# The Patent Trial and Appeal Board and Inter Partes Review > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/crs%3AR48016 ## Record - **Collection:** Congressional research report - **Document type:** CRS Report - **Published:** May 28, 2024 - **Citation:** R48016 ## Text The Patent Trial and Appeal Board and Inter Partes Review Updated May 28, 2024 Congressional Research Service https://crsreports.congress.gov R48016 SUMMARY The Patent Trial and Appeal Board and Inter Partes Review The 2011 Leahy-Smith America Invents Act (AIA) is widely viewed as the most significant patent statute enacted by Congress in over 50 years. Although the AIA made many important changes to U.S. patent law, the most practically significant was the creation of the Patent Trial and Appeal Board (PTAB). R48016 May 28, 2024 Christopher T. Zirpoli Legislative Attorney Kevin J. Hickey Legislative Attorney PTAB is a tribunal within the U.S. Patent and Trademark Office (USPTO), the federal agency responsible for reviewing patent applications and granting patents. The AIA created PTAB and granted it authority to hear several new types of administrative challenges to the validity of patents previously granted by USPTO. These challenges, which were also created by the AIA, include inter partes review (IPR) and post-grant review (PGR). IPRs and PGRs are typically decided by a panel of three administrative patent judges (APJs). Entities accused of patent infringement have always been able to challenge the validity of patents asserted against them in federal court. Because those patents were reviewed and granted by USPTO, patents carry a presumption of validity when challenged in court. Patent invalidity must be demonstrated by a higher standard of proof (clear and convincing evidence) than the standard used for most issues in civil litigation (preponderance of the evidence). Litigating a patent case to a final judgment in a federal court is time-consuming and expensive: it typically takes several years, with average legal costs amounting to over a million dollars. In addition, because of judicial standing requirements, an entity can usually ask a court to decide the validity of a patent only if they have been sued or at least threatened with a patent lawsuit. Congress’s stated aim when creating IPR and PGR was to improve patent quality by providing a more efficient means to adjudicate patent validity issues. Congress was also concerned that poor-quality patents fueled litigation by so-called “patent trolls,” a pejorative term for patent plaintiffs that do not manufacture or sell the patented products. From the perspective of a person accused of patent infringement (or worried about being sued), PTAB procedures are often more advantageous than federal court litigation in that they are faster, cheaper, and use a lower standard of proof. By statute, IPRs and PGRs are supposed to reach a final determination no later than one year after PTAB decides to institute the proceeding. The administrative procedures are more streamlined than civil litigation, with average legal costs typically in the hundreds of thousands of dollars (as opposed to millions). In addition, PTAB does not require standing, so any person other than the patent holder can challenge a patent before PTAB. As a result, it has become common for entities sued for patent infringement in federal court or before the U.S. International Trade Commission to petition PTAB to institute an IPR and seek to challenge the patent in that forum. PTAB procedures—and IPR in particular—have aroused controversy among patent stakeholders since the enactment of the AIA. Critics of PTAB argue that it is biased against patent holders, creates uncertainty in patent rights, and discourages investment in innovation. PTAB critics further maintain that IPR is unfair to patent holders, who have successfully obtained a patent before USPTO but must now again defend their patent’s validity before the same agency. Since 2011, the Supreme Court has heard a number of cases concerning PTAB. In Oil States Energy Services v. Greene’s Energy Group, the Supreme Court rejected a constitutional challenge to IPR, holding that challenges to already-issued patents in an administrative forum did not violate the Seventh Amendment or Article III of the U.S. Constitution. In United States v. Arthrex Inc., the Court held that the unreviewable authority exercised by APJs violated the Constitution’s Appointments Clause but spared PTAB by granting the Director of USPTO discretionary authority to review PTAB decisions. Members of Congress have examined whether to maintain PTAB as it exists or to modify IPR and PGR procedures, with both House and Senate committees holding hearings on the issue. Legislative proposals introduced in recent Congresses include bills that would abolish PTAB entirely or make various procedural and substantive reforms to PTAB. For their part, USPTO and PTAB have issued regulations, precedential decisions, and other guidance on issues including USPTO Director review, repeat IPR petitions, and when PTAB should exercise its discretion to decline to institute (i.e., hear) an IPR or PGR. In 2024, USPTO issued notices of proposed rulemaking (NPRMs) on some of these issues. Congressional Research Service The Patent Trial and Appeal Board and Inter Partes Review Contents Introduction ..................................................................................................................................... 1 Overview of U.S. Patent Law .......................................................................................................... 2 What Are Patents? ..................................................................................................................... 2 What Inventions Can Be Patented? ........................................................................................... 3 Eligible Subject Matter Requirement .................................................................................. 3 Novelty Requirement .......................................................................................................... 4 Nonobviousness Requirement ............................................................................................ 4 Utility Requirement ............................................................................................................ 5 Requirements for Specification and Claims........................................................................ 5 How Do Inventors Obtain a Patent? .......................................................................................... 6 How Do Courts Adjudicate Patent Rights? ............................................................................... 6 What Was USPTO’s Role in Patent Adjudication Prior to the AIA? ........................................ 8 Overview of the America Invents Act and PTAB ............................................................................ 9 The AIA’s Key Changes to Patent Law ..................................................................................... 9 PTAB’s Structure..................................................................................................................... 10 PTAB Post-Grant Proceedings .......................................................................................................11 Inter Partes Review ..................................................................................................................11 Standing, Timing, and Grounds to Petition for IPR .......................................................... 12 Discretionary Institution of IPR ........................................................................................ 12 IPR Process Following Institution .................................................................................... 13 Discovery in IPR ............................................................................................................... 15 IPR Final Decisions, Director Review, and Appeals ........................................................ 16 IPR Statistics ..................................................................................................................... 17 Post-Grant Review .................................................................................................................. 21 Covered Business Method Review ......................................................................................... 22 Comparison of PTAB and Other Post-Grant Proceedings ...................................................... 22 PTAB at the Supreme Court .......................................................................................................... 23 Statutory Interpretation Cases ................................................................................................. 24 Cuozzo Speed Technologies, LLC v. Lee ........................................................................... 24 SAS Institute, Inc. v. Iancu ................................................................................................ 26 Return Mail, Inc. v. U.S. Postal Service ............................................................................ 27 Thryv, Inc. v. Click-to-Call Technologies, LP ................................................................... 29 Constitutional Challenges to IPR ............................................................................................ 30 Oil States Energy Services, LLC v. Greene’s Energy Group, LLC .................................... 30 United States v. Arthrex ..................................................................................................... 31 Current Debates and Proposed Reforms ........................................................................................ 33 What Roles Do the USPTO Director and PTAB Management Play in PTAB Decisions? ............................................................................................................................ 33 Interim Director Review Process ...................................................................................... 33 Concerns Regarding Transparency and APJ Independence .............................................. 35 Who Has Standing to Petition PTAB and Appeal Its Decisions? ............................................ 37 What Should Be PTAB’s Standards for Invalidation and Claim Construction? ..................... 38 Invalidity: Preponderance of Evidence or Clear and Convincing Evidence? ................... 38 Claim Construction: Should USPTO or Congress Decide the Right Standard? ............... 39 When Should PTAB Deny Institution of an IPR? ................................................................... 40 Petitions Raising Previously Presented Prior Art and Arguments..................................... 41 Congressional Research Service The Patent Trial and Appeal Board and Inter Partes Review Serial Petitions .................................................................................................................. 42 Parallel Petitions ............................................................................................................... 44 Parallel District Court Litigation ...................................................................................... 45 Patent Claims Already Upheld by a District Court ........................................................... 47 Conclusion ..................................................................................................................................... 48 Figures Figure 1. IPR and PGR Outcomes by Petition in FY2023 ............................................................ 18 Tables Table 1. USPTO Post-Grant Proceedings ...................................................................................... 23 Contacts Author Information........................................................................................................................ 48 Congressional Research Service The Patent Trial and Appeal Board and Inter Partes Review Introduction The Patent Trial and Appeal Board (PTAB), which is part of the U.S. Patent and Trademark Office (USPTO), was created by Congress in 2011 through the Leahy-Smith America Invents Act (AIA).1 The AIA established new administrative procedures to challenge patent validity called inter partes review (IPR) and post-grant review (PGR).2 While entities accused of patent infringement have long been able to challenge the validity of the patents asserted against them in court, IPR and PGR allow a party to petition PTAB to hear a challenge to the validity of an already-issued patent in an administrative forum, regardless of whether the petitioner has been sued or threatened with suit for patent infringement.3 IPR and PGR thus provide a way for anyone to challenge patents before USPTO and, if successful, cancel patent claims that PTAB concludes should have never issued.4 From an accused patent infringer’s perspective, using IPR or PGR to challenge patent validity is often more advantageous than judicial proceedings because PTAB processes are typically faster and less expensive, and require a lower burden of proof to invalidate patents.5 It is thus common for entities threatened with or sued for patent infringement in court or in the U.S. International Trade Commission (ITC) to petition PTAB to attempt to invalidate the patents asserted against them in those other forums.6 Congress’s stated purpose in creating PTAB was to “improv[e] patent quality and provid[e] a more efficient system for challenging patents that should not have issued; and reduc[e] unwarranted litigation costs.”7 Congress also observed that poor-quality patents may fuel litigation by so-called patent “trolls,”8 a pejorative term for patent plaintiffs that do not manufacture or sell the patented products.9 On this view, PTAB may be seen as an attempt to reduce patent-troll litigation by weeding out poor-quality patents. Some stakeholders have criticized PTAB, labeling it a “patent death squad.”10 Critics of PTAB argue that PTAB has made it too easy to challenge patents, creating uncertainty in patent rights, stifling innovation, and discouraging investments in patent-intensive industries and early-stage 1 Pub. L. No. 112-29 (2011). 2 A third procedure created by the AIA was transitional and sunsetted in 2020. See infra “Covered Business Method Review.” 3 See 35 U.S.C. §§ 31–32. 4 See generally CRS Report R46525, Patent Law: A Handbook for Congress, coordinated by Kevin J. Hickey, at 24–25 (2020). 5 See CRS Report R47267, Patents and Innovation Policy, by Emily G. Blevins, at 10 (2020). 