Federal Circuit Says PTAB Judges Are Not Constitutionally Appointed

By IPWatchdog
October 31, 2019

“These factors, considered together, confirm that APJs are principal officers under Title 35 as currently constituted. As such, they must be appointed by the President and confirmed by the Senate; because they are not, the current structure of the Board violates the Appointments Clause.” – Federal Circuit opinion

constitution - https://depositphotos.com/13456269/stock-photo-we-the.htmlThe U.S. Court of Appeals for the Federal Circuit, in an opinion authored by Judge Moore, has ruled that the current statutory scheme for appointing Administrative Patent Judges (APJs) to the Patent Trial and Appeal Board (PTAB) violates the Appointments Clause of the U.S. Constitution as it makes APJs principal officers. APJs are presently appointed by the Secretary of Commerce, but principal officers must be appointed by the U.S. President under the Constitution, Article II, § 2, cl. 2. To remedy this, the statutory removal provisions that are presently applied to APJs must be severed so that the Secretary of Commerce has the power to remove APJs without cause, said the Court.

Dismissing the government’s and appellees’ arguments that the Appointments Clause issue had been waived by the appellant, Arthrex, Inc., because Arthrex had not raised the issue with the PTAB, the Federal Circuit said that “this is an issue of exceptional importance, and we conclude it is an appropriate use of our discretion to decide the issue over a challenge of waiver.”

Officers, Not Employees

The Court first held that APJs are undoubtedly Officers, rather than employees, because they “exercise significant authority” as set out in Buckley v. Valeo:

Under 35 U.S.C. § 6(a), APJs “hold a continuing office established by law . . . to a position created by statute.” Lucia, 138 S. Ct. at 2053. The APJs exercise significant discretion when carrying out their function of deciding inter partes reviews. They oversee discovery, 37 C.F.R. § 42.51, apply the Federal Rules of Evidence, 37 C.F.R. § 42.62(a), and hear oral arguments, 37 C.F.R. § 42.70. And at the close of review proceedings, the APJs issue final written decisions containing fact findings and legal conclusions, and ultimately deciding the patentability of the claims at issue. See 35 U.S.C. § 318(a). The government itself has recognized that there is a “functional resemblance between inter partes review and litigation,” and that the Board uses “trial-type procedures in inter partes review.”

Furthermore, neither the government, as Intervenor, nor the appellees, Smith & Nephew, Inc., Arthrocare Corp., disputed that APJs are Officers rather than employees.

PTAB Judges are Principal Officers

The remaining question was therefore whether APJs are principal or inferior officers. In deciding this question, the Court took into account three factors set out in Edmond v. United States (1997):

“(1) whether an appointed official has the power to review and reverse the officers’ decision;

(2) the level of supervision and oversight an appointed official has over the officers; and

(3) the appointed official’s power to remove the officers.”

Since the Secretary of Commerce and the Director of the USPTO are the only two presidentially-appointed officers that provide direction to the USPTO, and “neither of those officers individually nor combined exercises sufficient direction and supervision over APJs to render them inferior officers,” the Court found that APJs must be principal officers.

With respect to review power over final decisions of the APJs, the USPTO Director has no power to single-handedly review, nullify or reverse decisions rendered by a panel of APJs, wrote the Court. As for the government’s and appellees’ arguments that the Director does have tools at his or her disposal to intervene in PTAB proceedings, the Court was unpersuaded:

That authority offers no actual reviewability of a decision issued by a panel of APJs. At most, the Director can intervene in a party’s appeal and ask this court to vacate the decision, but he has no authority to vacate the decision himself. And the statute only gives the parties to the inter partes review the power to appeal the decision, not the Director…. The Director cannot, on his own, sua sponte review or vacate a final written decision.

The Court was also not impressed by the mechanism of the Precedential Opinion Panel, which allows the Director to designate certain decisions precedential and to convene panels comprising the Director, the Commissioner for Patents, and the Chief Administrative Patent Judge:

To be clear, the Director does not have the sole authority to review or vacate any decision by a panel of APJs. He can only convene a panel of Board members to decide whether to rehear a case for the purpose of deciding whether it should be precedential. No other Board member is appointed by the President. The government certainly does not suggest that the Director controls or influences the votes of the other two members of his special rehearing panel. Thus, even if the Director placed himself on the panel to decide whether to rehear the case, the decision to rehear a case and the decision on rehearing would still be decided by a panel, two-thirds of which is not appointed by the President.

Addressing the government’s final argument on review power, that the Director can decide not to institute an inter partes review in the first instance, which constitutes review power, the Court disagreed. “We do not agree that the Director’s power to institute (ex ante) is any form of review (ex post). For the past several years, the Board has issued over 500 inter partes review final written decisions each year. The relevant question is to what extent those decisions are subject to the Director’s review.”

