{"id":11444,"date":"2021-02-25T15:16:24","date_gmt":"2021-02-25T21:16:24","guid":{"rendered":"https:\/\/www.717madisonplace.com\/?p=11444"},"modified":"2021-03-10T23:13:26","modified_gmt":"2021-03-11T05:13:26","slug":"questions-for-arthrex-oral-argument","status":"publish","type":"post","link":"https:\/\/www.717madisonplace.com\/?p=11444","title":{"rendered":"Questions for Arthrex oral argument"},"content":{"rendered":"\n

If the Supreme Court justices are looking for questions to ask during the Arthrex<\/em> oral argument, here are some options:<\/p>\n\n\n\n

  1. The USPTO has new PTAB judges take a judicial oath.<\/li><\/ol>\n\n\n\n
    \"\"<\/a><\/figure>\n\n\n\n

    The judicial oath is grounded in 28 U.S.C. \u00a7453:<\/p>\n\n\n\n

    \u00a7\u202f453.Oaths of justices and judges<\/p>

    Each justice or judge of the United States shall take the following oath or affirmation before performing the duties of his office: \u201cI, ___ ___, 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.\u201d<\/p>28 U.S.C. \u00a7453.<\/cite><\/blockquote>\n\n\n\n

    The Federal Circuit has implied that the patent eligibility guidance of the USPTO (now required to be followed by PTAB judges) might sometimes contradict Federal Circuit case law. See, e.g., cxLOYALTY, INC. v. MARITZ HOLDINGS INC.<\/em>, No. 2020-1307 (Fed. Cir. Feb. 8, 2021) at footnote 1.<\/p>\n\n\n\n

    Is it the Government’s position that PTAB judges will violate their judicial oaths in order to follow PTO guidance of the Director, e.g., the patent eligibility guidance, rather than enforce the common law of the Federal Circuit out of fear of losing their judgeships? If the answer is “no”, is such guidance really a controlling factor on APJ behavior? If a Director’s guidance is merely parroting the law, how is that guidance considered controlling when a PTAB judge has taken an oath\/affirmation to follow the law? 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?<\/p>\n\n\n\n

    2. What should the Court make of footnote 6 in Brenner v. Manson<\/a><\/em>? Footnote 6 of Brenner v. Manson<\/em> makes a comment about whether the then-Commissioner of the USPTO was bound by determinations of the Board of Patent Appeals and Interferences.  The footnote reads:<\/p>\n\n\n\n

    [6]<\/a> We find no warrant for this curious limitation either in the statutory language or in the legislative history of \u00a7 1256. Nor do we find persuasive the circumstance that the Commissioner may not appeal adverse decisions of the Board of Appeals. 35 U. S. C. \u00a7\u00a7 141, 142, and 145 (1964 ed.). As a member of the Board and the official responsible for selecting the membership of its panels, 35 U. S. C. \u00a7 7 (1964 ed.), the Commissioner may be appropriately considered as bound by Board determinations. No such consideration operates to prevent his seeking review of adverse decisions rendered by the CCPA.<\/p><\/blockquote>\n\n\n\n

    See this earlier post for more information from the oral argument of that case: [Link<\/a>].<\/p>\n\n\n\n

    3.  In Knowles Electronics LLC v. Iancu<\/em>, 886 F.3d 1369 (Fed. Cir. 2018)(then-captioned Knowles Electronics LLC v. Matal<\/em>) — before the Arthrex<\/em> issue had been tee’d up and in a brief that was disinterested in the Arthrex<\/em> issue — the Government explained how the Director is the representative of the agency, i.e., the USPTO; but, the PTAB is the USPTO\u2019s adjudicator. The Director can ask the PTAB to reconsider a decision. But, when the PTAB makes a decision, it is in reality an order of the agency itself. If the Director disagrees with a PTAB decision, he\/she is free to challenge that decision at the Federal Circuit.<\/p>\n\n\n\n