6 See Jeffrey C. Totten, Four Strategies to Stay Litigation in Favor of IPR, FINNEGAN (May 2014), https://www.finnegan.com/en/insights/articles/four-strategies-to-stay-litigation-in-favor-of-ipr.html. 7 H.R. REP. NO. 112-98, at 39–40 (2011), as reprinted in 2011 U.S.C.C.A.N. 67, 69. 8 H.R. REP. NO. 112-98, at 54 (“A number of patent observers believe the issuance of poor business-method patents during the late 1990’s through the early 2000’s led to the patent ‘troll’ lawsuits that compelled the Committee to launch the patent reform project 6 years ago.”). 9 See FTC, PATENT ASSERTION ENTITY ACTIVITY: AN FTC STUDY 15–17 (2016) (defining “patent assertion entity”); Halo Elecs., Inc. v. Pulse Elecs., Inc., 579 U.S. 93, 109 (2016) (“Trolls, in the patois of the patent community, are entities that hold patents for the primary purpose of enforcing them against alleged infringers, often exacting outsized licensing fees on threat of litigation.”). 10 See Peter J. Pitts, “Patent Death Squads” vs. Innovation, WALL ST. J. (June 10, 2015, 7:23 PM), https://www.wsj.com/articles/patent-death-squads-vs-innovation-1433978591. Congressional Research Service 1 The Patent Trial and Appeal Board and Inter Partes Review startups.11 PTAB critics also argue that administrative challenges to patents are unfair to patent holders who have successfully obtained a patent through the USPTO patent prosecution process but must now again defend their patent’s validity before USPTO.12 These stakeholder debates have led to proposed reforms to PTAB, both from USPTO itself and from Members of Congress, including multiple bills introduced in the last several Congresses. This report provides the legal background necessary to understand these debates and the practical effects that changes to PTAB may have on technology and innovation. This report begins with an overview of U.S. patent law, including what patents are, what kinds of inventions may be patented, the process of obtaining a patent with USPTO, and how patent owners may enforce their patent rights. It then discusses the AIA and its creation of PTAB, including PTAB’s administrative structure. The report then explains and compares the three types of post-grant proceedings established by the AIA, focusing on IPR, the most used of these proceedings. The report follows with a discussion of several cases involving PTAB decided by the Supreme Court. Finally, the report discusses current debates and proposed reforms of PTAB, including standing, burdens of proof, discretionary institution of IPRs, claim construction, and the role of the USPTO Director in reviewing PTAB decisions. Overview of U.S. Patent Law What Are Patents? Patents are a form of intellectual property that give their holders the exclusive right to practice their inventions (i.e., make, use, sell, offer to sell, or import them) for a limited period of time. The Constitution gives Congress the power to grant patent rights to inventors by authorizing Congress to “promote the Progress of Science and useful Arts, by securing for limited Times to . . . Inventors the exclusive Right to their respective . . . Discoveries.”13 Since 1790, Congress has enacted patent laws granting inventors certain exclusive rights in their inventions for a period of time.14 (Currently, patents expire 20 years after the date that the patent application that gave rise to the patent was filed.15) Patents represent a “quid pro quo” by which the inventor publicly discloses an invention in exchange for time-limited, exclusive rights to practice it.16 In the United States, USPTO is responsible for evaluating patent applications and granting patents on qualifying inventions, as explained below.17 11 See, e.g., id.; ALLIANCE OF U.S. STARTUPS AND INVENTORS FOR JOBS, Why Patents Matter, https://www.usij.org/why- patents-matter/ (last visited Mar. 28, 2024). 12 See, e.g., Gene Quinn, A Kinder, Gentler ‘Death Squad’: Ten Years in, Despite Some Reforms, the USPTO Is Still Killing U.S. Patents, IP WATCHDOG (Sept. 19, 2021, 12:15 PM), https://ipwatchdog.com/2021/09/19/kinder-gentlerdeath-squad-ten-years-despite-reforms-uspto-still-killing-u-s-patents/id=137765/; Oil States Energy Servs. v. Greene’s Energy Grp., 584 U.S. 325, 345–47 (2018) (Gorsuch, J., dissenting). 13 U.S. CONST. art. I, § 8, cl. 8. 14 See, e.g., 35 U.S.C. § 271 (setting forth how patents may be infringed). 15 Id. § 154(a)(2). Patent terms can be extended in some circumstances, such as delays by USPTO in reviewing a patent application. See id. §§ 154(b), 156. 16 J.E.M. Ag Supply, Inc. v. Pioneer Hi-Bred Int’l, Inc., 534 U.S. 124, 142 (2001) (“The disclosure required by the Patent Act is ‘the quid pro quo of the right to exclude.’” (quoting Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 484 (1974))); see also Universal Oil Prods. Co. v. Globe Oil & Refin. Co., 322 U.S. 471, 484 (1944) (“As a reward for inventions and to encourage their disclosure, the United States offers a . . . monopoly to an inventor who refrains from keeping his invention a trade secret. But the quid pro quo is disclosure of a process or device in sufficient detail . . . .”). 17 See infra “How Do Inventors Obtain a Patent?”. Congressional Research Service 2 The Patent Trial and Appeal Board and Inter Partes Review Once granted, the holder of a valid patent has the exclusive right to make, use, sell, or import the invention in the United States until the patent expires.18 Any other person who practices the invention without permission from the patent holder infringes the patent and is liable for monetary damages, and possibly subject to injunctive relief, if sued by the patentee.19 Patents have the attributes of personal property, and the patentee may sell or assign the patent to another person.20 A patentee may also license other persons to practice the invention, granting them permission to make, use, sell, or import the invention, usually in exchange for consideration (such as monetary royalties).21 What Inventions Can Be Patented? In order to be patented, an invention must meet four substantive requirements: The invention must be (1) directed to patentable (or “eligible”) subject matter, (2) new, (3) nonobvious, and (4) useful.22 In addition to these four substantive patentability requirements, the Patent Act imposes minimum requirements for the technical disclosure of the invention in the patent application, which must adequately describe and distinctly claim the invention.23 As discussed in this report, PTAB administers certain proceedings in which petitioners may seek to invalidate a patent previously granted by USPTO on the grounds that the patent fails to satisfy certain of these requirements. This section briefly surveys these patentability requirements. Eligible Subject Matter Requirement The Patent Act allows inventors to obtain patents on any new and useful “process, machine, manufacture, or composition of matter, or . . . improvement thereof.”24 Examples of technological areas for patentable inventions include pharmaceuticals, biotechnology, chemistry, computer hardware and software, electrical engineering, mechanical engineering, and manufacturing processes.25 By contrast, the Supreme Court has long held that “laws of nature, natural phenomena, and abstract ideas” are not patentable.26 The Court has reasoned that to permit a monopoly on the “‘basic tools of scientific and technological work’ . . . might tend to impede innovation more than it would tend to promote it.”27 In a series of cases in the 2010s, the Supreme Court established a two-step test for patentable subject matter, sometimes called the Alice test or the Alice/Mayo framework.28 The first step 18 35 U.S.C. § 271(a). 19 Id. §§ 271, 281, 283–285. 20 Id. § 261. 21 License, BLACK’S LAW DICTIONARY (10th ed. 2014); 35 U.S.C. § 271(a). 22 See 35 U.S.C. §§ 101–103. 23 Id. § 112; see generally Hickey, supra note 4, at 12–14. 24 35 U.S.C. § 101. 25 See USPTO, PATENT TECHNOLOGY CENTERS MANAGEMENT, https://www.uspto.gov/patent/contact-patents/patent- technology-centers-management (last visited Mar. 28, 2024) (listing technological divisions for USPTO examiners). 26 Diamond v. Diehr, 450 U.S. 175, 185 (1981); see generally Hickey, supra note 4, at 10–20 (overviewing development of the law of patent-eligible subject matter). 27 Mayo Collaborative Servs. v. Prometheus Lab’ys, Inc., 566 U.S. 66, 71 (2012) (quoting Gottschalk v. Benson, 409 U.S. 63, 67 (1972)). 28 See Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208 (2014); Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576 (2013); Mayo Collaborative Servs., 566 U.S. at 66. USPTO has issued guidelines for its patent examiners to determine whether a patent application seeks to claim ineligible subject matter. See 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019). Congressional Research Service 3 The Patent Trial and Appeal Board and Inter Partes Review addresses whether the patent claims are “directed to” ineligible subject matter—a law of nature, natural phenomenon, or abstract idea.29 If not, the invention is patentable. If directed at ineligible subject matter, the invention is not patentable unless the patent claims have an “inventive concept” under the second step of the Alice/Mayo test. To have an “inventive concept,” the patent claims must contain elements “sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself,” transforming the nature of the claim to a patent-eligible application of ineligible subject matter.30 Novelty Requirement Perhaps the most fundamental requirement for patentability is that the claimed invention must be novel (i.e., new). By statute, USPTO cannot issue a patent if “the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.”31 In other words, if every element of the claimed invention is already disclosed in the prior art—the information available to the public at the time of the patent application—then the alleged inventor “has added nothing to the total stock of knowledge,” and no valid patent may issue to her.32 Nonobviousness Requirement Even if a claimed invention is novel in the narrow sense that it is not “identically disclosed” in a prior art reference (such as an earlier patent or publication), the invention must further be nonobvious to be patentable.33 Specifically, an invention cannot be patented if “the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious . . . to a person having ordinary skill” in the relevant technology.34 When determining obviousness, courts may evaluate considerations such as “commercial success, long felt but unsolved needs, [or] failure of others . . . to give light to the circumstances surrounding the origin of the subject matter sought to be patented.”35 By its nature, obviousness is an “expansive and flexible” inquiry that cannot be reduced to narrow, rigid tests.36 That said, if an invention merely combines “familiar elements according to known methods,” yielding only “predictable results,” it is likely to be deemed obvious.37 29 Alice Corp., 573 U.S. at 217. 30 Id. (quoting Mayo Collaborative Servs., 566 U.S. at 73). 31 35 U.S.C. § 102(a)(1). There are certain exceptions to this requirement when, for example, the prior art disclosure derives from the inventor and the patent application is made within one year of the disclosure. Id. § 102(b)(1). 32 Great Atl. & Pac. Tea Co. v. Supermarket Equip. Corp., 340 U.S. 147, 153 (1950); see Graham v. John Deere Co., 383 U.S. 1, 6 (1966) (“Congress may not authorize the issuance of patents whose effects are to remove existent knowledge from the public domain, or to restrict free access to materials already available.”). 33 35 U.S.C. § 103. 34 Id. Patent law frequently relies on the concept of a “person having ordinary skill in the art,” a “hypothetical person” with a typical level of skill in the relevant technology who is “presumed to be aware of all the pertinent prior art” in the particular field. See Standard Oil Co. v. Am. Cyanamid Co., 774 F.2d 448, 454 (Fed. Cir. 1985). 35 Graham, 383 U.S. at 17–18. 36 KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 415–19 (2007). 37 Id. at 416. Congressional Research Service 4 The Patent Trial and Appeal Board and Inter Partes Review Utility Requirement An invention must also be useful to be patentable, which means that it must have a specific and substantial utility.38 The utility requirement derives from the Constitution’s command that patent laws exist to “promote the Progress of . . . useful Arts.”39 The constitutional purpose of patent law thus requires a “benefit derived by the public from an invention with substantial utility,” where the “specific benefit exists in currently-available form.”40 The bar for utility is low, requiring only that the claimed invention have some “significant and presently available benefit to the public” that “is not so vague as to be meaningless.”41 Requirements for Specification and Claims Along with the four substantive requirements discussed above, the Patent Act imposes requirements relating to the form of the patent application. These formal requirements pertain to two key sections of the patent application, known as the claims and the specification, which become part of the patent itself if the application is granted. Section 112 of the Patent Act requires that patents contain a “specification” that includes a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to . . . make and use the same, and shall set forth the best mode contemplated by the inventor or joint inventor of carrying out the invention.42 This statutory language yields three basic disclosure requirements for patentability.43 First, to satisfy the written description requirement, the specification must “reasonably convey[] to those skilled in the art that the inventor had possession of the claimed subject matter as of the filing date” of the patent application.44 Second, to satisfy the enablement requirement, the specification must contain enough information to teach a person skilled in the art how “to make and use the invention without undue experimentation.”45 Finally, to satisfy the best mode requirement, the specification must show that the inventor “possessed a best mode for practicing the invention” at the time of the patent application, and disclose that preferred way of practicing the invention.46 These disclosure requirements ensure that the patent adequately discloses the invention to the public so that the public can use the invention after the patent term expires.47 If granted, the patent’s legal scope is defined by the patent claims, which are words that “particularly point[] out and distinctly claim[] the subject matter which the inventor . . . regards as the invention.”48 In essence, while the specification explains the invention in a technical sense, 38 Brenner v. Manson, 383 U.S. 519, 534–35 (1966); In re Fisher, 421 F.3d 1365, 1371 (Fed. Cir. 2005). 39 Stiftung v. Renishaw PLC, 945 F.2d 1173, 1180 (Fed. Cir. 1991) (citing Brenner, 383 U.S. at 528–29); see also Graham, 383 U.S. at 5–6. 