Back to top

Federal Circuit Rules PTAB Can Both Initiate And Decide AIA Reviews

The Federal Circuit affirmed in Ethicon Endo-Surgery Inc. v. Covidien LP, No. 2014-1771 (Fed. Cir. January 13, 2016), the Patent Trial and Appeal Board’s practice of having the same panel decide whether to institute an America Invents Act review and then make the final decision. In a 2-1 decision, the Court affirmed the PTAB’s finding in an AIA inter partes review that U.S. Patent No. 8,317,070 was invalid as obvious.

Ethicon had argued that having the same PTAB panel first determined whether a review of the patent should be instituted, then issue the final decision on validity, violated the due process clause of the U.S. Constitution because the panel might prejudge the case on the limited evidence presented in an AIA petition, before seeing the full record in the actual review.

The Federal Circuit decision, written by Judge Dyk, however, held that the board is entitled to a "presumption of honesty and integrity" and that the AIA does not require the institution decision and final decision to be made by different parties. "There is nothing in the Constitution or the statute that precludes the same board panel from making the decision to institute and then rendering the final decision." The AIA gives the USPTO Director the authority to determine whether an AIA review should be instituted, and the Director can delegate that authority to the PTAB. "Congress obviously assumed that the director would delegate." The Court further noted "the longstanding rule that agency heads have implied authority to delegate to officials within the agency, even without explicit statutory authority." The Court also noted that having the same panel making institution decisions and final decisions in AIA reviews is "directly analogous to a district court determining whether there is 'a likelihood of success on the merits' and then later deciding the merits of a case.”

In dissent, Judge Newman wrote that the majority “departs not only from the statute but also from the due process guarantee of a ‘fair and impartial decision-maker.’” The dissent suggested that the USPTO director could delegate the institution decision to an examiner or solicitor, but not to the same PTAB panel that makes the final decision.