DOJ Brief to CAFC Slamming Apple Highlights PTAB Code of Conduct Problem

By Gene Quinn
February 6, 2020

“It is unconscionable for the USPTO to continue to allow the PTAB to operate without a separate, distinct and legitimate Code of Conduct that at a minimum mandates recusal when an APJ cannot objectively preside over both parties in the proceeding.”

https://depositphotos.com/stock-photos/code-of-conduct.html?filter=allAndrei Iancu, the Director of the United States Patent and Trademark Office (USPTO), has a real mess on his hands. This particular mess relates to the Patent Trial and Appeal Board (PTAB) and the astonishing reality that the Administrative Patent Judges (APJs) on the PTAB are not bound by any Code of Judicial Conduct, as is applicable to Article III federal judges. Instead, PTAB Judges are only bound by the same ethics standard that applies to all other employees, which requires them to recuse themselves from any decisions relating to former employers for one year. That is how several PTAB Judges have been able to adjudicate inter partes review (IPR) and covered business method (CBM) challenges filed by a former litigation client – Apple, Inc.

Indifferent at Best, Disgraceful at Worst

It makes absolutely no sense for PTAB Judges to be allowed to adjudicate matters dealing with former clients. How the USPTO has allowed for this to happen is a mystery, and why they continue to allow it to happen is nothing short of a startling display of indifference. Chief Justice John Roberts of the United States Supreme Court famously recuses himself of any case dealing with Microsoft, and has for his entire career, and will for the rest of his career, but PTAB Judges are allowed to adjudicate Apple challenges only 12 months after they stop representing Apple? Obviously, that is absurd in the extreme and it is both demeaning and disgraceful that the USPTO has not done anything to fix this problem in the nearly three years since it was first brought to the attention of the Office.

What is scandalous is the dismissal of this behavior in the recently filed amicus brief filed at the United States Court of Appeals for the Federal Circuit by the United States Department of Justice (USDOJ) in the matter of Apple, Inc. v. Voip-Pal, Inc., Nos. 2018-1456, 2018-1457. In this case there are no clean hands, although you can certainly feel for the patent owner.

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Ex Parte Communications

The events leading up to the current appeal took place after Apple had filed petitions for IPR proceedings to challenge the validity of VoIP-Pal patent claims that had been asserted against the consumer tech giant in federal district court. A series of six letters was sent by former VoIP-Pal CEO Dr. Thomas Sawyer to former PTAB Chief Judge David Ruschke, former Acting USPTO Director Joseph Matal and Secretary of Commerce Wilbur Ross between May 2017, almost a year after Apple first petitioned for IPR proceedings on VoIP-Pal’s patent claims, and October 2017.

The content of the Dr. Sawyer letters included a series of allegations of various criminal activities and other ethical infractions. For example, in a letter dated June 21, 2017, Dr. Sawyer complained about the cancellation rates for IPRs and suggested potential ethical violations posed by conflicts of interest with administrative patent judges (APJs) which went unreported by Apple. In the final letter, Dr. Sawyer suggested that the PTAB engaged in potential criminal violation of the Racketeering Influenced and Corrupt Organizations (RICO) Act and that IPR proceedings operated as a “killing field” for small inventors.

Clearly, these types of ex parte communications are not the appropriate way to handle the grievance; sanctions followed, but the USPTO did remove the PTAB panel, which Apple did not appreciate. Although no explanation as to why the panel was removed was forthcoming, Dr. Sawyer’s allegations were not the made-up rantings of a lunatic. APJ Stacy Beth Margolies had previously represented Apple in several patent litigation matters, so at a minimum there was an appearance of impropriety.

The Problem with the USPTO’s Argument

Enter the USDOJ. While the department’s brief ultimately rejects Apple’s contentions that 1) the PTAB should have imposed additional sanctions against Voip-Pal.com and 2) that the Board is required to cancel Voip-Pal’s patent claims without a determination of unpatentability or to redo the entire IPR, it also states as a matter of fact: “The impermissible ex parte communications sent by Sawyer with Voip-Pal’s involvement focused on wide-ranging and unsubstantiated claims of bias that were not ‘relevant to the merits’ of the patentability question at issue in these inter partes reviews.” Let’s parse that statement.