40 Brenner, 383 U.S. at 534–35. 41 In re Fisher, 421 F.3d at 1371–72. 42 35 U.S.C. § 112(a) (emphasis added). 43 See Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S. 722, 736 (2002); Ariad Pharms., Inc. v. Eli Lilly & Co., 598 F.3d 1336, 1344 (Fed. Cir. 2010) (en banc). 44 Ariad Pharms., 598 F.3d at 1351. 45 In re Wands, 858 F.2d 731, 735 (Fed. Cir. 1988). 46 Eli Lilly & Co. v. Barr Lab’ys, Inc., 251 F.3d 955, 963 (Fed. Cir. 2001). 47 See Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 480–81 (1974). 48 35 U.S.C. § 112(b). Congressional Research Service 5 The Patent Trial and Appeal Board and Inter Partes Review the claims set forth the patent’s legal effect.49 Much as a deed may describe the boundaries of a tract of land, the claims define the “metes and bounds” of the patent right.50 Patent claims must be sufficiently definite to be valid—that is, when the claims are read in context, they must “inform, with reasonable certainty, those skilled in the art about the scope of the invention.”51 This requirement is designed to give the public clear notice of what is and is not covered by the patent claims. How Do Inventors Obtain a Patent? The process for receiving a patent begins with the filing of an application with USPTO.52 A USPTO patent examiner then reviews the application for compliance with the legal requirements for receiving a patent.53 If the examiner determines that the application does not meet one of the requirements, she will reject the application.54 The applicant may generally then amend the application in an effort to overcome the examiner’s rejection.55 Once the examiner determines that an application meets all of the patentability requirements, she “allows” the application to issue as a patent.56 Patent prosecution is the process of applying for a patent, addressing examiner concerns, and—if successful—receiving the patent.57 USPTO examiners are generally not lawyers, but rather are subject specialists in the relevant science and/or technology area.58 Accordingly, USPTO issues the Manual of Patent Examining Procedure (MPEP) to provide guidance for examiners and practitioners.59 How Do Courts Adjudicate Patent Rights? Patents are not self-enforcing: to obtain relief from infringement, the patentee must sue in court.60 Patent law is an area of exclusive federal jurisdiction,61 and the traditional forum for patent 49 See Ariad, 598 F.3d at 1347 (Fed. Cir. 2010); In re Vamco Mach. & Tool, Inc., 752 F.2d 1564, 1577 n.5 (Fed. Cir. 1985). 50 Corning Glass Works v. Sumitomo Elec. U.S.A., Inc., 868 F.2d 1251, 1257 (Fed. Cir. 1989). 51 Nautilus, Inc. v. Biosig Instruments, Inc., 572 U.S. 898, 901 (2014). 52 See generally 35 U.S.C. § 111. 53 See JAMES E. HAWES & FREDERIC M. DOUGLAS, PATENT APPLICATION PRACTICE § 2:4 (2020) (providing an overview of the patent application process); USPTO, General Information Concerning Patents (Oct. 2015), https://www.uspto.gov/patents-getting-started/general-information-concerning-patents. 54 HAWES & DOUGLAS, supra note 53, § 14:2. 55 Id. § 15.7−15.19. 56 Id. § 21.1. 57 Nick Cornor, Are Changes to the U.S. Patent System Objectively Killing Innovation?, 24 CURRENTS: J. INT’L ECON. L. 87, 90 (2020) (“Patent prosecution refers to the process of applying for a patent.”). Although the foregoing discussion provides a high-level overview of the process, patent prosecution is governed by specific laws and regulations, the detailed discussion of which could fill its own report. See generally HAWES & DOUGLAS, supra note 53. 58 Lital Helman, Decentralized Patent System, 20 NEV. L.J. 67, 89 (2019) (“PTO examiners are not lawyers.”); cf. Greg Reilly, Decoupling Patent Law, 97 B.U. L. REV. 551, 592 (2017) (“Inherently legal tasks—like parsing the wording of documents, analogizing and distinguishing precedent, and applying canons of document interpretation—are better suited for legally trained judges than legally limited patent examiners.”). 59 See USPTO, Manual of Patent Examining Procedure (9th ed. July 2022), https://www.uspto.gov/web/offices/ pac/mpep/index.html [hereinafter MPEP]. 60 35 U.S.C. § 281. 61 28 U.S.C. § 1338. Congressional Research Service 6 The Patent Trial and Appeal Board and Inter Partes Review disputes is federal district court.62 Although patent suits may be filed in any district court across the country with jurisdiction over the defendant and proper venue, all appeals in patent cases are heard by a single specialized court, the U.S. Court of Appeals for the Federal Circuit (the Federal Circuit).63 Once accused of infringement in a district court case, the defendant may claim an “absence of liability” based on noninfringement.64 In other words, the patentee may fail to prove that the activities of the accused infringer fall within the scope of the patent claims.65 Parties accused of patent infringement may also rely on several affirmative defenses, which are grounds on which the defendant—not the plaintiff—bears the burden of proof. First, although patents are subject to a presumption of validity, the accused infringer may assert that the patent is invalid.66 To prove invalidity, the accused infringer must show, by clear and convincing evidence, that USPTO should not have granted the patent because the patent failed to meet the statutory requirements for patentability.67 Thus, for example, the accused infringer may argue that the invention lacks novelty, is obvious, or claims nonpatentable subject matter; that the patent fails to enable the invention; or that the patent claims are indefinite.68 In addition, the accused infringer may argue the patent is unenforceable based on the patent holder’s inequitable or illegal activities, such as obtaining the patent through fraud on USPTO.69 All of these legal arguments are generally evaluated on a claim-by-claim basis—that is, a court may find that some of the patent’s claims are valid but other claims are invalid, or that the defendant infringes some of the patent’s claims but not others, for example. Both patent infringement and patent validity determinations turn in part on the meaning and scope of a patent’s claims,70 which define the boundaries of the patentee’s intellectual property right. For instance, if a patent’s claims are interpreted broadly, it may be easier for the plaintiff to prove that the defendant’s products or activities infringe that patent. On the other hand, interpreting 62 In 2023, roughly 3,108 patent lawsuits were filed in federal district courts. See 2023 Patent Dispute Report: Year in Review, UNIFIED PATENTS (Jan. 8, 2024), https://www.unifiedpatents.com/insights/2024/1/8/patent-dispute-report2023-in-review. An additional forum for patent infringement disputes is the ITC, which has authority to conduct administrative trials into whether imported goods violate patent and other IP rights. See 19 U.S.C. § 1337. The ITC may issue exclusion orders to stop such goods from entering the United States. See CRS In Focus IF12295, An Introduction to Section 337 Intellectual Property Litigation at the U.S. International Trade Commission, by Christopher T. Zirpoli (2024). The ITC typically initiates several dozen Section 337 investigations per year. See Section 337 Statistics: Number of New, Completed, and Active Investigations by Fiscal Year, ITC (last updated Oct. 12, 2023), https://www.usitc.gov/intellectual_property/337_statistics_number_new_completed_and_active.htm (reporting fiftyfive new complaints in Fiscal Year 2023). 63 28 U.S.C. § 1295(a)(1). 64 35 U.S.C. § 282(b)(1). 65 To prove direct infringement, the plaintiff must show that each element contained in a patent claim is practiced by the alleged infringer, either literally or by an equivalent. Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 29–30 (1997). 66 35 U.S.C. § 282(a)–(b). 67 Id. § 282(b)(2)–(3); Microsoft Corp. v. i4i LP, 564 U.S. 91, 95–96 (2011). 68 35 U.S.C. §§ 101, 102–103, 112, 282(b)(2)–(3). 69 Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1285, 1290–91 (Fed. Cir. 2011) (en banc). 70 MPHJ Tech. Invs., LLC v. Ricoh Ams. Corp., 847 F.3d 1363, 1364 (Fed. Cir. 2017) (“[T]he first step in any validity analysis is to construe the claims of the invention to determine the subject matter for which patent protection is sought.” (quoting Smiths Indus. Med. Sys., Inc. v. Vital Signs, Inc., 183 F.3d 1347, 1353 (Fed. Cir. 1999))); Nazomi Commc’ns, Inc. v. Nokia Corp., 739 F.3d 1339, 1343 (Fed. Cir. 2014) (“The first step of the infringement analysis is claim construction . . . .”); see also TVIIM, LLC v. McAfee, Inc., 851 F.3d 1356, 1362 (Fed. Cir. 2017) (“Claim terms must be construed the same way for the purpose of determining invalidity and infringement.”). Congressional Research Service 7 The Patent Trial and Appeal Board and Inter Partes Review claims broadly may make it easier for the defendant to show that the claims are invalid because they were anticipated or obvious in light of prior art. When the parties dispute how patent claims should be interpreted, the judge must decide how to construe the disputed claim terms.71 The process for determining the meaning of a disputed patent claim term is referred to as claim construction.72 While claim construction is a question of law decided by the judge,73 the ultimate issue of whether the accused product(s) infringe the patent claims, as construed by the judge, is a question of fact generally tried to a jury.74 What Was USPTO’s Role in Patent Adjudication Prior to the AIA? In addition to asserting invalidity as an affirmative defense to a patent infringement lawsuit in district court, a person may petition to invalidate an issued patent in various administrative proceedings known as post-grant proceedings, which are administered by USPTO.75 Before the AIA was enacted, the available post-grant proceedings included ex parte reexamination and inter partes reexamination. Ex parte reexamination, the longest-standing post-grant proceeding, allows “[a]ny person at any time” (including the patent owner herself) to request that USPTO reexamine an issued patent.76 The request must be based on “patents or printed publications which that person believes to have a bearing on the patentability of any claim of a particular patent.”77 If the USPTO Director determines that the request raises “a substantial new question of patentability affecting any claim of the patent,” then she may institute an ex parte reexamination.78 If a reexamination is initiated, it proceeds in the same manner as the initial patent examination; in other words, the examiner may reject the claims on the basis of the new prior art, the applicant may amend the claims, et cetera.79 Claim terms are given their broadest reasonable construction consistent with the specification (as in the initial examination).80 The person who sought reexamination, however, is not involved in the process once USPTO decides to initiate reexamination. 71 Markman v. Westview Instruments, Inc., 517 U.S. 370, 372 (1996) (“We hold that the construction of a patent, including terms of art within its claim, is exclusively within the province of the court.”). 72 Netword, LLC v. Centraal Corp., 242 F.3d 1347, 1352 (Fed. Cir. 2001) (“‘Claim construction’ is the judicial statement of what is and is not covered by the technical terms and other words of the claims.”); see also Abbott Lab’ys v. Sandoz, Inc., 544 F.3d 1341, 1358 (Fed. Cir. 2008) (“The first step in most infringement suits is the procedure called ‘claim construction,’ where the scope of the claim is defined by the court.”); Pall Corp. v. Hemasure, Inc., 181 F.3d 1305, 1308 (Fed. Cir. 1999) (“Analysis of patent infringement starts with ‘construction’ of the claim, whereby the court establishes the scope and limits of the claim, interprets any technical or other terms whose meaning is at issue, and thereby defines the claim with greater precision than had the patentee.”). 73 See Markman, 517 U.S. at 372. 74 See Apple Inc. v. Samsung Elecs. Co., 839 F.3d 1034, 1040 (Fed. Cir. 2016) (en banc) (reviewing jury verdict of infringement). 75 Although the terminology is different, there is no practical difference between a district court invalidating a claim during litigation and USPTO cancelling a claim following an administrative proceeding. The result is the same: the patent can no longer be enforced. 76 35 U.S.C. § 302. 77 Id. § 301(a)(1). 78 Id. § 303(a). The USPTO Director may also determine whether a substantial new question of patentability exists on her own initiative. Id. 79 Id. § 305. For more detail regarding initial examination, see Hickey, supra note 4, at 8–9. 80 In re Man Mach. Interface Techs. LLC, 822 F.3d 1282, 1286 (Fed. Cir. 2016) (“In reexamination, claims are given their broadest reasonable interpretation . . . consistent with the specification.”). Congressional Research Service 8 The Patent Trial and Appeal Board and Inter Partes Review In 1999, inter partes reexamination was added as an available post-grant proceeding for persons to challenge granted patents.81 Inter partes reexamination provided third-party requesters the ability to participate to a limited extent in a reexamination through comments and declarations submitted during the reexamination proceedings.82 Third-party requestors who sought inter partes reexamination were later estopped from alleging that a patent was invalid based on any grounds that could have been raised in the reexamination.83 The AIA eliminated inter partes reexamination and created two currently available adversarial post-grant proceedings—known as inter partes review and post-grant review—and established PTAB to administer them. The following sections discuss in depth the AIA, PTAB, and the new post-grant proceedings. Overview of the America Invents Act and PTAB In 2011, Congress passed the AIA, a major reform of U.S. patent law. Among the most important changes made in the AIA were the creation of PTAB and the new post-grant proceedings for PTAB to administer. This section provides an overview of the key provisions of the AIA and the administrative structure it established for PTAB. The AIA’s Key Changes to Patent Law Under the AIA, PTAB replaced a body known as the Board of Patent Appeals and Interferences (BPAI), which ceased to exist when PTAB began operations in 2012.84 PTAB took over BPAI’s responsibility for hearing appeals from USPTO rejections of patent applications.85 PTAB also took over BPAI’s responsibility for hearing appeals from rejections of patent owners’ claims in ex parte reexaminations.86 The AIA replaced inter partes reexamination with two new administrative proceedings—inter partes review (IPR) and post-grant review (PGR)—administered by PTAB. The AIA also created a transitional program to challenge covered business method (CBM) patents, which expired in 2020. These proceedings are discussed in detail below.87 In addition, the AIA effected a major change to U.S. patent law with respect to priority, or who is entitled to a patent when different people claim to have invented the same thing at around the same time.88 Previously, the first person to invent a particular invention was generally given priority in obtaining a patent when two different people filed patent applications on the same invention.89 The AIA provides that for applications filed on or after March 16, 2013, the first 81 American Inventors Protection Act of 1999, Pub. L. No. 106-113. 