717 Madison Place

I don’t think I ever saw this Schoolhouse Rock short:

It seems odd to me that an application being prosecuted with a non-publication request is opened up to the public when an applicant proceeds to the Board. An interesting article might delve into the reasoning behind that odd structure and propose a solution. I find it hard to believe that Congress intended secrecy only to apply to proceedings before examiners, but not to proceedings before Board members. Moreover, it has a chilling effect on applicants who might want to take their arguments to the Board.

I was poking around on the internet to try to understand better the interplay between a published decision and a mandate. Here’s an interesting article that came up in the search: [Link].

Schoolhouse Rock wasn’t any help on this topic.

Update 11/8/19:

Judge Dyk’s concurrence in the judgment of BedGear, LLC v. Fredman Bros. Furniture Company, Inc., 2018-2082 (Fed. Cir. Nov. 7, 2019), at footnote 8, highlights this issue, as well:

The difficulty of identifying at what point in time the appointments became effective is evident. Is it when then panel issues the decision, when the mandate issues, when en banc review is denied, when certiorari is denied, or (if there is an en banc proceeding) when the en banc court affirms the panel, or (if the Supreme Court grants review) when the Supreme Court affirms the court of ap- peals decision?

Following on the heels of the Federal Circuit decision in Arthrex last week by Judges Moore, Chen and Reyna, a new panel consisting of Judges Reyna, Wallach, and Hughes heard the oral argument in Polaris v. Kingston this morning. This oral argument was dedicated entirely to the issue of the constitutionality of PTAB judges and the effect of the Arthrex decision.

The entire oral argument is worth a listen; however, here are some points of note:

1. Polaris suggested that the court’s correction of the statute that was implemented in Arthrex is insufficient and recommended the nuclear option — invalidate the statute; then let Congress fix it.
2. The government needs to check in with various agencies as well as the Solicitor General before deciding whether to request en banc review. It sounded as if the government might not reach a decision on whether to request en banc review for another 42 days.
3. The lack of an issued mandate in Arthrex is causing procedural obstacles. Polaris v. Kingston is perhaps a better vehicle for en banc review given the issues at play; but, the Polaris court can’t apply Arthrex until the mandate issues. So, the timing of a decision in Polaris will be tricky to keep Arthrex and Polaris on relatively parallel tracks for en banc review requests. (Meanwhile, in Customedia v. Dish, decided last week, the CAFC applied Arthrex — prior to a mandate issuing in Arthrex !?!)
4. There are lingering due process issues with respect to the Director’s instruments of persuasion for controlling Board members.
5. This constitutionality challenge has been raised once before prior to the Arthrex case. Apparently, in one of the Trading Technologies cases, the issue was raised and the Federal Circuit issued a Rule 36 Judgment. I believe that panel was Judges Newman, Dyk, and Wallach.
6. The government believes that it was not permitted to use a statutory right when the government was not given a chance to intervene in the Uniloc case that was remanded to the Board last week in view of Arthrex:

You can listen to the oral argument here:

Updated 11/6/19:

Here is the discussion of non-severability:

It will be interesting to see the fallout from today’s opinion in Arthrex v. Smith & Nephew. For example, one sentence in today’s opinion states: “Although the Director still does not have independent authority to review decisions rendered by APJs, his provision of policy and regulation to guide the outcomes of those decisions, coupled with the power of removal by the Secretary without cause provides significant constraint on issued decisions.” See pages 25-26 of the Arthrex slip opinion. Another states: “In addition to these policy controls that guide APJ-panel decision making, the Director has administrative authority that can affect the procedure of individual cases.” See page 13, of the Arthrex slip opinion.