    C. The USPTO\u2019s statutory authority allows it to choose whether to intervene and, if so, what position to take<\/strong><\/p>

    Because Article III of the Constitution \u201cposes no bar\u201d to the USPTO\u2019s participation in an appeal from a USPTO decision, see Ingalls, 519 U.S. at 264, we next address the USPTO\u2019s statutory authority to intervene and the extent of that authority. By statute, the Director of the USPTO has a right to intervene in every inter partes case arising from the USPTO. And the Director has statutory authority to take any position in those cases.<\/strong><\/p>

    Before Congress passed the America Invents Act (AIA) in 2011, the Patent Act stated, \u201cIn an ex parte case or any reexamination case, the Director shall submit to the court in writing the grounds for the decision of the Patent and Trademark Office, addressing all the issues involved in the appeal.\u201d 35 U.S.C. \u00a7 143 (2002) (emphasis added). Thus, before the AIA, the USPTO was, by statute, a party to every appeal from an inter partes reexamination. The AIA amended that sentence, removing \u201cany reexamination case\u201d from the category of appeals in which the agency was obligated to appear. 35 U.S.C. \u00a7 143 (2012).<\/p><\/blockquote>\n\n\n\n

    Instead, Congress added a sentence addressing the agency\u2019s authority to intervene, at its discretion, in appeals from inter partes cases, including inter partes reexaminations. The new sentence states, \u201cThe Director shall have the right to intervene in an appeal from a decision entered by the Patent Trial and Appeal Board . . . in an inter partes or post-grant review under chapter 31 or 32.\u201d 35 U.S.C. \u00a7 143 (2012). Although that sentence does not specifically mention inter partes reexaminations, which were being phased out by the AIA, Congress explained elsewhere in the Act that \u201cthe Director\u2019s right under the fourth sentence of section 143\u201d\u2014the sentence just quoted\u2014\u201cto intervene in an appeal from a decision entered by the Patent Trial and Appeal Board shall be deemed to extend to inter partes reexaminations.\u201d AIA, Pub. L. No. 112-29 \u00a7 7(e)(4), 125 Stat. 284, 315 (2011); see also 157 Cong. Rec. S1377 (daily ed. Mar. 8, 2011) (statement of Sen. Kyl) (\u201cIn the effective-date provision at the end of section [7], various existing [appeal] authorities are extended so that they may continue to apply to inter partes reexaminations commenced under the old system.\u201d); see also Joseph Matal, Legislative History of the America Invents Act: Part II of II, 21 FED. CIR. B.J. 539, 542 n.25 (2012).<\/p>

    Furthermore, the Director\u2019s right to intervene in inter partes reexaminations extends to those reexaminations \u201cthat are requested . . . before the effective date\u201d of the AIA. Pub. L. No. 112-29 \u00a7 7(e)(4), 125 Stat. 284, 315. In other words, the change in the law was made applicable to all inter partes reexaminations that were requested before the AIA came into effect. Thus, the USPTO\u2019s participation in appeals from inter partes reexaminations went from an obligation to a right, even for inter partes reexaminations that were already pending.<\/p>

    The statute thus spells out the situations in which the Director has the right to intervene, which include inter partes reexaminations, inter partes reviews, and other inter partes cases in the USPTO. This Court therefore routinely asks the USPTO if it plans to intervene in inter partes cases, particularly in cases like this one where the Court would otherwise lose the benefit of the adversarial process. The statute also clearly specifies the cases in which the Director is automatically a party\u2014ex parte cases. 35 U.S.C. \u00a7 143 (2012).<\/p>

    The statute does not discuss or limit the positions the Director may take in any type of case. <\/strong>In ex parte cases, the statute merely specifies that the Director must \u201caddress[ ] all of the issues raised in the appeal,\u201d 35 U.S.C. \u00a7 143 (2012); in inter partes cases, even that requirement does not exist. Although the Director typically intervenes on the side of the appellee, even in that posture, the Director may take any substantive position he likes<\/strong>.2<\/p>