82 MPEP, supra note 59, §§ 2609, 2654. 83 35 U.S.C. § 315(c) (2011). 84 U.S. GOV’T ACCOUNTABILITY OFF., GAO-22-106121, PATENT TRIAL AND APPEAL BOARD: PRELIMINARY OBSERVATIONS ON OVERSIGHT OF JUDICIAL DECISIONMAKING 1 n.1 (2022). 85 35 U.S.C. § 134(a) (allowing applicant to appeal to PTAB after “claim[] has been twice rejected”). 86 35 U.S.C. § 134(b) (allowing owner to appeal to PTAB from “final rejection” in a reexamination). BPAI had also overseen appeals from inter partes reexamination proceedings. 87 See infra “PTAB Post-Grant Proceedings.” 88 See SNIPR Techs. Ltd. v. Rockefeller Univ., 72 F.4th 1372, 1374 (Fed. Cir. 2023) (“‘Patent priority’ establishes who is entitled to a patent on a particular invention claimed by different parties.”). 89 Leahy-Smith America Invents Act, Pub. L. No. 112-29, § 3(n)–(o), 125 Stat. 284, 293 (2011). Congressional Research Service 9 The Patent Trial and Appeal Board and Inter Partes Review inventor to file an application with USPTO is regarded as the inventor.90 The AIA thus changed the United States from a first-to-invent to a first-to-file jurisdiction,91 consistent with the rest of the world.92 In addition to international uniformity, Congress sought to make priority determinations more “objective and simple” by changing to a first-to-file system.93 (Generally speaking, it is simpler to determine when a person filed a patent application than when a person conceived of a particular idea and reduced it to practice.) To match the change to a first-to-file patent system, the AIA overhauled proceedings for contesting priority. Previously, if a person claimed to have invented something earlier than the patent applicant, that person could contest ownership of the patent via a challenge known as an interference, which could be asserted in administrative proceedings decided by BPAI or in district court.94 The AIA left interferences in place for patents filed prior to March 16, 2013 (i.e., under the first-to-invent regime),95 and transferred responsibility for those proceedings to PTAB.96 For patents filed on or after March 16, 2013, interference proceedings “are no longer necessary because it is now the first filer—not the first inventor—who has priority and is entitled to a patent.”97 For patents filed on or after March 16, 2016, the AIA replaced interference with derivation, a challenge that may be asserted in proceedings decided by PTAB or in district court litigation.98 Whereas interference allowed a challenger to take priority over a patent by showing that the challenger had invented the claimed subject matter before the patentee, derivation requires the challenger to show that an earlier patent filer derived the invention from the challenger (i.e., the patentee took the idea from the challenger as opposed to inventing it independently).99 Derivation is used infrequently, with one survey counting fewer than two dozen derivation petitions filed at USPTO between 2013 and 2022.100 PTAB’s Structure The AIA provides that PTAB consists of the USPTO Director and Deputy Director, the Commissioner for Patents, the Commissioner of Trademarks, and an unspecified number of 90 Id.; see also 35 U.S.C. § 102. 91 See SNIPR Techs., 72 F.4th at 1373. 92 See id. at 1375 (“The U.S. was the last remaining country in the world to use a first-to-invent system.”). 93 Id. at 1374. Consistent with the new first-to-file system, the AIA amended the definitions of prior art and obviousness so that both would be assessed as of the filing date rather than the time of invention. See id. at 1375. 94 See id. at 1375. 95 See id. at 1376; Biogen MA, Inc. v. Japanese Found. for Cancer Rsch., 785 F.3d 648, 655 (Fed. Cir. 2015) (noting “interference proceedings are to continue with respect to . . . applications filed before March 16, 2013”). 96 The AIA also left interference in place for patents that contain at least one claim each with pre- and post-March 16, 2013, effective filing dates. See SNIPR Techs., 72 F.4th at 1376. In SNIPR Techs., the Federal Circuit held that “pure AIA patents” with no claims having pre-March 16, 2013, filing dates may not be subjected to interference, including where the alleged basis for prior inventorship is a pre-AIA patent. See id. at 1374. 97 Id. at 1374. 98 See 35 U.S.C. § 135 (derivation proceedings decided by PTAB), § 291 (derivation asserted in district court); SNIPR Techs., 72 F.4th at 1375–76 (“AIA . . . repealed interferences in pre-AIA §§ 135 and 291 . . . .”). 99 See SNIPR Techs., 72 F.4th at 1376 (“Whereas interference proceedings determined who was the first inventor, derivation proceedings determine whether the earlier filer had derived the claimed invention from a later filer.”). 100 See Barbra Clarke McCurdy et al., Spotted: The Rare AIA Derivation Proceeding!, FINNEGAN (April 22, 2022), https://www.finnegan.com/en/insights/blogs/at-the-ptab-blog/spotted-the-rare-aia-derivation-proceeding.html. Congressional Research Service 10 The Patent Trial and Appeal Board and Inter Partes Review administrative patent judges (APJs).101 Currently, PTAB employs more than 200 APJs.102 PTAB is divided into a Trial Division and an Appeals Division. The Trial Division administers post-grant proceedings created by the AIA, while the Appeals Division hears appeals of patent prosecution decisions. The Secretary of Commerce, in consultation with the USPTO Director, appoints the APJs to serve on PTAB.103 The AIA requires that APJs be “persons of competent legal knowledge and scientific ability.”104 The Director, who is appointed by the President with advice and consent of the Senate, is a member of PTAB and maintains a degree of authority over the APJs.105 The AIA gives the Director authority to select the three-member APJ panels who decide IPRs106 and to issue regulations governing the conduct of PTAB proceedings,107 although in practice the Director has delegated panel selection to a Chief Judge.108 The AIA also gives the Director authority to designate selected written decisions as precedential and thus binding on future panels of APJs.109 APJs cannot be removed without cause.110 PTAB Post-Grant Proceedings As noted above, the AIA charged PTAB with administering three new types of post-grant proceedings for challenging the validity of patents previously issued by USPTO. One of these proceedings, CBM review, sunset in 2020 pursuant to the AIA. The other two—IPR and PGR— have no sunset provision and are regularly used. This section provides an overview and comparison of IPR, PGR, and CBM reviews. The discussion focuses principally on IPR, which has been both the most used type of PTAB proceeding and the target of many current reform efforts, which are discussed in the final section of the report.111 Inter Partes Review IPR is the most-used type of post-grant proceeding introduced by the AIA by an overwhelming margin.112 This section discusses the statutory requirements for filing an IPR, PTAB’s discretion whether to institute IPRs, and the IPR process. 101 35 U.S.C. § 6(a). 102 U.S. GOV’T ACCOUNTABILITY OFF., GAO-23-105336, PATENT TRIAL AND APPEAL BOARD: INCREASED TRANSPARENCY NEEDED IN OVERSIGHT OF JUDICIAL DECISION-MAKING 14 (2022), at 5 [hereinafter GAO PTAB REPORT]. 103 35 U.S.C. § 6(a). 104 Id. 105 See id. 106 Id. § 6(c). 107 Id. § 6(b)(2). 108 USPTO, PATENT TRIAL AND APPEAL BOARD: STANDARD OPERATING PROCEDURE 1 (rev. 15), https://www.uspto.gov/sites/default/files/documents/SOP%201%20R15%20FINAL.pdf [hereinafter SOP 1]. 109 See USPTO, PATENT AND TRIAL APPEAL BOARD: STANDARD OPERATING PROCEDURE 2 (rev. 11) (July 24, 2023), https://www.uspto.gov/sites/default/files/documents/20230724_ptab_sop2_rev11_.pdf. 110 35 U.S.C. § 3(c); 5 U.S.C. § 7513(a); see also United States v. Arthrex, Inc., 594 U.S. 1, 16–17 (2021). 111 See infra “Current Debates and Proposed Reforms.” 112 See USPTO, PTAB TRIAL STATISTICS: FY23 END OF YEAR OUTCOME ROUNDUP—IPR, PGR 3, https://www.uspto.gov/sites/default/files/documents/ptab_aia_fy2023__roundup.pdf (last visited Mar. 28, 2024) [hereinafter PTAB FY23 STATISTICS]. Congressional Research Service 11 The Patent Trial and Appeal Board and Inter Partes Review Standing, Timing, and Grounds to Petition for IPR Any person other than the patent owner may file a petition requesting that PTAB institute (i.e., proceed with) an IPR.113 An IPR petition may be filed at any time starting nine months after the patent issues through the time the patent expires.114 If the petitioner or their “real party in interest[] or privy” is sued for infringement of the patent, the petitioner may not file the petition any later than one year after they are served with the infringement complaint.115 An IPR petition may challenge the validity of patent claim on only two bases—anticipation (35 U.S.C. § 102) or obviousness (35 U.S.C. § 103).116 It may not challenge patentability for other reasons, such as whether the patent claims eligible subject matter (35 U.S.C. § 101) or is not enabled (35 U.S.C. § 112). The IPR petition may rely only on prior art patents or printed publications.117 Other forms of prior art, such as public uses or sales of the claimed invention, cannot be a basis for IPR.118 An IPR petition must also meet a number of procedural requirements. For example, the petitioner must identify all real parties-in-interest; identify the challenged patent claims and the grounds for the challenge “with particularity”; and pay a fee set by USPTO.119 Discretionary Institution of IPR The AIA makes the USPTO Director responsible for deciding whether or not to institute an IPR.120 The Director is charged with making this decision based on the challenger’s petition as well as an optional preliminary response that the patent owner may choose to file within three months of the petition.121 The Director must determine whether to institute the IPR within three months of receiving the preliminary response (or three months after the last date on which such a response could be filed).122 The Director has delegated all IPR institution decisions to PTAB.123 When an IPR petition is filed, a panel of three APJs is assigned to the case, and it is this panel that makes the institution decision.124 Thus, references to the “Director” in the provisions of the AIA regarding institution now refer, in practice, to a PTAB panel of three APJs. The AIA does not permit PTAB to institute an IPR unless it determines that the petition and any preliminary response “shows that there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition.”125 Nonetheless, the AIA does not require PTAB to institute an IPR if this threshold is satisfied, and it provides that “[t]he 113 35 U.S.C. § 311(a). 114 Id. § 311(c). If a PGR is instituted with respect to the patent, an IPR may not be filed until the PGR concludes. Id. 115 Id. § 315(b). A “real party in interest” refers to the “person entitled under the substantive law to enforce the right sued on.” Real party in interest, BLACK’S LAW DICTIONARY (11th ed. 2019). A “privy” refers to “someone who controls a lawsuit though not a party to it; someone whose interests are represented by a party to the lawsuit; and a successor in interest to anyone having a derivative claim.” Privy, BLACK’S LAW DICTIONARY (11th ed. 2019). 116 35 U.S.C. § 311(b). 117 Id. § 311(b). 118 Cf. id. § 102(a)(1). 119 Id. § 312. 120 Id. § 314(a). 121 See id. §§ 313, 314; 37 C.F.R. § 42.107(a)–(b). 122 35 U.S.C. § 314(b). 123 37 C.F.R. § 42.108. 124 See GAO PTAB REPORT, supra note 102, at 8; SOP 1, supra note 108, at 1. 125 35 U.S.C. § 314(a). Congressional Research Service 12 The Patent Trial and Appeal Board and Inter Partes Review determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.”126 The AIA also prohibits institution of IPR in specific situations regarding related district court and PTAB proceedings. First, the AIA provides that an IPR may not be instituted if, prior to the filing of the petition, the petitioner or “real party in interest” filed a district court action (i.e., a declaratory judgment action127) challenging any claim of the same patent.128 Thus, a party cannot file a district court case requesting a declaratory judgment of invalidity and then file an IPR petition challenging any claims of the same patent. Second, the AIA contains an estoppel provision that prohibits some so-called serial petitions, which are discussed in greater depth below.129 The estoppel provision states that, once an IPR results in a final written decision, the petitioner (or their real party in interest or privy) cannot “request or maintain” any other USPTO “proceeding” (including IPR) with respect to the same patent claim based on “any ground that the petitioner raised or reasonably could have raised” in the original IPR.130 The estoppel provision does not, however, prevent the petitioner from filing a second IPR petition regarding the same patent claim(s) prior to a final written decision on the first IPR. It also does not prevent a petitioner from filing a second IPR petition regarding different claims in the same patent. Through guidance and PTAB precedent, USPTO has developed guidelines for PTAB’s decisions whether or not to institute IPRs in cases where none of the above-noted prohibitions on IPRs apply.131 These guidelines address common scenarios such as serial IPR petitions and parallel district court proceedings. The guidelines—and related reforms proposed by certain Members of Congress and USPTO itself—are explained in more detail in the final section of this report. IPR Process Following Institution The framers of the AIA intended for IPR to serve as a faster, less costly alternative to district court litigation.132 The AIA itself sets forth certain requirements for conducting and deciding IPR proceedings.133 As directed by the AIA,134 USPTO has supplemented those requirements by promulgating more detailed rules on PTAB trial practice and procedure.135 PTAB also provides 126 Id. § 314(d) (the “no-appeal provision”). 127 Cf. id. § 315(a)(3) (providing that this prohibition does not apply where the petitioner is sued for infringement and responds with “[a] counterclaim challenging the validity of a claim”). 128 See id. § 315(a)(1). 129 See infra “Serial Petitions.” 130 35 U.S.C. § 315. 