The Patent Trial and Appeal Board (“PTAB”) enjoys a wide range of discretion on a number of issues. For instance, the PTAB has interpreted 35 U.S.C. § 314(a) as providing the Director with the discretion to institute or not, regardless of whether there is a reasonable likelihood that the petitioner will prevail on at least one claim. E.g., IPR2014-00581, Paper 8; IPR2014-01203, Paper 13. There is also additional, independent discretionary authority provided by 35 U.S.C. § 325(d), which permits the PTAB to take into account whether the same or substantially the same prior art or argument were previously presented to the Patent and Trademark Office (“the Office”), and to deny institution on that basis. Id. And, of course, the PTAB is effectively immune from appellate review on its decisions to institute. 35 U.S.C. § 314(d); Cuozzo Speed Technologies, LLC v. Lee, 136 S. Ct. 2131 (2016).
Within the decision to institute, there are a number of procedural issues outside the patent-law question of whether there is a reasonable likelihood that the petitioner will prevail on at least one claim (on the merits). For instance, the PTAB may need to determine whether the petition is timely filed, whether the petition has identified all real parties-in-interest, or whether the petition is barred based on patent-office estoppel.
Complete and unfettered discretion would be undesirable for both petitioners and patent owners. Having some framework for exercising discretion (e.g., for deciding when a petition is timely filed), allows for greater predictability and allows parties to better make business decisions related to bringing petitions in the first instance and then in proceeding with a case whether by continuing with the petition as petitioner or challenging it as patent owner. In part to address these concerns, the Office has provided four categories of decisions: routine, informative, representative, and precedential. See PTAB’s “Standard Operating Procedure 2” document.
Precedential decisions are binding on PTAB panels. All other decisions are not. To date, the Office has designated less than ten decisions as being precedential—an exceedingly tiny fraction of the total decisions.
In practice, panels have sometimes converged on a stable framework for at least some instances of exercising discretion. For example, on the question of whether a dismissal without prejudice resets the one-year bar date, panels have generally held the answer to be “yes” (though it is a fact-specific question). Of the less than ten opinions designated as precedential, the Office has designated two precedential decisions related to this question (Oracle Corp. v. Click-to-Call Techs, LP, IPR2013-00312, Paper 26 (Oct. 30, 2013) (precedential only as to Section III.A) and LG Electronics, Inc. v. Mondis Tech Ltd., IPR2015-00937, Paper 8 (Sept. 17, 2015)). Even where decisions are not designated precedential, some are cited so frequently to effectively inform stakeholders about the framework in which the PTAB will exercise its discretion.
Even so, the lack of precedential decisions in these areas can lead to uncertainty and the attendant costs associated with uncertainty. For example, different panels considering the same petition may exercise discretion under 325(d) differently. While the same is obviously true in a district court setting (e.g., where a judge may be bound by precedent to consider a list of factors in considering whether to stay a case), there is at least some framework that each judge will follow. In the PTAB, lacking precedential opinions dictating how to exercise discretion, each panel may decide for itself (and may decide differently from one petition to the next). Some panels will permit a second petition where it explicitly addresses the strengths and weaknesses of the different references. IPR2017-00221, Paper 9 at 9. Some panels do not require that. IPR2014-01203, Paper 13 (noting that case cited by patent owner indicating petition should address strengths and weaknesses of different references was not precedential). Some panels will find the addition of a secondary reference to an obviousness ground enough to make the petition not constitute “the same or substantially the same” prior art or arguments. Id. Other panels disagree. IPR2014-00581, Paper 8. As may be expected, such disparity of treatment does not lead to any generalized or unified view of how the PTAB looks at redundancy and discretion under 325(d). This can lead petitioners astray in deciding what grounds (and how many) to include in a single petition (or multiple petitions), and can also lead patent owners astray in deciding how to challenge such petitions.
The Office has the power to address the problem of uncertainty. For example, it can designate some opinions as precedential, or parts of decisions as precedential. It could encourage panels to use rules- or standards-based approaches to exercising discretion, and then after seeing how this played out in practice over a number of decisions, select the most workable solutions. Alternatively, the Office could promulgate rules through its rule-making authority. For instance, the Office could identify a multi-factor test of what to consider when exercising its discretionary authority to institute redundant grounds. Either of these approaches would at least have the benefit of providing more certainty.