Current post-IPR review crushes PTO resources

The Arthrex decision does not provide much guidance on the form of the new procedures other than stating that the director “may review final PTAB decisions and, upon review, may issue decisions himself on behalf of the Board.” The Arthrex decision likens this review to the model implemented by the Trademark Trial and Appeal Board in the Trademark Modernization Act of 2020. While the USPTO is still determining what such review in both adjudicative bodies would look like, without engaging in overspeculation, we would expect the director to implement a system similar to the Precedential Opinion Panel, albeit without the panel itself. Regardless of the mechanics involved in implementing review, we expect changes to PTAB operations and further anticipate that there will be several considerations in approaching rehearing requests under the anticipated procedures.

An initial consideration is that the Arthrex decision is limited to “final PTAB decisions,” so any resulting rule changes should not affect procedures for requesting rehearing for institution decisions. We expect the success rate for rehearing requests at institution to remain steady. In contrast, because the panel issuing the final written decision will no longer be reviewing itself for error, we expect that the historically low success rate for rehearing requests after the final written decision to increase. With such an increase, parties may come to see rehearing requests not as a last-ditch effort but rather as a viable attempt at overturning unfavorable decisions, similarly causing an increase in rehearing request filings.

More importantly, director-driven review will give requesting parties another bite at the apple. While rehearing requests have been an option for parties after the final written decision, due to the low success rate and barring clear error, the most viable option to date has been to appeal the PTAB decision to the Federal Circuit. Under the anticipated rehearing procedures, parties will have the opportunity to have the final written decision reviewed by the director, but all decisions would remain appealable to the Federal Circuit. On the other hand, the likely increase in granted rehearing requests may similarly increase the number of appeals from the PTAB to the Federal Circuit because the additional review procedure may generate additional material for appeal.

In addition to increasing the Federal Circuit caseload, new review procedures may also create yet another backlog at the USPTO. The PTAB already has a heavy caseload, and creating an extra layer of review procedures will only add to it. Similarly, the director has many other duties beyond participation in the PTAB, and the Supreme Court’s new requirements will only add to those duties. These additions will ultimately create a backlog in all director-driven procedures, at least until a new system is developed. So, while the new review procedures will be an interesting, if not positive, change, we expect that any proceedings under review will be stalled for many months.

Should Congress choose to intervene, however, these changes will be a moot point. As alluded to by Justice Gorsuch, Congress can and may enact legislation to change the outcome of the Arthrex decision. Taking it further, Justice Thomas’s dissent practically challenges Congress to intervene, proclaiming that the Court’s opinion amounts to holding that Congress violated the Constitution by creating the APJ position. Ultimately, unless or until Congress gets involved, the Supreme Court’s decision in Arthrex will require the PTAB to overhaul its review procedures, resulting in significant changes to how parties approach not only rehearing requests but also IPR proceedings as a whole.