Academic journal article Iowa Law Review

A Functional Approach to Judicial Review of PTAB Rulings on Mixed Questions of Law and Fact

Academic journal article Iowa Law Review

A Functional Approach to Judicial Review of PTAB Rulings on Mixed Questions of Law and Fact

Article excerpt

I. Introduction

During the heyday of Chevron deference to agencies' interpretations of the laws they administer,1 the Court of Appeals for the Federal Circuit ("Federal Circuit") took a notably less deferential approach toward the Patent and Trademark Office ("PTO").2 Treating the PTO the same as federal district courts, the Federal Circuit reviewed its factual findings for clear error and its legal conclusions de novo.3

The Supreme Court held that the Administrative Procedure Act ("APA") requires greater deference to PTO factual findings in its 1999 decision in Dickinson v. Zurko.4 After that, the Federal Circuit recited that it reviews such findings for "substantial evidence" in the administrative record rather than for clear error.5 But it continued to review the PTO's conclusions of law de novo, reasoning that Chevron deference was not appropriate because the Patent Act did not give the PTO rulemaking authority over substantive issues of patent law.6 Meanwhile, the Federal Circuit defined an expanding list of disputed issues in patent matters as questions of law.7

A potential game changer occurred in 2011 when Congress expanded the PTO's authority to engage in both rulemaking and adjudication in the Leahy-Smith America Invents Act ("AIA").8 Concerned about the impact of patents of dubious validity on innovation, Congress sought to provide a quicker, cheaper, and more expert alternative to federal district courts for adjudicating validity challenges.9 The AIA authorizes the PTO to resolve such challenges in adjudicatory proceedings before the Patent Trial and Appeal Board ("PTAB"),10 and to prescribe regulations for the conduct of these proceedings.11 Some commentators argue that these new delegations of authority call for greater deference to the PTO's interpretations of ambiguous provisions in the Patent Act.12 On the other hand, some Federal Circuit judges argue that administrative factfinding in the AIA PTAB proceedings should get less deference than the Supreme Court required in Dickinson v. Zurko.13

An important category of PTAB determinations falls outside much of this discourse: rulings that apply general legal standards to particular cases. Arguably such rulings amount to statutory gap-filling under implicit delegation of authority to the PTO from Congress, and are thus entitled to Chevron deference.14 But the Federal Circuit calls these determinations "conclusions of law" and reviews them de novo.15 In their specificity and grounding in the evidence, these "legal conclusions" resemble fact finding more than statutory interpretation, and they may indeed rest on subsidiary findings that the Federal Circuit codes as factual.16 The Federal Circuit recites that it reviews the underlying factual findings for substantial evidence, while it reviews the ultimate rulings de novo.

Such issues predominate in inter partes review proceedings ("IPR(s)"), which account for more than 90% of filings to date seeking AIA adjudications before the PTAB.17 Although the PTAB may consider a broader set of issues in other proceedings, the AIA limits the use of IPRs to challenges under sections 102 and 103 of the Patent Act (i.e., lack of novelty and obviousness) based on prior art consisting of patents and printed publications.18 Both determinations compare the challenged patent claim(s) to the prior art, often raising disputes about the meaning of the claim language.19 Most IPRs thus involve rulings on three issues: novelty, nonobviousness, and claim interpretation. The Federal Circuit codes novelty as a question of fact, reviewing agency findings for substantial evidence.20 But it codes nonobviousness and claim interpretation as legal conclusions that it reviews de novo (although it reviews subsidiary factual findings for substantial evidence).21 This approach leaves considerable scope for appellate review of two of the three principal issues in IPRs.

The AIA provides for Federal Circuit review of PTAB decisions,22 without specifying standards of review. …

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