I enjoy looking back at Judge Mayer and Judge Michel’s dissent from In re Alappat when cases like Arthrex are decided. That dissent is reproduced below. One interesting passage in that dissent that caught my eye this evening was the following:

But if the board is simply implementing policy set out by the Commissioner, its decisions cannot be considered “legal” but must be subject to review as statements of agency policy. How such agency policy decisions 1577*1577 are to be reviewed is not uniformly agreed upon by the courts; some review them for abuse of discretion, some for whether they are arbitrary and capricious, and some virtually refuse to review them at all.^[8] Regardless of which of these standards would be most appropriate, it at least may be said that the standard of review applied by this court to the board should include a good deal more deference than has been applied heretofore.^[9] Our practice is inconsistent with our review of agency boards of contract appeals. Those boards are “independent” of their agencies, and yet the Contract Disputes Act directs that their fact finding be reviewed under the deferential “substantial evidence” standard. See 41 U.S.C. § 609(b) (1988); Triax-Pacific v. Stone, 958 F.2d 351, 353 (Fed.Cir.1992). If the court is correct that the patent appeals board is less “independent” and makes policy-based decisions, then arguably it should be reviewed more deferentially than contract appeals boards, not less so, as now.

Back in 1994, when Alappat was decided, it was a different iteration of the Board and different iterations of the statutes and case law. So, while I’m not sure how relevant the above-passage is under present law — not to mention that it was in a dissenting opinion — I’m curious if the Federal Circuit is giving up any reviewing power over any aspect of Board decisions via today’s Arthrex decision. Perhaps a slow and thoughtful en banc review is warranted.

Judge Mayer and Judge Michel’s dissent from In re Alappat is reproduced below:

Read the rest of this entry »

The supplemental briefs requested by the Federal Circuit concerning whether PTAB judges were constitutionally appointed have been entered.

They are available below:

My guess is that this issue is headed for en banc review. Hopefully, the Federal Circuit does so publicly, rather than in secret, so that amicus briefs can be filed.

In the previous post, I covered the oral argument from Arthrex v. Smith & Nephew. One of the issues that the Federal Circuit might have to decide in that case is whether PTAB judges are “inferior” or “superior” officers. There is a mosaic of factors that go into determining whether one is an “inferior” or “superior” officer. One factor may rest upon whether PTAB judges are directed and supervised by a superior officer, such as the Director.

I wonder how the judicial oath/affirmation factors into the determination of whether a PTAB judge is directed and supervised by a superior officer? I believe the government requires PTAB judges to take such a judicial oath. My impression is that the language of the PTAB judicial oath/affirmation is similar to the language reflected below for US district and appellate court judges:

Each justice or judge of the United States shall take the following oath or affirmation before performing the duties of his office: “I, ___ ___, do solemnly swear (or affirm) that I will administer justice without respect to persons, and do equal right to the poor and to the rich, and that I will faithfully and impartially discharge and perform all the duties incumbent upon me as ___ under the Constitution and laws of the United States. So help me God.”

(June 25, 1948, ch. 646, 62 Stat. 907; Pub. L. 101–650, title IV, § 404, Dec. 1, 1990, 104 Stat. 5124.)

If the PTO requires its judges, under oath, to faithfully and impartially discharge their duties under the Constitution and laws of the United States, how could it expect the judges to subordinate their own interpretation of the law to the viewpoint of the Director?

It will be interesting to see how the Federal Circuit treats this factor.

In the oral argument of Arthrex v. Smith & Nephew on October 1, 2019, a panel of Judges Moore, Chen, and Reyna expressed significant interest in an argument addressing whether PTAB judges were constitutionally appointed. Similar issues are scheduled for an oral hearing before the CAFC in the November 4th oral argument of Polaris v. Kingston.

You can listen to the hour long oral argument of Arthrex v. Smith & Nephew here: [Link].

Judge Chen was the first member of the panel to express an interest in the constitutionality issue during the oral argument. You can hear that questioning and an explanation of the constitutionality challenge here:

As I understand it, the argument being asserted is that PTAB judges are authorized by the AIA to issue final written decisions in IPR’s (and other proceedings) and therefore need to be “Principal Officers.” Principal officers are required to be appointed by the President and confirmed by the Senate. Since PTAB judges have not been confirmed by the Senate, they have not been appointed as Principal Officers in conformance with the Constitution. Therefore, their rulings lack authority under the Constitution.

Under the case law, one factor that is important in determining whether PTAB judges are principal vs. inferior officers is whether the Director has the power to supervise their judgments. Judge Reyna expressed some skepticism as to how the Director can exercise supervisory authority over the Board if the Director also serves as a member of the Board:

Judge Reyna also asked whether the Board has the authority to rule on whether its authority is constitutional:

Melissa Patterson appeared for the government and did an excellent job. She works for the DOJ rather than the USPTO. You might recall she had the unenviable task of trying to defend the DOJ’s “Magic Microscope” test in an earlier appearance before the court.

