PTAB Issues FAQs on Interim Process for Workload Management

Earlier today, the Patent Trial and Appeal Board (PTAB) issued a list of FAQs related to the new bifurcated process for discretionary denial established in the March 26 memorandum issued by Acting Director Stewart. The FAQs follow the April 16 Boardside Chat addressing the new process.  

We explained previously that decisions on whether to institute inter partes review (IPR) or post-grant review (PGR) will be bifurcated between (1) discretionary considerations and (2) merits and other non-discretionary considerations. The bifurcated process applies to any IPR or PGR in which the patent owner preliminary response (POPR) was due after March 26, 2025. Since that time, the Board hosted a Boardside Chat with several senior officials from the Office (Acting Chief Communications Officer Janet Gongola, Acting Senior Legal Advisor Michelle Ankenbrand, and Vice Chief Administrative Patent Judge Kalyan Deshpande) explaining the new bifurcated process. The PTAB also issued FAQs for Interim Processes for PTAB Workload Management.   

The schematic diagram on Slide 15 — revealed during the Boardside Chat — reflects the timelines for the bifurcated process. It shows that the patent owner has two months in which to file a request for discretionary denial after the Board issues a notice of filing date accorded (or “NOFDA”). Importantly, if the patent owner does not file this request, then the petition will proceed directly to the merits panel — there will be no “sua sponte” Director decisions exercising discretion to deny institution. See FAQ 9.   

The petitioner then has one month, which will typically coincide with the date that the POPR is due, to file an opposition.  The schematic diagram assumes that the patent owner will file its request for discretionary denial on the two-month due date and that the petitioner will file its opposition one month later. This timing raised the question of whether the petitioner would need to file early if the patent owner filed its request before the two-month due date. But the FAQs clarify that the petitioner’s due date is not accelerated if the patent owner files the request for discretionary denial early. FAQ 7. In any event, the bifurcated process will proceed rapidly, as the FAQs state that the parties cannot stipulate to later due dates. FAQ 6.   

At the end of the briefing, the Director will receive the petition, the patent owner’s request for discretionary denial, petitioner’s opposition, and the POPR.  FAQ 8. The Director will determine, based on these papers and in consultation with at least three senior PTAB judges, whether discretionary denial is appropriate. The Director will issue this decision within one month. FAQ 8. If the Director decides not to exercise discretion, then the parties will receive a docketing notice indicating the case has been transferred to a panel of three administrative patent judges to determine whether to institute IPR or PGR on the merits and “other non-discretionary considerations.” FAQ 9.  

Those “other non-discretionary considerations” include, for example, failing to provide a necessary claim construction in the Petition, or failing to identify the grounds of unpatentability with adequate particularity under the Board’s rules. FAQ 11. The FAQs further note that a panel may deny for discretion only where the petition presents an insufficient number of challenges that meet the reasonable likelihood standard, thereby indicating that institution is an inefficient use of resources. FAQ 9. 

Both the Boardside Chat and the FAQs reveal that the three senior PTAB judges consulting with the Director will be different from the APJs determining whether to institute on the merits. Accordingly, the merits panel will have only two months (down from the previous three months) to determine whether to institute. This reduction in time counsels for clear and sufficiently concise briefing. FAQ 10. 

Important Takeaways on Factors Affecting the Director’s Exercise of Discretion  

The FAQs also answer (and perhaps raise) many questions about factors the Director will consider in determining whether to discretionarily deny a petition. The changes contemplated by the FAQs are significant and will undoubtably impact post-grant practice. Moving forward, petitioners, patent owners, and post-grant practitioners should keep the following in mind: 

