The PTAB Review - October 2020

On October 31, 2019, the U.S. Court of Appeals for the Federal Circuit killed the Patent Trial and Appeal Board (PTAB), then promptly brought it back to life. A year later, a dozen petitions involving more than 100 parties and amici curiae are pending at the Supreme Court, testing whether the resuscitation will hold or whether the PTAB never died at all.In Arthrex, Inc. v. Smith & Nephew,1 the Federal Circuit confronted the question of whether the administrative patent judges (APJs) who enter the final decisions in inter partes reviews (IPRs) are constitutionally appointed. The court held that the decision on whether to cancel a patent claim is too important to be entrusted to anyone without Presidential nomination and Senate consent. Rather than destroy 1 941 F.3d 1320 (Fed. Cir. 2019).2 963 F.3d 1380 (Fed. Cir. 2020).the PTAB permanently, the court held that it could cancel another statute instead, thus leaving the PTAB able to decide future cases. After considering a number of options, the court decided certain statutory protections no longer apply to APJs, rendering them at-will employees of the United States Patent and Trademark Office (USPTO) director (who is a Presidential appointee) so that at least as a legal fiction the director could dictate decisions to the APJs entering a final agency action. The decision left open what should be done with PTAB decisions already entered. The court drew a bright line between pending cases and those already decided. The court further distinguished between parties that timely raised the issue early in their appeals and latecomers simply hoping to benefit from the decision. Moreover, the beneficiaries only receive an automatic remand to the PTAB for consideration by a new panel of APJs. The court subsequently extended its holding to other PTAB proceedings, including other trials but significantly also—in an appeal from Boloro Global Ltd.—to appeals from patent examiner rejections.2 As a result, scores of cases were remanded. Since the government is seeking relief at the Supreme Court, the PTAB has stayed those cases and the U.S. Solicitor General filed a single October 2020(Continued on page 2)THE PTAB REVIEWIn This IssueThe PTAB on Trial at the Supreme Court...Again ....................Pages 1-2Same-Party Joinder Redux .................................Pages 2-3Recent Precedential and Informative Decisions .... Pages 4- 6The PTAB Strikes Back: Discretionary Non-Denial for Rocket-Docket District-Court Litigation .................................. Page 7This issue of the PTAB Review provides an update on the Arthrex Appointments Clause decision, the continuing demise of same-party joinder and deference to Patent Trial and Appeal Board (PTAB) precedential decisions, the most recent PTAB precedential and informative decisions, and developments in the PTAB’s discretionary denial practices.The PTAB on Trial at the Supreme Court...AgainTHE PTAB REVIEW2October 2020petition naming patentees in 74 cases3 not already pending at the Court as respondents to avoid violating the Federal Circuit’s mandate in those cases.The Arthrex decision left almost no one outside the Federal Circuit happy. Both parties and the federal government (which intervened) filed petitions for certiorari after COVID-19 delays. Curiously, a follow-on case beat the Arthrex case to the Supreme Court. The arguments on petition cluster into three issues. The Solicitor General and many petitioners argue that the whole appointments question was forfeited because the parties did not argue the issue at the PTAB, depriving the agency of an opportunity to address the issue before it spun out of control. They also argue that no constitutional problem exists because the USPTO director retains adequate control over both APJs and pending cases to maintain political accountability in a properly appointed official.Patentees disagree, although their positions vary depending on how the Federal Circuit applied Arthrex in their particular cases. Several also raise case-specific merits issues. Arthrex 3 The IPRs underlying the lead case, Image Processing Technologies v. Samsung Electronics, subsequently settled at the PTAB. The United States has moved for a partial dismissal of its petition for the settled cases.4 The effect might be that the APJs must lose their jobs because simply stripping them of job security is unlawful.5 Because the question of whether these petitioners forfeited their Appointments clause argument was independent from whether the argument is correct, this denial does not directly speak to what will happen in Arthrex.itself (which timely raised the issue in its second appeal) argues that there is no remedy and hence no PTAB to cancel its claims. Specifically, Arthrex argues that Congress did not intend to permit the Federal Circuit to strip APJs of employment rights. One amicus goes so far as to argue that the court could not do so without violating the APJs’ due process.4 Arthrex also contends that the remedy is not sufficient because making APJs at-will employees is not enough to shift accountability and control substantially to the director. Patentees who did not timely raise the issue (five petitions, include one from Arthrex for its other appeal) argue that Arthrex represented a change in the law that must apply to all pending cases regardless of whether or when they raised the issue.All but three of the petitions were considered in the Supreme Court’s September 29 conference, the first of the Court’s 2020 Term. The Court denied certiorari for the two forfeiture petitions that had been fully briefed,5 but did not otherwise address the remaining cases in its subsequent order on October 5. Assuming the Court grants the petition for a writ of certiorari in at least one case, it would likely set an argument for early in 2021. The Court is unlikely to hear all of the petitions; indeed, the Solicitor General has urged the Court to take the lead Arthrex case and simply hold the remaining cases pending a decision in Arthrex.The Supreme Court has issued two high-profile decisions holding appointments improper in recent terms, but the facts were very different so it is difficult to predict how the Court would decide the core Appointments Clause issue here. Given the large number of petitions and parties, including two petitions from the Solicitor General, as well as the Court’s penchant in recent terms to revisit the PTAB practice, the Court may be likely to grant certiorari. In the unlikely event that the Court decides that the PTAB is broken and unfixable, Congress almost certainly will create a prompt solution. After all, patentees might be happy to be free of the so-called “patent death squad” in post-grant trials, but they will be much less happy to be at the mercy of patent examiners with no route for appeal other than a mandamus action in district court.The Federal Circuit in September modified its March 2020 decision on same-party joinder to account for the intervening Supreme Court Thryv decision. In Facebook, Inc. v. Windy City Innovations, LLC, the Court held earlier this year that the PTAB could not use its statutory authority under the 6 Facebook, Inc. v. Windy City Innovations, LLC, 953 F.3d 1313 (2020).7 Id. at 1318-19.joinder provision of the A.I.A. (35 U.S.C. §315(c)) to add additional patent claims to already instituted IPRs.6 After Thryv, the Federal Circuit came to the same conclusion as before. The PTAB granted Facebook same-party joinder out of a sense of fairness. Facebook found itself at a strategic disadvantage after Windy City asserted multiple patents against it that collectively contained 830 claims.7 The IPR time-bar provision (35 U.S.C. §315(b))...