IP Law Daily, PATENT NEWS—USPTO adopts final rule for Director Review of PTAB decisions, (Sep 30, 2024)

By Brian Craig, J.D.

The final rule provides when a party to an AIA proceeding may request review by the USPTO Director.

Following a 2021 U.S. Supreme Court decision and an interim process for Director Review of proceedings under the Leahy-Smith America Invents Act (AIA), the USPTO had adopted a final rule for Director Review of Patent Trial and Appeal Board (PTAB) decisions. The new rule, which takes effect on October 31, 2024, provides that a party to an AIA proceeding may only request Director Review of: (1) a decision on whether to institute an AIA trial, (2) a final decision in an AIA proceeding, (3) a panel decision granting a request for rehearing of a decision on whether to institute a trial or a final decision in an AIA proceeding, or (4) any other decision concluding an AIA proceeding. In addition, the final rule provides that the Director may, on their own initiative, initiate a review of PTAB decisions. The final rule will be published in the Federal Register October 1, 2024, according a USPTO news release.

Background. The AIA at 35 U.S.C. § 6(a) provides that only the PTAB may grant rehearings of its decisions. In United States v. Arthrex, Inc., 594 U.S. 1, 141 S. Ct. 1970 (2021), the U.S. Supreme Court held that the Appointments Clause of the Constitution rendered Section 6(a) of the AIA unenforceable as to the Director to the extent that it prevents the Director from reviewing the decisions on his or her own. In the Court’s view, the supervisory structure of the USPTO requires the Director, a principal officer of the United States, to have the ability to review the PTAB's final written decisions.

On June 29, 2021, in response to Arthrex, the USPTO implemented an interim process for Director Review. On April 16, 2024, the USPTO published proposed rules to provide guidance on the types of issues the agency’s Director will consider in reviews of decisions made by the PTAB in proceedings under the AIA. Following the proposed rule and solicitation of public comments, the USPTO issued the final rule to implement key aspects of the processes used for Director Review.

Comments and responses. The USPTO received a total of 12 comments in response to the proposed rule. Commenters were generally supportive of the proposed rule and agreed that the rule would promote the accuracy, consistency, and integrity of Board decision-making in AIA proceedings. Some commenters suggested expanding the scope of Director Review. The final rule adopted most of the language in the proposed rule, with some minor changes.

Final rule. The final rule formalizes key aspects of the interim Director Review process and provides that a party to an AIA proceeding. The final rule provides that a party to an AIA proceeding may only request Director Review of: (1) a decision on whether to institute an AIA trial; (2) a final decision in an AIA proceeding; (3) a panel decision granting a request for rehearing of a decision on whether to institute a trial or a final decision in an AIA proceeding; or (4) any other decision concluding an AIA proceeding. The final rule sets forth the timing and format of a party’s request for Director Review.

In the final rule, a “final decision” is defined as both final written decisions under 35 U.S.C. § 318, 328, for inter partes review and post grant review proceedings, and also final decisions under 35 U.S.C. § 135, for derivation proceedings. In addition, the final rule provides that the Director may sua sponte, or on their own initiative, initiate a review of PTAB decisions. The final rule also provides that the Director may delegate a review.

In addition, the final rule addresses the impact of Director Review on the underlying PTAB proceeding and clarifies the time by which an appeal to the U.S. Court of Appeals for the Federal Circuit must be filed. Appeals to the Federal Circuit will use the same procedures for appealing other PTAB decisions under 35 U.S.C. §§ 141(c), 141(d), 319. Director Review decisions on decisions on institution are not appealable.

Effective date. The final rule will be published in the Federal Register on October 1, 2024. The final rule is effective on October 31, 2024.

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