• File stipulations “as soon as practicable.” The Boardside Chat suggested filing within one month of a notice of filing date accorded, and the FAQs indicate that: 
  • “A petitioner should file a Sotera or Sand stipulation as soon as practicable, so that a patent owner may address the impact of the stipulation in its discretionary denial brief.”  
  • Note, however, that patent owners can file their discretionary denial briefings earlier than the allotted two months from the filing of the notice of accord of filing date. Petitioners should account for that possibility when considering the timing for filing their stipulations.
• While a patent owner can file its discretionary denial brief earlier than the due date for such briefing, doing so “will not change” timing of filing of petitioner’s opposition or the Director’s decision. The FAQs state that, even if a discretionary denial brief is filed early, a “petitioner opposition” will continue to be “due within 1 month of due date for a patent owner discretionary denial brief (i.e., on the POPR due date) and the Director’s decision will not issue until after a patent owner files its POPR or the deadline for filing the POPR has passed.”
• Consider how stipulations reduce overlap between the parallel proceedings. The FAQs explain that: 
  • “The Director will take into account whether the stipulation materially reduces overlap between the proceedings. Where the petitioner is relying on corresponding system art in a co-pending proceeding and/or several other invalidity theories, a stipulation may not be particularly meaningful because the efficiency gained by any AIA proceeding will be limited.”
• Carefully consider the timing for when discretionary denial issues should be raised in post-grant proceedings. The FAQs state that patent owners must raise such issues in their opening discretionary denial briefs, and that “[a]bsent extraordinary circumstances, the Director and the Board panel will not consider arguments relating discretionary denial raised in a POPR.” Additionally, the FAQs explain that Petitioners need not address discretionary issues in their petitions and instead can raise such issues in their oppositions to the discretionary denial briefs.  
• Petitions will not be denied on discretionary grounds unless a patent owner seeks consideration of discretion through submission of briefing. The FAQs state that “[i]f a patent owner chooses not to file a discretionary denial brief, the Director will not issue a decision on discretionary considerations,” and in that situation, “a notice” will be entered “into the docket indicating the case is now before a Board panel to consider the non-discretionary issues.”
• Watch expert testimony closely. The FAQs state that:  
  • “While the Board may consider expert testimony, as a matter of efficiency, extensive reliance on expert testimony and/or reasonable disputes between experts on dispositive issues may suggest that the questions are better resolved in an Article III court. The statute and our reviewing court require that petitions be based on prior art patents and printed publications. As the judges have technical and legal expertise, it is not necessary for an expert to explain every aspect of the prior art. It is most helpful if an expert is providing focused testimony, for example to provide helpful context or to explain terms of art. The failure to provide focused expert testimony may weigh against institution.”
• Assess how to best address “merits” during pre-institution briefing with both a brief for discretionary denial and a POPR available. 
  • The FAQs indicate that “the Director will consider the merits arguments made in the petition and the POPR when relevant to the discretion determination,” but that “[t]he parties should not treat a discretionary denial brief or opposition as an additional opportunity for merits briefing.”  The FAQs also explain that, “when filing a brief for discretionary denial, a patent owner may direct attention to an anticipated POPR and evidence for a discussion of the merits” and, “in arguing about the strengths or weaknesses of the merits, the parties may refer to arguments made in the petition and cite to record evidence.”  Notably, “[a] Board panel is not bound by merit findings or conclusions in a discretionary consideration decision but must explain in the decision on institution why the panel’s findings and/or determination are different (citing the parties’ evidence of record as relevant), if that occurs.”
• Evaluate all grounds during the pre-institution phase of a proceeding. The FAQs indicate that the Board panel may even assess discretionary denial when “the petition presents an insufficient number of challenges that meet the reasonable likelihood standard”: 
  • “Unless otherwise authorized by the Director, the Board panel will not address discretionary considerations, except where the petition presents an insufficient number of challenges that meet the reasonable likelihood standard indicating that institution is an inefficient use of resources, as explained in Chevron Oronite Co. LLC v. Infineum USA L.P., IPR2018-00923, Paper 9 (PTAB Nov. 7, 2018) (informative) (“Chevron”) and Deeper, UAB v. Vexilar, Inc., IPR2018-01310, Paper 7 (PTAB Jan. 24, 2019) (informative) (“Deeper”).”
• Analyze a broad range of discretionary considerations and monitor decisions closely.   
  • The Boardside Chat and FAQs indicate that parties may raise “any applicable bases for discretionary denial of institution” and encourage parties “to address any fact or circumstance they believe bears on the Director’s discretion to institute, including reasons not discussed in current Board precedent or in the Process Memorandum.”   
• The patent owner and petitioner are permitted to submit additional evidence with their discretionary denial briefings. At a minimum, this allows for additional evidence to be submitted by the petitioner between the time of the petition filing and the institution decision.