On the topic of supervision power, however, the Federal Circuit found that the Director’s administrative oversight authority actually weighed in favor of a finding that APJs are inferior officers because the Director has the authority to promulgate regulations governing the conduct of inter partes review; to issue policy directives and management supervision of the USPTO; to provide guidance on applying the patent law to certain fact patterns; and because no decision of the Board can be designated or de-designated as precedential without the Director’s approval, among other reasons.

Finally, when considering the Director’s power to remove APJs, the Court found that “under the current Title 35 framework, both the Secretary of Commerce and the Director lack unfettered removal authority,” again weighing in favor of classifying APJs as principal officers. While the government argued that the Director has broad authority to exclude or remove APJs from particular panels or cases, or to designate panels, the Court held that “the Director’s authority to assign certain APJs to certain panels is not the same as the authority to remove an APJ from judicial service without cause…. The only actual removal authority the Director or Secretary have over APJs is subject to limitations by Title 5…[which] creates limitations on the Secretary’s or Director’s authority to remove an APJ from his or her employment at the USPTO. Specifically, APJs may be removed ‘only for such cause as will promote the efficiency of the service.’”

Such limitations, which effectively mean that APJs can only be removed for misconduct that would have an adverse impact on the agency, mean that the Director’s or Secretary’s supervision powers fall short of those necessary to render the APJs inferior officers, said the Court.

Thus, in spite of the USPTO Director’s oversight authority, which may weigh in favor of finding APJs inferior officers, overall, “the control and supervision of the APJs is not sufficient to render them inferior officers,” said the Court, adding:

The lack of control over APJ decisions does not allow the President to ensure the laws are faithfully executed because ‘he cannot oversee the faithfulness of the officers who execute them. These factors, considered together, confirm that APJs are principal officers under Title 35 as currently constituted. As such, they must be appointed by the President and confirmed by the Senate; because they are not, the current structure of the Board violates the Appointments Clause.

The Solution

Having thus found the appointment of APJs to be in violation of the Appointments Clause, the Court reasoned that the narrowest remedy would be to sever the current restriction on removal of APJs from the statute, which would render them inferior officers. The Court followed the approach set forth by the Supreme Court in Free Enterprise Fund v. Public Company Accounting Oversight Board (2010) and followed by the U.S. Curt of Appeals for the D.C. Circuit in Intercollegiate Broadcasting System, Inc. v. Copyright Royalty Board (2012). The Court said:

Title 5 U.S.C. § 7513(a) permits agency action against those officers and employees “only for such cause as will promote the efficiency of the service.” Accordingly, we hold unconstitutional the statutory removal provisions as applied to APJs, and sever that application. Like the D.C. Circuit in Intercollegiate, we believe severing the restriction on removal of APJs renders them inferior rather than principal officers. 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.

The Court ultimately ruled that the PTAB’s determination that Arthrex’s claims were unpatentable as anticipated must be vacated and remanded to a new panel of APJs.

There will be more to come on this decision as industry reactions roll in.

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Discuss this

There are currently 34 Comments comments. Join the discussion.

  1. mike November 1, 2019 12:37 am

    “The narrowest remedy would be to sever the current restriction on removal of APJs from the statute, which would render them inferior officers.”

    This is where the Federal Circuit is WRONG. Severing the current restriction on removal of APJs from the statute DOES NOT REMEDY THEIR UNCONSTITUTIONAL APPOINTMENT IN THE FIRST INSTANCE!!!

    These current APJs were NOT appointed by the President, nor vetted nor confirmed by the Senate. So, if this is the only remedy that will be provided with regard to the violation of the APPOINTMENTS Clause, then Director Iancu should act within his authority and remove EVERY ONE of these APJs IMMEDIATELY, as the Federal Circuit admits that NONE OF THEM were constitutionally appointed in the first instance.

    Director Iancu, you now have the authority to remove all of these unconstitutionally appointed APJs immediately and to appoint your own.

  2. Glen Wade Duff November 1, 2019 8:39 am

    I agree. This certainly could support our ability to have confidence in a strong patent system again.

  3. Anon November 1, 2019 8:59 am

    mike,

    Your own call for action from Director Iancu belies the sentiment that you lead in with.

    By invoking the action (allowability), the CAFC has transformed — in the first instance — the position itself to be a different type of position.

    Once that is done, then ALL appointments (past, present, and future) are judged NOT as even requiring the initial vetting at that Constitutional level, but instead, since the position itself renders the APJs to be merely inferior officers, there is NO initial vetting to be a question that could be raised.

