PTAB Brass steps into IPR to decide Apple motion for sanctions

By Gene Quinn & Steve Brachmann
September 9, 2018

On August 22nd, an order was entered in the inter partes review (IPR) proceedings currently ongoing between between Bellevue, WA-based digital multimedia communications developer VoIP-Pal and Cupertino, CA-based consumer device giant Apple Inc. The order removed the panel of administrative patent judges (APJs) that had been adjudicating the IPR, replacing them with Deputy Chief APJ Scott Boalick and Vice Chief APJs Jacqueline Bonilla and Michael Tierney.

This is the second time the panel of APJs has been completely changed in this particular IPR proceeding. Originally, the panel had consisted of APJs Barbara Benoit, Lynne Pettigrew and Stacy Beth Margolies. Although no explanation was provided (as is typical with the PTAB) the panel was changed a few weeks after we reported that APJ Margolies had previously represented Apple in patent infringement proceedings in U.S. district court.

The second panel of APJs assigned to this case included APJs Josiah Cocks, Jennifer Meyer Chagnon and John Hudalla. This panel, which was assigned to the casein June 2017, was the panel that issued the final written decision entered last November, find that the petitioner Apple had not proven the challenged patent claims were invalid. This was the same panel sitting on the case through January 19th of this year, when the PTAB entered an order regarding VoIP-Pal’s discharge of its prior counsel in the case.

Interestingly, although the order notes that all three APJs on the second panel were involved in the call regarding the change of counsel, the order itself only lists APJs Cocks and Hudalla as presiding over the case. That discrepancy is not explained in the Order, and is sadly typical of the lack of transparency seen in PTAB decisions and Orders. In an Article III Court it is customary, if not absolutely expected, that when any procedural irregularities occur they are explained with at least a footnote. Notions of substantial fair play and justice require at least that modicum of an appearance of propriety. 

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At some point between January and August of this year, the PTAB made the decision to replace the second panel with a high ranking panel of APJs, which occurred shortly after an announcement that former PTAB Chief Judge David Ruschke would be stepping down from his position to assume new responsibilities at the USPTO. Whether the two are somehow connected is impossible to say given the shroud of secrecy that surrounds everything at the PTAB, including Orders and Decisions.

The only matter at issue in the IPR, which is now currently before APJs Boalick, Bonilla and Tierney, is a motion for sanctions which was filed by Apple based on allegations that former VoIP-Pal CEO Thomas Sawyer engaged in improper ex parte communications by sending a series of letters to Ruschke and other Executive Branch officials.

It seems extraordinarily unusual for a tribunal — any tribunal — to change change judges for purpose of ruling on a sanctions motion. If the letters from VoIP-Pal’s CEO did actually constitute improper behavior, the best people to decide that issue would be the panel of APJs who were assigned to the case at the time the behavior took place. Unquestionably, the APJs that were presiding over the case are in the best position to determine whether sanctions are appropriate. Most of the challenged behavior occurred during the timeframe that APJs Cocks, Chagnon and Hudalla constituted the presiding panel. Only one of Sawyer’s letters was sent prior to the first panel change, and if that panel was in fact changed because APJ Margolies had a conflict of interest it would be inappropriate for that panel to consider the sanctions motion. 

While highly unusual for the PTAB to switch judges in midstream without any explanation, this kind of action does happen. It is also why observers so confidently claim the procedures of the PTAB are arbitrary and capricious.

The USPTO has engaged in the stacking of APJ panels in order to achieve policy outcomes, APJ Margolies is not the only APJ to have sat on a case where there was a blatant conflict of interest, in fact APJ Matt Clement has decided several dozen cases involving Apple, who he formerly represented. The PTAB also rather effectively squashes dissenting opinions by requiring permission to dissent and recently after an APJ did dissent in favor of a patent owner he was mysteriously and without explanation removed from the panel.  We also know that subordinate APJs assigned to cases engage in extra-judicial, deliberative conversations with superiors relating to cases and issues, a clear and flagrant violation of the Administrative Procedure Act (APA), which requires decisional independence. 

Minus any explanation as to why the panel was recently changed in the VoIP-Pal/Apple IPR, this situation is yet another example of the lack of transparency issuing from the PTAB and will undoubtedly have the effect of making it look as though the PTAB’s decision in this case was preordained, no matter which side prevails in the motion for sanctions.

