On June 21, 2021, the Supreme Court handed down a highly-anticipated decision in United States v. Arthrex, Inc., finding that Administrative Patent Judges (“APJs”)—the judges who sit on Patent Trial and Appeal Board (“PTAB”) panels and hear quasi-adversarial, post-grant review proceedings such as IPRs and PGRs—were appointed unconstitutionality in violation of the Appointments Clause. To resolve that constitutionality issue, without dismantling the entire PTAB and post-grant review system, the Court held that the Director of the USPTO must have the single-handed authority to review and reverse rulings issued by the APJ panels: “Because Congress has vested the Director with the ‘power and duties’ of the PTO, the Director has the authority to provide for a means of reviewing PTAB decisions. The Director accordingly may review final PTAB decisions and, upon review, may issue decisions himself on behalf of the Board.” Arthrex, 594 U.S. ___, *21 (2021) (internal citations omitted).
Consistent with that decision, the USPTO has established an interim process for Director review of a final decision in a PTAB proceeding. Although such a review may be initiated sua sponte by the Director, it can also be requested by a party to a PTAB proceeding by filing a Request for Rehearing by the Director and providing email notice to the USPTO. That Request must be filed within 30 days of the entry of a Final Written Decision or a decision on rehearing by a PTAB panel. But the Director can extend the rehearing deadline for “good cause.” USPTO’s Arthrex Q&As explain that if a party’s deadline for requesting Director rehearing had already expired at the time the Arthrex decision issued, that party may request a waiver of the rehearing deadline, so long as it requests the waiver before the due date for filing a notice of appeal. Accordingly, parties whose 30-day Director rehearing request deadlines have already passed may still seek Director review within 63 days after the date of the Final Written Decision or decision on panel rehearing.
However, the USPTO Q&As do not address how the Board will handle PTAB proceedings in which the appeal deadline has passed, but no appeal was taken. In such situations, it is arguable that the constitutionality issue has not been fully resolved because those patents remain invalidated by adjudicators that did not have the constitutional power to do so. Parties who received an unfavorable PTAB ruling, but elected not to appeal, should consider whether to seek a waiver of the deadline for filing a Request for Rehearing by the Director. If the Director denies waiver in that situation, those parties may be able to file an appeal to the Federal Circuit seeking review of the waiver denial. It is an avenue worth considering for important patents that stand invalidated, but the USPTO and the Federal Circuit could find that the constitutional arguments have been waived unless raised earlier. Although there’s no set deadline for seeking such a retroactive waiver, parties seeking to pursue this avenue, should do so without significant delay.
Unsuccessful parties at PTAB must act quickly in order to seek Director review of any adverse decisions. Hogan Lovells’ knowledgeable team of attorneys is standing ready to assist with evaluating post-Arthrex options and opportunities.
Authored by Simon Roberts, Jason Leonard, and Nitya Anand.