One of the issues at play in this case is whether the constitutionality challenge was waived/forfeited by appellants. Judge Moore noted the importance of the issue and how it could infect every PTAB proceeding going forward, if not addressed by the court:

The DOJ argued that the same issue is preserved in the Polaris v. Kingston case (2018-1831) to be argued on November 4th. Therefore, the argument goes, it would be OK for the panel in Arthrex to deem the issue waived and to kick the can down the road for the Polaris panel to consider. I’m not sure why the government would not want the Arthrex panel to consider the issue, however, if the government is so certain that the issue will inevitably be considered in Polaris. What difference should it make to the government which panel (Arthrex or Polaris) considers the issue? After all, the CAFC is a highly uniform decision-making body.

Judge Chen asked whether APJ’s, as opposed to Examiners, are required to follow the Director’s examination guidelines on topics such as §§101, 112, and 103. The government argued that APJ’s are required to do so. Judge Chen stated that he was not sure whether the APJ’s believe they are bound by the Director’s guidelines.

Judge Moore asked where does the Director obtain authority to remove APJ’s from a panel. Judge Moore also asked whether panel stacking would create a due process problem and cited Justice Ginsburg’s comments as well as Judge Dyk’s comments with respect to panel stacking.

The government also argued that if an APJ disregarded the binding policy directions of the Director in issuing a decision that it could be considered insubordination and grounds for removal.

With respect to the Director’s authority to review a panel’s decision, the government acknowledged that the Director does not have the authority to grant rehearing; but, he does have the authority to ask the Board to rehear the case.

The panel explored how the statutory language could be modified by the court to remove any Appointments Clause problems — apparently under the severability doctrine. I was under the impression that the AIA does not have a severability clause.

As one option, the government proposed an alarming alteration to the AIA language that would permit a single APJ to handle an IPR rather than a panel comprised of at least three APJ’s. Judge Moore expressed her concern about that proposal in much the same way that I think the patent bar would voice its concern, if allowed to comment.

Finally, Judge Moore noted that the government has argued so vociferously in previous cases how analogous PTAB proceedings are to district court proceedings, that it is difficult for the government to now argue that Congress would be content with the Director doing everything single-handedly (or via one of his “minions”).

On October 15, 2019, the Federal Circuit requested further briefing on the constitutionality challenge. The court wrote:

Should the Court conclude that there was an Appointments Clause violation, based on a conclusion that PTAB Judges are principal officers that are not properly appointed, but that a portion of the Patent Act may be severed and excised to cure the constitutional infirmity, should the case then be vacated and remanded for a new hearing before the Board pursuant to Lucia v. SEC, 138 S. Ct. 2044 (2018)?

That order is available here:

The government requested an extension of time that would have made its brief due a week after the oral hearing that is currently scheduled for Polaris v. Kingston. However, the court has denied that extension request.

The court did, however, request that the government expand upon another severability doctrine issue:

[P]lease explain the government’s proposal on page 35 of its brief: “Alternatively, this Court could hold that 35 U.S.C. § 3(c)’s provision that USPTO officers and employees are subject to Title 5 cannot constitutionally be applied to Board members with respect to that Title’s removal restrictions, and thus must be severed to that extent.”

That second order is available here:

Donald Dunner passed away yesterday. [Link].

If you would like to listen to a case that Mr. Dunner argued at the Federal Circuit, the oral argument from 2006 in Xerox v. 3Com is a good example. You can listen to that oral argument below:

It might make for an interesting article to take on the subject of boilerplate language in patent applications. It would be particularly interesting to trace how the SCOTUS and CCPA/CAFC have treated boilerplate language throughout history. Moreover, how has the law of contracts treated boilerplate and is there any cross-over to patent law. During oral arguments, judges will sometimes say “well isn’t that just boilerplate” when referring to a party’s reliance on a portion of a specification. Why should that matter? The inventor chose to include it in the patent application and the PTO approved it before issuing the patent. What principle of law states that certain portions of a patent document should be given less significance than others? If there is such a distinction, what is the test for whether text is “boilerplate.”