    Mind you, I am NOT saying that I agree with the CAFC here (nor that there own action withstands Consitutional scrutiny, as they appear to be judicially intervening into a question of how the Legislature Branch set forth the internal apparatus of an Executive Branch administrative agency (which generally runs by its initial charter and any changes in law — from the Legislature — to that original charter). I am not convinced that the remedy invoked here is invoked properly — with the caveat that I have not read through the support that the court invokes.

    (I also “get” how you may feel that there is something untoward with such an “Ex Post Facto” law if we want to call what the CAFC did here was rewrite the law as to the structure of the administrative agency by way of Common Law law writing.)

  4. Night Writer November 1, 2019 9:24 am

    @1>>Director Iancu, you now have the authority to remove all of these unconstitutionally appointed APJs immediately and to appoint your own.

    You have no idea how DC works. Whenever something like this happens somehow or another the patent judges are going to end up with a better deal than they have now. The power of government unions (although they are not members) is absolute.

  5. BP November 1, 2019 9:26 am

    Does this decision impact ex parte provisions of MPEP 1214.04, where a TC Director reopens prosecution after a complete reversal of the Examiner rejections in a written decision of the PTAB?

    Decision: “There is no provision or procedure providing the Director the power to single-handedly review, nullify or reverse a final written decision issued by a panel of APJs.”

    Per MPEP 1214.04: If the examiner has specific knowledge of the existence of a particular reference or references which indicate nonpatentability of any of the appealed claims as to which the examiner was reversed, they should submit the matter to the Technology Center (TC) Director or Central Reexamination Unit (CRU) Director for authorization to reopen prosecution under 37 CFR 1.198 for the purpose of entering the new rejection. See MPEP § 1002.02(c) and MPEP § 1214.07. The TC or CRU Director’s approval is placed on the action reopening prosecution.

    37 CFR 1.198: When a decision by the Patent Trial and Appeal Board on appeal has become final for judicial review, prosecution of the proceeding before the primary examiner will not be reopened or reconsidered by the primary examiner except under the provisions of § 1.114 or § 41.50 of this title without the written authority of the Director, and then only for the consideration of matters not already adjudicated, sufficient cause being shown.

  6. B November 1, 2019 10:27 am

    @ Mike “This is where the Federal Circuit is WRONG. Severing the current restriction on removal of APJs from the statute DOES NOT REMEDY THEIR UNCONSTITUTIONAL APPOINTMENT IN THE FIRST INSTANCE!!!”

    I wholeheartedly agree. It also seems, despite the Freytag decision (see page 29 of the slip opinion) that all PTAB decisions should be voidable. I think the “nonjurisdictional structural” language is horse manure – a way to contain the havoc.

    “Director Iancu, you now have the authority to remove all of these unconstitutionally appointed APJs immediately and to appoint your own.”

    That appears to be the case. However, the standard of removal seems to be unclear. I can think of about three-dozen APJs who should be shown the door by noon today.

  7. Pro Say November 1, 2019 11:26 am

    Mike @ 1 is absolutely correct.

    The CAFC is also wrong that only those who actually raised such unconstitutionality at the PTAB are entitled to new panels.

    Accordingly, everyone who’s ever had their claims / patents unconstitutionally wiped out by the PTAB are entitled to new “trials.”

    And most important of all is that — because the CAFC has now materially modified the AIA / PTAB — the entire AIA / PTAB must fall since Congress made its / their existence all or nothing.

    One way or another, this mess is going to land in SCOTUS’ hands.

  8. Josh November 1, 2019 12:00 pm

    As stated by Eric Guttag in a July 13, 2015 post on IP Watchdog:

    And as those many have also observed, the lack of such a ““severability clause” in the AIA was not an oversight by Congress, but a deliberate omission to ensure passage of it. (A “severability clause” was present in earlier drafts of the AIA, but was then removed from the final version.) In other words, it could be very validly argued that if the IPR provision is ruled to be unconstitutional (invalid) by the courts, the entire AIA could completely fall because the invalid IPR provision cannot be “severed” from the remaining (and so far) valid provisions of the AIA.

    How does this not apply now?

  9. mike November 1, 2019 12:26 pm

    @Anon: “Your own call for action from Director Iancu belies the sentiment that you lead in with.”

    Exactly. I didn’t state whether the call for action from Iancu’s was proper. But should he use the power? Yes. Just like Lee used her power to improperly appoint.

  10. Disenfranchised Patent Owner November 1, 2019 1:02 pm

    Pro Say @ 7, Watch… SCOTUS is likely to punt. It’ll deny Cert, or whatever.
    Talk about a circus! The CAFC unconstitutionally issues a ruling stating that a really stupid law that was retroactively implemented to deny inventors due process is unconstitutional. BTW, didn’t a constitutional law professor sign the AIA into law?

