USPTO Issues Final Rule on Director Review of PTAB Decisions

On October 1, 2024, the USPTO published a new final rule, Rules Governing Director Review of Patent Trial and Appeal Board Decisions. 89 Fed. Reg. 79744 (October 1, 2024). The new rule codifies many aspects of the PTAB’s most recent revised interim Director Review process (effective July 24, 2023), and largely tracks the proposed rule that published on April 16, 2024 (89 Fed. Reg. 26807). The final rule becomes effective October 31, 2024.

The final rule adds 37 C.F.R. § 42.75, and addresses the following topics:

Scope of Director Review: Subsection (a) defines the scope of Director Review. Director Review is available for any institution decision or final decision in IPRs, PGRs, and derivation proceedings, as well as any decision granting rehearing of such a decision. This is consistent with current practice under the revised interim Director Review process, and clarifies that derivation proceedings are within the scope of Director Review. The final rule also provides that Director Review is available for “any other decision concluding [an AIA] proceeding” (e.g., a grant of adverse judgment, or a dismissal of the proceeding).

Sua Sponte Director Review: Subsection (b) provides that the Director may sua sponte order Director Review. This is consistent with current practice under the revised interim Director Review process. The new rule adds a deadline for initiating a sua sponte review “within 21 days after the expiration of the period for filing a request for rehearing” “absent exceptional circumstances.” The rule does not, however, include a specific deadline for the Office to issue any decision on Director Review.

Requests for Director Review: Subsection (c) details the timing and format of the request, which are generally consistent with current practice under the revised interim Director Review process. A party may file one request for Director Review, as an alternative to requesting panel rehearing. The deadline is the same as the deadline for requesting rehearing (per § 42.71(d)), with extensions available for good cause. The request must follow all format requirements of § 42.6(a) and is limited to 15 pages (per § 42.24(a)(1)(v)). No new evidence is permitted, and there is no responsive briefing by the opposing party. The Director may authorize modifications to the length, response, and evidence limitations in a particular proceeding.

Process: Subsection (e) provides information on the Director Review process. When granting Director Review, the Director will issue an order or decision setting out the scope of review, and a review will conclude with an order or decision providing the Director’s reasons for disposition of the case. By default, a request for or initiation of Director Review does not stay any deadlines in the underlying proceeding. However, a request for or initiation of Director Review of an appealable Board decision does reset the time for appeal to the Federal Circuit, which then starts after all issues on Director Review are resolved. This is consistent with current practice under the revised interim Director Review process.

Other Aspects: Subsections (d), (f), and (g) respectively address when an agency decision is considered “final” vis-à-vis a Director Review request, the Director’s authority to delegate their review, and the general prohibition against ex parte communications related to specific requests or proceedings.

The current Director Review web page (addressing the revised interim process) includes many specific details regarding practice and procedures that are not expressly included in the final rule. However, the Federal Register notice indicates that the Office will continue to provide additional guidance on various issues, consistent with the final rule, through the Director Review web page. The current Director Review web page includes, for example, the applicable standards of review, information about precedential designation, possible issues to address in a Director Review request, details of the decision-making process and the Advisory Committee, and step-by-step instructions on how to file and perfect a request. The Federal Register notice states that the current Director Review web page remains in effect until October 31, 2024, at which time a “new Director Review web page will publish and become effective.”

Notably, under this final rule, Director Review is only applicable to AIA trial proceedings. Director Review is not available for ex parte appeals (including appeals from reexamination or reissue applications). The Appeals Review Panel may be convened by the Director sua sponte to review PTAB ex parte appeals decisions. See www.uspto.gov/patents/ptab/appeals-review-panel.

In sum, the new final rule provides some certainty for parties as to the Director Review process in AIA trial proceedings, while still maintaining flexibility for the Director in reviewing and deciding Director Review requests.