  1. Clearly, the ex parte nature of the communications was impermissible. So, this statement is true.
  2. Sawyer’s claims were wide-ranging and not related to the merits of the patentability issue in the IPRs. So, again, this statement is true.
  3. The claims of bias were not unsubstantiated. This statement is false as a matter of law.

Unless the USDOJ fundamentally disagrees with the foundational rationale for ethics and a Code of Conduct, there is simply no way they can say the substance of Sawyer’s grievance is unsubstantiated. Under any fair reading of any Code of Conduct, a panel that consists of APJ Margolies is fundamentally and hopelessly biased against Voip-Pal, period. The problem here, however, is the PTAB doesn’t have a Code of Conduct. So, does the absence of a Code of Conduct make the substance of Sawyer’s grievance “unsubstantiated”?

Trust Must be Earned

It is unconscionable for the USPTO to continue to allow the PTAB to operate without a separate, distinct and legitimate Code of Conduct that at a minimum mandates recusal when an APJ cannot objectively preside over both parties in the proceeding.

Anyone who is at all familiar with Apple and how restrictively they control their attorneys and former attorneys knows full well that Apple would never consent to one of its former litigation counsel representing Voip-Pal, and under the Rules of Professional Conduct applicable to attorneys it would be Apple’s decision whether a former attorney could take such a case adverse to them. See ABA Model Rule 1.10.  Nevertheless, it is somehow acceptable for APJs to adjudicate cases involving their former client because there is no Code of Conduct to prevent it and the same Commerce Department ethics policy that applies to janitors only requires them to recuse themselves for 12 months?

Director Iancu has brought a number of procedural reforms to the PTAB, but unforced errors like APJs adjudicating cases of former clients makes it impossible to view the PTAB as a real tribunal worthy of trust and respect. This mistrust is only deepened when the Administration through the USDOJ excuses such obvious bias as “unsubstantiated”. No, it is not unsubstantiated. The bias concern is real and precisely why every Code of Conduct for Judges and every set of Rules of Ethics for lawyers would prohibit a former attorney from inserting themselves into a representative or decisional capacity in such a situation.

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The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and President & CEO ofIPWatchdog, Inc.. Gene founded IPWatchdog.com in 1999. Gene is also a principal lecturer in the PLI Patent Bar Review Course and Of Counsel to the law firm of Berenato & White, LLC. 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.

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 34 Comments comments. Join the discussion.

  1. Josh Malone February 6, 2020 8:33 pm

    A code of conduct would be lipstick on a pig. “America’s Innovation Agency” has no business invalidating patents. It cannot be done with due process. They are political bureaucrats, not independent judges, not technical experts. They have immense power to arbitrarily rule that a claimed invention “would have been obvious” and thereby crush a nascent business for the benefit of their corporate cronies. They are like allowing a little league parent to call balls and strikes from the bleachers. A code of conduct will make no difference. The code of conduct should be “do not invalidate patents unless you are called to serve on a jury supervised by a Senate confirmed independent judge”.

    Dr. Sawyer is a hero for exposing the corrupt system.

  2. EG February 7, 2020 7:22 am

    Hey Gene,

    That APJ’s can sit on an IPR panel involving former clients is unethical, improper, and shameful. And I said as much in my IPWatchdog article on the Oil States decision. See : https://www.ipwatchdog.com/2018/04/29/reflections-oil-states-silver-linings/id=96619/ . I’ll go even further: ANY such attorney sitting as APJ on an IPR panel involving former clients should be referred to their respective state bars for disciplinary action. There’s simply no excuse for such conduct, especially by an attorney.

  3. angry dude February 7, 2020 9:47 am

    Someone in wash dc do something already !!!

    Special Prosecutor pleeeeeaze !!!

  4. SH February 7, 2020 10:40 am

    What about Arthrex? According to the federal Circuit, PLJs are, or should be, politically accountable, and the normal political recourse is to “petition” to the political appointees, Ruschke, Matal and Ross. Such petitions, are, in their nature, ex parte. Were those letters impermissible?

  5. Pro Say February 7, 2020 10:57 am

    Big +1s Josh and EG.

    The only true, real, complete, and permanent answer to the no-code-of-conduct, death squad PTAB?

    Abolish this unconstitutional kangaroo court (with apologies to kangaroos) and send these fake “judges” packing.