  11. Model 101 November 1, 2019 1:03 pm

    @ Pro Say

    Accordingly, everyone who’s ever had their claims / patents unconstitutionally wiped out by the PTAB are entitled to new “trials.”

    I agree …. Silicon Valley and FAANGM are getting their way, again. More patents die a painful death at the hands of the CAFC.

  12. jack November 1, 2019 1:26 pm

    Cause for celebration

  13. Ben November 1, 2019 2:41 pm

    File your patents in Germany, America is run by corporations. I filed for my patent in Germany and was able to find angle investors, I have set up a small company that has grown to 9 people. I have zero confidence in the PTAB and 101, and I know congress will ignore doing the right thing while they collect their bribery money, sorry I mean “special Interest donations” to keep patent right DEAD for the small inventor. Hallo Deutschland!!

  14. Josh Malone November 1, 2019 3:58 pm

    Lots of conversations with inventors today. We are such fools. They are going to give us another “opportunity” to go through the PTAB! Kaching. The lawyers and USPTO are cashing in and making us laughingstocks. How many times can they get us to pay for the same patent?

  15. fellowtraveler November 1, 2019 4:15 pm

    Is there an argument to be made that (1) the original decisions by the PTAB are void, AND (2) the cases cannot be brought again by the same parties because of estoppel (or a similar concept)?

  16. Anon November 1, 2019 5:03 pm

    Josh @ 8,

    If you have a pincite, it would be greatly appreciated. Note that I could not find the reference EG used in my own searching.

    Note as well that on another blog, Dave Boundy recollected (loosesly): “insofar as a severability amendment was tentatively offered but never made it vary far. (offered by Rep. Sheila Jackson-Lee, and it was either withdrawn or failed in Rules Committee. I don’t remember the details).

    Now Dave’s view also includes that the mere presence and defeat of the severability amendment does not carry the force that the remaining work does have the intent of Congress of being NON-severable.

    He’s typically good at provided support for his positions (and certainly better than most); which makes this a little suspect in that this appears to be more “feeling” as opposed to certainty.

    I surely recognize that when Congress acts — and the subject is not addressed whatsoever — that there is a tendency and leaning towards severability, which some may take as requiring an actual written clause of NON-severability in order to state that such was Congress’s intent.

    This begs too much though. Any such actual presence clearly would not venture in to the aspects of figuring out the intent of Congress. Further, the intent of Congress when offered the clarity of having a severability amendment — and Congress declining — is far more indicative of NON-severability being desired. Sure, to “lock things down,” such an affirmative “This is not severable” statement would be good. But that is merely a “would be” and is NOT dispositive as to Congressional intent. This can easily be seen in the converse of having the direct opposite words included (and in some cases such ARE included).

    The bottom line as to intent of Congress is that — for BOTH sides — actually having the words is the only way to be certain enough that “intent” need not be searched for. But without words, intent IS searched for. The fact that there is a default FOR severability if the search for intent is inconclusive by no means teaches that words MUST be there. The search for intent that finds — for example, a rejection of an amendment that would be unequivocal as to being severable, IS in fact evidence of intent to have the item BE NON-severable.

    Is such a dead-nuts “Amendment defeated – Non-severability must be in place”? Most likely not. After all, at this point in the analysis, we have delved beyond the “Sure Thing” (of BOTH sides), and are into the land of reading the tea leaves of Congressional intent.

    But make NO mistake that this type of thing most definitely overcomes the natural proclivity that Act of Congress are meant to be severable (even those acts that are entirely quiet on the matter). NOT being quiet removes the leaning that may have been there with a “being quiet.”

  17. Disenfranchised Patent Owner November 1, 2019 5:21 pm

    Iancu can/should require “clear and convincing evidence” in order to institute.
    Cumulative prior art and related arguments should NOT be allowed.
    There should be “deference” given to highly qualified PTO examiners as in court.
    If/as/when instituted, due process MUST be afforded patent owners as in court.
    Anything less is denial of Rights guaranteed by Const. Art. I, Sec. 8, Clause 8.

  18. PTO-Indentured November 1, 2019 8:50 pm

    In View of Unconstitutionality — a Ridiculously-Narrowed ‘Adjustment’

    So, in view of 1890 ‘judge’-years* of FC-deemed unconstitutional APJs having already elapsed, the doors of justice shall now be swung wide open to right non-legal wrongs of say, no more than 50-75 cases? And the same ones of the FC-admitted unconstitutionally appointed PTAB APJs (demoted only in title) simply carry on.

