“Only once has Clements sat as an APJ on an Apple trial that ended with a final written decision upholding any claims, and not once has he upheld all challenged claims.”
As was recently reported by IPWatchdog Founder Gene Quinn, it has come to light that information made public by the California State Bar shows that Matthew Robert Clements, formerly an administrative patent judge (APJ) at the Patent Trial and Appeal Board (PTAB) has been hired as an attorney by consumer tech giant Apple Inc. Prior to his work as a PTAB APJ, Clements was a patent attorney at Ropes & Gray and he represented Apple as counsel in patent infringement matters, where Apple was a defendant. While at the PTAB, Clements served on APJ panels in a few dozen cases brought by Apple, a situation that raises questions of ethics and that brought to light other matters, such as a lack of any code of judicial conduct for PTAB APJs despite their importance in adjudicating U.S. property rights which can be worth billions of dollars.
We’ve previously reported on statistics showing the outcome of PTAB trials petitioned by Apple where Clements served as an APJ, noting that the mixture of those ingredients resulted in nothing short of a lethal cocktail for patents and their owners. With Clements’ departure from the PTAB now upon us, we wanted to revisit his career statistics at the PTAB using Lex Machina’s data analytics tools to see how the new Apple hire ruled in cases involving his current employer.
PTAB Validity Trial Outcomes Involving Apple and APJ Clements
Of course, to do this analysis justice, we first need a baseline against which to compare Clements’ Apple trials. From the very beginning of the PTAB through April 20 of this year, the PTAB has been petitioned to scrutinize the validity of patent rights 10,091 times. 5,170 of those petitions have been instituted, and 1,751 of those petitions that have been instituted, or 33% of the total instituted, have ultimately resulted in all challenged claims being determined to be invalid. The situation grows more dire for patent owners when looking only at those petitions that have been instituted and reached a final decision. When looking at those 2,618* petitions, that 1,751 figure for all claims invalidated grows to 67%, or two-thirds, of all final decisions. Only 461 times, 18% of all final decisions, were all claims upheld.
Already, we’re starting from a baseline that doesn’t appear at all friendly to patent owners. Once we start filtering the results to look at Clements’ work, however, the situation becomes even more bleak. There have been 366 petitions filed at the PTAB for validity trials where Clements has sat on the APJ panel at some point of the proceedings. 245 of those were instituted, and 153 of those reached final decisions. Of those 153, 107—or 70%–resulted in final written decisions where all claims were held invalid. Only 20 trials involving APJ Clements have led to all claims being upheld— only 13% of the final decisions involving Clements and only 5% of total petitions involving Clements.
Apple has been one of the most prolific filers of petitions for validity trials at the PTAB, having filed 547 such petitions since the Board was enacted, more than 5% of all petitions filed at the PTAB. Apple on its own was already doing better than the average, as 115 of its petitions resulted in final decisions of all claims being held invalid. That’s 21% of all Apple petitions, and 79% of the 145 Apple petitions that have reached the final written decision phase.
Stirring the “Lethal Cocktail”
Mix these components together and the result is a kind of poison for patents that would put Socrates’ hemlock to shame. Clements has sat as an APJ on 53 PTAB petitions involving Apple as petitioner, making him the fourth-most active APJ on Apple’s PTAB docket. Of those 53 petitions, 26 of them have ended in final written decisions where all claims were held invalid. That’s 49% of all Apple petitions and 96% of those petitions that have reached final written decisions. Only once has Clements sat as an APJ on an Apple trial that ended with a final written decision upholding any claims, and not once has he upheld all challenged claims.
To be fair, while these figures may be updated since the first time we ran this story in June 2017, there hasn’t been a major change in either the total numbers or percentages when looking at the outcomes. Of course, perhaps the fact that there has only been one additional Apple petition added to Clements’ docket since our original story may itself be proof that bringing this situation to light had an actual impact on PTAB docketing practices, albeit in a limited sense. Still, there’s no doubt that patent owners such as Smartflash, Parthenon Unified Memory Architecture, e-Watch and others may wonder, with good reason, whether the PTAB deck was stacked against them from the very start.
