IP Law Daily, STRATEGIC PERSPECTIVES: PTAB must meet Administrative Procedure Act’s ‘arbitrary and capricious’ standard, attorney explains, (Aug 9, 2017)

The differing standards of review applicable to appeals of Patent Trial and Appeal Board (PTAB) decisions provide multiple strategies for challenging those decisions that prevailing parties should be prepared to defend, attorney Thomas Rooney explains in an article in the August 2017 issue of Intellectual Property & Technology Law Journal. Rooney notes that final written decisions by the PTAB must be supported by three equally important legs: (1) factual findings must be supported by substantial evidence; (2) legal conclusions must withstand de novo review; and (3) the written decision itself must not be arbitrary and capricious. With respect to the third standard, the Federal Circuit reviews the PTAB as an administrative agency, applying the prescriptions of the Administrative Procedure Act. Rooney’s article focuses on the implications to practitioners of challenges based on administrative law principles.

Although the "arbitrary and capricious" standard is theoretically more deferential than the "substantial evidence" standard, it obligates an agency to articulate its reasoning. Rooney highlights recent decisions demonstrating that PTAB decisions may be vacated if the PTAB fails to articulate the basis for its decision without regard to whether its factual findings might otherwise be supported by substantial evidence. Such a victory, however, may prove pyrrhic, Rooney cautions, if the Federal Circuit simply remands the case to the PTAB for an opportunity to correct it. In order to ensure that decisions stand up to review, a party should clearly support its case, not just to prevail before the PTAB, but so that the PTAB’s decision withstands scrutiny in court.

Rooney’s article, entitled "The Three-Legged Stool: The Federal Circuit’s Review of the PTAB under the Administrative Procedure Act," was published in Intellectual Property & Technology Law Journal, Vol. 29, No. 8, August 2017.

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