Vidal's Tenure May Make The PTAB A More Desirable Litigation Venue

• Jurisdiction: United States,Federal
• Law Firm: Baker Botts
• Subject Matter: Intellectual Property, Patent
• Author: Ms Amara Osisioma
• Published date: 09 February 2023

Director Kathi Vidal assumed the role of Director of the U.S. Patent and Trademark Office ("PTO") in April 2022. Prior to her appointment as the director of the PTO, Director Vidal was a senior partner and intellectual property litigator at Winston & Strawn and a member of the executive committee of the firm. She had also been a principal at Fish & Richardson P.C., prior to her time at Winston & Strawn LLP, and had served as a member of the management committee. There is little doubt that she brought a deep understanding of patent disputes and district court litigation to her leadership at the PTO. This may result in making the Patent and Trial Appeal Board ("PTAB") a more popular venue for patent disputes.

A Brief History of the PTAB and its Impact on Patent Law

In 2012, the Leahy-Smith America Invents Act ("AIA") created a system for challenging patents outside district courts using a post-grant review process before the PTAB. The purpose of this new forum was to provide "a more efficient and streamlined patent system that [would] improve patent quality and limit unnecessary and counterproductive litigation costs."¹ This efficiency is achieved when an accused infringer challenges the validity of a patent to resolve the question of validity in approximately eighteen months and with limited discovery, as compared to the lengthy and far greater expense needed to litigate the case in the district court. Since the AIA was passed, challenges to patent validity have primarily occurred through inter partes reviews ("IPRs").² Though there have been many patent disputes initiated before the PTAB, federal district courts are still the primary venue for resolving patent disputes. An analysis published by Unified Patents in 2022 indicates that over the last nine years the number of patent disputes at the PTAB have averaged about 39.5% of the disputes in the district court.³ On the other hand, district court litigation is a key driver of PTAB proceedings, as nearly two thirds of patents challenged in IPR proceedings are involved in parallel district court litigation involving the same patent and parties.⁴

Historically, parties could request review of a PTAB decision or request that an opinion be made precedential by submitting a written request to the Precedential Opinion Panel ("POP").⁵ In June 2021, the U.S. Supreme Court issued a decision in U.S. v. Arthrex making decisions by Administrative Patent Judges ("APJs") reviewable by the PTO director.⁶ The ability to have a decision reviewed by the PTO director provides another avenue for petitioners to seek rehearing of PTAB decisions. Review of decisions by the director may also serve to clarify the standards for instituting an IPR challenge and determining validity of a patent.

Director Vidal's Approach as PTO Director

The PTO Director's role has always been an important feature of the patent landscape, and the Arthrex decision made it even more so. Director Vidal has also taken an active role in reviewing PTAB decisions and clarifying PTAB policy. At the time of the Arthrex decision, an interim director implemented an interim process for director review, and only three requests were granted from the over a hundred requests submitted.⁷ After she became director, in just four months, between June and September 2022, Director Vidal initiated review of at least eight cases'most reviews were initiated on her own accord. She reviewed both final decisions on validity, as well as IPR institution decisions. Since assuming leadership of the PTO, Director Vidal has clarified policy regarding discretionary denials, clarified the standards for review and institution of serial petitions, and sanctioned abuse of the forum.

Making IPRs a Realistic Alternative to District Court Litigation

Two months after her confirmation, Director Vidal provided guidance on discretionary denials under Fintiv. Apple Inc. v. Fintiv Inc. is a decision that was made precedential by the PTAB in May 2020.⁸ In Fintiv, the PTAB identified six factors to be considered in exercising discretion to deny an IPR petition (without considering the strength of the invalidity case presented in the petition): (1) whether the district court has stayed the infringement case pending the outcome of the PTAB case; (2) the proximity of the trial date to the PTAB's deadline to issue a decision, which would come one year after a review is instituted; (3) the amount of resources the court and parties have invested in the district court case; (4) overlap between the issues raised in the petition and those being considered in district court, for example if both the IPR petition and the invalidity case in the district court involve the same prior art and arguments, that would weigh in favor of denying the petition; (5) whether the petitioner is the defendant in the...