    FAANG members, other big-tech, and other big-corp invention and patent-stealing infringers will welcome them with open and appreciative arms.

    While American innovation rejoices.

  6. Allison February 7, 2020 11:58 am

    Thank you for writing about this. I was unaware. It seems there are no longer any codes of conduct anywhere.

  7. Paul F. Morgan February 7, 2020 12:12 pm

    A code of conduct may be a good idea, but note that all APJs are attorneys, with state bar requirements for that and other matters. Nor is judging a matter involving a company in which you have no current investment, or any firm or client representation, and never worked on the same matter in dispute, an ethics violation.

  8. Anon February 7, 2020 1:27 pm

    Paul,

    I think that your post is more smoke(screen) than fire.

    First, you introduce the notion that there is an attorney ethics that is “in play,” and then turn around and want to say “no foul” because of those attorney ethics.

    The issue though is NOT attorney ethics – it is specifically judge ethics.

    That you introduce something purportedly covering the situation (that does not cover the situation) does NOT make it so that there are no ethical concerns.

  9. G February 7, 2020 1:45 pm

    I don’t think it is much of a problem tbh…. it isn’t an article vii court. Based on Oil States, the justification for the PTAB’s power seems to be the PTO’s original authority/ability to grant patents. Because it can grant them, it can change its mind. The fact that it is in the form of a trial is likely fairly arbitrary, it could probably have easily been something like an alternate form of prosecution instead. Based on that reasoning, why would PTAB judges need a stricter code of ethics? Their power is based purely on what the PTO already does and Examiners aren’t held to a higher code of conduct. It is just as possible that a former Apple employee became an examiner and is nicer to them when granting patents.

    Also not entirely sure why people seem to think getting rid of the PTAB would be a good thing… PTAB is not unconstitutional, we have already had this discussion in Oil States (though there may be some due process issues to discuss). Examiners don’t do a particularly good job tbh and there are plenty of ridiculous patents granted yearly, but getting a patent invalidated in federal court is ridiculously hard because non-technical juries/judges lack confidence and tend to defer to the PTO. It also reduces cost of litigation from 4 million per average case to around 250,000 which is a big deal.

  10. EG February 7, 2020 2:02 pm

    “Nor is judging a matter involving a company in which you have no current investment, or any firm or client representation, and never worked on the same matter in dispute, an ethics violation.”

    Paul,

    Please get real. An attorney judging a matter as an APJ in an IPR involving a former client is a “conflict of interest,” as well as giving the “appearance of impropriety.” A sitting judge in a court proceeding would understand the ethical problems created by both, but you obviously don’t.

  11. angry dude February 7, 2020 2:17 pm

    Pecunia non olet

  12. Anon February 7, 2020 3:13 pm

    Examiners aren’t held to a higher code of conduct. It is just as possible that a former Apple employee became an examiner and is nicer to them when granting patents.

    Examination is not adjudication.

  13. Pro Say February 7, 2020 4:25 pm

    G @ 10: “though there may be some due process issues to discuss”

    Nah, that can’t be right. This is America, dontcha know?

    You know; where due process matters in all things legal . . . er, um . . . that is . . . except with one of the primary reasons America used to lead the world in innovation . . . patents.

    Then . . . then . . . then due process don’t mean squat.

  14. Concerned February 7, 2020 5:04 pm

    Who can forget Michelle Lee of Google. Silicon Valley placed their cronies at the PTAB and USPTO quite masterfully.

  15. G February 8, 2020 2:52 am

    @13 Anon. My point is based on the rationale for the PTABs power via Oil States, the PTO, if given the power to do so, could invalidate patents withour even adjudicating. After all, the reason for the constitutionality of their patent invalidation is the PTOs original patent granting right. The exact form of that invalidation power just happens to be a judicial proceeding. But the point is that form aside, the invalidation power is as unrestrained as the power to grant patents.

  16. Concerned February 8, 2020 5:16 am

    G @10:

    “Examiners don’t do a particularly good job and there are plenty of ridiculous patents granted yearly”

    How can IBM get 333,530 patents and I cannot even get one? My examiner throws every unsubstantiated and illogical argument in the book at me and IBM has 333,530 patents. The preceding statement is not my support of your view about ridiculous patents are being granted. It is my contention that a code of conduct to ensure consistency in the patent grant and the maintaining of the same would be welcomed.