    *270 APJs x 7 years of PTAB

    Of course the door of justice is not being swung open, rather it is severely (ridiculously) limited to barely a crack / a sliver opening, wherein unbelievably:

    a.) Many law firms smart enough to know in a IPR appeal that a complaining about ‘a non-constitutionality of the PTAB’ would only fall on deaf ears – and thus avoiding doing so — For each of their cases and its patent’s claims no review by a panel of different APJs will be provided. However,
    B.) For law firms ‘FWIW’ tossing in the non-constitutionality issue (that upon filing their response would not have been found deserving of any attention whatsoever) only they get a new panel of APJs (still unconstitutionally placed) to review their patent’s claims and the right to a new oral hearing.

    See in the decision, with respect to “B.)” above, where even FC Judge Moore concedes “that it would have been futile for parties to raise the issue at the PTAB because the APJs would not have had the authority to declare their own appointments unconstitutional”.

    Much ado about nothing.

  19. PTO-Indentured November 2, 2019 8:44 am

    CAFC Admits to Unconstitutionality of 1890 ‘judge’-years *

    Transparency consequence: A

    Accountability consequence: F

    “The CAFC has failed, and failed, and failed…”
    “The PTAB … patent death squads”
    Quotes: Paul Michel former chief judge of CAFC

    *270 APJs x 7 years of PTAB = 1890

  20. concerned November 2, 2019 12:05 pm

    All in the name of killing the patent troll or bad patent.

    The preceding terms have to be one of the greatest and successful marketing plan ever.

  21. Anon November 2, 2019 2:32 pm

    Josh (in reference to your post at 8), EG, and even the renowned Mr. Boundy,

    I would very much appreciate an actual pincite to wherever it is in the Congressional proceedings that an amendment to include severability in the AIA was denied/defeated/withdrawn.

    Once provided here, a copy needs to be provided to the judges of the CAFC (and certainly, to their interns).

    For if indeed the will of Congress was that the change in law as provided in the AIA was intended to be non-severable, this may well have some profound effects.

    But until such can be provided, I must hold to me (revised) position that severability of the AIA is a proper default, given that no express words in either direction of severability or non-severability are present in the AIA.

    I would also indicate (having seen an earlier view regarding such), that the fact that the larger notion of the entirety of patent law (as seen in United States Code 35) may provide severability somewhere (anywhere), would NOT be dispositive of the America Invents Act (even as that Act is both dispersed throughout United States Code 35 – and in some instances, NOT codified). An important aspect of this position is the plain fact that NOT all of the AIA was codified!

  22. Anon November 2, 2019 2:39 pm

    There nearest that I could find was this:

    https://www.ipwatchdog.com/2015/07/13/problematical-ipr-proceedings-aia/id=59751/

  23. Hieronymous Smuth November 2, 2019 6:32 pm

    For those who have been asking about severability, it is discussed in the legislative history as detailed at https://www.pillsburylaw.com/images/content/4/6/v2/4679/AIA-LegislativeHistory-final1.pdf

    An Amicus Brief filed in Oil States contends: Nor can any inference be drawn from the rejection of a severability clause during the legislative process. See, e.g., 157 Cong. Rec. H4,491 (daily ed. June 23, 2011) (statement of Rep. Watt) (describing an amendment offered during the House of Representatives floor debate that would have added a severability clause as simply “standard policy”; the amendment was later withdrawn). The clause could have been rejected simply because it is unnecessary, or for any number of other reasons.
    https://www.scotusblog.com/wp-content/uploads/2017/09/16-712-ac-3M.pdf

  24. mike November 2, 2019 6:40 pm

    @Anon. Is this what you are looking for?

    From https://www.congress.gov/congressional-record/2011/06/23/house-section/article/H4480-1

    ====

    Amendment No. 11 Offered by Mr. Watt

    The Acting CHAIR. It is now in order to consider amendment No. 11 printed in part B of House Report 112-111.
    Mr. WATT. Madam Chair, we were expecting Congresswoman Waters. I would ask unanimous consent that this amendment be delayed until we can determine whether she is still planning to offer it.
    The Acting CHAIR. The Committee of the Whole is unable to reorder the amendments.
    Mr. WATT. In that case, I offer the amendment as the designee of the gentlewoman from California.
    The Acting CHAIR. The Clerk will designate the amendment.
    The text of the amendment is as follows:

    Page 139, insert the following after line 12 and redesignate succeeding sections (and conform the table of contents) accordingly:

    SEC. 29. SEVERABILITY.

    If any provision of this Act or amendment made by this Act, or the application of a provision or amendment to any person or circumstance, is held to be unconstitutional, the remainder of this Act and amendments made by this Act, and the application of the provisions and amendment to any person or circumstance, shall not be affected by the holding.

