Archive for October, 2019

What will the fallout be from Arthrex v. Smith and Nephew?

Thursday, October 31st, 2019

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:


Supplemental Briefs filed in PTAB Judges Appointments Clause case — Arthrex v. Smith & Nephew

Thursday, October 31st, 2019

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.

The Judicial Oath’s Impact on Determining Who is a Principal Officer

Sunday, October 27th, 2019

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 “principal” officers. There is a mosaic of factors that go into determining whether one is an “inferior” or “principal” officer. One factor may rest upon whether PTAB judges are directed and supervised by a principal 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 principal 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. 907Pub. 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.


(Updated on 10/22/20 to change “superior” to “principal” throughout.)

Federal Circuit Entertains Arguments on Whether PTAB Judges Were Constitutionally Appointed

Wednesday, October 23rd, 2019

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 arguing at the Federal Circuit

Thursday, October 17th, 2019

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:

Article suggestion: Boilerplate

Thursday, October 17th, 2019

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.”

Oral argument of the day: In re Tropp

Monday, October 14th, 2019

The oral argument of the day is from the Federal Circuit’s decision in In re Tropp, decided this past December. The Federal Circuit panel was critical of the PTAB for not writing a clear opinion — so unclear that remand was necessary.

Interestingly, Judge Moore’s remarks during the oral argument seem much more critical of the Board than any comment that made its way into the decision that she authored for the court.

You can listen to one strong remark below:

You can listen to the entire oral argument here:

You can read the court’s opinion here: [Link].

SCOTUS Oral argument of Peter v. NantKwest

Saturday, October 12th, 2019

The Supreme Court heard oral argument in Peter v. NantKwest this past week. You can listen to the oral argument here:

The transcript of the oral argument is available here: [link].

The briefing is available [here].

Judge Dyk asks “You’d agree that a novel way of hurricane prediction would be patentable, right?

Thursday, October 10th, 2019

With hundreds of thousands without power in Northern California and power grid vulnerabilities in question, a patent attorney’s mind naturally turns to the Electric Power Group case. Electric Power Group was discussed at some length in this year’s oral argument in POWER ANALYTICS CORPORATION v. OPERATION TECHNOLOGY INC., No. 2018-1428 (Fed. Cir. Jan. 15, 2019). [Link].

You can listen to that oral argument here:

What I thought was particularly interesting was Judge Dyk chiming in to Judge Chen’s hypothetical question about the patent eligibility of a model for predicting the path of a hurricane. One is always interested to hear of things that Judge Dyk might believe are patentable. You can listen to that questioning here:

I also thought that this was an interesting comment by Judge Chen: “there are big data solutions out there that seem to be very valuable and so therefore you would think, instinctively, ought to be part of the patent system.”

In case you want to look at one of the Electric Power Group claims, it is shown below:

12. A method of detecting events on an interconnected electric power grid in real time over a wide area and automatically analyzing the events on the interconnected electric power grid, the method comprising:

receiving a plurality of data streams, each of the data streams comprising sub-second, time stamped synchronized phasor measurements wherein the measurements in each stream are collected in real time at geographically distinct points over the wide area of the interconnected electric power grid, the wide area comprising at least two elements from among control areas, transmission companies, utilities, regional reliability coordinators, and reliability jurisdictions;

receiving data from other power system data sources, the other power system data sources comprising at least one of transmission maps, power plant locations, EMS/SCADA systems;

receiving data from a plurality of non-grid data sources;

1352*1352 detecting and analyzing events in realtime from the plurality of data streams from the wide area based on at least one of limits, sensitivities and rates of change for one or more measurements from the data streams and dynamic stability metrics derived from analysis of the measurements from the data streams including at least one of frequency instability, voltages, power flows, phase angles, damping, and oscillation modes, derived from the phasor measurements and the other power system data sources in which the metrics are indicative of events, grid stress, and/or grid instability, over the wide area;

displaying the event analysis results and diagnoses of events and associated ones of the metrics from different categories of data and the derived metrics in visuals, tables, charts, or combinations thereof, the data comprising at least one of monitoring data, tracking data, historical data, prediction data, and summary data;

displaying concurrent visualization of measurements from the data streams and the dynamic stability metrics directed to the wide area of the interconnected electric power grid;

accumulating and updating the measurements from the data streams and the dynamic stability metrics, grid data, and non-grid data in real time as to wide area and local area portions of the interconnected electric power grid; and

deriving a composite indicator of reliability that is an indicator of power grid vulnerability and is derived from a combination of one or more real time measurements or computations of measurements from the data streams and the dynamic stability metrics covering the wide area as well as non-power grid data received from the non-grid data source.

