A Look at Key USPTO Director Review Decisions and their Significance
“Looking at the Director Review (DR) decisions so far in 2024, preliminary observations show that the landscape around the DR process appears to be shifting from sua-sponte focused DRs to party-initiated DRs.”
Prior to the Supreme Court’s 2021 decision in United States v. Arthrex, Inc., while there were some mechanisms for review of decisions by Patent Trial and Appeal Board (PTAB) panels, Director Review (DR) as a standalone review mechanism was essentially non-existent. After Arthrex, however, that changed—with the U.S. Patent and Trademark Office (USPTO) setting forth an interim DR process, followed by a revised DR process, and now formal rulemaking in April 2024.
Stakeholders have closely monitored these developments and many PTAB users have elected to submit DR requests—both for institution decisions and final written decisions. Director Vidal has also taken an active role in identifying DR cases through initiation of sua sponte reviews. This article briefly comments on some notable trends in DR requests—both in who is making the requests and in the nature of the requests most likely to catch the Director’s attention.
Who’s Requesting DRs?
Looking at the annual trends (graphic below), there is a slight trend of increasing DR requests by petitioners, and a decrease in requests by patent owners. Sua sponte DRs were common in 2022, increased further in 2023, and have not reemerged in 2024 yet. By June of 2023, the Director had already initiated 10 sua sponte DRs. It will be interesting to see if the Director resumes identifying cases on her own volition or looks to the involved parties to identify appropriate DR candidates.
Looking at the request data on a month-by-month basis (below) reveals a sharp increase in DR requires following release of revised interim DR guidelines in July 2023.
Which DRs are Being Granted?
As shown below, most party-initiated DR requests are denied.
Petitioners have fared better than Patent Owners recently. For example, in 2024, 100% of the 20 disposed PO-initiated requests were denied, while approximately 28% of Petitioner-initiated DR requests (8 out of 29 requests) were granted.
The Director’s recent focus on reviewing institution decisions appears to have caused a recent uptick in granted DR requests from aggrieved petitioners. A majority of the DR requests that have been granted recently relate to institution denials. Of the 11 DR requests disposed of in 2024, 73% of those requests (8 out of 11 requests) requested review of institution decisions.
Thus, most recently in 2024, the Director has slightly favored DRs requested by Petitioners, especially when related to institution denials. The USPTO also just announced a reformatted Status of Director Review requests webpage, which now closely resembles the organizational structure used for the Precedential and Informative decisions webpage. A closer look at the issues of particular interest to the Director reveals some recent trends, as is discussed below.
Review of Issues Related to 35 U.S.C. § 314(a)
The most common reason for a Board decision to be vacated and remanded through the DR process has been based on considerations under 35 U.S.C. § 314(a), including based on the Board’s General Plastic factors as articulated in IPR2016-01357, Paper 19, pp. 15-16 (PTAB Sept. 6, 2017) (precedential as to § II.B.4.i) (“General Plastic”).
General Plastic sets out seven non-exclusive factors that are relevant for the discretionary determination. However, in the recent DR decisions, the Director has focused on factor 1, which looks at “whether the same petitioner previously filed a petition directed to the same claims of the same patent.”
Under factor 1, the Board considers the relationship between parties that have filed different petitions requesting PTAB review, including evaluating if the petitioners have a “significant relationship . . . with respect to [the challenged patent],” then the Board will consider the first petition under the General Plastic analysis. And in the DR Decisions disposed of in 2024, the Director has made clear that a finding of a “significant relationship” between parties requires a seemingly high bar. For example, the Director found that where different parties were being sued for infringement in different venues over different accused products, the relationship was not enough for a finding of a “significant relationship,” even when each of the challengers was seeking invalidation of the same patent. See, e.g., Ford Motor Co. v. Neo Wireless LLC, IPR2023-00763, Paper 28, pp. 8-11 (Director Review Mar. 22, 2024).
Delegated Rehearing Panel
In addition to providing for review of institution decisions, the DR process now also permits delegation of certain decisions to the Delegated Rehearing Panel (DRP) created by the Director. While there appear to be no clear-cut rules as to when delegation might occur, the USPTO website notes that delegating decisions to the DRP is appropriate when personal review by the Director is not needed but, nonetheless, the decision warrants further consideration by an independent panel (e.g., when a material issue of fact or law was misapprehended or overlooked by the original Board decision).
Notably, in 2024, two DR decisions were delegated to the DRP, and both related to institution decisions by the Board. In both, the DRP vacated decisions related to the Board’s construction of claim terms, suggesting that the DRP may be a vehicle for seeking review of more routine error correction, including more technical aspects of Board decisions. See, e.g., DK Crown Holdings Inc. v. Diogenes Ltd., IPR2023-00268, Paper 14 (DRP Mar. 4, 2024).
Looking Forward
Looking at the DR decisions so far in 2024, preliminary observations show that the landscape around the DR process appears to be shifting from sua-sponte focused DRs to party-initiated DRs. It will be interesting to see if this trend holds or if the Director identifies additional areas requiring sua sponte intervention, as well as whether discretionary denial will continue to hold the Director’s attention or whether new areas of PTAB practice will get more attention through the DR process. The Director’s choice of which DRs should be delegated to the DRP will also be interesting to monitor, including as to whether the DRP remains a vehicle for addressing more nuanced positions as compared to broader guidance announced by way of DRs handled by the Director personally.
