Scope of AIA-Trial Director Review

by Dennis Crouch

New USPTO Director Kathi Vidal is working through the details of how to run the AIA-Trial Director Review program.  For now, she has promised transparency as the interim process is developed and is seeking public input.

Once an IPR is instituted, the statute calls for the PTAB to issue a written decision on whether to cancel the challenged claims.  That decision is then immediately appealable by the losing party, at least according to the statute.  In Arthrex, the Supreme Court held that PTAB judges are not proper principal Officers of the United States and therefore do not have authority to speak for the US on important matters such as cancelling private property rights.  The Supreme Court then offered a non-statutory solution of inserting a director-review process following the PTAB decision prior to appeal. The result then is that the decision will be given the imprimatur of the Director who is a Principal Officer since she was appointed by the President and Confirmed by the Senate.

As I mentioned, the new Director Review was created by the Supreme Court on the fly without setting any clear bounds for its procedure or Director reasoning.  Questions:

  • To what extent can the Director take into account outside lobbying or outside evidence? Lets say, for instance, that the Director reads NYTimes editorials.
  • To what extent can the Director base her decision on issues apart from those listed in the IPR statute (e.g,. novelty and obviousness). For instance, is it permissible for the Director to consider US global competitiveness and impact on the marketplace?
  • To what extent must the Director personally conduct and decide the reviews rather than delegate that responsibility.

Dir. Vidal is committed to make this an open process and the PTO will likely issue a Request for Comments in the coming weeks.

More from the PTO here.

27 thoughts on “Scope of AIA-Trial Director Review

  1. 4

    According to the USPTO page linked in the article, the interim process provides that for Director-level review, “all issues of law or fact are reviewed de novo.” This is a big departure from standard APJ panel rehearing which limits review to “abuse of discretion,” a deferential standard that explains in part why a large majority of panel rehearing requests are denied (and why losing parties often don’t bother with rehearing and go straight to appeal).

    I previously thought that the right to request rehearing before the Director would end up being a nothingburger, that most losing parties would just skip to expedite their appeal, but that was based on my assumption that a more deferential standard would apply. But “de novo” means the Director gives zero deference to the APJs’ Final Written Decision, even in its resolution of factual disputes, which is something you wouldn’t get from a direct appeal to the Federal Circuit. This could result in a significantly higher number of Director-level review petitions being filed.

    1. 4.1

      “‘all issues of law or fact are reviewed de novo.’ This could result in a significantly higher number of Director-level review petitions being filed.”

      Great point.

      There’s going to have to be a 2nd Director just to handle the forthcoming tidal wave of Director Reviews . . .

      Indeed, given the materially different standards, would NOT recommending that a losing client request a Director Review . . . border on malpractice?

      SCOTUS knows not what they have wrought.

    2. 4.3

      According to the USPTO page linked in the article, the interim process provides that for Director-level review, “all issues of law or fact are reviewed de novo.”

      It is easy to say “reviewed de novo,” but harder to do. I guess we will need to see whether—in actual practice—Director review results in more reversals than are achieved with appeal to the CAFC.

      If so, then I expect that you are correct that the Director will be flooded with requests for review. If, on the other hand, the Director consistently upholds the PTAB on review, then there will probably not be much enthusiasm for this route of review.

      1. 4.3.1

        Not sure why Greg thinks “harder to do,” but it is even more odd that he jumps to the odd conclusion of how people will react based purely on some projected trend of decision (untethered to the legal point offered).

        This seems to be a rather rude dismissal of the point of distinction being offered for consideration.

  2. 3

    A Director Review Program . . . on top of PTAB trials . . . on top of District Court cases . . . on top of CAFC PTAB and Dist. Ct. appeals . . . on top of SCOTUS petitions . . .

    Enough already. Enough.

    With all the other critically-important IP matters to address and attend to . . . on top of all the other many necessary duties of heading up an organization with more than 12,000 employees — the Director — any Director — should not be expected to have the adjudication of PTAB cases piled on top of her already-overflowing plate.

    In addition to being unfair and unreasonable to the Director, this is a gross disservice to the Patent Office, it’s hard-working employees, and to innovation; especially American innovation.

    Since the decisions of PTAB “judges” are unconstitutional, the only solution — despite SCOTUS’ shameful refusal to do what they knew THEY should have done — is to abolish the PTAB.

    The only solution.

    1. 3.1

      Once the PTAB is abolished, what happens to all of the applicants with ex parte appeals pending? Do they get shunted back to prosecution in front of the examiner again?

      1. 3.1.1

        Greg, I am of course referring to PTAB (IPR & PGR) trials. Not ex parte appeals. Those can — and indeed must — continue.


          There is only one PTAB, and the same constitutional defect that taints the PTAB when it conducts IPRs taints it when it conducts ex parte appeals. In re Boloro Global Ltd., 963 F.3d 1380, 1381 (Fed. Cir. 2020). You cannot get rid of the one but not the other. If you mean to abolish the PTAB, you need to figure out what you plan to do with the ex parte appeals and the interferences.

          Indeed, the PTAB decides orders of magnitude more ex parte appeals each year than it decides IPRs. The net effect of abolishing the PTAB will be much more to throw a wrench into ex parte prosecution than to disrupt post-grant challenges.