One may be tempted to argue that changing the panel to constitute such a high-ranking panel will ensure consideration by PTAB leadership who aren’t under any influence, but if the PTAB does not similarly treat future sanctions motions legitimate questions will be asked about why Apple received special treatment. Furthermore, the optics of using a panel including APJ Tierney in a case involving Apple will no doubt raise some eyebrows given that once a challenge has been instituted Tierney has overwhelmingly sided with Apple. Indeed, according to data collected by Lex Machina, never once has a final decision involving both Apple and APJ Tierney ever led to a finding that all claims remained valid, and only once has Tierney sat on a panel where at least one claim remained valid.

Perhaps more intriguing, Tierney sat as an APJ on the IPR filed by Apple against VirnetX where Apple was able to get around the statute of limitations for filing an IPR. Should the PTAB grant Apple’s sanctions motion there will undoubtedly be some who will see this as a second great favor done by Tierney on Apple’s behalf.

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and founder of IPWatchdog.com. Gene is also a principal lecturer in the PLI Patent Bar Review Course and an attorney with Widerman Malek. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Gene Quinn

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 17 Comments comments. Join the discussion.

  1. Anon September 9, 2018 12:04 pm

    It appears that someone has forgotten that it is not just impropriety, but additionally the appearance of impropriety that the “court” is to be on guard for (and address).

  2. Patent Investor September 9, 2018 10:03 pm

    Steve,

    “Perhaps more intriguing, Tierney sat as an APJ on the IPR filed by Apple against VirnetX where Apple was able to get around the statute of limitations for filing an IPR. Should the PTAB grant Apple’s sanctions motion there will undoubtedly be some who will see this as a second great favor done by Tierney on Apple’s behalf.”

    Perhaps even more intriguing still is the presence of Tierney on the RPX IPR of the ‘135 patent where (after having originally denied VirnetX’s request for discovery on the possibility of Apple being an RPI to the case) VirnetX presented a smoking gun forcing discovery and ultimately getting the IPRs dismissed with an undeniable link between Apple and RPX regarding the IPR filings. The record itself and several teleconference transcripts contained lines and lines of attorney argument claiming total innocence on the matter. Why VirnetX never motioned for sanctions against both parties is beyond me. Foolish attorneys who can’t even hide their own underhanded metadata deserve what they get.

    THEN flashforward to the Mangrove IPRs, one of which was also against the ‘135, and Tierney is on this panel too. Actually both panels consisted of Tierney, Easthom, and Siu who have taken down their fair share of VirnetX’s patents regardless of prior art. Anyway, this murderer’s row panel that saw the smoking gun evidence of Apple’s involvement with RPX, which totally contradicted a large sum of attorney argument, refused to allow VirnetX any additional discovery into whether Mangrove and RPX were in cahoots concerning the IPRs based on nothing more than (you guessed it) attorney argument.

    I thought the old saying was, “fool me once shame on you, fool me twice shame on me”, not “fool me once and I make money, fool me twice and you owe me even more!”????

  3. peter September 10, 2018 1:14 am

    Gene should take up this lack of independence issue concerning Tierney directly with Director Iancu and see what the Director has to say.

  4. AAA JJ September 10, 2018 8:55 am

    That “career officials” at the PTO don’t believe the law actually applies to them is, unfortunately, not news.

  5. J Wayne Watson September 10, 2018 11:34 am

    The PTAB has certainly made my view of “equal justice” a very questionable action in America! Hopefully the Trump Spirit if real truth, transparency and timeliness will prevail here and VOIP-Pal can be vendicated quickly!

  6. Paul Morgan September 10, 2018 7:02 pm

    Actually, it is quite common for D.C. judges to decide various motions for cases they many not preside on at trial.
    Also, decisions on motions for sanctions are rare in PTO proceedings, and the AIA 35 USC 316 (a)(6) statutory basis for them is unique for the PTO. A good reason for high level PTO careful consideration.
    But of course conspiracy theories are more popular these days.

  7. Patent Investor September 10, 2018 7:38 pm

    Paul,

    AIA 35 USC 316 (a) “Regulations.—The Director shall prescribe regulations—

    (6)prescribing sanctions for abuse of discovery, abuse of process, or any other improper use of the proceeding, such as to harass or to cause unnecessary delay or an unnecessary increase in the cost of the proceeding.

    So, bald face lying to the panel in both teleconferences and written documents regarding RPI sounds like: abuse of discovery (check), abuse of process (check), AND improper use of the proceeding to harass or to cause unnecessary delay or an unnecessary increase in the cost of the proceeding (double check)!!

    You don’t need any conspiracy theories to know that, just a passing awareness of the English language. These guys should have been sanctioned to the point where they’d never be in front of a PTAB panel again.

