Before Lourie, Taranto, and Chen. Appeal from the United States District Court for the Northern District of California.
Summary: Challenged instructions that the PTO’s Director gave to the PTAB regarding discretionary denial of inter partes review petitions are general statements of policy and thus not subject to the notice-and-comment rulemaking requirements of the Administrative Procedure Act.
Apple Inc. and four other companies (collectively, “Apple”) challenged three instructions issued by the Director of the Patent and Trademark Office (PTO) to the Patent Trial and Appeal Board (Board) based on, as relevant to this decision, the PTO’s failure to use the formal notice-and-comment rulemaking procedure. Two of the three instructions at issue were in the form of precedential Board decisions issued in the NHK and Fintiv cases. The “NHK-Fintiv instructions” identified six nonexclusive factors for the Board to evaluate when deciding whether to institute an IPR proceeding or not. The third instruction, issued by the Director in the form of a memorandum, modified the NHK-Fintiv instructions. The district court held that the challenged instructions were not required to go through the notice-and-comment rulemaking procedure. Apple appealed.
In February 2025, after the parties briefed the appeal, the Acting Director of the PTO rescinded the third set of instructions. In October 2025, the Director indicated that he, rather than the Board, would determine whether to institute IPR proceedings.
The Federal Circuit ruled that Apple’s challenge turned on whether the challenged instructions were substantive legislative rules or mere statements of general policy. The Federal Circuit explained that “legislative rules alter the landscape of individual rights and obligations, binding parties with the force and effect of law[.]” By contrast, “general statements of policy are pronouncements that do not have the force and effect of law” and are “merely statements issued by an agency to advise the public prospectively of the manner in which the agency proposes to exercise discretionary power.” The Federal Circuit concluded that the challenged instructions were mere statements of general policy, because they were not binding on the PTO and simply advised the public of the manner in which the agency proposed to exercise its discretionary power.
The Federal Circuit also explained that, while the “touchstone” of a substantive rule is that it has the force and effect of law with respect to individual rights and obligations, a non-institution decision does not affect a patent challenger’s actual legal rights or obligations. The patent challenger’s rights and obligations remain what they would have been if Congress had not enacted the IPR regime.
Thus, the Federal Circuit affirmed the district court’s judgment rejecting Apple’s challenge to the Director’s instructions.
Editor: Sean Murray
Subscribe for News and Updates