131 See, e.g., Memorandum from USPTO Director Katherine K. Vidal to PTAB, Interim Procedure for Discretionary Denials in AIA Post-Grant Proceedings with Parallel District Court Litigation (June 21, 2022), https://www.uspto.gov/sites/default/files/documents/interim_proc_discretionary_denials_aia_parallel_district_court_liti gation_memo_20220621_.pdf. 132 See H.R. REP. NO. 112-98, at 39–40 (2011) (stating that among the goals of the AIA were to “improv[e] patent quality and provid[e] a more efficient system for challenging patents that should not have issued” and to “limit unnecessary and counterproductive litigation costs”). 133 35 U.S.C. §§ 316–319. 134 Id. § 316(a) (“The Director shall prescribe regulations . . . .”). 135 See 37 C.F.R. pt. 42. Congressional Research Service 13 The Patent Trial and Appeal Board and Inter Partes Review guidance on its standard practices for conducting these proceedings in its Consolidated Trial Practice Guide.136 Once an IPR is instituted, PTAB issues a scheduling order setting forth key dates and deadlines. The patent owner is given time to file a response to the petition—regardless of whether the patentee filed a preliminary response before institution—followed by sur-replies by each party to address any new arguments.137 During the IPR, the patent owner may also file a motion either to cancel any challenged claims or to amend claims by “propos[ing] a reasonable number of substitute claims” for each such challenged claim that would not “enlarge the scope” of the existing claims.138 In March 2024, USPTO issued a notice of proposed rulemaking that would formalize a pilot program that it established in 2019 to give patent holders additional options when filing a motion to amend (MTA) their claims.139 Under this pilot program (and the proposed rule), patent holders may request “preliminary, non-binding guidance” from PTAB on the merits of an MTA.140 Patent holders may also file either a revised MTA or a reply brief in support of the original MTA following the petitioner’s opposition and any preliminary guidance from PTAB.141 Patent holders have had more success amending claims in AIA proceedings since the pilot program began in 2019. USPTO notes that 24% of final determinations have granted at least one substitute claim during the pilot program, versus 14% previously.142 The petitioner in an IPR has the burden of proving unpatentability of challenged claims by a preponderance of the evidence.143 As in district court litigation, PTAB may need to resolve disagreements about claim construction (i.e., the interpretation of patent claims) in order to reach a decision as to their validity.144 PTAB currently applies the same claim construction standard used in district court litigation,145 which requires PTAB to construe claim terms according to their “ordinary and customary meaning . . . to a person of ordinary skill in the art in question at the time of the invention.”146 To discern this meaning, PTAB must look to the claims themselves, the patent specification, documents from the prosecution of the patent (prosecution history), and, to a lesser degree, “extrinsic evidence” such as expert testimony, dictionaries, and treatises.147 136 PTAB, CONSOLIDATED TRIAL PRACTICE GUIDE (Nov. 2019), https://www.uspto.gov/sites/default/files/documents/tpgnov.pdf [hereinafter CONSOLIDATED PTAB PRACTICE GUIDE]. 137 37 C.F.R. § 42.107, 42.120; CONSOLIDATED PTAB PRACTICE GUIDE, supra note 136, at 73–75. 138 35 U.S.C. § 316(d). 139 Motion to Amend Practice and Procedures in Trial Proceedings Under the America Invents Act Before the Patent Trial and Appeal Board, 89 Fed. Reg. 15531 (Mar. 4, 2024). In addition to IPR, the pilot program and proposed rule apply to PGR and derivation proceedings. See id. 140 Id. at 15532. 141 See id. 142 See id. at 15533. 143 35 U.S.C. § 316(e). 144 See supra “How Do Courts Adjudicate Patent Rights?”. 145 See Changes to the Claim Construction Standard for Interpreting Claims in Trial Proceedings Before the Patent Trial and Appeal Board, 83 Fed. Reg. 51340 (Oct. 11, 2018) (codified at 37 C.F.R. § 42.100(b)); Personalized Media Commc’ns, LLC v. Apple Inc., 952 F.3d 1336, 1340 n.2 (Fed. Cir. 2020) (“Per recent regulation, [PTAB] applies the Phillips claim construction standard to IPR petitions filed on or after November 13, 2018.”). 146 Phillips v. AWH Corp., 415 F.3d 1303, 1313 (Fed. Cir. 2005). 147 See id. at 1313–19. Congressional Research Service 14 The Patent Trial and Appeal Board and Inter Partes Review As discussed below,148 some reform efforts seek to eliminate USPTO’s authority to depart from the currently used claim construction standard, in light of the fact that PTAB previously employed a different standard. Discovery in IPR Parties to an IPR may obtain evidence through discovery, although the scope of available discovery is narrower than in district court litigation. The AIA largely defers to USPTO to “set[] forth standards and procedures for discovery,”149 specifying only that discovery shall be limited to “the deposition of witnesses submitting affidavits or declarations”150 and “what is otherwise necessary in the interest of justice.”151 USPTO has promulgated rules requiring each party, at a minimum, to provide “routine discovery” comprising the disclosure of any exhibit cited by the party, disclosure of nonprivileged information inconsistent with the party’s litigation positions, and making witnesses who submit affidavits available for cross-examination.152 Under USPTO rules, the parties may also conduct discovery via “mandatory initial disclosures.” Despite their name, these “mandatory” disclosures are required only if the parties agree to them or, barring agreement, if PTAB grants a party’s motion to require them.153 The parties may agree either on narrow initial disclosures modeled on those required in district court litigation154 or on a “more extensive” set of disclosures focusing on nonpublished prior art and secondary indicia of nonobviousness, as set forth in the Consolidated Trial Practice Guide.155 If the IPR is instituted, the parties may “automatically” take further discovery regarding information identified in mandatory initial disclosures.156 Parties may agree or move to conduct additional discovery “in the interests of justice.”157 When determining whether additional discovery is in the interests of justice, PTAB looks to five factors, known as the Garmin factors: (1) whether there is more than a “mere possibility” or “mere allegation” that useful information will be found; (2) whether the discovery request is a pretext to seek the other party’s litigation positions or contentions; (3) whether the requesting party can obtain the information by other means; (4) whether the discovery request is “easily understandable”; (5) and whether the request is overly burdensome.158 Finally, parties may move to request authorization to compel testimony or documents from third parties, similar to issuing a subpoena in a civil lawsuit.159 148 See infra “Claim Construction: Should USPTO or Congress Decide the Right Standard?”. 149 35 U.S.C. § 316(a)(5). 150 Id. § 316(a)(5)(A). 151 Id. § 316(a)(5)(B). 152 37 C.F.R. § 42.51(b)(1). 153 Id. § 42.51(a)(1), (2). 154 CONSOLIDATED PTAB PRACTICE GUIDE, supra note 136, at 29 (citing Fed. R. Civ. P. 26(a)(1)(A)). 155 See id. at 30–31. 156 37 C.F.R. § 42.51(a)(1)(ii). 157 Id. § 42.51(a)(2)(i). 158 See CONSOLIDATED PTAB PRACTICE GUIDE, supra note 136, at 25–28 (citing Garmin Int’l, Inc. v. Cuozzo Speed Techs. LLC, Case IPR2012-00001 (P.T.A.B. Mar. 5, 2013) (Paper 26) (precedential)). 159 37 C.F.R. § 42.52(a). Congressional Research Service 15 The Patent Trial and Appeal Board and Inter Partes Review IPR Final Decisions, Director Review, and Appeals PTAB may decide an IPR based solely on written submissions by the parties, although the parties may request an oral hearing before the three-APJ panel.160 A typical hearing consists of about an hour of oral argument from each side.161 Although usually the hearing solely involves attorney argument, live witness testimony may also be presented at the discretion of the panel.162 PTAB must issue a final written decision within one year after it institutes the IPR, although this deadline may be extended by up to six months for “good cause.”163 Final written decisions must address the patentability of each claim challenged by the petition, as well as any substitute claims sought to be added by the patentee.164 Final decisions are accompanied by publication of a certificate that cancels or confirms each claim depending on whether PTAB finds it to be patentable; the certificate may also incorporate into the patent any patentable new or amended claims.165 If the patent owner and any petitioner reach a settlement with one another prior to the final written decision, they may request to terminate the IPR as to that petitioner by filing a motion to terminate and the settlement agreement.166 If no petitioners remain in the IPR, PTAB may choose either to terminate the IPR or to proceed to a final written decision.167 As originally enacted, the AIA allowed for parties to seek rehearing of a decision in an IPR only from PTAB itself.168 As discussed below, following a 2021 Supreme Court decision, parties may instead request review of final PTAB panel decisions by the USPTO Director.169 In addition, final PTAB decisions (or denials of rehearing of a final decision) may be appealed to the Federal Circuit.170 Any of the parties to the IPR have a right to be a party to such an appeal.171 The USPTO Director may also intervene in the appeal to defend PTAB’s decision, regardless of whether any party does so.172 PTAB’s decision to institute an IPR or not, however, is not appealable.173 160 Id. § 42.70(a); CONSOLIDATED PTAB PRACTICE GUIDE, supra note 136, at 81–82. 161 CONSOLIDATED PTAB PRACTICE GUIDE, supra note 136, at 81. 162 Id. at 85 (“[PTAB] receives relatively few requests for presenting live testimony.”). 163 35 U.S.C. § 316(a)(11). 164 Id. § 318(a). 165 Id. § 318(b). 166 Id. § 317. 167 Id. § 317(a). 168 Id. § 6(c); 37 C.F.R. § 42.71(d). 169 See infra “United States v. Arthrex”; “What Roles Do the USPTO Director and PTAB Management Play in PTAB Decisions?”. 170 35 U.S.C. § 319. While the AIA affords a procedural right to appeal, the appealing party must have Article III standing under the Constitution to maintain an appeal. See generally Cong. Rsch. Serv., ArtIII.S2.C1.6.1 Overview of Standing, https://constitution.congress.gov/browse/essay/artIII-S2-C1-6-1/ALDE_00012992/ (last visited Mar. 28, 2024). A patent holder dissatisfied with a PTAB decision will usually have standing to appeal the cancellation of a patent claim. However, challengers to patents that do not practice the invention (e.g., nonprofit groups) may lack standing to appeal PTAB decisions upholding the patent. See, e.g., Consumer Watchdog v. Wis. Alumni Rsch. Found., 753 F.3d 1258, 1262–63 (Fed. Cir. 2014) (holding that nonprofit consumer rights organization lacked standing to appeal IPR decision affirming patentability). 171 35 U.S.C. § 319. 172 Oil States Energy Servs., LLC v. Greene’s Energy Grp., LLC, 584 U.S. 325, 332–35 (2018). 173 35 U.S.C. § 314(d). Congressional Research Service 16 The Patent Trial and Appeal Board and Inter Partes Review IPR Statistics In a typical year, PTAB receives between 1,000 and 2,000 petitions for IPR or PGR.174 Of these filings, the overwhelming majority are IPRs.175 In FY2023, for example, PTAB received 1,209 IPR petitions (97.6%), compared with 30 PGR petitions (2.4%).176 Litigating an IPR costs several hundreds of thousands of dollars in legal costs on average.177 While expensive, an IPR is usually many times cheaper than litigating a patent suit in the federal courts, which can cost several million dollars.178 IPR Outcomes Very roughly, PTAB denies institution—that is, declines to hear the IPR or PGR—in a little less than one-third of petitions.179 A similar number of cases settle.180 For example, of the 1,327 petitions resolved in FY2023, PTAB denied institution in 374 cases (28%), and 402 cases settled (30%).181 Thus, PTAB typically reaches a final written decision for between 35–40% of the petitions it receives.182 In those IPRs and PGRs that do reach a final written decision, PTAB cancels some or all of the patent claims at issue in the large majority of cases. In FY2023, for example, PTAB issued a final written decision in 508 cases.183 Of those, it found all the claims unpatentable in 343 cases (67.5%), upheld all of the patent claims in 87 cases (17.1%), and reached a mixed result (i.e., upholding some patent claims and canceling others) in 78 cases (15.4%).184 Figure 1 displays these outcome statistics as reported by USPTO. 174 PTAB FY23 STATISTICS, supra note 112, at 3 (1,239 post-issuance review petitions received in FY2023); USPTO, PTAB TRIAL STATISTICS: FY23 END OF YEAR OUTCOME ROUNDUP—IPR, PGR 3 (2022), https://www.uspto.gov/sites/default/files/documents/ptab__aia_fy2022_roundup.pdf [hereinafter PTAB FY22 Statistics] (1,367 post-issuance review petitions received in FY2022); see also Dani Kass, PTAB Filings Drop Alongside Declining Patent Litigation, LAW360 (Feb. 7, 2024, 11:02 PM), https://www.law360.com/articles/1794397 (number of annual IPR filings between 2014 and 2023 ranging from a high of 1,723 petitions in 2017 to a low of 1,157 petitions in 2023). 175 See Kass, supra note 174 (showing over 1,000 IPRs filed each year, but only several dozen PGRs). 176 PTAB FY23 STATISTICS, supra note 112, at 3. 177 AIPLA, REPORT OF THE ECONOMIC SURVEY 2019, at 52 (2019), https://ipwatchdog.com/wpcontent/uploads/2021/08/AIPLA-Report-of-the-Economic-Survey-Relevant-Excerpts.pdf (median litigation costs for IPRs ranging from $100,000 to $350,000 depending on the type of case and amount in controversy). 178 Id. at 50–52 (median total patent litigation costs ranging from $700,000 to $8 million depending on the type of case and amount in controversy); accord Stephen Yelderman, Prior Art in Inter Partes Review, 104 IOWA L. REV. 2705, 2706 (2019) (“[T]he cost of litigating an IPR to a final written decision was about $324,000, which pales in comparison to the $1–2 million reported cost of litigating a patent in court.”). 179 See, e.g., PTAB FY23 STATISTICS, supra note 112, at 10 (institution denied for 28% of petitions in FY2023); PTAB FY22 STATISTICS, supra note 174, at 11 (institution denied for 30% of petitions in FY2022). 180 See, e.g., PTAB FY23 STATISTICS, supra note 112, at 10 (30% of petitions settled in FY2023); PTAB FY22 STATISTICS, supra note 174, at 11 (27% of petitions settled in FY2022). 181 PTAB FY23 STATISTICS, supra note 112, at 10. 182 See, e.g., id. (final written decision in 39% of petitions in FY2023); PTAB FY22 STATISTICS, supra note 174, at 11 (final written decision in 37% of petitions in FY2022). 