Patent Trial and Appeal Board

Anthony M. Verna, III, Esq.

2 weeks ago

The Role and Significance of the Patent Trial and Appeal Board (PTAB) at the USPTO

The Patent Trial and Appeal Board (PTAB) is an administrative body within the U.S. Patent and Trademark Office (USPTO). Established to oversee disputes related to patents, the PTAB handles a range of procedures that review the validity of patents issued by the USPTO. Over the past decade, it has become a pivotal institution in the U.S. patent system, handling everything from appeals of adverse examiner decisions to reviews of patent validity in high-profile disputes. The PTAB proceedings have revolutionized patent litigation in the U.S., saving businesses billions in unnecessary costs by providing an efficient alternative to the traditional district court litigation process.

Verna Law, P.C. is an intellectual property law firm focusing on patent, trademark, and copyright law. Call us at 914-908-6757 or send us an e-mail to anthony@vernalaw.com for any questions you may have.

Formation of the PTAB and Its Role in U.S. Patent Law

The PTAB was established in 2012 following the passage of the America Invents Act (AIA), which aimed to overhaul the U.S. patent system. The AIA sought to modernize the patent system and introduced new post-grant review procedures. As a result, the PTAB was tasked with hearing and deciding on inter partes review (IPR), post-grant review (PGR), and derivation proceedings, among others. The goal was to allow third parties to challenge the validity of patents after they had been granted by the trademark office.

Before the PTAB was formed, such patent challenges were handled primarily through reexamination proceedings, which were time-consuming and limited in scope. The PTAB has brought a streamlined and effective process to these challenges, allowing patent challengers to contest a patent’s validity based on prior art or improper issuance in a way that is faster and less costly than traditional litigation in federal courts.

PTAB Judges and Their Role in Proceedings

The PTAB proceedings are adjudicated by administrative patent judges (APJs), who are experts in intellectual property law and possess deep experience in technology fields such as computer science and electrical engineering. APJs are appointed by the Secretary of Commerce, in consultation with the USPTO Director, and they preside over PTAB trials and appeals. These judges are responsible for evaluating the evidence presented by both parties and issuing final written decisions regarding the patent’s validity.

A key feature of the PTAB is that it allows for a balanced assessment of both the patent holder’s and the patent challenger’s arguments. By integrating experts from both legal and technical backgrounds, the PTAB ensures that the majority of judges have the necessary expertise to interpret complex patent applications and prior art references. This makes the PTAB an ideal venue for resolving disputes that require a deep understanding of both patent law and technical innovation.

Key PTAB Proceedings: Inter Partes Review (IPR) and Post-Grant Review (PGR)

One of the most important aspects of the PTAB’s work involves inter partes review (IPR) and post-grant review (PGR). Both proceedings were created by the America Invents Act (AIA) to provide a cost-effective way to challenge patents after their issuance. While IPR and PGR share similarities, they differ in terms of the timing and grounds for challenging a patent.

Inter Partes Review (IPR)

IPR proceedings allow a third party to challenge the validity of a patent based on prior art, including patents and printed publications. The IPR process can be initiated after the patent has been granted, but no later than one year after the patent challenger has been sued for infringement. The IPR process is often used as an alternative to patent litigation in district court, as it allows for a faster and less expensive resolution.

The filing date of the IPR petition is critical because it marks the beginning of a time-sensitive process. After an IPR petition is filed, the PTAB judges must decide whether to institute a trial based on the preliminary response from the patent owner. Once the trial is initiated, both sides present their evidence and arguments during oral arguments, leading to a final written decision within one year.

Post-Grant Review (PGR)

Post-grant review (PGR), on the other hand, provides a broader range of challenges and must be filed within nine months of the patent’s issuance. In a PGR, the patent challenger can dispute the patent’s validity based on not only prior art but also issues such as patent eligibility and compliance with written description requirements. This makes PGR a powerful tool for contesting patents early in their lifespan.

PGR offers an opportunity for businesses and competitors to challenge the strength of newly issued patents, especially in fields like business method patents, which have been the subject of much scrutiny since the passage of the AIA. The PTAB has been instrumental in reviewing business method patent reviews, and its decisions in this area have significantly shaped the scope of patent protection for business methods and software-related inventions.

Derivation Proceedings and Other PTAB Procedures

In addition to IPR and PGR, the PTAB also handles derivation proceedings, which are initiated to determine whether an inventor improperly derived their claimed invention from another. These proceedings are particularly important when competing parties file similar patent applications, and there is a dispute about the true origin of the invention.

The PTAB also presides over appeals from adverse examiner decisions, where patent applicants whose applications have been rejected can challenge the USPTO’s findings. The PTAB’s ability to review such cases ensures that patent applicants have a fair opportunity to argue their case and correct any perceived errors by the examiners.

The Supreme Court and the PTAB

The PTAB’s role in the U.S. patent system has not been without controversy. The Supreme Court has reviewed the constitutionality of the PTAB’s trial process in cases such as Oil States Energy Services, LLC v. Greene’s Energy Group, LLC and United States v. Arthrex, Inc.. These decisions have clarified key issues about the PTAB’s structure and the authority of administrative patent judges. In Arthrex, the Court found that APJs were not properly appointed under the Appointments Clause of the Constitution, leading to changes in how APJs are supervised by the USPTO Director.

The Federal Circuit, which hears appeals from the PTAB, has also played an essential role in shaping the scope of PTAB proceedings, ensuring that decisions are subject to rigorous review by the courts. Many high-profile PTAB cases have made their way through the U.S. Court of Appeals for the Federal Circuit, and this appellate court remains crucial in setting precedents for how the PTAB operates within the larger patent litigation landscape.