    Indeed, Ingalls directly addresses the Director\u2019s position in these appeals, not as a representative of the Board but as a representative of the agency as a whole. When the Board\u2014the USPTO\u2019s adjudicator\u2014makes a decision, the \u201corder of the agency\u2019s designated adjudicator is in reality an order of the agency itself.\u201d 519 U.S. at 268. The agency \u201cmay then be free to designate its enforcer\/litigator as its voice before the courts of appeals.\u201d Id. The agency\u2019s litigator\u2014in this case the USPTO Solicitor\u2014while appearing on the side of the appellee, \u201cis free to argue on behalf of the petitioner and to challenge the decision of the Board.\u201d<\/strong> Id. at 270. Thus, if the Director (or Solicitor) disagrees with the Board\u2019s decision, he need not argue in support of affirmance.<\/strong>This prevents \u201ca \u2018lopsided\u2019 scheme whereby the Director can appear only in defense of the [Board\u2019s] decisions.\u201d Id. (citations omitted).3<\/p>

    In practice, the USPTO Director typically intervenes in appeals from inter partes cases in only two particular types of situations. Recognizing that the two parties can adequately represent the adverse sides of the dispute if both are present but not when the appellee has dropped out of the case, the Director will often intervene when the appellee has dropped out to preserve the adversarial presentation of the issues and to support the agency\u2019s decision. Other than that, the Director often intervenes when the dispute on appeal implicates broader USPTO or government interests. Those interests may involve the validity or interpretation of federal statutes, of the USPTO\u2019s procedures, or of USPTO regulations. So, for example, if an appellant argues that a regulation that the Board followed is contrary to the Patent Act, the Director may intervene to support the regulation. Although the Director could choose to intervene, under the statute, in every inter partes case, he instead selects cases in which his participation would be most important to the agency and helpful to the Court.<\/p>

    The Director\u2019s presence is not required, however, for the appeal to proceed. As discussed above, the appellant has a justiciable controversy because it stands to lose its patent. The lack of USPTO participation does not moot the appellant\u2019s case any more than does the reexamination requester\u2019s declining to participate, discussed above.<\/p>

    In the unlikely event that the government were to decline to defend the Board\u2019s decision in a case in which no other party was defending it, the Court could simply decide to hear the patentee\u2019s appeal without the benefit of an adverse party. Alternatively, the Court could appoint or invite an amicus to defend the Board\u2019s decision. The Supreme Court, for example, often chooses that route when the government confesses error and declines to defend a favorable decision from a lower tribunal. See, e.g., Becker v. Montgomery, 532 U.S. 757, 762 n.1 (2001) (\u201cWithout any party to defend the Sixth Circuit\u2019s position, we invited [attorney] Stewart A. Baker to brief and argue this case, as amicus curiae, in support of the judgment below. His able representation . . . permit[s] us to decide this case[,] satisfied that the relevant issues have been fully aired.\u201d (citations omitted)). Or, if the government confesses error and the Court concludes that, in consequence, there is nothing substantial remaining to be decided, the Court may simply vacate and remand. See Lawrence on Behalf of Lawrence v. Chater, 516 U.S. 163, 169-73 (1996); Florida Power & Light Co. v. Lorion, 470 U.S. 729, 744 (1985) (\u201cIf the record before the agency does not support the agency action, if the agency has not considered all relevant factors, or if the reviewing court simply cannot evaluate the challenged agency action on the basis of the record before it, the proper course, except in rare circumstances, is to remand to the agency for additional investigation or explanation.\u201d).<\/p>

    Regardless, because the USPTO typically intervenes to defend the Board\u2019s decision and tries to avoid situations in which a Board decision that it disagrees with is heard on appeal, the situation rarely arises.<\/strong> Far more common, and preferable, is a situation like this, in which the USPTO Director chooses to intervene to support the Board\u2019s decision.<\/p><\/blockquote>\n\n\n\n

