USPTO Strikes Expanded Paneling Option from New PTAB Operating Procedure

The U.S. Patent and Trademark Office (USPTO) today announced that it has updated its Patent Trial and Appeal Board (PTAB) Standard Operating Procedure (SOP 1) on “Assignment of Judges to Panels.” The 16^th revision to SOP 1 deletes a section on “expanded panels,” among other changes.

According to the USPTO’s announcement, the revision “aligns with recently updated Paneling Guidance, Standard Operating Procedure 4, and Director Review procedures.” Just yesterday the Office issued a final rule on pre-issuance circulation and internal review of PTAB decisions.

As part of that final rule, SOP 4 was updated to delegate the Director’s power to designate and re-designate PTAB panels to the Chief Administrative Patent Judge and also to “prohibit the Director from directing or otherwise influencing the paneling or repaneling of any proceeding prior to issuance of the panel decision.”

The previous version of SOP 1 contained language that permitted PTAB members, the Patent Business Unit, applicants, or a patent owner or petitioner to suggest the need for an expanded panel of more than three judges, though it said they were “not favored and ordinarily will not be used.”

Revision 16, however, has struck that language completely.

The process for panel expansion caused much controversy over the years, and in one instance the USPTO admitted during oral arguments at the United States Court of Appeals for the Federal Circuit that “the selection of Judges for expanded panels is done with the express intent to ensure the ruling desired by the Director.”

In September 2023, the Office announced new guidance on empaneling procedures for the PTAB and Trademark Trial and Appeal Board (TTAB) that said both PTAB and TTAB management will “avoid empaneling cases to judges who hold stock or bonds (publicly traded or privately held) in any of the disclosed parties or real parties in interest, regardless of the dollar value.”

The guidance did not require PTAB and TTAB judges to divest any financial interests like stocks or bonds, and it did not prohibit them from holding any financial interests. It simply asked all judges to “voluntarily inform their management of any companies in which they know that the judge, the judge’s spouse, or their minor children own stocks or bonds, regardless of the dollar value.” Even if they choose not to provide this information to management up front, however, they must “promptly notify” the paneling staff once they receive notice of empaneling on a particular case whether repaneling is necessary in light of the guidance.

This guidance has now been incorporated by reference into the revised SOP 4.

Finally, in In July 2021, the USPTO announced that it would be implementing an interim rule in response to the U.S. Supreme Court’s late June 2021 decision in Arthrex v. Smith & Nephew.  And in July 2022, the Office published an official Request for Comments (RFC) on the interim Director Review process, as well as the Precedential Opinion Panel (POP) process and the interim process for PTAB decision circulation and internal PTAB review. USPTO Director Kathi Vidal released updated interim guidance on Director Review and PTAB decision circulation/internal review soon after taking office in April 2022 and accepted preliminary feedback via a dedicated email address, but said the comments received in response to the RFC would officially inform upcoming notice-and-comment rulemaking to formalize these processes, as well as any modifications to the interim processes prior to formalization. In July 2023, the Office officially implemented a revised interim Director review process that included the creation of two new review panels replacing the previous Precedential Opinion Panel (POP) process of Director review. In April 2024, the Office announced a Notice of Proposed Rulemaking (NPRM) aimed at formalizing the interim process for Director Review. Comments close on that NPRM on June 17, 2024.

The SOP 1 version 16 indicates that the Director may delegate Director Review to a panel of the Board, known as the Delegated Rehearing Panel (DRP). Once the Director issues an order delegating review, “the designee(s) who assigns panels will assign three judges to serve on a DRP from the list of judges eligible to serve on a DRP (convened based on DRP-specific procedures provided elsewhere in public USPTO guidance).”

USPTO Director Kathi Vidal said in today’s announcement that “updating our procedures on assigning judges to PTAB panels improves, and increases the transparency of, our operations.”

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