    There is a lot that does not meet the eye in the patent environment. Pecunia non olet (up wind of course).

  17. Anon February 8, 2020 11:42 am

    G,

    Your rumination about Oil States shows a lack of appreciation of the issues of that case and the larger problems in patent law today.

    You state (emphasis added): “the PTO, if given the power to do so, could invalidate patents withour even adjudicating.” — but how exactly would this power be given, and under what conditions do you see OTHER protections of property (under the Constitution) be eliminated without thought or concern?

    Your comment of “After all, the reason for the constitutionality of their patent invalidation is the PTOs original patent granting right.” misstates what Constitutionality considerations may and may not be permissible once a property right is created.

    The point is most definitely NOT “if form aside.” Adjudication is not mere happenstance.

    Your statement of “ invalidation power is as unrestrained as the power to grant patents.” is doubly false, as clearly, NO government power (under the chosen domain of the US Constitution) is unrestrained, as we as a nation have chosen our government to be one of limited power. You seem to want to have a premise of unlimited power to grant patents (not true), and then turn around and require an equal unlimited power to undue. But that is simply NOT true under our Constitution (I suggest that you look into Takings law).

    You do seem to be earnest in your beliefs (as opposed to some that know better and yet seek to play games in order to advance their own belief system). But there are some basic and foundational aspects that appear to be missing from your understanding.

  18. angry dude February 8, 2020 11:49 am

    Concerned @16

    Because… you are not IBM or Apple or Amazon or Google etc.

    A few years back Greg Aharonian did a study of IBM patents and concluded that they are mostly junk – like 90% of them (I would say 99% by my standards of patentability in hi-tech)

    Also a few years back IBM nominated their best inventor of the year – an indian dude head of their semiconductor research group or something like that, who filed so many patents that year – pretty much one patent every week, every two or three days for the duration of the entire year !
    And he was listed as first or one of the first inventors on each and every of those junk patent applications… like he didn’t eat didn’t sleep just filed junk patent applications with USPTO for his corporate masters

    Welcome to America.. the land of the free, where corporations are people, not just regular people but super-human people with super-human abilities and superior rights

    I said it before and I say it again: We do not need such patent system !

  19. Pro Say February 8, 2020 12:36 pm

    Concerned @ 16: “How can IBM get 333,530 patents and I cannot even get one?”

    The sad but simple answer?

    Because you’re not IBM.

  20. Concerned February 8, 2020 1:22 pm

    Angry Dude:

    Well IBM did miss trademarking the phrase “Routine, conventional and well understood.”

    As often as that phrase is throw at inventors, IBM would have made at fortune on infringement.

  21. Anon February 8, 2020 2:15 pm

    Concerned,

    I “get” that your post was a quip, but the IP geek in me bristles at the incorrect notion of your use of “trademark” (which is a protective mechanism of a source for a related good (or service). Mere “popular use” is not the ‘thing’ of Trademark.

  22. Concerned February 10, 2020 7:53 am

    An established player in the NBA gets extra “steps” on the way to the basket. One popular video showed a famous player getting 11 steps and no traveling call.

    IBM getting 333,530 equilivant type steps is as ridiculous as. a poster on this article suggesting no code of conduct is necessary. Money talks louder and louder when left to human nature alone.

    I thought “lip service” is a service eligible for trademarking. My bad lol.

  23. Anon February 10, 2020 11:42 am

    Concerned,

    Hmm, I may have to reconsider my view, as you have identified the ‘service’ of “Lip Service” which may well suffice for the mark.

    You may still have an issue with other Trademark evaluations (including the notion that others may well have established identity of the mark (i.e., the courts), and it is unclear what good or service — from IBM — is going to be confused in commerce.

    😉

  24. Concerned February 10, 2020 6:45 pm

    Speaking of confusion……

    I took my Dad to the doctor’s office last week. I could not escort him back to the examination room due to HIPAA regulations.

    He came out of the examination room crying profusely. The doctor told him he has ADHD at 87.

    I told Dad not to feel bad. I got IBM at 250.

  25. angry dude February 10, 2020 9:01 pm

    Anon@24

    Dude,

    Methinks you are a paid shill for Apple or Google
    – always distracting reader’s attention from real issues

  26. Anon February 11, 2020 8:21 am

    angry dude — check yourself.

