Reasoned Decisionmaking vs. Rational Ignorance at the Patent Office

• Author: John F. Duffy
• Position: Samuel H. McCoy II Professor of Law and Elizabeth D. and Richard A. Merrill Professor of Law, University of Virginia School of Law
• Pages: 2351-2386

2351

Reasoned Decisionmaking vs. Rational

Ignorance at the Patent Office

John F. Duffy*

ABSTRACT: In the late 1990s, the Patent Office began describing the

“primary mission” of its “Patent Business” as being “to help customers get

patents”—an administrative approach widely perceived as leading to an

exceptionally profligate era of patent granting. Intellectual cover for the

agency’s approach was provided by the academic theory that the Patent Office

could follow a “rational ignorance” approach to patent granting—that the

agency could rationally issue patents even where it had gathered only sparse

information concerning the merits of claimed inventions and had spent little

effort in reasoning through and explaining its decisions to grant rights.

Modern administrative law, however, generally requires agencies to act only

through the process of “reasoned decisionmaking,” which demands that

agencies engage in careful study of the issues presented by any proposed agency

action and provide reasoned explanations for their decisions. On both legal

and policy grounds, reasoned decisionmaking provides a far superior polestar

for guiding the administrative processes of the Patent Office than any theory

based on rational ignorance. As a matter of law, the Congress since 1836

has repeatedly rejected any policy favoring the grant of patents through

bureaucratic ignorance. As a matter of policy, reasoned decisionmaking

provides more comprehensive guidance to the Patent Office not only on how

much effort the agency should expend acquiring information, but also on how

the agency should exercise its powers in determining the validity of claims to

intellectual property rights.

I. INTRODUCTION ........................................................................... 2352

II. THE FOUNDATIONS OF REASONED DECISIONMAKING AND

RATIONAL IGNORANCE ............................................................... 2358

A.REASONED DECISIONMAKING AS A GENERAL ASPIRATION

OF ADMINISTRATIVE LAW....................................................... 2359

B.THE ORIGINS AND MEANING OF “RATIONAL IGNORANCE” ....... 2363

*

Samuel H. McCoy II Professor of Law and Elizabeth D. and Richard A. Merrill Professor

of Law, University of Virginia School of Law.

2352 IOWA LAW REVIEW [Vol. 104:2351

III.THE HISTORICAL TREND TOWARD A MORE KNOWLEDGEABLE

AND POWERFUL PATENT OFFICE ................................................. 2367

A.THE REGISTRATION PERIOD AND ITS DISCONTENTS................. 2369

B.EXAMINATION AND THE ACCRETION OF ADMINISTRATIVE

POWER: 1836–1952............................................................. 2371

C.CANCELLATION OF ISSUED PATENTS: 1952–PRESENT ............. 2372

IV.THE CONSEQUENCES OF CHOOSING REASONED

DECISIONMAKING ........................................................................ 2373

A.REASONED DECISIONMAKING IN INITIAL EXAMINATION ........... 2374

1.Reasonably Informed .................................................. 2374

2.Reasonably Reasoned: Better Legal Reasoning ........ 2378

3.Reasonably Reviewed: Judicial Review of

Patent Grants ............................................................... 2381

B.REASONED DECISIONMAKING IN AIA POST-ISSUANCE

PROCEEDINGS ........................................................................ 2384

V.CONCLUSION .............................................................................. 2386

I. INTRODUCTION

A polestar of modern administrative law is that the Administrative

Procedure Act (“APA”) imposes a comprehensive system of “reasoned

decisionmaking” to regulate agency behavior.1 That interpretation of the APA

has unanimous support on the Supreme Court and has been expressly

invoked by Justices on both sides of the Court’s ideological divide.2 It is also a

long-standing principle. The exact phrase dates back more than a third of a

century to the Supreme Court’s momentous 1983 decision in Motor Vehicle

Manufacturers Ass’n v. State Farm Mutual Automobile Insurance Co.,3 but the

theoretical basis for the doctrine extends to some of the Supreme Court’s

earliest interpretations of the APA.4 Indeed, the precursors of the principle

1. See, e.g., Allentown Mack Sales & Serv., Inc. v. NLRB, 522 U.S. 359, 374 (1998)

(recognizing that the APA “establishes a scheme of ‘reasoned decisionmaking’” (quoting Motor

Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 52 (1983))).

