The Patent Trial and Appeal Board (PTAB), created in 2012 as part of the America Invents Act, a branch of the United States Patent and Trademark Office (USPTO) that  hears appeals to adverse examiner decisions and conducts trials, including inter partes reviews and post-grant challenges. Ideally, the PTAB is meant to ensure the predictable, uniform, and unbiased application of USPTO policy to patent applications.

Some criticisms have arisen, however, regarding the operations of the PTAB. Some have complained that there is too much inconsistency among different PTAB panels despite similar fact patterns.  The inherent difficulties in recommending and designating panel opinions as precedential left the PTAB with too few guiding cases.

The assignment and composition of PTAB panels also have raised some concern. Some have reproached the PTAB with panel “stacking,” overlooking conflicts of interest, and not informing the parties concerned when panel membership changes.

USPTO Director Andrei Iancu has recently attempted to address these concerns by making changes to the PTAB’s Standard Operating Procedures (SOPs). He acknowledges that it is vital that the PTAB and USPTO act as one uniform entity and that the business community maintains its faith in the patent system. The changes were based on the office’s own experience with trial proceedings and feedback the USPTO received from stakeholders, courts, and legislators.

The revisions apply to the first and second set of operating procedures (SOP1 and SOP2) and seek to enhance the certainty of patent rights before the PTAB.

Key Changes to SOP1

SOP1 concerns the assignment of PTAB panels to various matters. Here are the most important takeaways about the changes to panel assignment procedures.

• Expanded panels will be rare. A panel normally consists of three judges, though panels are occasionally expanded to include additional judges without informing the parties involved or the public of the change. SOP1 (III) (M) now states that expanded panels will be rare and can be appointed only at the discretion of the director. In the event that a panel is expanded, notice of the change will be given to the parties involved and the public through a Panel Change Order. If a panel is expanded post-decision, every attempt will be made to include the original judges on the expanded panel.
• Conflicts of interest will be vigorously avoided. This change was made in response to the fact that some panel judges have decided cases that involved their former litigation clients, opening the door to biases. The revised SOP1 (III) (B) clearly instructs Administrative Patent Judges to avoid conflicts of interest. It requires them to provide and regularly update lists of potential conflicts. The onus is placed on the judge to ensure conflicts do not exist. This is more in line with the codes of conduct to which federal judges are subject.
• When panel changes are made, an explanation will be given. As revised, SOP1 (III) (L) makes clear that panel changes are disfavored, and that if a change in judges is strictly necessary because of retirement, sick leave, etc. the reason will be made available to the parties involved and to the public.

Key Changes to SOP2

• A Precedential Opinion Panel will be created. According to the USPTO, Revised SOP2 “creates a Precedential Opinion Panel (POP), typically comprising the director, the commissioner for patents, and the chief judge of the PTAB.” The panel can be convened to “rehear matters in pending trials and appeals, for example on issues of exceptional importance.” It also may assist the director in determining whether a PTAB decision should be considered as precedential or informative. The Precedential Opinion Panel is expected largely to negate the need for expanding panels, a practice clearly stated to be disfavored in revised SOP1. The USPTO asserts that this process should be more transparent and predictable for the parties involved and result in more decisions being designated as precedential.
• New procedures are established for making existing panel decisions precedential. Revised SOP2 establishes an Executive Judges Committee consisting of five members to make recommendations to the director on which decisions should become precedential, and therefore binding for other judges and panels. The committee also will work to determine which decisions will be considered informative, i.e., establishing norms judges should follow in most cases unless justification is given. These changes should help to increase uniformity in decisions among different PTAB panels.

What These Changes Will Mean for Patent Owners and Applicants

Revised SOP1 and SOP2 will hopefully bring constructive change for users of the USPTO system. Having more precedential and informative decisions should make the post-grant process more fair and predictable.

When Director Iancu addressed the Senate Committee on the Judiciary back in April, he said, “The USPTO’s mission is a critical one. It is directed toward fostering innovation and economic growth by providing innovators and entrepreneurs with the protection and information they need to raise capital, build their businesses, and bring their products and services to the marketplace.” If the spirit of these revisions is adhered to, that mission will advance considerably.

If you have any questions regarding PTAB and revisions to the operating procedures, please contact the attorneys at Panitch Schwarze.