    The Acting CHAIR. Pursuant to House Resolution 316, the gentleman from North Carolina (Mr. Watt) and a Member opposed each will control 5 minutes.
    The Chair recognizes the gentleman from North Carolina.
    Mr. WATT. Madam Chair, I yield myself such time as I may consume solely to say that this is a straightforward amendment that provides that if one part of the bill is determined to be unconstitutional, it can be severable from the rest of the bill and it doesn’t bring the rest of the provisions down. That’s a standard policy to put in most legislation. With that, I reserve the balance of my time.
    Mr. SMITH of Texas. Madam Chair, I rise to claim the time in opposition, although I support the amendment.
    The Acting CHAIR. Without objection, the gentleman is recognized for 5 minutes.
    There was no objection.
    Mr. SMITH of Texas. I thank the gentleman for offering the amendment, and I urge my colleagues to support it. I yield back the balance of my time.
    Mr. WATT. Madam Chair, I have just been advised that we were mistaken in the desire of Ms. Waters to offer the amendment. She didn’t want me to offer it in her stead, and that’s why she didn’t show up. I would just ask unanimous consent to withdraw the amendment, unless the chairman has an objection.
    The Acting CHAIR. Without objection, the amendment is withdrawn.
    There was no objection.

  25. Curious November 2, 2019 8:38 pm

    How does this not apply now?
    Silly goose. Because the Federal Circuit said so. Laws and rules are for losers. The winners get to make the law/rules (and break them when they see fit).

    What happens when the Emperor is shown to have no clothes and nobody cares? This where we are at in patent law. A couple of sabers get rattled in the Senate, but all-in-all, no one cares.

    Little surprises me these days.

  26. Anon November 2, 2019 10:18 pm

    mike,

    Wow – that is the first time that I have actually seen that exchange.

    I have to say that the withdrawal has nothing to do with the substance of the amendment itself, and appears to be entirely “procedural.”

    Without more, I cannot find an intent of Congress as to any intent FOR severability of the America Invents Act as a whole.

    However,

    I also cannot find an intent of Congress as to any intent AGAINST severability of the America Invents Act as a whole.

    There was no vote, and the “dissent” was not a dissent. All that we have is an “oopsie.” The Amendment offered in the place of another, and a correction that that another did not intend to offer the amendment.

    As I have noted elsewhere, in cases in which severability or non-severability is clear in the Act, there is no need to look for Congressional intent. In case in which Congressional intent is either unstated, or where, as here, cannot be affirmatively stated, the default takes over.

    The default is severability.

    My gratitude mike for the clarity that you have provided.

  27. mike November 3, 2019 11:46 am

    @Anon:

    Follow the dialog:

    Mr. Watt offered the severability amendment, saying “That’s a standard policy to put in most legislation.”

    Of his own admission, Mr. Watt says it is standard to put it in, so he admits the standard is not to leave it absent and let “default severability” kick in if needed, but the standard policy is “to put in”.

    Mr. Smith rose to claim time in opposition and said, “I support the amendment.” Once recognized, he said “I thank the gentleman for offering the amendment, and I urge my colleagues to support it.”

    Why would Mr. Smith feel the need to urge his colleagues to support it, if severability was a default?

    Mr. Watt then says “I have just been advised that we were mistaken in the desire of Ms. Waters to offer the amendment.”

    Now we know Ms. Waters does not want to offer the amendment for severability (“[they] were mistaken in the desire of Ms. Waters to offer the amendment”).

    Mr. Watt continues, “[Ms. Waters] didn’t want me to offer [the amendment for severability] in her stead.”

    He NEVER SAID “Ms. Waters wanted to offer the amendment.” Also, he did NOT SAY “Ms. Waters wanted to offer the amendment in my stead.” Assuming either of those is assuming words not expressed nor spoken.

    All we have is “[Ms. Waters] didn’t want me to offer [the amendment for severability] in her stead.”

    And he then adds “That’s why [Ms. Waters] didn’t show up,” NOT because SHE wanted to offer the amendment instead or Mr. Watt, but because SHE DIDN’T WANT MR. WATT TO OFFER THE AMENDMENT. Again,
    “[they] were mistaken in the desire of Ms. Waters to offer the amendment”. Those are the words recorded.

    Then, Mr. Watt says, “I would just ask unanimous consent to withdraw the amendment”.

    He didn’t say he say he wanted it removed because severability is the default. He said that Ms. Waters didn’t want to offer the amendment.

    Notice that the amendment had already been designated.

    The Acting CHAIR then said “Without objection, the amendment is withdrawn.”

    With the amendment already designated, now there was opportunity to object to its withdrawal. No one objected. Not even Mr. Smith. Mr. Smith felt the need to urge his colleagues to support the amendment, yet he did not speak up in objection on its withdrawal.

    What is important to note is that Ms. Waters never offered the amendment later.

    So…
    Ms. Waters did not want the amendment added. Mr. Smith urged his colleagues to support it. All members of the House, even Mr. Smith, had the opportunity to object to its withdrawal after it had already been designated. They did not.

