Allegations of ex parte PTAB Communications raise more questions of due process, APA violations

By Steve Brachmann
January 25, 2018

Allegations of ex parte PTAB Communications raise more questions of due process, APA violationsOn January 4th, the Patent Trial and Appeal Board (PTAB) issued what can only be considered a scathing response to a motion requesting an oral hearing which was filed by the Saint Regis Mohawk Tribe in a series of six inter partes review (IPR) proceedings in which the Saint Regis tribe is the patent owner. Applying some very interesting legal reasonings, including a due dates in the cases’ scheduling orders which passed before the Saint Regis tribe was the patent owner, the PTAB moved to prevent the Saint Regis tribe from filing any additional papers in these IPRs without prior authorization from the Board.

The PTAB’s decision to largely prevent the Saint Regis tribe from filing any additional papers in the case to which they are a party seems remarkable given the fact that the PTAB has opened up the proceedings of the Saint Regis trials to allow amicus briefings from third parties with an interest in the case. So, it would seem that the PTAB seems more interested in giving the agency’s supporters a say in these cases than the actual patent owner whose property rights are on the line, hardly the result one would anticipate if the PTAB were a court operating with any true sense of justice.

The Saint Regis tribe had originally filed its request for oral hearing to seek additional discovery in the case about the possibility of political pressure and financial interests which could have an effect on the PTAB’s decision in the IPRs. The Saint Regis tribe raised the possibility that ex parte oral or written communications could have occurred involving administrative patent judges (APJs) on the merits panels of these cases; such communications should be made public information under the terms of the Administrative Procedure Act (APA), a law which prohibits political pressure from being placed upon administrative judges such as APJs. On top of this, the Saint Regis tribe noted the non-trivial financial impact that a successful defense on sovereign immunity could have on the filing fees collected by the PTAB.

In denying the Saint Regis tribe’s request for oral hearing, the PTAB raised multiple objections to Saint Regis’ activities at the PTAB. First, the Saint Regis tribe filed the request for oral argument on the legal matters at issue without the Board setting a time for the Saint Regis tribe to file a request for oral argument on specific issues. Essentially, the Saint Regis tribe did not get the PTAB’s permission to raise those legal issues, yet the tribe raised those issues anyways. Further, the PTAB argued that the scheduling order’s deadline for parties to file a request for oral argument passed on July 20th, 2017, almost a full two months before Saint Regis became the patent owners in the case.

Although the PTAB could have expunged the tribe’s request for oral argument outright, it chose not to in order ensure that the record is clear on why the Saint Regis tribe’s request for discovery exceeded the scope of permissible discovery in IPR proceedings. Saint Regis sought discovery under 37 CFR § 42.51, which enables a single party to file for additional discovery. As the PTAB’s denial notes, however, the Saint Regis tribe was seeking additional discovery into the Board itself instead of another party in the case; the PTAB was not itself a “party” to the proceedings, it argued. “As a final note, we caution counsel for the Tribe that failure to comply with an applicable rule or order, abuse of discovery, and abuse of process are all grounds for sanctions,” the PTAB’s order reads.

Procedures at the PTAB require a party to email the merits panel to request a telephone hearing to seek permission to file a motion requesting additional discovery. But the party requesting the hearing cannot discuss legal issues in that email; those can only be explored during the telephone hearing. Counsel representing the Saint Regis tribe emailed the merits panel requesting a teleconference but that request was summarily denied. “That denial was intended to prevent us from making any legal arguments,” Evans said. “So the only avenue we had to make a record was to file a paper formally request an oral hearing.” Because there isn’t anything in the rules governing PTAB that gives the agency the ability to deny requests for oral hearings, the Board relied on a long-past deadline laid out in the original scheduling order to deny the request. “The process they’re employing against us is designed to prevent us from making any legal record,” Evans said. “That’s what’s really troubling. If they think that we’re wrong, fine. But they should let us file a brief and then rule on the legal issues we present.”

If the PTAB acted consistently in this fashion, denying a party’s request for discovery into ex parte communications with the merits panel after deadlines in the scheduling order had passed, that would be one thing. But the PTAB’s denial of the Saint Regis tribe’s request for oral argument looks dubious in light of the PTAB’s decision to allow a very similar request made by Apple as a petitioner in a different IPR. On December 20th, Apple filed a motion for judgment in favor of petitioner as sanction for improper ex parte communications by patent owner VoIP-Pal.com. Apple argued that the patent owner had engaged in a campaign of sending “threatening letters” accusing the Board of “criminal conspiracy” and that none of those letters had been presented to Apple. Such ex parte communications “irreparably tainted” the IPR proceeding in favor of VoIP-Pal, Apple argued, and Apple argued that the Board should reverse the final decision in the case and “provide a constitutionally correct process going forward.” (Whether the PTAB can even guarantee a constitutionally correct process in its trial proceedings is part of the question presented to the U.S. Supreme Court in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, a case which will be decided in 2018.) The day prior to Apple filing its motion, the PTAB granted Apple’s request for a telephonic hearing and authorized Apple to file its motion concerning the due process implications of ex parte communications and their impact on its trial. Most troubling, Apple’s motion demonstrates that PTAB does not publish ex parte communications into the administrative record as required by the APA, which is the exact issue Saint Regis requested discovery on.