In Oil States Energy Services v. Greene’s Energy Group (2018), the U.S. Supreme Court upheld the constitutionality of the Patent Trial and Appeal Board (PTAB) and its inter partes review (IPR) process, which allows administrative patent judges (APJs) to invalidate patents. Oil States argued that only Article III courts should have the authority to invalidate patents, but the Court ruled that patent rights are public rights and could be subject to executive branch review, thus making IPR constitutional.

Following Oil States, another significant case, United States v. Arthrex, Inc., raised a different constitutional challenge to the PTAB under the Appointments Clause of Article II. In this case, the issue was whether APJs, who are appointed by the Secretary of Commerce, were acting as principal officers, since their decisions could not be reviewed by any superior officer. This appointment structure was challenged because principal officers must be appointed by the President and confirmed by the Senate.

The Federal Circuit agreed with Arthrex’s argument and offered a constitutional remedy by severing the APJs’ tenure protections, effectively demoting them to inferior officers. This solution allowed for more direct oversight of APJs by the Director of the U.S. Patent and Trademark Office (USPTO). However, none of the parties were satisfied with this outcome, and the case was appealed to the Supreme Court.

In Arthrex, Chief Justice Roberts, writing for the majority, agreed that APJs were acting as principal officers, thus violating the Appointments Clause. However, instead of following the Federal Circuit’s approach, Roberts chose to sever a provision of the America Invents Act that prevented the USPTO Director from reviewing PTAB decisions. This change enabled the Director, who is a principal officer, to review and overrule decisions made by APJs, ensuring compliance with the Appointments Clause.

The ruling preserves the PTAB’s functionality while giving the Director oversight to review PTAB decisions. The Supreme Court also remanded the case to the Acting Director of the USPTO to decide whether to rehear the original PTAB petition on patent invalidity. The decision affirms the need for executive oversight to avoid future constitutional violations while maintaining the PTAB’s role in patent disputes. This outcome is expected to have a lasting impact on the patent community and the structure of administrative bodies like the PTAB.

PTAB and Confidential Information

One of the critical issues in PTAB proceedings is the handling of confidential information. Given the sensitive nature of patent disputes, parties involved in PTAB trials often need to safeguard proprietary business data, trade secrets, and technical details. The PTAB has implemented procedures for protecting such sensitive information, including protective orders that restrict access to confidential materials.

The balance between transparency in PTAB proceedings and the need to protect proprietary information has led to ongoing debates among stakeholders. PTAB trials are typically open to the public, but measures are in place to prevent the disclosure of sensitive materials that could damage the competitive position of the parties involved.

PTAB Procedures and Rule Changes

The PTAB continually updates its rules and procedures to improve its operations. Proposed changes are frequently released to address concerns raised by patent holders, litigants, and practitioners. For instance, there have been recent updates related to serial petitions and the treatment of confidential information in trials. Stakeholders from the patent bar, including the PTAB Bar Association and various patent litigators, play an active role in providing feedback on these proposed rules.

The Federal Trade Commission (FTC) and the Government Accountability Office (GAO) have also conducted studies to assess the PTAB’s effectiveness and ensure that the process remains fair and transparent. Additionally, the official website of the USPTO serves as a critical resource for understanding the current rules and guidelines for PTAB proceedings.

The Future of the PTAB

Looking ahead, the PTAB is likely to continue playing a pivotal role in patent disputes, particularly as the volume of patent applications grows and new technologies emerge. The PTAB’s ability to handle business method reviews, patent validity challenges, and disputes over prior art will remain crucial for patent holders and challengers alike. With ongoing debates over issues such as proposed rule changes and the handling of confidential information, the PTAB will need to adapt to the evolving patent landscape while maintaining its commitment to fairness and efficiency.

As more companies and inventors turn to the PTAB for resolving their patent disputes, the board’s management review process and the decisions of its administrative patent judges will continue to shape the future of the U.S. patent system.

The Federal Circuit and the PTAB

In the LKQ Corporation v. GM Global Technology Operations LLC case (No. 21-2348), the Federal Circuit overruled the long-standing Rosen-Durling test used to assess the obviousness of design patents under 35 U.S.C. § 103. The en banc court found that the more flexible standard from the Supreme Court’s decision in KSR International Co. v. Teleflex Inc., which applies to utility patents, also applies to design patents. This marks a significant shift in design patent law.

Previously, the Rosen-Durling test required (1) a primary reference that was “basically the same” as the design patent in question, and (2) prior art closely related to the primary reference. LKQ argued that this rigid test contradicted the Supreme Court’s broader approach in KSR, which advocates for flexibility and considers a combination of familiar elements to be obvious if it produces predictable results. The Federal Circuit agreed, holding that the obviousness standard for design patents should now align with the flexible approach used for utility patents.

The court now requires applying the Graham v. John Deere factors to determine design patent obviousness, which involve:

Analyzing the scope and content of the prior art, including analogous art.
Determining the differences between the claimed design and prior art.
Evaluating the level of skill of an ordinary designer.
Assessing whether there is a motivation to modify prior designs to arrive at the claimed design.

By removing the Rosen-Durling requirements, the Federal Circuit opened up design patents to broader obviousness challenges, making it harder to obtain and defend such patents. The decision is expected to increase obviousness rejections at the USPTO, as well as the number of post-issuance reviews and IPR petitions challenging design patents. This ruling has far-reaching consequences for industries reliant on design patents, including automotive and tech, and reflects a shift toward stricter scrutiny of design patents similar to that applied to utility patents.

The immediate impact will be felt in industries like automotive, but the ruling is likely to affect all pending and future design patents. Those involved in design patents will need to reassess their legal strategies following this decision.