    With those facts, one could conclude that it was the intent of Congress to not include the severability amendment.

  28. mike November 3, 2019 12:24 pm

    @Anon:

    I will also add that there may be other versions and discussions of the bill and severability. This was just one version and one analysis.

  29. PTO-Indentured November 3, 2019 12:44 pm

    Time to Invalidate the Invalidators (PTAB)

    Notwithstanding severability, default or otherwise…

    Let the PTAB, that metaphorically lived by their ‘invalidating sword’ die by an invalidating sword.

    The CAFC decsion Monday concedes to improper and unauthorized empowerment of 270 APJs. For 1890 ‘judge’- years (270 x 7 PTAB yrs) they wielded powers inappropriately well above their rightful pay grade. Many would content their mandate was to invalidate U.S. patents — most often those issued by the PTO to U.S. individual inventors.

    Demoting the inappropriately authorized APJs now to a lower station, does not erase nor does it help remedy the tremendous harm they were improperly empowered to inflict. All 270 of the APJs should have been subject to the checks and balances accorded in the constitution to impose a rightful due oversight, and an assessment discretion determined at not less than the highest executive branch level. Avoidance of this due process and the severity of consequences it wreaked over seven years, is way more than a mere ‘oops’ — and way more than the alleged quick “fix” purported.

    The CAFC decision also concedes reparations (of a sort) are in order, albeit under the most bizzarre arrangement, a loophole issue judge Moore herself states “would have been futile for parties to raise” — and if unintuitively they had, includes a redo solution requiring same ones of the inappropriately appointed APJs to decide (and under which standards?). Apparently, this is some arbitrary let’s-keep-this-to-a 50 to 75 cases limit, out of concern that we mustn’t now overburden the seven-year, sans-authorized APJs with too much work.

    Let’s be clear.

    First of all, there would be none of this ‘work’ had the APJs not been exercising seven years of unauthorized patent-invalidating powers.

    Secondly, conceding a redo reparation shall be in order (under the bizarre arrangement) but only to a handful of patentees, relative to the thousands of patents the APJs improperly invalidated, often at a financially devestating cost to individual inventors, is a joke.

    SUGGESTION: Invalidate the improperly installed APJs/PTAB. Allow patentees whose patents fell by the sword of PTAB executioners to write and/or amend claims deemd clearly supported by their specification. Grant a patent term adjustment (PTA) to each, commensurate with the years eaten away under PTAB’s action. Then: Let the PTO function in the manner by which it most flourished prior to AIA — say for at least the next seven years — and if things go worse than they have under AIA and PTAB caused PTO nosedive (not likely) you can always decide then, to mandate a similar invalidating of essentially U.S. individual inventor PTO-issued patents.

  30. Anon November 3, 2019 1:05 pm

    Mr. (Miss?) Smuth,

    Thank you for the additional material.

    I have already rendered my view of the Watt situation. The amicus brief that you supply overstates the situation in regards to Congressional intent.

    While in the immediate instance of the Watt exchange, intent could not be found, this is NOT to say that a more meaningful offer of an amendment and a purposeful defeat of the amendment portends the same result. That amicus brief instead turns the question decidedly into one in which non-severability would affirmatively require explicit wording in an Act.

    That is just not so, and that view nullifies the very essence of the need to look to Congressional intent in the absence of express words either providing for severability or for providing for non-severability.

    I have to thank you further though (even as I disagree with the statements in the additional amicus brief.

    The larger Pillsbury compilation is an excellent add to my AIA materials.

    In that massive collection, one can find the Watt exchange (pages 631-632).

    I note with some hesitancy (as this may yield a different outcome) that there is one other section revealed in which severability is discussed: Manager’s Amendment (page 91).

    I say “hesitancy” because the mention in the Manager’s Amendment is NOT of the same tone as the Watt instance, but I can find no additional discussion (directly) on the topic of severability in this other instance. I DO find some serious questioning of BOTH the Manager’s Amendment and the seemingly roughshod attempt to ram the AIA through Congress. Such may well be substantially more than the type of things that the amicus brief calls out.

    The hesitancy comes in part as well in that the massive collection seems incomplete. What happened to Section 19 of the Manager’s Amendment? If indeed this item was deleted due to the contentious exchanges as evidenced on the record, then THAT may be a completely different and separate point to contend with than the Watt exchange.

    Indeed, if I were skeptical, I might even view the Watt exchange as a disingenuous manipulation of the record in an attempt to inoculate against a different happenstance concerning severability. Think about it: someone pops up, wants to put an amendment into the process “for someone else,” and in the span of a matter of minutes (from the initial “can we wait?” to the answer of no, to the answer of “well, let me put this as her designee,” to ONE SENTENCE LATER by a separate party, to Congressman Watt “magically(?)” receiving word that the amendment was not actually meant to be added.

