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Patent Office Admits to Stacking Judges to Manipulate IPR Decisions


By
Smith & Hopen PA

The U.S. Patent and Trademark Office (USPTO) has admitted, through Solicitors for the USPTO, that in several different instances the Director of the USPTO has intentionally manipulated the composition of the Patent Trademark Trail and Appeal Board (PTAB) during rehearings to reverse a panel’s judgement and ensure that Board rules in line with the Director’s policy. This type of intentional and methodical manipulation of the PTAB may prove to be a critical public policy basis for dismantling or substantially overhauling inter partes review (IPR) proceedings in the Supreme Court’s upcoming case Oil States Energy Servs., LLC v. Greene’s Energy Group, LLC (Supreme Court 2017), during which the Court will consider the constitutionality of IPR proceedings. While panel manipulation may have temporarily achieved uniformity in accordance with the USPTO’s Director’s policy, this myopic approach may tarnish the reputation of the former Director and the USPTO.

Further, and more detailed, discussions on this matter can be found at IPWatchdog and Patentlyo. Both blog postings provide separate examples of the Federal Circuit’s distaste for the USPTO’s manipulation of Panels during rehearings. IPWatchdog includes a partial transcript of the oral arguments in Yissum Research Development Co. v. Sony Corp. (Fed. Cir. 2015), which is reproduced below:

USPTO: And, there’s really only one outlier decision, the SkyHawke decision, and there are over twenty decisions involving joinder where the –

Judge Taranto:  And, anytime there has been a seeming other-outlier you’ve engaged the power to reconfigure the panel so as to get the result you want?

USPTO: Yes, your Honor.

Judge Taranto:  And, you don’t see a problem with that?

USPTO: Your Honor, the Director is trying to ensure that her policy position is being enforced by the panels.

Judge Taranto:  The Director is not given adjudicatory authority, right, under § 6 of the statute that gives it to the Board?

USPTO: Right. To clarify, the Director is a member of the Board.  But, your Honor is correct –

Judge Taranto: But after the panel is chosen, I’m not sure I see the authority there to engage in case specific re-adjudication from the Director after the panel has been selected.

USPTO: That’s correct, once the panel has been set, it has the adjudicatory authority and the –

Judge Taranto:  Until, in your view, it’s reset by adding a few members who will come out the other way?

USPTO: That’s correct, your Honor.  We believe that’s what Alappat holds.

 Patentlyo further highlights dicta from Nidec Motor v. Zhongshan Broad Ocean Motor (Fed. Cir. 2017), which is reproduced below:

Although we do not decide the issues here, we have serious questions as to the Board’s (and the Director’s) interpretation of the relevant statutes and current practices. . . .

[W]e are also concerned about the PTO’s practice of expanding administrative panels to decide requests for rehearing in order to “secure and maintain uniformity of the Board’s decisions.” . . .

[Although t]he Director represents that the PTO “is not directing individual judges to decide cases in a certain way”[,] we question whether the practice of expanding panels where the PTO is dissatisfied with a panel’s earlier decision is the appropriate mechanism of achieving the desired uniformity.

It will be interesting to see if former patent owners attempt to sue the USPTO for improperly tampering with IPR panels, which ultimately resulted in their respective patents being invalidated. It seems reasonable that the Director’s intentional manipulation of panels creates a case or controversy for which former patent owners may sue the USPTO.  




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