183 See PTAB FY23 STATISTICS, supra note 112, at 10. 184 See id. Congressional Research Service 17 The Patent Trial and Appeal Board and Inter Partes Review Figure 1. IPR and PGR Outcomes by Petition in FY2023 Source: USPTO, PTAB TRIAL STATISTICS: FY23 End of Year Outcome Roundup—IPR, PGR 10 (2023), https://www.uspto.gov/sites/default/files/documents/ptab_aia_fy2023__roundup.pdf. Notes: “FWD” means final written decision by the Patent Trial and Appeal Board (PTAB). “IPR” refers to inter partes review; “PGR” refers to post-grant review. Some critics of PTAB argue that because PTAB cancels at least one patent claim in over 80% of its final written decisions, the panels may be biased against patent owners.185 While that number is accurate, PTAB denies institution in nearly one-third of IPRs filed. Since a denial of institution leaves the patent claims intact, it arguably represents a “win” for the patent holder.186 Moreover, because PTAB may institute an IPR only if it finds that “there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged,”187 it is perhaps not surprising that most of the instituted IPRs in fact invalidate one or more claims.188 185 See Steve Brachmann & Gene Quinn, Are More than 90 percent of Patents Challenged at the PTAB Defective?, IPWATCHDOG (June 14, 2017, 10:00 AM), https://ipwatchdog.com/2017/06/14/90-percent-patents-challenged-ptabdefective/id=84343/ (arguing that the statistics suggest that either “PTAB APJs are being too aggressive in invalidating patents or that the examiners are producing incredibly poor quality patents”). 186 See Angela Morris, US PTAB Invalidation Rates Under the Microscope as Reform Bill Refiled, IAM (June 26, 2023), https://www.iam-media.com/article/us-ptab-invalidation-rates-under-the-microscope-reform-bill-refiled (“The petitions that were denied institution should be viewed as a patent holder win.”). Counted in that way, one could argue that the patent holder “wins” (374 denials and 87 written decisions upholding all claims) about as often as they “lose” (343 written decisions finding all claims unpatentable and 78 finding some claims unpatentable). Some argue that settlements should be also counted as losses for the patent holder, however. See Brachmann & Quinn, supra note 185 (arguing that “many (if not all) of these [IPR] settlements result in outcomes unfavorable to the patent owner”). Ultimately, how to characterize these various outcomes is a matter of interpretation. 187 35 U.S.C. § 314(a). 188 See Brachmann & Quinn, supra note 185 (“If [PTAB] judges are doing a really good job on institution, one should expect to see that most of the decisions instituted reach a fairly favorable petitioner outcome.” (quoting Brian Howard)). Congressional Research Service 18 The Patent Trial and Appeal Board and Inter Partes Review When appealed to the Federal Circuit, the large majority of PTAB findings on patent validity or invalidity are affirmed.189 One study found an affirmance rate for IPRs of over 90%.190 While district court patent validity findings are also usually affirmed by the Federal Circuit, the affirmance rate (85%) is somewhat lower.191 Notably, the Federal Circuit reverses district courts on patent validity issues at a higher rate (12.1% reversal rate) than it does PTAB decisions (4.8% reversal rate).192 189 Matthew G. Sipe, Experts, Generalists, Laypeople—and the Federal Circuit, 32 HARV. J.L. & TECH. 575, 578 (2019). 190 Id. at 604 tbl.7. 191 Id. at 610 tbl.15. 192 See id. (“Three tendencies emerge from this picture: (1) the PTAB is affirmed notably more often than district courts on validity issues; (2) district court decisions tend to be reversed outright, rather than vacated or remanded; and (3) PTAB decisions, on the other hand, experience both types of non-affirmance in roughly equal measure.”). Congressional Research Service 19 The Patent Trial and Appeal Board and Inter Partes Review “Big Tech” and IPRs Some observers allege that large technology companies lobbied for the creation of PTAB and are its primary beneficiaries.193 As evidence, critics note that some so-called “big tech” firms are among the most frequent users of IPRs. According to one analysis, in 2021, Samsung, Apple, Google, Intel, and Microsoft collectively accounted for 81% of PTAB petitions filed by the top 10 petitioners during that year.194 Critics allege that such companies are using PTAB as “a key tool in their predatory infringement strategies.”195 Large technology firms are also among the most frequent defendants in patent litigation.196 Some stakeholders claim that financial incentives may lead these companies to infringe patents more often than smaller firms.197 This view holds that well-resourced firms may choose to engage in a practice called efficient infringement, in which a firm intentionally infringes a patent rather than purchasing or licensing it, based on the calculation that potential profits outweigh the potential costs associated with legal fees or damages it may owe as a result of infringement.198 Some observers argue that the practice of efficient infringement has been encouraged by recent legal changes, which have made obtaining injunctive relief for patent infringement (i.e., a court order stopping the defendant’s infringing activities) more difficult to obtain.199 They claim that when injunctive relief is not granted and adequate damages are not awarded to patent owners whose rights have been infringed, potential infringers may decide that the economic benefits of infringement outweigh the potential costs of being sued for patent infringement.200 Others argue that large technology firms are frequently sued not because they are more likely to infringe patents but because they are attractive targets of abusive litigation practices. Such practices, they claim, often involve socalled “patent trolls”201 asserting low quality patents that should not have been granted by USPTO.202 For example, in 2022, Google’s general counsel argued the declining quality of U.S. patents was causing an uptick in abusive patent litigation and accused patent trolls and opportunistic companies of weaponizing such patents against their rivals.203 193 See Adam Mossoff, Big Tech’s Abuse of Patent Owners in the PTAB Must End, HERITAGE FOUNDATION 5–6 (June 29, 2023), https://www.heritage.org/sites/default/files/2023-06/LM336.pdf; Paul R. Michel, Big Tech Has a Patent Violation Problem, HARVARD BUSINESS REVIEW (Aug. 5, 2023), https://hbr.org/2022/08/big-tech-has-a-patentviolation-problem. 194 Paul Michel & Chris Israel, Don’t Let Big Tech Sabotage U.S. Innovators’ Protections, BLOOMBERG LAW (Apr. 22, 2022) (companies listed in the order they appear in the article). 195 Mossoff, supra note 193, at 5–6; see Michel, supra note 193. 196 See Figure 11 in UNIFIED PATENTS, 2022 Patent Dispute Report (Jan. 5, 2023), https://www.unifiedpatents.com/insights/2023/1/4/2022-patent-dispute-report (identifying Alphabet, Amazon, Apple, AT&T, Cisco, Lenovo, Microsoft, Samsung, Verizon, and Walmart as the most frequently named defendants in patent infringement suits in U.S. federal courts in 2022). 197 See Michel, supra note 193. 198 See Julie Turner, The Nonmanufacturing Patent Owner: Toward a Theory of Efficient Infringement, 86 CAL. L. REV. 179, 210 (1998). 199 See Kristen Osenga, “Efficient” Infringement and Other Lies, 52 SETON HALL L. REV. 1085 (2022); Adam Mossoff, Institutional Design in Patent Law: Private Property Rights or Regulatory Entitlements, 92 S. CAL. L. REV. 921 (2019). In the 2006 case eBay v. MercExchange, the Supreme Court held that an equitable balancing test governed the decision of whether a district court should issue a permanent injunction in patent infringement cases, reversing the Federal Circuit rule that injunctions should issue “absent exceptional circumstances.” 547 U.S. 388 (2006). 200 See Mossoff, supra note 199, at 939. According to one commentator, when injunctive relief is not routinely granted, “it makes much more sense for a potential infringer to infringe now—and pay later. At worst, if an injunction is not granted following a patent infringement trial, the infringer will simply have to pay damages for past infringement and an ongoing royalty for continued, future infringement. This result is akin to having taken a license to start with, but with the bonus of an interest-free loan for the period of infringement prior to and during the trial period.” Osenga, supra note 199, at 1087. 201 “Patent troll” is a pejorative term for patent plaintiffs that enforce patents but do not manufacture or sell products. FTC, supra note 9, at 15–17. According to an opinion from the Supreme Court, “Trolls, in the patois of the patent community, are entities that hold patents for the primary purpose of enforcing them against alleged infringers, often exacting outsized licensing fees on threat of litigation.” Halo Elecs., Inc. v. Pulse Elecs., Inc. 579 U.S. 93, 109 (2016). 202 Patent quality generally refers to whether granted patents actually meet the statutory standards of patentability. These include requirements that the invention claimed in a patent be novel, nonobvious, and clearly described. (continued...) Congressional Research Service 20 The Patent Trial and Appeal Board and Inter Partes Review Post-Grant Review In addition to IPR, the AIA created PGR, another administrative proceeding that can result in cancellation of an issued patent.204 There are three primary differences between PGR and IPR. First, a petition for PGR may be filed only during the first nine months after a patent issues.205 An IPR petition, by contrast, may be filed only after the window for filing PGR ends; that is, an IPR must be filed more than nine months after the patent issues (and after any PGR regarding the patent concludes).206 Second, the standard for instituting a PGR is higher, requiring PTAB to find “that it is more likely than not that at least 1 of the claims challenged in the petition is unpatentable.”207 By contrast, institution of IPR requires only “a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition.”208 The third main difference between PGR and IPR concerns the grounds for cancellation that may be presented to PTAB. While an IPR may challenge a patent claim only on grounds of anticipation (35 U.S.C. § 102) or obviousness (35 U.S.C. § 103) based on prior art patents or printed publications (and not other forms of prior art, such as public uses),209 a PGR may challenge whether a patent claim meets any of the requirements for validity in the Patent Act.210 For example, a PGR petitioner may argue that the patent is not directed to patentable subject matter under 35 U.S.C. § 101 or that the claims are indefinite under 35 U.S.C. § 112—arguments that are not available in IPR. Procedurally, PGR functions similarly to IPR. Anyone other than the patent holder may file a petition with USPTO requesting that PTAB initiate PGR to review the validity of the patent.211 After a PGR petition is filed, the patent owner may file a preliminary response arguing that the patent claims meet all patenting requirements.212 Based on the petition and any response, the USPTO Director determines whether “it is more likely than not that at least 1 of the claims challenged in the petition is unpatentable.”213 If so, PTAB may institute review.214 PTAB may also institute review if the petition “raises a novel or unsettled legal question that is important to other patents or patent applications.”215 As with IPRs, the decision whether to institute a PGR is unreviewable. 203 Halimah DeLaine Prado, Reforming the Patent System to Support American Innovation, GOOGLE: THE KEYWORD, (Apr. 28, 2022), https://blog.google/outreach-initiatives/public-policy/reforming-the-patent-system-to-supportamerican-innovation/. 204 35 U.S.C. §§ 321–329. 205 Id. § 321(c). 206 Id. § 311(c). 207 Id. § 324(a). 208 Id. § 314(a). 209 Id. § 311(b). 210 Id. § 321(b). 211 Id. § 321(a). 212 Id. § 323. 213 Id. § 324(a). The USPTO Director has delegated this authority to PTAB. 37 C.F.R. § 42.4 (“[PTAB] institutes the trial on behalf of the Director.”); Thryv, Inc. v. Click-to-Call Techs., LP, 590 U.S. 45, 49 (2020) (“The Director has delegated institution authority to the Patent Trial and Appeal Board.”). 214 35 U.S.C. § 324(a). Notably, the decision whether to institute is permissive, rather than mandatory. See id. (stating that “the director may not authorize” PGR “unless” the petitioner demonstrates that it is more likely than not that at least one claim is unpatentable, but not mandating institution (emphasis added)). 215 Id. § 324(b). Congressional Research Service 21 The Patent Trial and Appeal Board and Inter Partes Review If PTAB institutes review, the patent owner may file a full response to the petition; the petitioner may file a reply; and, generally, the patent owner may file a sur-reply.216 The patent owner may also file a motion to amend the claims.217 Following the sur-reply, PTAB holds a hearing where the petitioner and patent owner present arguments regarding whether the patent meets the relevant requirements for patenting.218 Following the hearing, PTAB issues a final written decision determining whether the patent claims are valid.219 A party dissatisfied with the final written decision may seek review by the USPTO Director220 or appeal to the Federal Circuit.221 If, after all appeals, the patent claims are held invalid, USPTO issues a certificate cancelling those claims.222 Covered Business Method Review The AIA also introduced CBM review, a time-limited administrative proceeding for reviewing patents relating to methods of doing business.223 CBM review followed many of the same procedures as PGR,224 with several differences. A CBM review petition could be filed only by a party who “has been sued for infringement of the patent or has been charged with infringement under that patent” and only against a patent that is the subject of the suit.225 Moreover, the patent had to claim a “covered business method,” which the statute defined as “a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term [did] not include patents for technological inventions.”226 The CBM review program sunsetted on September 16, 2020.227 Comparison of PTAB and Other Post-Grant Proceedings Table 1 compares filing deadlines, standing, grounds for invalidation, and evidentiary thresholds for the three types of post-grant proceedings established by the AIA—PGR, IPR, and CBM review—as well as ex parte reexaminations, which predate the AIA and are not administered by PTAB. 216 See CONSOLIDATED PTAB PRACTICE GUIDE, supra note 136; see also 35 U.S.C. § 326(a) (giving USPTO Director the power to promulgate regulations governing PGR). 217 35 U.S.C. § 326(a)(9). 218 See id. § 326(a)(10). 219 Id. § 328(a). 