Appeals court says U.S. Patent Office review policy not unconstitutional

(Reuters) - The U.S. Patent and Trademark Office's policy of refusing requests to review an internal tribunal's decisions on whether to take up patent-eligibility disputes does not run afoul of the U.S. Constitution, a U.S. appeals court said Tuesday.

The U.S. Court of Appeals for the Federal Circuit ruled that a 2021 decision by the U.S. Supreme Court allowing the PTO director to review final determinations on patentability by the Patent Trial and Appeal Board does not mean the director must considercomplaints about the board's decisions to accept or reject patent challenges.

The ruling favors Centripetal Networks Inc, which fended off Palo Alto Networks Inc challenges to two computer-networking patents at the board. The companies, their attorneys and the PTO did not immediately respond to requests for comment.

The Supreme Court ruled last year in United States v. Arthrex Inc that PTAB judges had been appointed unconstitutionally, but solved the issue by giving the director of the PTO the power to review their final decisions.

The PTO later said the director would not take requests to review the board's decisions on whether to institute patent challenges, which also generally cannot be appealed to a court. Palo Alto challenged the PTO's policy at the Federal Circuit after the board declined its requests to review two Centripetal patents it had been accused of infringing.

U.S. Circuit Judge Timothy Dyk wrote for a three-judge panel Tuesday that the office's policy was constitutional. Dyk said the Arthrex decision "strongly suggests" that the constitutional issue was only with the lack of director review for final board decisions, not decisions on whether to hear cases.

The case is In re Palo Alto Networks Inc, U.S. Court of Appeals for the Federal Circuit, No. 22-145.

For Palo Alto: Douglas Hallward-Driemeier of Ropes & Gray

For Centripetal: Paul Andre of Kramer Levin Naftalis & Frankel

(NOTE: This Tuesday story has been updated to clarify that the decision concerns the PTO's policy of not accepting requests to review PTAB institution decisions.)

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