    Footnotes:<\/p>

    2 Because the USPTO does not have independent litigating authority, the Director seeks and obtains authorization from the Solicitor General before intervening in this Court. See generally 28 U.S.C. \u00a7 516; 28 C.F.R. \u00a7 0.20(c)<\/p>

    3 Practically speaking, the Solicitor would not often argue in support of reversal of a Board decision because the agency would likely handle those cases administratively.<\/strong> For example, the Director can ask the Board to reconsider a decision. If the decision has already been appealed and the Director then determines that it is somehow defective, the Solicitor can seek a remand for the Board to reconsider. See, e.g., In re Bursey, No. 2016-2675 (Fed. Cir. Apr. 28, 2017) (nonprecedential) (remanding appeal upon Solicitor\u2019s request to allow Board to reconsider); In re DiStefano, 562 Fed. App\u2019x 984 (Fed. Cir. June 4, 2014); In re Shield, No. 2013-1562 (Fed. Cir. Apr. 16, 2014); In re Motorola Mobility LLC, No. 2012-1470 (Fed. Cir. Mar. 5, 2013).<\/p>DOJ\/USPTO\u2019s Supplemental Brief filed July 31, 2017 in Knowles Electronics LLC v. Iancu<\/em>, 886 F.3d 1369 (Fed. Cir. 2018)(then-captioned Knowles Electronics LLC v. Matal<\/em>).<\/cite><\/blockquote>\n\n\n\n

    The entire brief is available here: [Link<\/a>].<\/p>\n\n\n\n

    4. Back in 1992, 75% of the judges on the Board of Patent Appeals and Interferences sent a memo to the Commissioner of Patents and Trademarks.  The memo objected to instances in which the composition of panels of the Board had been manipulated or re-constituted.<\/p>\n\n\n\n

    We wish to express our concern regarding matters that carry disturbing implications of which you may not be aware.  There are an increasing number of instances in which the composition of panels of the Board of Patent Appeals and Interferences (BPAI) has been manipulated in a manner which interferes with the decisional independence of the Board and gives the appearance that a predetermined or predecided outcome has been reached in cases appealed under 35 USC \u00a7134.<\/p>

    Recently, for example, a randomly selected three member panel, acting pursuant to its statutory authority, reached and signed a decision, favorable to the appellant in Application Serial No. ***.  The issues in this application involved matters requiring special knowledge of *** technology and case law. The three member panel assigned to decide the appeal was constituted of individuals having this special knowledge.<\/p>

    For reasons unknown to us, the Chairman of the BPAI prevented the mailing of that decision.  He subsequently convened a special panel formed only of management officials, namely the Commissioner, the Deputy Commissioner, the Assistant Commissioner for Trademarks, the Chairman and the Vice-Chairman of the BPAI.  All of the original panel members were replaced.  To our knowledge, none of the new panel members has any special expertise or knowledge in *** technology or case law.  The management panel rendered a decision opposite in result to that reached by the legally constituted original panel, making no mention of the earlier decision.  These circumstances reflected an appearance of impropriety, e.g., an appellant being denied procedural due process within the U.S. Patent and Trademark Office.<\/p>

    It is the function of the BPAI to interpret case law of reviewing courts of the United States Patent and Trademark Office and apply this case law in reaching decisions on appeals.  It is the function of either the Court of Appeals for the Federal Circuit or the District Court of the District of Columbia to review the decisions of the BPAI.  There is no<\/em> statutory authorization for any individual or individuals other than the above-noted Courts for reviewing decisions of the BPAI.<\/p>

    Interference with the decision making process of any agency\u2019s authorized appellate board of review has at least the appearance of being improper.  Compare 5 USC \u00a7554.<\/p>