    Clearly – the Watt exchange does not and cannot indicate a sense of Congressional intent. Even I have so asserted. But what if this was completely staged in order to distract from a more meaningful exchange (for example, in the contentious Manager’s Amendment exchange)?

    I would posit that just as the Watt exchange was clearly NOT enough to dictate Congressional intent — one way or any other way — it ALSO is NOT enough to dictate an overpowering “re-intent” IF some other instance of Congressional intent may be found.

    I am NOT saying that the Manager’s Amendment provides that Congressional Intent. I AM saying that it is entirely possible that the Manager’s Amendment exchange MAY WELL provide Congressional intent for non-severability.

  31. mike November 3, 2019 1:22 pm

    @Anon:

    Please see my “Follow the dialog” post above. Curious on your thoughts.

  32. Anon November 3, 2019 1:38 pm

    PTO-Indentured,

    All 270 of the APJs should have been subject to the checks and balances accorded in the constitution to impose a rightful due oversight, and an assessment discretion determined at not less than the highest executive branch level.

    Yes – and No.

    The level you speak of is for only the principal officers, and not for the inferior officers. So while it is certainly true at the time of their appointment that higher standard WAS to have been followed, such is no longer true.

    The 270 APJs appear to be fully and properly empowered by the LESSOR standard for inferior officers (that is why the court here changed the law).

    What this case does is acknowledge the initial error (prior to October 31, the APJs WERE principal officers), and the court (note, not Congress) CHANGES the structural law and MAKES ALL APJs (even those older ones that may have been empowered differently) into inferiors officers — from October 31 onward.

    This DOES open every PTAB case still within a window of being appealed subject to appeal by BOTH sides. In other words, every PTAB case loser going backwards in time to the cut-off period of filing an appeal is NOW on notice to file an appeal and at least get a second bite at the apple with a new hearing with different APJs. And by “loser” and “every” I do mean every single case, as the loser may be the patentee or the petitioner and both sides can use the same result of the present case to invoke a rehearing.

    (There is even further debate possible that the affected zone reaches back even further — note that the Per Curiam follow-ups of Customedia may have followed an improper line of legal reasoning (the Island Creak Coal / Turner Bros / Dicta from Supreme Court case of Freytag) instead of the direct (and controlling) words of the Supreme Court case of Glidden)

    mike @ 28 – apologies for not noticing your caveat. I add to that very notion in my post at 30.

  33. Anon November 3, 2019 1:55 pm

    mike @ 27/31,

    Again, apologies, I had not seen your post at 31, nor read your post at 27 prior to my earlier posts of today.

    That being said, I do note that a cynical position of me provides a reason why the extremely fast Watt exchange could have happened.

    But to your slightly different view of the Watt exchange, I do NOT reach that view. As I noted, since the Watt exchange is largely meaningless – apparently offered in error and asked to be withdrawn based solely on that error, that exchange can do NOTHING as to indicate Congressional intent. Keep in mind though, that this NOTHING cuts both ways. Just as it cannot “push” in the direction of non-severability, it cannot “push” in the direction of severability.

    Let me also clarify the notion of severability as a default. Such is the recognized notion of legislation that is BOTH 1) absent of express indicators of either severability or non-severability AND 2) the intent of Congress is silent.

    ONLY under both of these conditions is the default of severability taken as being in place.

    So in order to “get there,” one has to go through several layers:

    First layer of course are the direct words in the passed legislation. That is, if there IS a severability clause, then severability is the rule. Likewise, if there is a non-severability clause, then non-severability is the rule.

    IF there is NO direct words, then Congressional intent IS reviewed. Note here some have tried to insert that this is NOT the case, and that absent express words, Congressional intent is meaningless and need not even be reviewed, with the default kicking in at this level.

    Clearly, that is not so. If that were so, then Congressional intent would not be “a thing.”

    Understanding that Congressional intent IS a thing, we see its proper place in the next level after absence of a direct clause (one way OR the other) is noted.

    Where the default DOES kick in is IF the Congressional intent review mirrors the higher level and that no intent can be discerned. As I note above, if there is ONLY the Watt exchange, then that exchange does not move the needle on Congressional intent (one way or the other) and IF that is the only item to be considered, THEN the bottom level default is in fact reached.

    The critical question now is NOT the Watt exchange, but instead is the Manager’s Amendment exchange.

  34. Ben November 3, 2019 2:23 pm

    When will Andrei Iancu grow some balls and fix PTAB. Michelle Lee did a lot more damage then Iancu has fixed in his time as head of the USPTO.

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