Rule 36 Opinions and Judicial Weight Gain

Wednesday, October 9th, 2019

I suppose one way of encouraging panels not to issue so many Rule 36 judgments is to appeal to their vanity. According to a recent report, grandmaster chess players burn around 6,000 calories a day during a chess tournament. One player, Fabiano Caruana, has dropped from 135 pounds before a tournament to 120 pounds at the end of the tournament. During a match, a player’s breathing rate can triple and blood pressure can elevate.

There is obviously a significant difference in mental effort involved in writing an opinion as compared to issuing a Rule 36 judgment. So, if judges were to forsake the “Rule 36 Diet” and embrace the “Opinion Writing Workout,” they might find themselves in need of brand new robes.

You often hear patent law described as “the thinking person’s profession.” Usually, it is patent attorneys describing it this way! (I suspect attorneys in all areas of the law describe their specialty as “the thinking person’s profession.”) It would be an interesting survey to see if patent attorneys do indeed benefit from a higher neuro-calorie-burn.

Judicial notice of abstract ideas

Wednesday, October 2nd, 2019

The oral argument prior to the Federal Circuit’s decision in IN RE WHITE, No. 2018-1242 (Fed. Cir. Jan. 16, 2019) had an interesting sound bite. The case is a trademark case in which the Appellant asked the Federal Circuit to take judicial notice of the teaching of American history in public schools. Judge Wallach asked the Appellant if there was some source upon which the court could base such a taking of judicial notice.

It is interesting to note the care of the court when judicial notice is requested explicitly. Compare that situation to the court’s frequent pronouncements of abstract ideas (without evidentiary support) in step 1 of the Alice analysis under 35 U.S.C. §101. Some would argue that a court’s pronouncement of something being an abstract idea is a taking of judicial notice.

You can listen to Judge Wallach’s comment from In re White here:

Judge Lourie warned about the slippery slope of divorcing patent examination from the citation of references back in the oral argument of HIMPP v. HEAR-WEAR TECHNOLOGIES, LLC, No. 2013-1549 (Fed. Cir. May 27, 2014). His comments were focused on obviousness; but, they ring true for patent eligibility, as well:

We have an examination system based on citation of references.  I may have used the word ‘slippery slope’ already.  But, I worry about that — where an examiner who is of some skill and training in a particular art could simply say ‘Aha, I think, I think, and it is my common knowledge . . . .’ And, they start rejecting claims based on what they ‘think.’  Isn’t that a serious departure from our system of citation of references to reject claims?  [Listen]

It doesn’t seem to me to be the function of the appellate court to take judicial notice of the ordinariness of certain decided claim limitations.  We can take judicial notice that ‘today is Wednesday’ and ‘we had snow earlier in the week’ — I’m glad you made it through the snow — but, we don’t make rejections based on judicial notice of . . . finding a claim limitation to be common sense. [Listen]

Whistleblower Protection Act and the Federal Circuit

Tuesday, October 1st, 2019

It would be interesting to know if the Federal Circuit will play any future role in the fallout from the impeachment inquiry taking place at this time. Application of the Whistleblower Protection Act often comes up during Senate confirmation hearings of Federal Circuit nominees, especially when Senator Grassley questions nominees about the Act he co-authored. You can see one example of this in the confirmation hearing for Judge Taranto between the 46:44 and 52:14 minute marks of this video:

According to Senator Grassley’s comment, the Federal Circuit had exclusive jurisdiction for appeals concerning the Whistleblower Protection Act at the time of Judge Taranto’s hearing; however, it appears that subsequent legislation may have extended jurisdiction to all circuits.

Judge Taranto deftly handled the question about “irrefragable proof” during the hearing.

Oral argument of the day: Intellectual Ventures I LLC v. T-Mobile USA, Inc.

Tuesday, October 1st, 2019

The oral argument of INTELLECTUAL VENTURES I LLC v. T-MOBILE USA, INC., No. 2017-2601 (Fed. Cir. Jan. 14, 2019) was an interesting §101 case with some good sound bites. I’ll add some of them to this post in the coming days.

The recording of the oral argument is available here:

The Rule 36 Judgment is available here: [Link].