314(a) defines what constitutes the “determination” by the Director and what it is required by the director to make that determination.

          314(c) reiterates the “Director’s determination under subsection (a)”

          As such, 314(d) likely only applies to a determination “under subsection (a)”, that is when a Director “determines” information presented “shows” something.

          In my hypothetical, no such determination was made, the Director did not determine anything from the presented information let alone that it shows anything.

          In my hypothetical, review might be had on the basis that the Director simply made no determination under 314(a) (which would be unreviewable).

          i.e. what is being reviewed is the unlawful non-determination by the Director in instituting inter partes review.

          Sorry for the bad hypo…


            As such, 314(d) likely only applies to a determination “under subsection (a)”, that is when a Director “determines” information presented “shows” something.

            Trying too hard.

            That is not what 314(d) says on its face.

            Congress could have written that section as you appear to desire.

            They did not.


              Ack… for Pete’s sake… you are right there ARE two determinations.

              The one under 314(a) (determines information presented shows something) and the one under 314(b) (determine whether to institute)… 314(d) clearly refers to the one in 314(b), not the one of 314(a).

              If 314(d) only says that the determination of 314(b) is nonappealable, how does that affect the appealability of a fact situation where a Director contravenes 314(a)? 314(a) prohibits “authorization” “unless” the other determination re. information presented shows something?

              One determination (was wholly avoided) another was made. The one made is unappealable, the one avoided is a requirement on the Director which has been violated… why can’t that be reviewed?


                why can’t that be reviewed?

                How do you want to go about doing that, while still heeding the direct (and unambiguous) words of Congress?

    2. 3.2

      Anon, thanks for your comment.

      I agree that not just any company would be able to challenge a regulation in an APA action–there certainly has to be a case or controversy. But I don’t think this is quite as much of a hurdle as you seem to think.

      5 U.S.C. § 702 states that “[a] person suffering a legal wrong because of agency action, or adversely affected or aggrieved by agency action . . . is entitled to judicial review thereof.” N.B. It is well-settled that the promulgation and publication of a final regulation after formal notice and comment is “final” agency action. See Toilet Goods Ass’n v. Gardner, 387 U.S. 158, 162 (1967).

      Here, there are many repeat players–both on the petitioner and patent owner side. In my view, any of these repeat players who can make a plausible showing that a regulation affects them in some negative way would have standing to challenge the promulgation of that regulation.

      1. 3.2.1

        Still circular, as de facto you must resolve to the very item for which no appeal (on the plain face of the words of Congress) is allowed.


          Perhaps I’m not understanding your point? I’m not sure what you mean by “must resolve to the very item . . .”

          If you mean that collateral challenge would simply collapse into an analysis of whether institution was proper for a particular IPR, I disagree. I think that a “facial” challenge–such as an argument that a particular regulation is in conflict with statute–need not delve into the specifics of any particular petition. General challenges to the promulgation of regulations are commonly brought in non-IP areas, and I don’t see why that can’t also be the case here.


            How do you get into court without the underlying case or controversy which IS the item that cannot let you be in (appeals) court?


              Would not a “blind” general challenge be a part of the USPTO rules promulgation apparatus? (e.g., notice and comment)…? Also, would this path – as the good professor notes on the more recent thread) be changing?


              “anon”: How do you get into court without the underlying case or controversy

              He’s not suggesting that there isn’t an “underlying controversy.” He explained that in crystal clear English.

              Try to remember, “anon”: almost all of the time you’re the least intelligent and least articulate person in the room here. If there’s a difficulty, there’s a 99% chance it’s a “you” problem.


                You jump too quickly, Malcolm, since there is no case or controversy except that which to get into court with (as you seem to grasp), then the circularity comes home to roost – exactly as I pointed out.

                Somehow you would need to not have the very element that Congress (plainly) stated was not appealable in order to get to the appeal stage (of the very thing that is not appealable).

                Try to keep up, son.


            I’m not understanding your point

            Join the club, Oliver. There’s more than two thousand members already and it’s growing steadily.

  9. 2

    Been giving this a lot of thought. We could challenge a few things around the edges. For instance the Director delegating institution to the same panel doing the review.

    However tinkering around the edges won’t resuscitate the U.S. patent system. The statute is clear that the PTAB can institute on previously considered prior art (no Significant New Question required). The S.C. affirmed BRI in Cuozzo so it is the same prior art and the same claim construction. As a result every patent ever issued is at risk of a panel finding a motivation to combine where the examiner did not. This is a completely subjective judgment call. And it is killing patents nearly daily. Wish there were a basis to challenge these fatal problems under the APA, but I am not seeing it.

    1. 2.1

      Re: subjectiveness of determining obviousness

      As an Examiner, this is very true. Broadly speaking, about 20% of cases I pick up have clearly allowable subject matter, about 20% have no chance of getting a patent, leaving about 60% somewhere in the middle. My job is to weigh the evidence (prior art, mostly) and make the call one way or the other.

      Which is to say, in my view, over half of the allowed patents might not have been allowed if reviewed by a different Examiner.

      So yes, I can see the legitimate concern of patent owners that their granted patent might be subject to cancellation.

      1. 2.1.1

        Thanks exer, hence the importance of the presumption of validity and exactly why the taking at the initiation decision point of that particular stick in the bundle of property rights (a taking mind you, with ZERO recompense and with no [normal, non-circular] chance of review – of that initiation decision) draws into question the higher Constitutional issue.

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