220 See infra “Interim Director Review Process.” 221 35 U.S.C. § 329. 222 Id. § 328(b). 223 Leahy-Smith America Invents Act, Pub. L. No. 112-29, 125 Stat. 331, § 18(a) (2011). 224 Id. § 18(a)(1)(A). 225 Id. § 18(a)(1)(B). 226 Id. § 18(d)(1). 227 Id. § 18(a)(3). Congressional Research Service 22 The Patent Trial and Appeal Board and Inter Partes Review Table 1. USPTO Post-Grant Proceedings Proceeding Time for Filing Challenger (Standing) Grounds Evidentiary Threshold Sunset Date Ex Parte Reexamination (not PTABadministered) Any time. Anyone, including the USPTO Director on his/her own initiative. Novelty or nonobviousness on the basis of patents or printed publications. Substantial new question of patentability. None. PGR No later than nine months after issuance or reissuance of a patent. Anyone except the patent owner. Patent-eligible subject matter; novelty; nonobviousness; indefiniteness; written description; enablement. More likely than not that at least one of the challenged patent claims is unpatentable. None. IPR No earlier than (1) nine months after patent grant or (2) after the termination of any PGR. Anyone except the patent owner. Novelty or nonobviousness on the basis of patents or printed publications. Reasonable likelihood that the petitioner would prevail with respect to at least one of the challenged claims. None. CBM Review Any time before the sunset date. A person or the person’s real party in interest or privy who has been sued or charged with infringement under the challenged patent. May challenge only a covered business method patent. May raise patenteligible subject matter; novelty; nonobviousness; indefiniteness; written description; or enablement issues. More likely than not that at least one of the challenged claims is unpatentable. Sept. 16, 2020. Source: Created by CRS based on Title 35 chapters 30 (ex parte reexamination), 31 (IPR), and 32 (PGR), and Public Law No. 112-29, 125 Stat. 331, section 18 (CBM review). Notes: “PTAB” means the Patent Trial and Appeal Board; “PGR” means post-grant review; “IPR” means inter partes review; “CBM” means covered business method. PTAB at the Supreme Court Starting in 2016, the Supreme Court decided six major cases involving PTAB in a five-year period.228 The Court’s interest in PTAB may reflect, to some degree, novel statutory and constitutional issues raised by the AIA, as well as PTAB’s importance in the patent system. This section surveys the facts and holdings of each of these cases. 228 See Cuozzo Speed Techs., LLC v. Lee, 579 U.S. 261 (2016); SAS Inst., Inc. v. Iancu, 138 S. Ct. 1348 (2018); Oil States Energy Servs., LLC v. Greene's Energy Grp., LLC, 584 U.S. 325 (2018); Return Mail, Inc. v. U.S. Postal Serv., 139 S. Ct. 1853 (2019); Thryv, Inc. v. Click-to-Call Techs., LP, 590 U.S. 45 (2020); United States v. Arthrex, Inc., 594 U.S. 1 (2021). Congressional Research Service 23 The Patent Trial and Appeal Board and Inter Partes Review Statutory Interpretation Cases Four of the six Supreme Court cases addressing PTAB have raised questions regarding the correct interpretation of provisions of the AIA, including whether the AIA gives PTAB authority to select a certain legal standard for claim construction in AIA proceedings (yes), whether the AIA allows PTAB to institute an IPR for only some of the patent claims challenged in a petition (no), and whether the federal government is a “person” that may file a petition for IPR (no). In addition, two of these cases addressed the proper interpretation of 35 U.S.C. § 314(d), an AIA provision stating that the decision whether or not to institute an IPR is “final and nonappealable.”229 As discussed below, the Supreme Court held that PTAB’s decision to institute an IPR cannot be appealed on grounds that the petition did not comply with the AIA’s requirements or was untimely. Cuozzo Speed Technologies, LLC v. Lee The first Supreme Court decision to address IPR, 2016’s Cuozzo Speed Technologies, LLC v. Lee, involved two separate issues: (1) the scope of Section 314(d)’s no-appeal provision and (2) whether the AIA authorized USPTO to issue a regulation adopting a “broadest reasonable construction” (BRC) standard for claim construction in IPR proceedings.230 The Court concluded that PTAB’s institution decision was nonappealable and that USPTO had authority to issue the BRC regulation,231 affirming the Federal Circuit’s decision below.232 Nonappealability of Institution Decisions. Regarding the no-appeal provision, Cuozzo, a patent owner, argued that PTAB had improperly instituted an IPR because it invalidated certain of its patent claims on bases only implicitly raised in the petition.233 Thus, Cuozzo argued, the petition had not identified the challenged claims or grounds “with particularity” as required by 35 U.S.C. § 312(a)(3).234 The Supreme Court held that the no-appeal provision rendered PTAB’s decision to institute nonappealable.235 While the Supreme Court recognized a “‘strong presumption’ in favor of judicial review” that could only “be overcome by ‘clear and convincing’ indications” from Congress, it held that the language in Section 314(d) met that standard.236 To hold otherwise, the Court reasoned, would undercut the congressional objective of allowing USPTO to revisit patentability determinations.237 Specifically, the Court doubted that Congress would have given USPTO these review powers if it “thought that the agency’s final decision could be unwound under some minor statutory technicality related to its preliminary decision to institute [an IPR].”238 Nevertheless, the Supreme Court indicated that Section 314(d)’s scope is not boundless. The Court cautioned that the no-appeal provision “applies where the grounds for attacking the 229 35 U.S.C. § 314(d). 230 Cuozzo, 579 U.S. at 265–66. 231 See id. at 266. 232 See id. at 283. 233 See id. at 270. 234 See id. 235 See id. at 271. 236 Id. at 273–74 (quoting Block v. Cmty. Nutrition Inst., 467 U.S. 340, 349–50 (1984)). 237 See id. at 272. 238 Id. Congressional Research Service 24 The Patent Trial and Appeal Board and Inter Partes Review decision to institute [an IPR] consist of questions that are closely tied to the application and interpretation of statutes related to the Patent Office’s decision to initiate [IPR].”239 Thus, for instance, Section 314(d) bars judicial review where a patent holder challenges PTAB’s determination that the petition shows a “reasonable likelihood” of success.240 By contrast, the Court stated that it was not deciding whether the no-appeal provision would apply to “appeals that implicate constitutional questions, that depend on other less closely related statutes, or that present other questions of interpretation that reach, in terms of scope and impact, well beyond ‘this section.’”241 The Court also indicated that “shenanigans” where PTAB acted beyond its statutory jurisdiction would be reviewable.242 (As explained below, the Court would revisit the scope of Section 314(d)’s scope four years later, in Thryv, Inc. v. Click-To-Call Technologies, LP.243) Justice Alito, dissenting in part and joined by Justice Sotomayor, argued that Section 314(d) did not overcome the presumption against judicial review.244 Justice Alito argued that Section 314(d) should be read solely as precluding a party from appealing directly from the institution decision itself, while permitting a party to seek judicial review of the institution decision after PTAB issues its final written decision in the IPR.245 USPTO Authority for the BRC Claim Construction Standard. Turning to claim construction, the Court held that the AIA’s provision giving USPTO authority to issue regulations “establishing and governing [IPR]” allowed it to issue a regulation adopting the BRC standard.246 Since the AIA did not specify the claim construction standard to be used in IPR, the Court held that, as a matter of Chevron deference, USPTO was permitted to adopt reasonable rules to fill that statutory “gap.”247 The Court concluded that adopting the BRC standard was reasonable, explaining that USPTO has used this standard in other contexts for many years and that this standard protects the public by helping prevent patentees from “tying up too much knowledge.”248 The Court rejected Cuozzo’s argument that PTAB was required to use the same claim construction standard used by district courts, noting that IPR is “more like a specialized agency proceeding” than a judicial proceeding in some respects and is meant to serve a public interest in keeping “‘patent monopolies . . . within their legitimate scope.’”249 In a concurring opinion, Justice Thomas argued that Chevron deference was unnecessary to resolve the BRC question, since the AIA “contains an express and clear conferral of authority to the Patent Office to promulgate rules governing its own proceedings,” and the rule adopting the BRC standard was not “‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law’” under the Administrative Procedure Act.250 239 Id. at 274–75. 240 Id. (citing 35 U.S.C. § 314(a)). 241 Id. at 275. 242 Id. 243 590 U.S. 45 (2020). 244 Cuozzo, 579 U.S. at 387 (Alito, J., concurring in part and dissenting in part). 245 See id. at 291. 246 Id. at 276 (quoting 35 U.S.C. § 316(a)(4)). 247 Id. at 276–77 (citing Chevron U.S.A. Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984)). 248 See id. at 281. 249 Id. at 278–80 (quoting Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806, 816 (1945)). 250 Id. at 286–87 (Thomas, J., concurring) (quoting 5 U.S.C. § 706(2)(A)). Congressional Research Service 25 The Patent Trial and Appeal Board and Inter Partes Review SAS Institute, Inc. v. Iancu In the 2018 decision SAS Institute, Inc. v. Iancu,251 the Supreme Court held that the AIA did not permit a PTAB practice called “partial institution,” whereby PTAB could institute an IPR for some but not all patent claims challenged in a petition.252 Under the holding in SAS, PTAB must follow an all-or-nothing approach to institution decisions, either denying institution entirely or instituting an IPR on all of the claims the petitioner challenged.253 In other words, PTAB may not selectively “weed out” challenges to certain claims at the institution stage. The case began when SAS petitioned PTAB to institute an IPR on all 16 claims of another company’s software patent.254 Based on a USPTO regulation allowing “partial institution,” PTAB instituted an IPR as to nine of those claims, ultimately finding eight of them unpatentable.255 On appeal to the Federal Circuit, SAS argued that the AIA required PTAB to decide the patentability of all of the claims challenged in the petition once it instituted an IPR, but the Federal Circuit rejected this argument.256 The Supreme Court’s opinion, by Justice Gorsuch, held that the plain text of 35 U.S.C. § 318(a) prohibited partial institution.257 Section 318(a) provides: “If an [IPR] is instituted and not dismissed under this chapter, the [PTAB] shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner.”258 The Court held that “any” in this context implies “every,” requiring PTAB to resolve the patentability of every claim challenged in the petition if it decides to institute an IPR.259 The Court reasoned that other statutory features supported this reading of Section 318(a), including the fact that the AIA does not permit PTAB to institute an IPR of its own initiative and that IPR utilizes a “party-directed, adversarial process.”260 Further, the Court held that Section 318(a) is unambiguous, foreclosing any possible deference to PTAB’s interpretation of the statute.261 In short, the Court held, while PTAB generally has discretion “whether to institute review” if the petitioner shows a reasonable likelihood of success on at least one patent claim, PTAB does not have discretion “regarding what claim that review will encompass.”262 Four Justices dissented from the Court’s opinion. Justice Ginsburg authored one dissenting opinion, arguing that the Court’s holding would needlessly waste PTAB’s resources.263 Justice Ginsburg reasoned that, since PTAB is never required to institute an IPR, PTAB could accomplish the same result as partial institution—albeit less efficiently—by denying institution and encouraging the petitioner to file a new petition challenging only a subset of the same claims. 264 251 138 S. Ct. 1348 (2018). 252 See id. at 1354. 253 See id. at 1353. 254 See id. at 1354. 255 See id. 256 See id. 257 See id. 258 35 U.S.C. § 318(a). 259 See SAS, 138 S. Ct. at 1354. 260 Id. at 1355. 261 See id. at 1358 (discussing Chevron U.S.A. Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984)). 262 Id. at 1356. 263 Id. at 1360 (Ginsburg, J., dissenting). 264 See id. Congressional Research Service 26 The Patent Trial and Appeal Board and Inter Partes Review In a second dissenting opinion, Justice Breyer argued that Section 318(a) is ambiguous, requiring the Court to defer to PTAB’s reasonable interpretation of the statute under Chevron.265 Justice Breyer reasoned that the phrase “any patent claim challenged by the petitioner” could refer either to challenges made in the petition or to challenges that remain once the IPR instituted.266 Justice Breyer further contended that PTAB’s resolution of this ambiguity, allowing “partial institution,” was reasonable and entitled to deference.267 Return Mail, Inc. v. U.S. Postal Service In 2019, the Supreme Court decided Return Mail, Inc. v. U.S. Postal Service,268 holding that the AIA does not permit governmental entities to petition for AIA proceedings (i.e., IPR, PGR, or CBM review).269 This holding has significance for scenarios in which the government—or certain private parties acting on the government’s behalf, such as government contractors—might be accused of patent infringement. Return Mail, Inc. owned a patent on a method for processing undeliverable mail.270 Asserting that the U.S. Postal Service infringed this patent, Return Mail sued the Postal Service in the U.S. Court of Federal Claims under 28 U.S.C. § 1498.271 Section 1498 allows a patent owner to sue the United States in the Court of Federal Claims when the patented invention “is used or manufactured by or for the United States without license of the owner thereof or lawful right to use or manufacture the same.”272 Section 1498 allows a patent owner—such as Return Mail—to recover the “reasonable and entire compensation for such use and manufacture,” as well as costs and attorneys’ fees in some cases.273 In response to Return Mail’s pre-suit infringement accusations, the Postal Service petitioned USPTO for ex parte reexamination of the asserted patent.274 USPTO conducted an ex parte reexamination and confirmed the validity of the patent (albeit by substituting claims).275 Then, after Return Mail had filed its infringement suit in the Court of Federal Claims, the Postal Service petitioned for CBM review of the patent.276 PTAB initiated a CBM review and ruled that the 265 Id. (Breyer, J., dissenting) (citing Chevron, 467 U.S. at 842–43). 