Rehearing Requests & CAFC Remands to Tax PTAB Resources

As discussed on Tuesday, sometimes the Court of Appeal for the Federal Circuit (CAFC) will find it necessary to remand an appeal to the Patent Trial & Appeal Board (PTAB). Likewise, sometimes the Solicitor will seek remand in appropriate circumstances. Historically remand occurs in about 10-15% of appeals from the agency on a yearly basis (sometimes less). In any given year this meant only a handful of cases required “re-work” from the PTAB as the number of appeals from the PTAB to the CAFC was relatively modest.

As to requests for rehearing, the Board sees some volume of requests in patent reexamination proceedings, especially inter partes reexamination. Yet, given the lengthy pendency of such reexamination proceedings, a fair amount of these appeals are avoided. Or, are at least not as hotly contested after the the requesting party settles, which was common. 

Thanks to the wildly popular post-grant patent challenge mechanisms of the America Invents Act (AIA), all of that is about to change.

The PTAB is experiencing a filing rate of 150+ petitions per month (approaching 200 this month), or roughly 1800 AIA trial petitions per year. Given the 12 month trial schedule, the CAFC will soon see a corresponding surge in their appeal docket. Assuming 50% of IPR/CBM/PGR proceedings are settled/denied, that still leaves an eventual steady state of 900 potential new appeals for the CAFC, per year. Of these 900 cases it is expected that upward of 75% will first include a request for rehearing from one side or both. That is, 600+ request s for “re-work” decisions from the PTAB on top of the 1800 petition decision per year, final written decision, orders, teleconferences, etc. Given the statutory deadline on the active docket items, I can’t imagine rehearing requests will not be placed on the bottom of the growing pile. 

As to the CAFC, while historically remand was somewhat uncommon (10-15%), for this first wave of AIA appeals, I would expect that number to hover around 20%-25%. That is, as many as 200+ proceedings will find their way back to the PTAB in the first year or two. These remands are also expected to languish as items outside the statutory deadlines of the AIA. 

Significant delays on rehearing will almost certainly be leveraged as a tactic to forestall finality, especially for non-practicing entities (NPEs). Indeed, if such “delay requests” become the norm, overall pendency of AIA proceedings through appeal to the CAFC will be greatly aggravated. On top of this would be the inevitable lengthening of CAFC pendency due to the influx of new AIA appeals. Given the vision of Congress to provide for an expedited administrative option to patent litigation, keeping the process moving— from start to finish—is imperative to the long term efficacy of the AIA. Should Congress disrupt funding to the agency, or fail to recognize the need for continued support and additional horsepower, the progress made to date could all unravel very quickly.