The decision to deny the Saint Regis tribe the chance to have a phone hearing to explain its legal issues, in the context of the Board’s grant of a very similar motion made by Apple as a petitioner in another hearing, seems arbitrary and capricious to say the least. It certainly gives more sticking power to the tribe’s contention that financial interests may be compelling the PTAB to rule in certain ways; the Board wouldn’t even let the tribe brief the issue, attempting to sweep the problem under the rug by citing a deadline that passed before Saint Regis was even part of the trial, while basically allowing a petitioner bringing a case to the PTAB full reign to make the same argument well after any deadline for requesting an oral hearing would have passed. That certainly makes the PTAB seem much friendlier to the efficient infringer lobby bringing cases to its docket in a way that potentially highlights how that tribunal looks out after its own financial interests.

There are those who may very well contend that all of this is a natural extension of the fact that the PTAB is an alternative to district court in determining patent validity matters. And they would be right: the PTAB is an alternative to district courts, in much the same way that battery acid is an alternative to orange juice. Although Saint Regis is precluded from filing any additional papers in its IPR proceedings at the PTAB, Allergan, the original patent owner, filed a supplemental brief on litigation waiver issues on January 12th which argued against the PTAB’s findings on sovereign immunity defenses in other recent cases, such as the denial of the sovereign immunity defense issued by the PTAB in Ericsson, Inc. v. Regents of the University of Minnesota.

The Author

Steve Brachmann

Steve Brachmann is a writer located in Buffalo, New York. He has worked professionally as a freelancer for more than a decade. He has become a regular contributor to IPWatchdog.com, writing about technology, innovation and is the primary author of the Companies We Follow series. His work has been published by The Buffalo News, The Hamburg Sun, USAToday.com, Chron.com, Motley Fool and OpenLettersMonthly.com. Steve also provides website copy and documents for various business clients.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 12 Comments comments.

  1. Bemused January 25, 2018 7:31 am

    And the PTAB hits just keep a-coming. There really is no limit to the hubris of that clown show called the Patent Trial and Appeals Board.

    Steve, I really liked your analogy (“…much in the same way that battery acid is an alternative to orange juice.”).

    Here’s another…”much the same way that hemlock is an alternative to water.”

  2. Valuationguy January 25, 2018 9:08 am

    Thanks Steve for keeping on top of this. Given the personnel and politics within the PTO…it doesn’t surprise me that various official parties can’t stand up to the light presently being shined on their corruption and bias which…while bad previously….absolutely exploded under the Obama admin and the AIA due to Google-connected appointees and staff hirings.

    Looking forward to see how Iancu handles that PTO swamp if he ever gets confirmed….something Grassley and Goodlatte are trying to slow even if they know it is inevitable. My view is that he is going to have jettison 70% of the PTO long-term executive management if he wants to inact change there…because they are 99% behind Silicon Valley’s efficient infringement project atm. Getting rid of Lee did little since everyone else left were still in her inner coterie and agreed with her agenda.

  3. Anon January 25, 2018 12:21 pm

    Before being bent out of shape on the particulars, I would remind all that the mechanism that was being used in an attempt to “discover” NON-PARTY information was (most likely) simply not the appropriate mechanism, and the ‘rules of the game’ for THAT mechanism appear to be followed appropriately by the PTAB.

    Litigation is not my specialty, so I have to wonder how other “late joiners” may be treated in the course of an ongoing case (in either or both of Article III and non-Article III forums).

  4. Invention Rights January 25, 2018 12:54 pm

    If you look further at the request filed by the Mohawk Tribe you will see a smoking gun. They ask who wrote the concurring opinions in the University of Minnesota IPRs. Two identically worded opinions were written by two different APJ’s. They held that merely filing an application for a patent constitutes waiver of sovereign immunity.

    In IPR2017-01068, APJ Jacqueline Harlow writes:

    I write separately to express my view that a state university, having availed itself of Patent Office procedures to secure patent rights from the public, may not subsequently invoke sovereign immunity as a shield against reconsideration by the Patent Office in an inter partes review proceeding of whether the agency improvidently granted a patent monopoly in the first instance…To my eye, therefore, far from implicating the sovereignty or dignity of the states, inter partes review simply provides a streamlined, specialized mechanism by which the Patent Office may reconsider a patent grant and correct any mistake.

