Guest Post by Jason Rantanen
In its 2021 Arthrex decision, the Supreme Court rewrote the procedural process that Congress created for reviewing decisions by Patent Trial and Appeal Board (PTAB) judges.1 Rather than directly appealing to the Federal Circuit (or filing an action in the Eastern District of Virginia), a party that is dissatisfied with the outcome at the PTAB can petition the Director of the United States Patent and Trademark Office (the Director) for rehearing.2 This post summarizes some of my thoughts on the effects of Arthrex on PTAB decision-making, especially when PTAB decisions are appealed to the Federal Circuit. Overall, I’m skeptical that Arthrex presents a great opportunity for the Director to engage in patent policymaking. Given the way that United States Patent and Trademark Office (PTO) review is structured, there’s relatively little room for the Director to engage in policy-shaping through review of PTAB decisions. There are many other ways in which the Director can influence patent policy, and these are likely to be more promising paths than exercising direct oversight over individual PTAB decisions.
There are two reasons why I reach this conclusion.
First, a large portion of final written decisions in inter partes review (IPR) proceedings by the PTAB are appealed to the Federal Circuit. In other words, the patent office is very much notthe last stop when it comes to these decisions. To demonstrate this, I drew on the PTO’s PTAB data of decisions. Using the PTO’s API, I searched for AIA Trial: IPR that had Final Decisions for the period 1/1/2010 – 10/20/2021.3 This gave me 2,477 Final Written Decisions in unique inter partes review proceedings.4 Using the PTO’s docket number for these proceedings, I matched them to the corresponding Federal Circuit appeal docket using the Federal Circuit Dataset Project.5 Out of the 2,477 PTAB decisions, 1,271 matched to an appeal docket at the Federal Circuit—indicating an appeal rate of over 50%.6 For the period 1/1/2015 – 10/31/2021, there were 831 decisions in appeals from the Federal Circuit originating from an inter partes review proceeding with a Final Written Decision, some of which addressed multiple IPRs.7 So, at a minimum, 40% of inter partes review proceedings resulted in a subsequent appellate decision at the Federal Circuit.8 To the extent the Director actively uses the power of the office to change the outcome of PTAB decisions in inter partes review proceedings, those decisions will inevitably be appealed, and the Federal Circuit will review the decision. Unless the Federal Circuit starts granting deference to the PTO in areas of substantive patent policy, the Director’s ability to push policy in these reviews will be substantially constrained.
The second reason that I think there is relatively little room for the Director to effectuate patent policy through PTAB review is that, currently, the Federal Circuit affirms PTAB decisions at a fairly high rate. Generally, the Federal Circuit seems to be saying that the PTAB usually gets it right—even in contested inter partes review proceedings. It’s likely that a Director that stirs the pot through a PTAB review could get reversed themself.
To demonstrate this, I drew on all written opinions and Rule 36 summary affirmances from 2015-2021 (again, using the Federal Circuit Dataset Project).9 Figure 1 shows the rate at which the Federal Circuit found some error in decisions in appeals from inter partesreview proceedings over the past six years. Over the entire period, the Federal Circuit decisions on the merits had some error correction (an affirmance-in-part, reversal or vacate) in 22% of decisions.10 Seventy-eight percent of the time, the Federal Circuit affirmed the PTO in the entirety in inter partesreview proceedings.11
For comparison, Figure 2 shows the rate at which the Federal Circuit found some error in decisions in appeals from the district courts in patent infringement cases. These cases, of course, include issues other than § 102 or § 103. But overall, 29% of these cases for the same time period had some error correction; only 71% did not.12 Put another way, the Federal Circuit affirmed the PTO more often than it affirmed district court judges.
Ultimately, there just isn’t that much PTAB error to correct. In fact, a Director who reverses the decisions of the PTAB judges is probably going to increase the agency’s reversal rate more than decrease it, unless the Director is very good at picking winners. Indeed, for IPRs, if the Director reverses the decision of the PTAB judges, the now-losing party has every incentive to appeal. Additionally, the Director of the PTO will probably want to avoid result being reversed on appeal and the decision of the PTAB judges being reinstated.
 United States v. Arthrex, Inc., 141 S. Ct. 1970, 1987 (2021).
 PTAB Decisions, United States Patent and Trademark Office (Jan. 13, 2021), https://developer.uspto.gov/ptab-web/#/search/decisions.
 Federal Circuit Dataset Project, Harvard Dataverse (Jan. 13, 2021), https://dataverse.harvard.edu/dataverse/CAFC_Dataset_Project.
 See id.
 See id.