Posts Tagged: "Administrative Patent Judge"

Despite their best efforts, patent practitioners may reach an impasse during negotiations with patent examiners at the United States Patent and Trademark Office (USPTO). If an applicant still desires patent protection, it can authorize the filing of a notice of appeal to the Patent Trial and Appeal Board (PTAB) and an associated appeal brief. Thus begins an ex parte appeals process in which a panel of at least three administrative patent judges (APJs) considers patentability of the rejected claims. Over the years, I’ve observed some patent attorneys and agents approach ex parte appeals as essentially a document assembly exercise: arguments from past Office action responses are pasted into a template and then submitted to the PTAB. In my view, such an approach represents a missed opportunity to present the strongest possible case for patentability. In a worst-case scenario, it may even prevent a client from securing the patent protection it deserves. To maximize clients’ chances of success, practitioners instead should approach appeals with the mindset of a strategist and advocate.

On July 29, Askeladden LLC filed an amicus brief in support of the U.S. Government’s combined petition for a writ of certiorari in U.S. v. Arthrex, Inc., No. 19-1434. In particular, Askeladden asks the Supreme Court to accept the petition and address the threshold question raised by the U.S. Government: whether, for purposes of the Appointments Clause, U.S. Const. art. II, § 2, Cl. 2, administrative patent judges (APJs) of the Patent Trial and Appeals Board (PTAB) of the U.S. Patent and Trademark Office (USPTO) are “principal officers” who must be appointed by the President with the Senate’s advice and consent, or “inferior officers” whose appointment Congress has permissibly vested in a department head.

Whoever wrote the America Invents Act (AIA) left out the U.S. Patent and Trademark Office (USPTO) examiners. The examiner on any given patent at issue in an inter partes review (IPR) proceeding at the Patent Trial and Appeal Board (PTAB) agreed with the patent holder that the patent claims, as amended, were valid. Examiners are specialists, working under Supervisory Patent Examiners (SPEs), who are even more experienced, though in very narrow fields. As such, they knew the state of the art at the time a patent was being prosecuted.

In December, petitions for rehearing were filed at the U.S. Court of Appeals for the Federal Circuit by each party involved in Arthrex, Inc. v. Smith & Nephew, Inc., including the United States government as intervenor in the case. The panel decision in that case, rendered on October 31 of last year, severed a tenure provision protecting administrative patent judges (APJs) at the Patent Trial and Appeal Board (PTAB). This severance was determined by the Federal Circuit to overcome a constitutional challenge brought by Arthrex that APJs were principal officers of the United States, and thus their appointments by the U.S. Secretary of Commerce, rather than the President of the United States, with the advice and consent of the Senate, didn’t pass muster under the Constitution’s Appointments Clause. In their petitions for rehearing, Arthrex argued that the removal of the tenure provision was an insufficient solution, Smith & Nephew contended that the fix was incorrect because APJs were already inferior officers, and the U.S. government urged rehearing so that several legal errors made by the original Federal Circuit panel could be corrected. On January 3, Federal Circuit Clerk Peter Marksteiner informed  the parties in Arthrex that they could file a single response to the petitions for rehearing. Those petitions are due by January 17 and the parties have been informed that no extensions of time for submitting responses will be granted. By the end of December, the Federal Circuit had received a pair of amicus briefs in the case, one from the Association for Accessible Medicines (AAM) and the other from the New York Intellectual Property Law Association (NYIPLA).

On November 13, the United States Patent and Trademark Office (USPTO) requested the U.S. Court of Appeals for the Federal Circuit suspend all consideration of an appeal from the Patent Trial and Appeal Board (PTAB) that would raise the same issues addressed in Arthrex, Inc. v. Smith and Nephew, Inc., because the Office will seek rehearing en banc in Arthrex. See Stuben Foods, Inc. v. Nestle USA, Inc., No. 20-1082, -1083. As a reminder, on October 31, the Federal Circuit issued an important constitutional decision in Arthrex, which found that the hiring of Administrative Patent Judges (APJs) violated the Appointments Clause of the U.S. Constitution. The Federal Circuit did, however, attempt to provide a gift to the Office by rewriting the section of the statute they found to create the problem, which created the PTAB and the appointment of APJs, and by so doing turned APJs into inferior officers. The solution: APJs were judicially decreed to be employees-at-will in order to save the statute. So, why hasn’t Director Iancu cleaned house at the PTAB? It would seem to be because the USPTO believes Arthrex was wrongly decided.  

The Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office (USPTO) has had a sordid history. Whether you are in favor of the PTAB allowing serial challenges that require patent owners to constantly fight dozens of petitions from a multitude of challengers or not, no one can or should excuse the PTAB from the egregious appearance of impropriety that continues to plague the institution. It is insulting and inappropriate. It is well past time for Director Iancu to put an end to Administrative Patent Judges (APJs) deciding petitions filed by former clients. We know direct conflicts where APJs are deciding petitions filed by former clients are still happening thanks to two orders entered on August 8, 2019 in IPR2019-00819 and IPR2019-00820. Through these orders, we learn that APJ Stacy Beth Margolies is sitting on a panel assigned to address inter partes review (IPR) petitions filed by Apple, Inc. against patent owner MPH Technologies OY. The problem is Margolies, while she was an attorney, represented Apple.