    In IPR2017-01186 APJ Jennifer Bisk writes:

    I write separately to express my view that a state university, having availed itself of Patent Office procedures to secure patent rights from the public, may not subsequently invoke sovereign immunity as a shield against reconsideration by the Patent Office in an inter partes review proceeding of whether the agency improvidently granted a patent monopoly in the first instance…To my eye, therefore, far from implicating the sovereignty or dignity of the states, inter partes review simply provides a streamlined, specialized mechanism by which the Patent Office may reconsider a patent grant and correct any mistake.

    Chief APJ David Ruschke authored the majority opinion in both cases. He held that filing an infringement action in an Article III court constitutes waiver of sovereign immunity.

    So who really wrote the concurring opinions? Who is setting this up for appeal to see test how much power the PTAB can grab? David Ruschke, Joe Matal, Nathan Kelley surely have their fingers in it – are there others?

  5. The Time Is Now To Act January 25, 2018 4:31 pm

    IR – well done!

  6. Gene Quinn January 25, 2018 6:09 pm

    Invention Rights-

    Thanks for pointing out that identical language in two different concurring opinions allegedly written by two different APJs. Will follow up on that.

    -Gene

  7. Jeff Lindsay January 25, 2018 9:02 pm

    So much corruption taking place here. What a story. I cant wait to see the movie!

  8. Joachim Martillo January 26, 2018 9:50 am

    SAWS trained APJs routinely to insert lies into US government documents that are provided to the CAFC in 35 U.S. Code § 141 (Appeal to Court of Appeals for the Federal Circuit) actions. Because the CAFC routinely defers to the USPTO under Chevron Deference, APJs thanks to SAWS have been routinely corrupting the federal judicial process apparently since 1994.

    In the appeal of the 07/773,161 application, the three APJs claimed completely to have read documents pertaining to the appeal.

    Yet they upheld rejections, which the Examiner had withdrawn. When I gave the APJs an opportunity to admit that they lied, they blamed the Examiner, whose English — I admit — bordered on incomprehensibility except in the case of withdrawing rejections.

    Such a written lie is a crime under 18 U.S. Code § 1001 (Statements or entries generally) and is considered a violation that is as serious as perjury.

    Because of Chevron Deference lies by APJs are particularly grave and must be punished to the fullest extent of the law. In other words, corrupt APJs should expect maximum prison sentences and maximum fines unless they volunteer their complete knowledge of corruption within the USPTO.

    SAWS seems to have been terminated as post-grant review proceedings began to prove themselves to constitute a far superior mechanism of stealing IP from lone inventors and small businesses.

    The SAWS After SAWS document discusses the SAWS experience of the 07/773,161 Application.

    It is worthwhile to note that the adjudication of the appeal of the examination of the ‘161 application never made it into the FOIA reading room even though this application was public. (Sorry! In order to view the documents of the examination, you will have to go to Public PAIR.)

    It is particularly troubling that the three APJs, Dixon, Hughes, and Frahm, are senior USPTO 101-eligibility experts and that they made new and completely bogus 101 rejections of the CRM claims.

    In order to eradicate corruption at the USPTO, patriotic pro-patent system activists, who are trying to save the US political economic system, which depends very much on an honest strong patent system, must work without surcease to transform corrupt USPTO officials and APJs from US government employees into US government guests in the federal prison system.

    I have little doubt that corrupt APJs facing prison sentences will sing like canaries.

  9. Night Writer January 27, 2018 2:22 pm

    >>I would remind all that the mechanism that was being used in an attempt to “discover” NON-PARTY information was (most likely) simply not the appropriate mechanism

    Probably it was. The clear implication is that the adverse party had something to do with the ex parte communication.

  10. Anon January 27, 2018 3:20 pm

    Night Writer,

    Your suggestion would – perhaps – be indeed a valid one.

    Alas, such is absent from the record.

  11. Invention Rights January 27, 2018 4:30 pm

    The government’s position in Oil States is that IPR is not a trial between private parties. They say it is the PTAB representing the public versus the patentee. The PTAB is an adverse party to the patentee. There is no doubt about it. This is the universal experience of patentees in an IPR – the PTAB is trying to take away your patent. Even the concurring UMinn opinion on which the Tribe seeks discovery states that it is not a dispute between private parties. According to APJ Bisk and Harlow the PTAB is a party. The Tribe’s request was proper as the government consistently represents in statements and actions that it is a party in the dispute over patentability.

  12. Anon January 27, 2018 7:41 pm

    IR,

    Your take is not accurate. I suggest that you re-read the amicus brief of the government. That brief is indeed shocking (and undoubtedly, one of the worst versions of the patent system ever penned, let alone penned by an entity related to the entity entrusted to promote progress), but it is not the version that you seek to portray as being the active adversary (and in essence, no longer being the tribunal in the trial that is held in the non-Article III forum).

    Veritably, if your version were indeed correct, then the Constitutionality of the IPR regime would be even more grievously absent, and the IPR regime would have been dispatched by the courts almost immediately.

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