A Look at the Ethical Concerns in an Article III Context
The situation involving Apple and former APJ Clements raises plenty of questions about optics and ethics, and while the PTAB is an Article I tribunal under the Executive Branch, Charles Gardner Geyh, the John F. Kimberling Professor of Law at Indiana University Bloomington Maurer School of Law, offered some perspective on how this situation would play out in an Article III context. He noted that Article III judges must recuse themselves from cases involving matters with which they were involved as counsel prior to ascending to the bench, as well as cases where one party is represented by counsel from the judge’s former firm and the matter was handled by the judge’s former firm while the judge was an attorney at the firm. “There is no problem with a judge presiding over a case involving his former client, as long as neither judge nor the judge’s former firm represented the client while the judge was still practicing at his former firm – unless the relationship between lawyer and former client remains so close that a reasonable person, fully informed of the circumstances, would call the judge’s impartiality into question,” Geyh said.
More information collected from Lex Machina shows that, were these PTAB trials to have been conducted in an Article III context, there may have indeed been the kind of ethical conflict requiring recusal that Geyh discusses. In at least two covered business method (CBM) reviews challenging Smartflash patents that were petitioned by Apple and involved Clements as an APJ, Apple was represented by a legal team from Ropes & Gray including James Batchelder. As we’ve previously reported, Clements worked at the East Palo Alto office of Ropes & Gray, where Batchelder served as managing partner, and Batchelder was counsel of record defending Apple in the patent infringement suit brought by Smartflash. While it’s unclear whether Ropes & Gray was involved in the Smartflash case while Clements worked in Batchelder’s office, this starts to look like the kind of situation where impartiality could be reasonably questioned.
Further, Clements’ new work relationship as an Apple employee poses new ethical concerns. Geyh said that the business of a judge’s pursuit of an employment opportunity with parties appearing before the judge was more problematic and absolutely required recusal of an Article III judge even in the absence of the aforementioned situations of prior representation. “The reason is pretty obvious: a reasonable person, fully informed of the circumstances, would doubt the impartiality of a judge who presides over a case in which one of the lawyers or parties is in a position to influence the judge’s career,” Geyh said. “So, if the judge was presiding over cases where Apple was a party while he was negotiating future employment with Apple, there would be a problem.”
Article I Tribunals Often Subject to Political, Bureaucratic Pressure
Although the PTAB operates in an Article I context, James Pfander, the Owen L. Coon Professor of Law at Northwestern University Pritzker School of Law, indicated that case law precedent shows a strong preference for Article I tribunals to operate with proper oversight from Article III courts. Limits to the ability of Article I tribunals to adjudicate rights have previously come up in the bankruptcy court context in U.S. Supreme Court cases such as Stern v. Marshall (2011), a case that was oft-cited to SCOTUS in the lead-up to its decision in Oil States, as well as Northern Pipeline v. Marathon Pipe Line (1982). Further, while 1932’s Crowell v. Benson allowed for the adjudication of certain rights by administrative agencies, Article III courts still maintained final control over all issues of law and the factual record on which those issues could be resolved. “Not every case coming up to the Article III courts from an agency triggers full-bore Crowell-style review; it depends to some extent on the issue the litigants choose to raise,” Pfander said.
Of course, with life-tenured, independent and presumably unbiased judges, the quality of non-Article III tribunals like the PTAB can vary significantly from the federal judiciary, and this is where it could be argued that the situation with APJ Clements comes into play. “Some Executive Branch tribunals operate in an environment that subjects them to a good deal more political and bureaucratic pressure,” Pfander said. While it wasn’t obvious to him that a single instance of biased judging by an APJ at the PTAB would trigger any heightened degree of Article III scrutiny of the PTAB in general, given the fact that APJ decisions would be subject to internal agency review and then eventually review in an Article III court, it certainly could result in taking a harder look at any particular decision of a potentially biased APJ.
IPWatchdog note: Lex Machina’s calculation seems to be in error – the number should be 2,617 but is listed as 2,618.
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