IPWatchdog recently learned that Apple, Inc. has hired former Administrative Patent Judge Matt Clements. Although Clements’ LinkedIn profile does not reflect the fact that he has left the Patent Trial and Appeal Board (PTAB) as of this writing, a search of the California State Bar Attorneys Roster clearly identifies Matthew Clements as being employed by Apple, Inc. in Cupertino, California. If the name Matt Clements rings a bell it is because IPWatchdog has rather exhaustively covered the remarkable ethical transgressions that have taken place at the Patent Trial and Appeal Board (PTAB) over the past several years, and Clements was the protagonist in chief. As was first reported by Steve Brachmann, Clements represented Apple, Inc. as patent infringement defense counsel up to his appointment as an APJ in March 2013. Clements then proceeded to preside over several dozen post grant challenges brought by Apple. Not surprisingly, Apple did extraordinarily well in those challenges, leading Brachmann to conclude that having Clements on the panel for an Apple petition was a lethal cocktail for patent owners.

Earlier today the USPTO announced the substantial revision of Standard Operating Procedures (“SOPs”) for the paneling of matters before the PTAB (SOP1) and precedential and informative decisions (SOP2). The revisions deliver upon the repeated promises of USPTO Director Andrei Iancu to increase transparency, predictability, and reliability across the USPTO. These new SOPs update the procedures based upon feedback the Office received from stakeholders, courts, legislators, and six years of experience with AIA trial proceedings. These new SOPs are a major change to how PTAB panels will be comprised, and how precedential opinions will be designated. Given Director Iancu’s speeches, actions and apparent desire to have a more patent owner and innovator friendly Patent Office, these revisions will likely be game changing.

In early August, patent owner Smartflash filed a petition for a writ of certiorari with the U.S. Supreme Court to appeal a case stemming from covered business method (CBM) review proceedings carried out at the Patent Trial and Appeal Board (PTAB). Smartflash is asking the Supreme Court to decide whether PTAB administrative patent judges (APJs) are principal officers of the United States who are subject to the terms of the Appointment Clause, whether CBM review of patents disclosed prior to passage of the America Invents Act (AIA) violates the Fifth Amendment’s Due Process Clause, and whether undisputed evidence that an invention is not unduly preemptive is relevant to answer questions of patent eligibility under 35 U.S.C. § 101. At issue in this petition are a total of 30 CBM reviews petitioned by Apple, Samsung and Google against Smartflash, which were instituted by APJ panels at the PTAB.

On August 22nd, an order was entered in the inter partes review (IPR) proceedings currently ongoing between between 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.

As was the case with Justice Neil Gorsuch, Kavanaugh has a history of being skeptical toward the growth of the Administrative State, which means the growth of agency power is not something he has shown a predisposition to being in favor of in his decisions. Given the outsized importance of the Patent Trial and Appeal Board (PTAB) within the patent industry, and the fact that the Supreme Court has already twice mentioned “shenanigans” in PTAB procedures, another conservative Justice inclined to be skeptical about the growth of administrative power may ultimately set the stage for review of some of the more egregious PTAB violations of the Administrative Procedures Act, such as but not limited to a severe and substantial lack of judicial independence among the Administrative Patent Judges that make up the PTAB (i.e., the Office admittedly engaging in panel stacking to guarantee favored outcomes in inter partes challenges, the fact that dissents are not allowed unless approved by supervisors, and supervisors deliberating with subordinates on cases they were not assigned to handle).

This assertion is a mischaracterization of Alice Corp., which never held that the intermediated settlement claims at issue in Alice Corp. were abstract because of the risk hedging claims in Bilski were abstract.  Instead, the Supreme Court stated “that there is no meaningful distinc­tion between the concept of risk hedging in Bilski and the concept of intermediated settlement at issue here” because “[b]oth are squarely within the realm of ‘abstract ideas’ as we have used that term.”  That is: the claims in Bilski and Alice Corp. were comparable only because the underlying business methods were undoubtedly long-prevalent in the business community.  To hold otherwise is to ignore the vast bulk of both the Bilski and Alice Corp. decisions.

At the time, many thought this change in law would significantly assist patentees in avoiding full-blown cancellation of their claims. However, our review suggests a case-by-case analysis without overwhelming success on a motion to amend… Although the industry expected Aqua Products to cause a sea change for motions to amend, there has been little, if any, substantive effect. Since Aqua Products, the Board has considered the opinion’s impact in 92 cases, referring to the memorandum guidance in 38. Of those 92 cases, the Board has rendered decisions in 43 cases, denying 32 motions to amend, granting in whole or in part 7 motions, and denying as moot 4 motions.

On Thursday, April 26th, the U.S. Patent and Trademark Office issued new guidance regarding the effects of the U.S. Supreme Court’s judgment in SAS Institute Inc. on America Invents Act (AIA) trial proceedings held before the Patent Trial and Appeal Board (PTAB). Along with the new guidance, the USPTO also announced a webinar with PTAB Chief Judge David Ruschke taking…