David Boundy

The U.S. Patent and Trademark Office’s (USPTO’s) delay in retiring EFS-Web and Patent Center is welcome news. But my fear is the announcement could be just another display of the magical thinking, disregard of engineering and legal process, and deafness to stakeholder input that has been the hallmark of the USPTO’s software processes.

In Part I, I introduced the USPTO’s unpublished guidance document for signatures on powers of attorney, and the incompatibility of that guidance with state law, regulation, and the USPTO’s published guidance. Multiple laws should have caught the problems and led to a corrected document. Today, we’ll look at the USPTO’s pattern of ignoring those laws in multiple rounds of review under the Paperwork Reduction Act.

This two-part article explains the United States Patent and Trademark Office’s (USPTO’s) practices with respect to powers of attorney. The pattern of neglect of administrative law identified here with regard to powers of attorney alone imposes a $30 to $40 million per year excess burden on the public. For the USPTO’s rules as whole, the costs are about $2 billion per year. Over the last 18 months, about 100 patent attorneys signed on to letters to ask the USPTO to do the simple right thing: conform its practices to the rule of law.

Last week, Professor Andrew Michaels published an article with IPWatchdog commenting on Facebook v. Windy City and the U.S. Patent and Trademark Office’s claim for Chevron deference for precedential decisions of the Patent Trial and Appeal Board (PTAB). While I agree with his ultimate conclusion, “the PTAB cannot speak with the force of law through adjudication even on issues where it has the authority to do so through regulation,” I disagree with the path he took to get there. I’ve written extensively on the topic (see the bibliography is at the bottom of this article). Of my articles, the most relevant is The PTAB Is Not an Article III Court, Part 3: Precedential and Informative Opinions. More recently, I filed an amicus brief in Facebook. In my view, PTAB precedential decisions can be eligible for Chevron deference in only the rarest of circumstances:  the PTAB is the wrong entity in the USPTO to engage in rulemaking, the PTAB doesn’t follow the procedures required by statute and executive order for rulemaking, and the PTAB doesn’t have access to the personnel within the USPTO that are necessary for rulemaking.

After several years in which the U.S. Patent and Trademark Office (PTO) did not seem to have an official position on the issue, and many Patent Trial and Appeal Board (PTAB) panels took a position that was clearly at variance with the Administrative Procedure Act (APA), the PTO recently seems to be acquiescing to principles that the patent bar has been urging for years: (a) the PTO is subject to the same Administrative Procedure Act obligations as any other agency, and therefore cannot make factual findings without substantial evidence, and (b) there’s no carve-out for factual findings underlying § 101 subject matter eligibility rejections.