  8. Josh Malone September 11, 2018 12:02 am

    Patent Investor – good points. Of course Apple is not the one being threatened with sanctions. Dr. Thomas Sawyer exposed the Google-Apple-PTAB conspiracy and acted on his First Amendment right to petition his government for redress of grievances. He alerted proper authorities to the corruption. He caught them red-handed. The jig is up. There is no easy way to fix this.

    His letters are worth another read. They are incriminating. https://www.voip-pal.com/news-interviews-more.

    It is time to shut down the whole ugly operation. How about an Executive Order from the President firing all the APJ’s for violation of the Appointments Clause. Or a rule by Director Iancu vacating all the the institution decisions and returning the Institution Decision to the Director.

    There is no rule of law at the PTAB. The legitimacy of our patent system is fatally compromised.

  9. Not ANON September 11, 2018 11:31 am

    The PTAB now finds itself in quite the pickle. It has to make a decision (eventually) on Apple’s request for sanctions against Voip-Pal.

    If the PTAB rules in Apple’s favor it risks….

    * Further exposing the terrible PTAB practice of panel stacking and panel replacement to reach a meritless-based goal.

    * Taking the risk that Voip-Pal might follow through with a lawsuit addressing some of the observations stated in Dr. Sawyer’s letter to the PTAB (e.g. corruptive (criminal) practices – colluding with big-tech – link placed above by J. Malone)

    * Inviting further scrutiny of the decision of the PTAB judges NOT to disclose the Dr. Sawyer letters to both parties as it was obligated to do at the time it was received. Contrast this to the PTAB’s recent decision to disclose (under seal) a more recent ex-parte communication it received to both parties.

    * Having to explain why it granted a review of a rehearing request AFTER a final written decision was made when the IPR is determined to be completed and finished?

    ON THE OTHER HAND….

    If the PTAB rules in Voip-Pal’s favor then it risks angering big-tech company.
    By ruling in Voip-Pal’s favor the PTAB can accomplish making a decision based purely on the merits, avoid having further scrutiny into its corruptive practices and pass the buck to the Federal Appeals Court.

    FURTHER MORE…

    Judge Tierney’s record shows him to be heavily biased towards Apple. Perhaps adding him to the current panel that is being called upon to what many would say is a decision that should be elementary will afford him the opportunity to break with his own record so as to throw off any suspicion of favoritism on his part? –> What is the point of placing such high ranking judges on the panel for something that should be so simple to decide?

  10. Paul Morgan September 11, 2018 11:45 am

    JM, thanks for the hotlink. I was pleased to see the patent owner saying it has already won inter partes IPR challenges by Apple and AT&T re its major patent suits. What is not clear from that report is what effect, if any, does the still pending Apple motion for sanctions for ex parte contacts with PTO officials have on Fed. Cir. appeal of the IPR decision?

  11. Software Inventor September 11, 2018 1:49 pm

    Every time the US Congress, CAFC, USPTO and PTAB goes out of their way to protect their favored sons, big tech, they hurt America. Why? While they think they are protecting big tech from the illusive patent troll, they are in reality weakening our patent system and poking holes in our country’s IP armor, opening avenues for market entry – for others to exploit.

    Our trade deficit is not getting larger by the month because America is being flooded with innovative products…as my 12 y/o son says searching online for items he wants, “Dad, there sure are a lot of knock-offs out there.”

    More specifically, and empirically, reference back to the recent August 1, 2018 IPWatchdog piece on US developed cell phone PopSockets. Upon their commercial success, the US market was then being flooded with knock-offs. The company’s wise and capable enforcement attorney was able to attain an IHT General Exclusion Order to stop the invasion at the border. This example suggests both the level of exploitation and how valuable IP protection can be to our inventors and US economy.

    Furthermore, add the ongoing devaluation of patents in this equation.

    Lastly, these are my concerns about the anti-patent movement; they simply do not protect favored big tech – as an intended consequence, they are hurting all of America and our ability to invent and compete in global markets – as an unintended consequence.

  12. Paul Morgan September 11, 2018 3:58 pm

    Note to Anon, et al: First, if the PTAB panel, however, constituted, was really biased towards Apple then Apple would not have disastrously lost these very financially important IPRs. Secondly, the odds of any sanction motion, including those reportedly requested by Apple here,having any direct effect on the patent owner’s wins of these IPRs is extremely slim. Fed. Cir. case law strongly resists sanctions so severe as to actually change the judgement below. Many lesser forms of sanctions are available if any are granted. If letters send by an officer of a patent owner to PTO officials accusing named APJs of bias or ethical violations without evidence were not written or approved by a PTO registered attorney [the PTO is entitled to ask], then OED attorney sanctions of the patent owner’s patent attorneys seems unlikely either.

