USPTO Faces Public Policy Dilemma

The Patent Trial & Appeal Board (PTAB) has the power to terminate an Inter Partes Review (IPR), Post Grant Review (PGR), or Transitional Proceeding for Covered Business Method Patents (CBM) upon request of the parties. This discretionary power to terminate a patentability challenge by agreement (37 C.F.R. § 42.74) is a new concept for the USPTO. Historically reexamination proceedings could not be terminated by agreement. In reexaminations (inter partes) where the contesting parties settled their dispute, the challenging party would simply drop out of the inter partes reexamination, but the Office would continue with the reexamination in the interests of public policy.  (cf. terminating an inter partes patent reexamination by operation of estoppel).

The PTAB greatly benefits from the ability to terminate post grant patent proceedings. This is because Board resources can be moved away from post grant proceedings that are no longer commercially relevant (at least as to the present parties) to those newly initiated, and there are plenty of them. Likewise, the ability to settle seems to encourage resolution of disputes as roughly 30 IPRs and CBMs have settled to date. But, some would argue that the public is left holding the bag for suspect patents that escape cancellation by operation of a private settlement.

While it is true that another challenger could come along and pick up where the last left off, such would be at a significant cost— AND the public would essentially be paying the USPTO twice for the same proceeding. Yet, there is a far better solution to this problem already on the books, one that would still allow the Board to free up judicial bandwidth. 

Although rarely invoked in recent years, 37 C.F.R. 1.520 provides that an ex parte reexamination may initiated by the Director in limited circumstances, specifically:

The Director, at any time during the period of enforceability of a patent, may determine whether or not a substantial new question of patentability is raised by patents or printed publications which have been discovered by the Director or which have been brought to the Director’s attention, even though no request for reexamination has been filed in accordance with § 1.510 or § 1.913.

MPEP 2239 explains the duty of office employees in this regard.

If an Office employee becomes aware of an unusual fact situation in a patent which he or she considers to clearly warrant reexamination, a memorandum setting forth these facts (including a proposed rejection of all appropriate claims) along with the patent file (paper or electronic) and any prior art patents or printed publications should be forwarded to the Office of Patent Legal Administration (OPLA) through the Central Reexamination Unit (CRU) or Technology Center (TC) supervisory chain of command.

(emphasis added)

In the case of a PTAB proceeding that settled post-trial-Order, a director ordered reexamination would seem to be almost mandated by the USPTO’s own internal policies and guidelines. Indeed, all that is required to move forward (i.e., rejections, and threshold showing) is already in the record of the terminated PTAB proceeding. Moreover, now that inter partes reexamination and the corresponding workload of new requests are gone from the Central Reexamination Unit (CRU) docket it seems there is some available bandwidth to address this important public policy concern.