266 Id. at 1361 (Breyer, J., dissenting). 267 See id. at 264. 268 139 S. Ct. 1853 (2019). 269 See id. at 1867. 270 See id. at 1861. 271 See id. 272 28 U.S.C. § 1498(a). 273 Id. (permitting award of costs and fees “if the owner is an independent inventor, a nonprofit organization, or an entity that had no more than 500 employees at any time during the 5-year period preceding the use or manufacture”). Section 1498 provides that patent owners may bring such claims against the United States not only when the government itself uses or manufactures the invention, but also when private parties use or manufacture the invention “for” the government with its “authorization or consent.” Id. (“[T]he use or manufacture of an invention described in and covered by a patent of the United States by a contractor, a subcontractor, or any person, firm, or corporation for the Government and with the authorization or consent of the Government, shall be construed as use or manufacture for the United States.”). 274 See Return Mail, 139 S. Ct. at 1861. 275 See id. 276 See id. Congressional Research Service 27 The Patent Trial and Appeal Board and Inter Partes Review patent was invalid because it was directed to ineligible subject matter. On appeal, the Federal Circuit affirmed PTAB’s decision.277 At the Supreme Court, Return Mail hinged on whether, as a matter of statutory interpretation, the government is a “person” eligible to petition for CBM review or other AIA proceedings.278 The AIA allows “a person who is not the owner of a patent” to petition for IPR, PGR, and CBM review,279 but it does not define the word “person.”280 The Court, in an opinion by Justice Sotomayor, held that “person” as used in the AIA does not include the government and its agencies.281 To reach this holding, the Court applied a “longstanding interpretive presumption” that the word “person” does not include the government.282 The Court noted that Congress itself had adopted this presumption283 in a 1947 law (the Dictionary Act) providing that specific words, as used in acts of Congress, should be interpreted according to definitions provided in the Dictionary Act “unless the context indicates otherwise.”284 The Dictionary Act’s definition of a “person,” the Court noted, included certain corporate entities but not the government.285 The Court rejected the Postal Service’s argument that Congress must have intended the government to be able to petition for AIA proceedings since Congress has made the government liable to pay compensation for patent infringement under Section 1498.286 In response to this argument, the Court noted that the government’s potential liability under Section 1498 is less severe than that of ordinary infringers in a civil suit, and the government may still assert invalidity as a defense in any Section 1498 lawsuit and petition for non-AIA proceedings such as ex parte reexamination.287 Justice Breyer issued a dissenting opinion that was joined by Justices Ginsburg and Kagan.288 The dissent argued that the presumption against interpreting “person” in the AIA to include the government was weakened by the fact that certain other uses of “person” in the Patent Act (e.g., those referring to eligibility to obtain a patent) include the government.289 The dissent also argued that allowing the government to petition for AIA proceedings would better serve Congress’s purpose in enacting the AIA and that it would be anomalous for Congress not to allow the 277 See id. 278 See id. 279 Id. at 1860; see 35 U.S.C. §§ 311(a) (IPR), 321(a) (PGR); Pub. L. No. 112-29 § 18(a)(1), (B), 125 Stat. 330 (2011) (providing that CBM review “shall be regarded as, and shall employ the standards and procedures of, a [PGR]” and that “[a] person may not file a petition for [CBM review] unless the person or the person’s real party in interest or privy has been sued . . . or . . . charged with infringement”). 280 See Return Mail, 139 S. Ct. at 1861. 281 See id. at 1867. 282 Id. at 1862–63 (quoting Vt. Agency of Nat. Res. v. United States ex rel. Stevens, 529 U.S. 765, 780–81 (2000)). 283 See Return Mail, 139 S. Ct. at 1863. 284 1 U.S.C. § 1. 285 See id. (“[T]he words ‘person’ and ‘whoever’ include corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals . . . .”). 286 See Return Mail, 139 S. Ct. at 1866–67. 287 See id. 288 See id. at 1868–72 (Breyer, J., dissenting). 289 See id. at 1868–70. Congressional Research Service 28 The Patent Trial and Appeal Board and Inter Partes Review government to petition for AIA review while allowing the government to be sued for patent infringement and to avail itself of other USPTO invalidity proceedings.290 Thryv, Inc. v. Click-to-Call Technologies, LP In 2020, the Supreme Court again considered Section 314(d)’s no-appeal provision in Thryv, Inc. v. Click-to-Call Technologies, LP.291 Click-to-Call concerned the “time-bar” provision of 35 U.S.C. § 315(b), which requires petitioners to file an IPR no more one year after they are sued for infringement of the patent.292 The Court, in an opinion by Justice Ginsburg, held that Section 314(d) bars judicial review of PTAB determinations regarding Section 315(b)’s time bar.293 The respondent, Click-to-Call Technologies, LP, owned a patent that Thryv, Inc. challenged via an IPR petition filed in 2013.294 Click-to-Call claimed the petition was untimely, arguing that Section 315(b)’s one-year clock had begun to run in 2001, when Thryv’s predecessor was sued for infringement of the patent.295 PTAB, however, ruled that this infringement suit did not trigger the one-year clock because it had been dismissed without prejudice.296 The Court found Cuozzo’s holding—that Section 314(d) bars review of “matters ‘closely tied to the application and interpretation of statutes related to’ the institution decision”—controlling in Thryv, since the Section 315(b) time bar is an “integral” condition on institution.297 The Court also determined that the “purpose and design” of the statute creating IPR reinforces the conclusion that the no-appeal provision applies to the time bar because IPR “sought to weed out bad patent claims,” and that allowing review of the time bar would permit the continued enforcement of patents held to be invalid.298 The Court rejected Click-to-Call’s arguments that Section 314(d) does not apply to time-bar determinations, including its attempt to read Section 314(d) as limited to the initial merits determination.299 The Court found this argument foreclosed by Cuozzo and inconsistent with related no-appeal provisions that Congress drew more narrowly. If Congress had intended Section 314(d)’s scope to be narrower, the Court reasoned, it would have used narrower language.300 Accordingly, the Court vacated and remanded the Federal Circuit’s judgment, with instructions to dismiss the appeal for lack of jurisdiction.301 Justice Gorsuch issued a dissenting opinion that Justice Sotomayor joined in part. Justice Gorsuch argued that Section 314(d)’s text indicates that the no-appeal provision applies only to PTAB’s initial determination on the merits of the petition, not to other determinations.302 Justice Gorsuch contended that Cuozzo’s statement to the contrary was “dicta” (i.e., nonbinding language not 290 See id. at 1870–71. 291 590 U.S. 45 (2020). 292 See id. at 47–49. 293 See id. 294 See id. 295 See id. & n. 4. 296 See id. at 47–49. 297 Id. at 46 (quoting Cuozzo, 579 U.S. at 273–75). 298 See id. at 52–54. 299 See id. at 56–57. 300 See id. at 56–59. 301 See id. at 60–61. 302 See id. at 65–66 (Gorsuch, J., dissenting). Congressional Research Service 29 The Patent Trial and Appeal Board and Inter Partes Review necessary to the holding of that case) and should not control the present case.303 Moreover, he argued that the presumption of judicial review indicates that the no-appeal provision should be read narrowly to reach only the initial merits determination.304 Justice Gorsuch also opined that the Court’s precedents interpreting the AIA shifted too much power to USPTO at the expense of the courts, particularly considering that the USPTO Director is a political appointee.305 Finally, he criticized the Court’s previous decision upholding the IPR’s constitutionality as part of a trend of “handing over judicial powers involving the disposition of individual rights to executive agency officials.”306 Constitutional Challenges to IPR While the foregoing cases addressed questions of statutory interpretation of the AIA, the Supreme Court has also heard two cases challenging aspects of IPR proceedings on constitutional grounds. In the first of these cases, the Supreme Court upheld the constitutionality of IPR against arguments that it violates separation-of-powers principles and the constitutional guarantee of jury trials. In the second case, the Supreme Court invalidated a provision of the AIA that prevented the USPTO Director from reviewing IPR decisions, holding that it violated the Constitution’s Appointments Clause. Oil States Energy Services, LLC v. Greene’s Energy Group, LLC In Oil States Energy Services, LLC v. Greene’s Energy Group, LLC,307 the Court addressed whether IPR violates Article III or the Seventh Amendment of the Constitution. In Oil States, a party whose patent claims had been invalidated in IPR argued that IPR was unconstitutional because patent rights can be revoked only by an Article III court (e.g., a federal district court), with the right to a jury trial pursuant to the Seventh Amendment.308 The Supreme Court rejected this argument.309 The Supreme Court explained that, while Article III “vests the judicial power of the United States” in federal courts, proceedings that adjudicate “public rights” do not necessarily involve an exercise of judicial power.310 This “public rights doctrine” gives Congress “significant latitude” to allow tribunals other than Article III courts to adjudicate public rights.33 The Court held that patent rights are public rather than private rights, since patents are created pursuant to statute and give the owner a “public franchise” or monopoly that prevents the public from practicing the claimed invention.311 Since IPR is “simply a reconsideration” of the initial granting of that public right312—and since patent claims are granted subject to the possibility that they may be invalidated in IPR313—the Court held that an issued patent’s validity can constitutionally be 303 See id. at 75–77. 304 See id. at 70–72. 305 See id. at 79–81. 306 Id. at 77–79; see infra “Oil States Energy Services, LLC v. Greene’s Energy Group, LLC.” 307 584 U.S. 325 (2018). 308 See id. at 332–34. PTAB is an administrative or legislative court, not an Article III court, because PTAB hears cases in which the petitioner lacks standing and APJs do not enjoy protections afforded to Article III judges such as lifetime tenure. See generally CRS Report R43746, Congressional Power to Create Federal Courts: A Legal Overview (2015). 309 Oil States, 584 U.S. at 344–45. 310 See id. at 332–35. 311 Id. at 334–38. 312 Id. at 334–35. 313 See id. at 335–37. Congressional Research Service 30 The Patent Trial and Appeal Board and Inter Partes Review determined by PTAB rather than an Article III court. Further, since Congress was permitted to assign IPR proceedings to non-Article III tribunal, the Court held that appellants had no right to a trial by jury under the Seventh Amendment.314 Seven Justices joined Justice Thomas’s majority opinion in full, with three of those Justices concurring to express their perspective that private rights may also sometimes be adjudicated by bodies other than Article III courts.315 Justice Gorsuch, joined by Chief Justice Roberts, dissented.316 Justice Gorsuch argued that, based on historical practice in the United States and England, cancelling an issued patent is an exercise of “judicial power”317 that is not comparable to USPTO’s initial decision whether to grant a patent.318 Whereas the majority noted that, prior to the creation of PTAB and IPR, Congress had established other non-Article III proceedings to cancel issued patents since 1980,319 Justice Gorsuch stressed that such proceedings did not exist from 1790 (when Congress enacted the first Patent Act) to 1980.320 United States v. Arthrex In the 2021 case United States v. Arthrex,321 the Supreme Court invalidated the provision of the AIA that prevented the USPTO Director from reviewing APJs’ IPR decisions, holding that this provision violated the Constitution’s Appointments Clause.322 The Court’s decision in Arthrex prompted PTAB to develop an interim process for the Director to review panel decisions—a process discussed in the following section of this report. The Appointments Clause sets forth how “Officers of the United States,” such as APJs, may be appointed.323 It gives Congress discretion to vest the appointment of “inferior [o]fficers” either in “the President alone, in the Courts of Law, or in the Heads of Departments” but requires the President to appoint all other officers—whom the Supreme Court refers to as principal officers— with the Senate’s advice and consent.324 In Arthrex, a company whose patent had been invalidated in an IPR claimed that APJs’ appointment by the Secretary of Commerce was unconstitutional, arguing that APJs were principal officers requiring presidential appointment and Senate confirmation.325 The Supreme Court, in an opinion by Chief Justice Roberts, held that the AIA gave APJs authority that was “incompatible with their appointment by the Secretary to an inferior office.”326 314 See id. at 334–38. 315 See id. at 334–38 (Breyer, J., concurring). 316 Id. at 345–47 (Gorsuch, J., dissenting). 317 See id. at 347–54. 318 See id. at 354–55. 319 See id. at 354–56. 320 See id. at 352–54 (Gorsuch, J., dissenting). The majority and Justice Gorsuch also reached differing interpretations regarding the extent to which nonjudicial proceedings to cancel patents were an accepted practice under English law at the time of the framing of the Constitution. Compare id. at 340–42 (majority opinion, noting practice of vacating patents via petitions to the Privy Council), with id. at 351–52 (Gorsuch, J., dissenting, arguing that this practice had become a “last resort” by the time of the Constitution). 321 594 U.S. 1 (2021). 322 See id. at 24–28. 323 See Cong. Rsch. Serv., Officer and Non-Officer Appointments, CONSTITUTION ANNOTATED, https://constitution.congress.gov/browse/essay/artII-S2-C2-3-10/ALDE_00013100/ (last visited Mar. 28, 2024). 324 U.S. CONST. art. II, § 2, cl. 2. 325 See Arthrex, 594 U.S. at 9–14. 326 Id. at 23. Congressional Research Service 31 [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/crs%3AR48016. Public record. Not legal advice.