    One of us engages in actual legal topics while the other constantly mouths an emotional whine that sounds in exactly what the Efficient Infringers want.

    You show zero reason by trying to call me the thing that you do.

    That’s no way to go through life, son.

  27. angry dude February 11, 2020 12:25 pm

    Anon @27

    Last time I checked myself I lost a fortune to crooked US patent system

    You get paid for posting a LOT of unworkable (and you perfectly know it) legal nonsense mumbo jumbo here to distract readers’ attention from real pressing issues like rampant corruption in wash dc – including pto, ptab, cafc, scotus and potus .. and some district courts too

    We are WAY past the point of political correctness and being polite now

    You are a paid shill

  28. Anon February 11, 2020 1:40 pm

    angry dude,

    You are as wrong as can be.

    This is what happens when you indulge yourself in emotion and lose the ability to use reason.

    As I have noted: between you and I, only one of us has a message that the Efficient Infringers want to spread. Based on that, can you reason which of us better aligns with the word “shill?”

    Hint: it is not the one that uses reason and discusses points of law (which would be me).

  29. Anon February 11, 2020 3:35 pm

    angry dude,

    In addition to the above comment, let’s deconstruct your latest emotional outburst;

    You get paid for posting a LOT of unworkable (and you perfectly know it) legal nonsense mumbo jumbo here

    I am not paid one penny for ANY postings that I provide here.
    What I DO provide is cogent and insightful legal analysis. That YOU may think this to be either “unworkable” or “nonsense mumbo jumbo” ONLY shows that you lack ANY understanding of law.

    But let’s compare YOUR posts:
    – NO cogent resemblance to ANY legal point.
    – emotional outbursts that happen to align with what the Efficient Infringers want as a take-away.

    I am not sure how you gauge this in relation to “political correctness” or even “being polite,” but any comparison between your posts and my posts — on a legal blog certainly do NOT hew to your favor.

    I suggest that you seriously consider BOTH your position and your tactics.
    Heck, I suggest that you seriously consider merely THINKING and not reacting in such emotional outbursts.

  30. angry dude February 11, 2020 4:55 pm

    @Anon

    Dude,

    You and I and Gene and everyone else here knows perfectly well that there is no patent law in the United States at this point – what we have is NOT LAW
    There is no point discussing something that does not exist anymore
    It only serves to divert reader’s attention from real issues like rampant corruption in wash dc

  31. Model 101 February 11, 2020 6:10 pm

    “Code of conduct”… there is no code of contact for hard core CROOKS. Everyone is talking about judges, lawyers, APJs, the USPTO, PTAB, CAFC, SCOTUS, District Courts, Congress, the Senate, Silicon Valley, etc…. like there is some (like a tiny kangaroo poop smudge of) integrity there.

    THEY’RE CROOKS!!!!!

    Heads should roll…but they won’t!!!

    They should have a computer determine eligibility and validity and eliminate the crookfest process and crookapalooza opinions.

    It’s a simple test – if the patent claim steps aren’t said in the prior art in a single reference…the patent claims are eligible and valid.

    I’ll write it for nothing.

  32. angry dude February 11, 2020 8:56 pm

    Model 101 @32

    APJs with Apple stock or anything Apple-related in their retirement accounts “adjudicating” validity of patents brought against Apple are not just little crooks – they are criminals in the upper echelons of US government

    Special Prosecutor please !

  33. angry dude February 12, 2020 7:40 am

    This country is going to hell… but slowly… so everyone is pretending things are still good … like a frog in a slowly heating pot… until it boils

    They appointed Special Prosecutor to investigate Bill Clinton’s private sex life so the entire world could laugh at the US

    Then they appointed Special Prosecutor to investigate some fake news about technically impossible foreign interference in the elections or even started impeachment proceedings over some god-forsaken country overseas which poses absolutely no threat to the US

    But when APJs in wash dc rob inventors, small companies and entire nascent industries of their IP to fill their retirement accounts with Apple proceeds and everyone can see it in bright daylight – nope.. no Special Prosecutor is needed

    Things are good in wash dc …until they are not…

    The entire world is laughing all the way to the bank looking at the remains of the 230-year old used to be best in the world US Patent System created by The Founding Fathers

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