2. Id.; Judulang v. Holder, 565 U.S. 42, 53 (2011) (holding that courts must “ensur[e]

that agencies have engaged in reasoned decisionmaking”).

3. State Farm, 463 U.S. at 52.

4. See, e.g., Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 415–16 (1971)

(holding that courts must engage in “a thorough, probing, in-depth review” to ensure that an

agency “could have reasonably believed” in the necessary factual predicates for it s decision, and

based its decision “on a consideration of the relevant factors,” and made no “clear error in

judgment”); Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 167 (1962)

(recognizing that “[e]xpert discretion is the lifeblood of the administrative pr ocess,” but also

concluding that “unless we make the requirements for administrative action strict and

demanding, expertise, the strength of modern government, can become a monster which rules

2019] REASONED DECISIONMAKING AT THE PATENT OFFICE 2353

are evident not only in pre-APA administrative case law, but also in the very

aspirations of modern administrative law.5

Despite the prominence of reasoned decisionmaking as a constraint on

administrative action, the principle has been, until recently, largely absent

from judicial decisions reviewing the work of the Patent Office.6 The Federal

Circuit did not invoke the concept in even a single patent case until 2002

—two decades after the court’s creation—and more than a decade would pass

before the principle would make another appearance in an appellate patent

decision. Indeed, the 2002 case that did require “reasoned decisionmaking”

in the Patent Office—In re Lee 7—likely did not become a watershed case

because the opinion included unfortunate passages that appeared to bar the

Patent Office from using “common sense” in evaluating patent applications.8

Subsequent Supreme Court precedent soon made clear that the Lee court was

wrong in its hostility toward the agency’s use of common sense.9 The

controversy over Lee’s “common sense” statements seemed to overshadow the

far more supportable portions of the opinion recognizing that the Patent

Office, just as any other administrative agency, must follow a course of

“reasoned decisionmaking” that includes, among other things, a “thorough

and searching” factual inquiry and “a full and reasoned explanation”

justifying the agency’s choice.10

While the constraint of “reasoned decisionmaking” was not being applied

to the Patent Office in the late 20th and early 21st centuries, another theory

of appropriate administrative behavior for the Patent Office gained

prominence and influence. Mark Lemley’s article Rational Ignorance at the

Patent Office posited that “[b]ecause so few patents are ever asserted against a

competitor, it is much cheaper for society to make detailed validity

determinations in those few cases than to invest additional resources

with no practical limits on its discretion” (quoting New York v. United States, 342 U.S. 882, 884

(1951) (Douglas, J., dissenting)) (emphasis added)).

5. See infra Section II.A and text accompanying notes 41–55.

6. While the agency’s official name is currently the “United States Patent and Trademark

Office,” 35 U.S.C. § 1(a) (2012), the Office has been known for most of its history as simply the

“Patent Office.” Because this Essay concerns only the agency’s patent law responsibilities, it will

refer to the agency as simply the “Patent Office”—a convention that even the Supreme Court has

followed in recent years. See, e.g., SAS Inst. Inc. v. Iancu, 138 S. Ct. 1348, 1352 (2018) (referring

to the agency as simply the “Patent Office”).

7. In re Lee, 277 F.3d 1338, 1346 (Fed. Cir. 2002) (reversing the Patent Office for failing

to engage in “reasoned decisionmaking”).

8. Id. at 1344 (holding that the “common knowledge and common sense on which the

[agency] relied in rejecting [the patent] application are not the specialized knowledge and

expertise contemplated by the Administrative Procedure Act”).

9. KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 421 (2007) (stating that rules denying

“factfinders recourse to common sense” are “neither necessary under our case law nor consistent

with it”).

10. In re Lee, 277 F.3d at 1342–43, 1346.