            Interesting Greg. Assuming you’re correct, do you see a way to protect the Director from having to devote the majority of her time on IPR / PGR / ex parte reviews?


              The best solution is to go back to the way that the board was appointed before the 1970s, where the president directly appoints APJs. Then the inferior officer problem goes away, and review by the director is no longer a necessary stop-gap. I realize that APJs seem (in the grand scheme of government) rather small-fry to require direct presidential oversight, but the Constitution does say what the SCOTUS takes it to say in Arthrex, so the proprieties must be observed.

              Meanwhile, it remains to be seen whether requests for reconsideration really will be much of a burden for the Director. As LR notes above, requests for panel reconsideration are not all that common presently. If requests for reconsideration by the Director become common, then the burden on her to address these requests will be something that must be addressed. If, on the other hand, such requests turn out to be no more common than are requests at present for panel reconsideration, then I am not sure that the “burden” of addressing such requests will merit consideration. In other words, this remains to be seen.


            ?? I thought the problem was that PTAB was doing both types i.e., it would be different if it *only* did ex parte appeals in prosecution.


              The problem in Arthrex was not that the board was revoking granted patents. The problem was that the PTAB was making decisions on behalf of the United States, but was not directly answerable to the president or a political appointee. That is a problem even if the PTAB only decides ex parte appeals*. Those decisions are still decisions on behalf of the United States.

              * Not that the PTAB or the BPAI ever decided only ex parte appeals. It has always been the case that the PTAB and its predecessor institutions have had the ability to revoke granted patents (i.e., interferences).


                Part of the difference though could be in the portion of the AIA that removed the path to the Article III courts for any such actions in the Executive Branch Administrative Agency, eh?

                1. The Arthrex decision clearly indicates that Article III reviews did not cure the Constitutional executive power restriction problem of junior officer [APJ] decisions being made by statute unreviewable by reconsideration by their executive branch Senior Officer, and struck down just THAT statutory provision to fix the problem.
                  Also, re arguments about Arthrex re PTAB ex parte decisions, see also the last sentence below from Arthrex: “In sum, we hold that 35 U. S. C. §6(c) is unenforceable as applied to the Director insofar as it prevents the Director from reviewing the decisions of the PTAB on his own. The Director may engage in such review and reach his own decision. … We add that this suit concerns only the Director’s ability to supervise APJs in adjudicating petitions for inter partes review. We do not address the Director’s supervision over other types of adjudications conducted by the PTAB, such as the examination process for which the Director has claimed unilateral authority to issue a patent.”


              The starting point for each party’s analysis is our opinion in Edmond. There we explained that “[w]hether one is an `inferior’ officer depends on whether he has a superior” other than the President. 520 U.S., at 662, 117 S.Ct. 1573. An inferior officer must be “directed and supervised at some level by others who were appointed by Presidential nomination with the advice and consent of the Senate.” Id., at 663, 117 S.Ct. 1573.

              In Edmond, we applied this test to adjudicative officials within the Executive Branch—specifically, Coast Guard Court of Criminal Appeals judges appointed by the Secretary of Transportation. See id., at 658, 117 S.Ct. 1573. We held that the judges were inferior officers because they were effectively supervised by a combination of Presidentially nominated and Senate confirmed officers in the Executive Branch: first, the Judge Advocate General, who “exercise[d] administrative oversight over the Court of Criminal Appeals” by prescribing rules of procedure and formulating policies for court-martial cases, and could also “remove a Court of Criminal Appeals judge from his judicial assignment without cause”; and second, the Court of Appeals for the Armed Forces, an executive tribunal that could review the judges’ decisions under a de novo standard for legal issues and a deferential standard for factual issues. Id., at 664-665, 117 S.Ct. 1573. “What is significant,” we concluded, “is that the judges of the Court of Criminal Appeals have no power to render a final decision on behalf of the United States unless permitted to do so by other Executive officers.” Id., at 665, 117 S.Ct. 1573.

              Congress structured the PTAB differently, providing only half of the “divided” supervision to which judges of the Court of Criminal Appeals were subject.

              United States v. Arthrex, Inc., 141 S. Ct. 1970, 1980 (2021)


            Patently false. An ex parte appeal involves no vested property right and is apealable de novo to a real judge and jury.


              Fine, but neither of those points are constitutional defects in the IPR context.

  3. 2

    Perhaps a nit re “The Supreme Court then offered a non-statutory solution of inserting a director-review process following the PTAB decision prior to appeal.” Was it not the Supreme Court fixing [or waffling] the “appointments clause” issue by holding unconstitutional in Arthrex the patent statute provision preventing PTAB decision reconsideration requests to anyone but the PTAB, and the PTO in response setting up an alternative path for such reconsideration requests to the Director?

    1. 2.1

      BTW, re questions 2 and 3 [re the Director finding and considering newly noted prior art, unexpected consequences, or bad PTO PR, re a PTAB decision], the Director also has 35 USC 304 authority to self-initiate a reexamination of any issued patent [irrespective of any PTAB decision] .

      1. 1.1.1

        As a point within the link, it is discussed (and noted in contradistinction to the part of your post that I quoted), that the incoming (duly confirmed) Director may NOT merely “provide her imprimatur” to the work of the “performing-the-duties-and-not-even-bothering-with-adding-“Acting”-in-title predecessor.

        Hence, the provided disdain.

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