    While we have referenced only a single appeal in which we believe impropriety may have occurred, there is a disturbing pattern of interference with the normal course of deciding appeals by this BPAI, either by special selection of panels or by oral threats to panel members that they will be removed from a panel if they decide \u201cthe wrong way.\u201d<\/p>

    The Commissioner is authorized under 35 USC \u00a77 to \u201cdesignate\u201d the members of a panel.  There is no apparent authority, statutory or otherwise, to un-designate a duly formed panel and to redesignate a completely new panel for any purpose, let alone the purpose of reaching a conclusion opposite to that of the original panel, after the original panel not only reached a decision, but signed that decision.<\/p>

    These matters raise questions of a very serious nature including ultra vires<\/em> agency action, interference with the judicial independence of the BPAI and denial of an appellant\u2019s right to procedural due process.<\/p>

    We respectfully submit this memorandum to apprise you of these matters and to formally disavow even the appearance that we condone them.<\/p><\/blockquote>\n\n\n\n

    If the proposed revision to the statute is adopted by the Court in Arthrex<\/em> to make Administrative Patent Judges at-will employees, does the Government believe that it will be able to recruit high quality candidates to the role of Administrative Patent Judge when it is clear that judicial independence is important to most administrative judges?<\/p>\n\n\n\n

    5. How is the threat of losing one’s job an ability to control the outcome of a case already decided by a PTAB panel? <\/p>\n\n\n\n

    6. During the oral argument of Oil States<\/em>, the Government led the Court to believe that panel stacking at the USPTO during IPR’s had taken place on only three occasions. Does the Government wish to update that statement? <\/p>\n\n\n\n

     In the oral argument of Nidec v. Zhongshan<\/em>, the then-Solicitor for the USPTO, who once served as the acting Chief Judge of the PTAB, commented that over the years panels of the Board have been expanded \u201cmany, many times.\u201d<\/p>\n\n\n\n

    You can listen to the sound bite from Nidec<\/em> here: [Listen<\/a>].  Or, you can find it at the 25 min 40 second mark of the oral argument in Nidec Motor Corp. v. ZHONGSHAN BROAD OCEAN MOTOR<\/em>, 868 F.3d 1013 (Fed. Cir. 2017), available at: [Link].<\/a>   Or, you can review the exchange from Nidec<\/em> below:<\/p>\n\n\n\n

    Judge Reyna: What kind of uniformity or certainty do we have in that where the PTAB can look at a prior decision and say well we don\u2019t like that, let\u2019s jump back in there and change that?<\/p>

    PTO: Well, \u2026.<\/p>

    Judge Wallach: How does the Director choose which judge to assign to expand the panel?<\/p>

    PTO: Uh, that\u2019s provided, your Honor, by our standard operating procedure. And, the Chief Judge actually makes that decision.And, the judges are selected based on their technical and legal competency. And, over the years, many many panels at the Board have been expanded. In fact if you looked at the thirty . . . .<\/p>

    Judge Reyna: Are they selected on whether they\u2019re going to rule in a certain way?<\/p>

    PTO: Uh, well, people can be placed on the panel . . . for example, the Director can place him or herself on the panel, and certainly the Director knows how they\u2019re going to rule. Nidec has not said and they say at their blue brief at page 43 that they don\u2019t challenge the independence of these judges on this panel. Um, these judges were not selected and told to make a particular decision. If judges could be told to make a particular decision, there would be no need to expand a panel in the first place.<\/p><\/blockquote>\n\n\n\n

    See this previous post indicating that expanded panels were used on at least five occasions in 2017 alone: [Link<\/a>].<\/p>\n\n\n\n

