Posts Tagged: "apa"

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).

One might naturally expect that, if a rejection under § 101 appealed from the PTAB failed to address all the claim limitations and had zero supporting evidence to determine whether something was abstract or well-understood, routine and conventional, the case would be a slam-dunk at the Federal Circuit.  After all, according to Supreme Court and Federal Circuit precedent, the Federal Circuit would be “powerless to affirm the administrative action by substituting what it considers to be a more adequate or proper basis.” Unfortunately though, nothing could be farther from the truth as is demonstrated by the Federal Circuit’s recent decision of In re Villena, Appeal No. 2017-2069 (August 29, 2018) where, as is proved by the joint appendix, the examiner failed to address each and every claim limitation separately, to address the claim limitations as a whole, ordered combination, and to provide any evidence whatsoever to support his factual assertions.

If this practice of phantom expanded panels, with APJs not identified on the record or to the parties, is legal then IPR panel assignments are nothing more than a farce. Any APJ, including Chief Administrative Patent Judge Ruschke, can actively participate in the deliberative process of any IPR without ever disclosing that fact to the public or to the parties. So, in effect, all IPR panels may be secretly stacked!

Hiring senior associates to be Administrative Patent Judges was a mistake, hiring so many senior associates from the same firm was an even bigger mistake. Making it clear that their job was to kill patents at all costs was inexcusable. Interpreting the rules at every turn to be disadvantageous to patent owners is un-American, violates fundamental notions of fairness of procedure, and tilts the balance so heavily toward challengers that it has become more feared by patent owners than any government agency or body. In short, the PTAB has destroyed the U.S. patent system and the value of U.S. patents. In my opinion, the only solution for the very serious transgressions of the PTAB is to disband this runaway tribunal.

The USPTO admits that the Director does not have statutory authority to adjudicate an issue after a panel has been chosen, but argues that the Director can assert administrative authority to intentionally select Judges that will rule diametrically opposite to those Judges originally assigned to the case, thereby stacking any panel the Director chooses to achieve the result the Director wants in any case… This admission by the USPTO is both stunning and scandalous for at least two reasons. First, the Administrative Procedure Act, which applies to the PTAB, demands decisional independence, which obviously is not happening when the Director of the USPTO can stack a panel to achieve a particular desired outcome.

The Federal Circuit vacated and remanded the PTAB’s decision in an inter partes review proceeding, finding the Board did not set forth its reasoning for finding the asserted claims obvious in enough detail for the Court to determine whether it was supported by substantial evidence… The Board also did not set forth its reasoning in sufficient detail for the Court to determine whether its obviousness decision was procedurally proper. The Board must comply with certain procedural requirements in conducting an inter partes review under the Administrative Procedure Act (APA), including informing the patent owner of “the matters of fact and law asserted,” give the patent owner an opportunity to submit facts and arguments, and permit the patent owner to submit rebuttal evidence.

The Federal Circuit held that the Board’s changed claim construction of “data flow,” violated the Administrative Procedure Act (APA), even if it was correct. In particular, it deprived the petitioner of the procedural protections of the APA, which prohibits an agency from changing legal theories during a proceeding without giving respondents notice of the change and the opportunity respond to the new theory. Because the Board changed its construction of the term “data flow” absent any suggestion from the parties, and without any notice, there was no meaningful opportunity to respond to the unanticipated change. Therefore, the Court vacated the decision of the Board to afford the parties an opportunity to present arguments on the Board’s newly-adopted construction of “data flow.”