The New World of Agency Adjudication
57 Pages Posted: 6 Mar 2018 Last revised: 9 Aug 2018
Date Written: February 24, 2018
In 1946, the Administrative Procedure Act (APA) set forth the criteria for “formal” adjudication, requiring an administrative law judge to make the initial determination and the agency head to have the final word. Today, however, the vast majority of agency adjudications are not paradigmatic “formal” adjudications as set forth in the APA. That is the lost world. It turns out that there is great diversity in the procedures by which federal agencies adjudicate. This new world involves a variety of less-independent administrative judges, hearing officers, and other agency personnel adjudicating disputes. Like in the lost world, however, the agency head retains final decision-making authority.
In 2011, Congress created yet another novel agency tribunal—the Patent Trial and Appeal Board (PTAB)—to adjudicate patent validity disputes between private parties. Questions abound concerning the PTAB’s proper place in the modern administrative state, as its features depart from the textbook accounts of APA-governed “formal” adjudication. Many of these questions are working their way through the Federal Circuit and to the Supreme Court. Indeed, the Supreme Court last Term held in Oil States Energy Services that PTAB adjudication does not unconstitutionally strip parties of their property rights in issued patents while leaving many questions about the limits of administrative adjudication unanswered.
This Article situates PTAB adjudication within administrative law’s larger landscape of agency adjudication. By surveying this new world of agency adjudication, it is clear that PTAB adjudication is not extraordinary. But we also identify one core feature of modern agency adjudication that is absent at the PTAB: the Director of the Patent and Trademark Office lacks final decision-making authority. To be sure, the Director has some power to influence outcomes: she can order rehearing and stack the board with administrative patent judges who share her substantive vision. But these second-best means of agency-head control raise problems of their own, including constitutional questions and inefficiencies in agency performance. This Article concludes by exploring alternative mechanisms that would remedy the lack of agency-head review at the PTAB.
Keywords: administrative law, patent law, agency adjudication, PTAB, Oil States
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