The New World of Agency Adjudication

In 1946, the Administrative Procedure Act (APA) set forth the basics for “formal” adjudication, with the classic account 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 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 disputes between private parties as to the validity of issued patents. 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 Court will decide this Term whether PTAB adjudication unconstitutionally strips parties of their property rights in issued patents. 

This Article situates PTAB adjudication within administrative law’s larger landscape of agency adjudication. By surveying this new world of agency adjudication, it becomes clear that PTAB adjudication is not that unusual. 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, in her ability to order rehearing and stack the board with those who share her substantive vision. But these second-best means of agency-head control raise problems of their own, including constitutional questions. This Article concludes by exploring alternative mechanisms to remedy the lack of agency-head review at the PTAB.