  13. Eric Berend September 11, 2018 5:26 pm

    It doesn’t walk like a duck.

    It doesn’t talk (or make writs) like a duck.

    It doesn’t fly like a duck.

    When is a so-called “duck” NOT in fact, a duck?

    U.S. Supreme Court Chief Justice Roberts, knows the difference.

    So why are the esteemed administrators of this site calling APJs of the USPTO “Judges”, when these are at best, de facto magistrates in their functions and empowerments, with at best, a mere passing resemblance in any case to jurists of any conception?

    It is best for any interest, community, tribe or nation, when subjected to destructive assault from a determined and powerful foe, not to adopt the invader’s terminology unconsciously and thereby cede an important mental and psychological advantage of allowing them to determine the rhetorical terrain of contention.

    Perhaps it is best to review the actual definition of the word “magistrate”, according to the well settled norms of U.S. jurisprudence:

    How about the online reference provided by Black’s Law Dictionary, for starters?
    https://thelawdictionary.org/magistrate/

    The U.S. legal system exists not in a societal vacuum, and so a reference to a more general authority is also relevant. Would most reading this not agree, that Mirriam-Webster is a long time well respected lexicographer?
    https://www.merriam-webster.com/dictionary/magistrate

    As it happens, the bureaucratic establishment of quasi-juidical role and functionality manifested as ALJs, is perfectly well defined by the word “magistrate”. It is perfectly NOT well defined by the misuse of the word “judge”.

    APJs of the USPTO, ARE NOT “Judges” – they are actually magistrates. These are simply, mere bureaucrats. That there is an official title of U.S. Magistrate in the U.S. system, does not alter the truth of this understanding.

    And, the sooner the general U.S. public understands that petty, corrupt bureaucrats – and NOT ‘Judges’ – are destroying industrial and small business development that will end up going instead, to China or Big Tech/Big Bankers/Big Auto/etc. – the sooner the IP pirates patent-destroying ploy will finally be exposed as being the giant criminal racket it truly is.

    Accuracy, veracity, integrity, Occam’s Razor.
    Clarity of concept and Justice Brandeis’ “sunlight” are the best policies, if there is ever to be a meaningful restoration of U.S. patent protections and respect for inventors’ standing in U.S. society.

    “Sunlight is said to be the best of disinfectants.”
    U.S. Supreme Court Associate Justice Louis D. Brandeis
    (Harper’s Weekly article, December 20, 1913)

  14. Anon September 12, 2018 8:25 am

    Mr. Morgan,

    Why address me in your post above? None of which you speak of there trace to my views or positions.

    To the contrary, I have pointed out matters that you do not engage upon, including the fact that you are a cheerleader of the IPR, regardless of ANY infirmity involved.

    Kindly do not lump me into positons that I have not advanced while avoiding engaging positions that I have advanced.

  15. Anon September 12, 2018 8:29 am

    So why are the esteemed administrators of this site calling APJs of the USPTO “Judges”,

    Most likely because of the “J” in “APJ”

    and probably nothing more than that.

  16. Paul Morgan September 12, 2018 10:45 am

    EB, if you are upset about the “J” in APJ, you should be a lot more upset about states that have town court “judges” and traffic court “judges” that do not have to even be attorneys! I.e., you cited definitions are incomplete.
    For that matter, sanctions motions, the subject here, are often decided in Federal District Courts by Magistrate Judges.

  17. Gene Quinn September 12, 2018 11:13 am

    Eric @13 (and Anon @15)

    “why are the esteemed administrators of this site calling APJs of the USPTO ‘Judges'”

    Anon is correct. APJ stands for Administrative Patent Judge.

    Eric @13 says:

    “these are at best, de facto magistrates in their functions and empowerments”

    That is a mistake. APJs are not at all magistrates. The power of a magistrate, at least in the federal system, derives from the federal district court. A magistrate is appointed to handle various matters by a district court judge, and can hear and decide other matters if the parties agree. The rulings of the magistrate are reviewable, and adopted by the district court judge. PTAB Judges have FAR more authority than a magistrate.

    Judge Michel has been saying for a number of years now that the PTAB is the most influential patent tribunal in the world. He is absolutely correct. Based on the number of cases, the deference given to their rulings by the Federal Circuit, and the reality that these unconfirmed administrative judges who do not even rise to the level of an Administrative Law Judge can and do overrule decisions of Article III constitutional officers.

    Don’t fool yourself. PTAB Judges wield tremendous power. They know it, and the tech giants know it too.

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