    7. If PTAB judges are required to meet certain legal and technical qualifications in order to qualify as APJ’s, are similar qualifications required of the representatives of the USPTO’s Solicitor’s Office? If the Solicitor’s Office\/Director is entitled to pick and choose which parts of a PTAB decision it wants to defend on appeal to the Federal Circuit, shouldn’t the members of the Solicitor’s Office at least meet the same qualifications required of PTAB judges? Is Congress’ intent of using highly qualified APJ’s to adjudicate IPR’s being carried out if people not meeting those same qualifications are entitled to pick and choose which parts of a PTAB decision to defend on appeal? <\/p>\n\n\n\n

    If PTAB judges are required to submit financial data to ensure impartiality, does the same requirement apply to other members of the Office who are free to take a position opposite to the PTAB’s position on appeal?<\/p>\n\n\n\n

    8. If the USPTO Solicitor’s Office were ever to refuse to defend a PTAB decision, could the PTAB represent itself?  See Justice Scalia\u2019s dissenting opinion in Ingalls <\/em>at 273 (\u201cThe second argument offered in support of the view that the Director is a proper respondent when review is sought of an order of the Board is that (1) Rule 15(a) requires<\/em> the naming of someone<\/em> representing the agency, and (2) the Director is certainly a more sensible candidate than the Board. Ante,<\/em> at 267, 268. The second part of this analysis, the faute de mieux<\/em> point, is questionable: The Board could readily develop a staff to defend its judgments, and it is hard to imagine a worse <\/em>defender than an entity that is free to disagree (and often does disagree) with the order under review.\u201d).<\/em><\/p>\n\n\n\n

    9. If APJ’s are determined to be improperly appointed principal officers and there is no cure to the statute, must the previous actions of the PTAB with respect to IPR’s be rendered arbitrary and capricious as not issued in accordance with the law in view of 5 U.S.C. \u00a7 706(2)(A)?<\/p>\n\n\n\n

    10. If APJ’s are determined to be improperly appointed principal officers and there is no cure to the statute, are previous invalidations of patents in IPR’s administrative takings?<\/p>\n\n\n\n

    11. If it is determined that PTAB judges are not principal officers and they are not currently being overseen by a principal officer \u2014 because Director Iancu has resigned his post \u2014 should forthcoming PTAB decisions be considered valid, until a new Director\/principal officer is confirmed by the Senate? After all, some argue that PTAB judges are inferior officers because a Director purportedly supervises them and a Director is a principal officer. What about when there is no Director\/principal officer to supervise the PTAB judges? Does the Vacancies Act provide a cure? If so, how does the Vacancies Act — merely a statutory measure — suspend a constitutional<\/em> requirement that a principal officer be appointed with the advice and consent of the Senate?<\/p>\n\n\n\n

    ——————————————————————————————–<\/p>\n\n\n\n

    Update 3\/10\/21:<\/p>\n\n\n\n

    12. How will a recusal by the Director affect an IPR? Is the action taken by the USPTO in the IPR valid if there is no principal officer supervising the IPR due to the recusal by the Director?<\/p>\n","protected":false},"excerpt":{"rendered":"

    If the Supreme Court justices are looking for questions to ask during the Arthrex oral argument, here are some options: The USPTO has new PTAB judges take a judicial oath. The judicial oath is grounded in 28 U.S.C. \u00a7453: \u00a7\u202f453.Oaths of justices and judges Each justice or judge of the United States shall take the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.717madisonplace.com\/index.php?rest_route=\/wp\/v2\/posts\/11444"}],"collection":[{"href":"https:\/\/www.717madisonplace.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.717madisonplace.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.717madisonplace.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.717madisonplace.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11444"}],"version-history":[{"count":41,"href":"https:\/\/www.717madisonplace.com\/index.php?rest_route=\/wp\/v2\/posts\/11444\/revisions"}],"predecessor-version":[{"id":11501,"href":"https:\/\/www.717madisonplace.com\/index.php?rest_route=\/wp\/v2\/posts\/11444\/revisions\/11501"}],"wp:attachment":[{"href":"https:\/\/www.717madisonplace.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11444"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.717madisonplace.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11444"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.717madisonplace.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11444"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}