A Functional Approach to Judicial Review of PTAB Rulings on Mixed Questions of Law and Fact

• Author: Rebecca S. Eisenberg
• Position: Robert & Barbara Luciano Professor of Law, University of Michigan Law School
• Pages: 2387-2416

2387

A Functional Approach to Judicial Review

of PTAB Rulings on Mixed Questions of

Law and Fact

Rebecca S. Eisenberg*

ABSTRACT: The Court of Appeals for the Federal Circuit (“Federal Circuit”)

has long relied on active appellate review to bring uniformity and clarity to

patent law. It initially treated the PTO the same as the federal district courts,

reviewing its factual findings for clear error and its legal conclusions de novo.

Following reversal by the Supreme Court in Dickinson v. Zurko, the Federal

Circuit began giving greater deference to PTO factual findings. But it

continued to review the PTO’s legal conclusions de novo, while coding an

expansive list of disputed issues in patent cases as legal conclusions, even

when they rest on subsidiary factfinding.

Congress expanded the role of the PTO in adjudicating challenges to patent

validity in the Leahy–Smith America Invents Act of 2011 (“AIA”),

authorizing new adjudicatory proceedings before the Patent Trial and Appeal

Board (“PTAB”) as an alternative to federal district court litigation. The

AIA provides for Federal Circuit review of PTAB decisions, without specifying

standards of review. The scope of review could determine the success of these

proceedings as a quicker, cheaper, and more expert alternative to district court

litigation of patent challenges. The Federal Circuit applies the same standards

of review to PTAB decisions in AIA proceedings that it applies to other PTO

rulings, reviewing legal conclusions de novo and factual findings for

substantial evidence. It also follows the same characterizations of issues as

legal or factual that it has long used in the context of court/court review. In

the past, by maximizing the scope of appellate review, these characterizations

allowed the Federal Circuit to exercise greater quality control over generalist

trial courts with limited competence to resolve patent matters. The net benefits

are more dubious as applied to decisions of expert PTAB panels in AIA

adjudications. Yet reversal rates at the Federal Circuit are essentially the same

for PTAB decisions as for decisions of district courts in patent cases,

*

Robert & Barbara Luciano Professor of Law, University of Michigan Law School. I

gratefully acknowledge helpful comments from Ed Cooper, Gary Fox, Nina Mendelson, Arti Rai,

Chris Whitman, and workshop participants at the Iowa Law Review Symposium on Administering

Patent Law.

2388 IOWA LAW REVIEW [Vol. 104:2387

threatening to frustrate a system designed to improve patent quality while

limiting litigation costs.

This Essay reconsiders the proper scope of judicial review of PTAB rulings on

two issues that the Federal Circuit codes as legal conclusions with factual

underpinnings: nonobviousness and claim interpretation. Drawing on a

functional approach to judicial review of mixed questions of law and fact, it

argues for more deferential review of PTAB rulings on nonobviousness and

claim interpretation given the expertise of the administrative tribunal and the

case-specificity of the rulings. The Federal Circuit would do better to confine

de novo review to generalizable legal rulings that provide guidance in future

matters rather than replicating the work of the PTAB from the appellate bench

on routine case-specific rulings.

I.INTRODUCTION ........................................................................... 2388

II.MIXED QUESTIONS OF LAW AND FACT ........................................ 2392

III.JUDICIAL REVIEW OF PTAB DECISIONS (COURT-AGENCY

REVIEW) ...................................................................................... 2395

IV.FEDERAL CIRCUIT REVIEW OF NONOBVIOUSNESS AND

CLAIM INTERPRETATION ............................................................. 2398

A.NONOBVIOUSNESS .................................................................. 2400

B.CLAIM INTERPRETATION ....................................................... 2405

V.CONCLUSION .............................................................................. 2415

I. INTRODUCTION

During the heyday of Chevron deference to agencies’ interpretations of

the laws they administer,1 the Court of Appeals for the Federal Circuit

(“Federal Circuit”) took a notably less deferential approach toward the Patent

and Trademark Office (“PTO”).2 Treating the PTO the same as federal

district courts, the Federal Circuit reviewed its factual findings for clear error

and its legal conclusions de novo.3

1. Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 842–43 (1984).

2. See Stuart Minor Benjamin & Arti K. Rai, Who’s Afraid of the APA? What the Patent System

Can Learn from Administrative Law, 95 GEO. L.J. 269, 299–300 (2007); John M. Golden, Working

Without Chevron: The PTO as Prime Mover, 65 DUKE L.J. 1657, 1672–73 (2016); Jonathan S. Masur,

Regulating Patents, 2010 SUP. CT. REV. 275, 277; Sarah Tran, Administrative Law, Patents, and

Distorted Rules, 80 GEO. WASH. L. REV. 831, 834–35 (2012); Melissa F. Wasserman, The Changing

Guard of Patent Law: Chevron Deference for the PTO, 54 WM. & MARY L. REV. 1959, 1975 (2013).

3. See, e.g., In re Alton, 76 F.3d 1168, 1172 (Fed. Cir. 1996) (“We review questions of fact

arising from Board rejections under a clearly erroneous standard. . . . We review questions of law