Federal Circuit: Our Muscles Are Not Working :{}

by Dennis Crouch

Shaw Industries v Automated Creel Systems[1] involves several interesting issues involving inter partes review proceedings.

One Year Filing Bar: The first involves the one-year deadline for inter partes review petitions following the service of a complaint to the future-petitioner.[2]  “An inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.”

Here, the patentee ACS had filed an infringement lawsuit and served Shaw more than one year before the IPR filing.  However, the parties voluntarily dismissed the lawsuit without prejudice in a joint filing.  In considering the issue, the Board determined that the voluntary dismissal “nullifie[d] the effect of the alleged service of the complaint on Petitioner.” As such, the Board was free to institute the inter partes review proceeding.

On appeal the Federal Circuit followed its prior ruling Achates[3] that the appellate court lacks jurisdiction to the Board’s decision on whether the time-bar of Section 315 applies.  The panel[4] did not support the PTO’s decision and noted that the Supreme Court’s decision in Cuozzo[5] “may affect this court’s holding regarding the reviewability of the decision to institute in Achates.”

As an aside, a petition for writ of certiorari had been filed in Achates, that case, however, has settled. We’ll see if ACS takes the case up here.

The Non-Doctrine of Redundancy: The second issue involves the PTAB’s non-doctrine of redundancy.  Shaw filed two IPR petitions and in each petition the Board implemented the IPR on one ground for each claim, but declined to implement IPR on the additional grounds because they were ‘redundant’ without further explanation of that redundancy. The redundant arguments included anticipation grounds found redundant to obviousness grounds. Oddly, the PTO has stated repeatedly in the case that “there is no redundancy doctrine.”

In the appeal, the Federal Circuit again stated that it has no authority to review the Board’s decision to institute an IPR.

In the case, Judge Reyna joined the court’s opinion but also penned a judgment “concurring specially” to reflect his “deep[] concern[] about the broader impact that the Redundancy Doctrine may have on the integrity of the patent system.”  Here, the doctrine’s existence is expressly denied by those applying it. The PTO argues that it need not explain what’s happening because “the Director has complete discretion to deny institution . . . and [does] not even have to state in our institution decisions why were choosing not to go forward.”[6] Judge Reyna responds:

The PTO’s claim to unchecked discretionary authority is unprecedented. It bases this claim on the statute that makes institution or denial of inter partes review “final and nonappealable.” See 35 U.S.C. § 314(a), (d). Regardless of appealability, administrative discretion is not and never can be “complete” because it is always bounded by the requirement that an agency act within the law and not violate constitutional safeguards. See 35 U.S.C. § 2(b)(2) (PTO “may establish regulations, not inconsistent with law”). There is good reason for this. “Expert discretion is the lifeblood of the administrative process, but unless we make the requirements for administrative action strict and demanding, expertise, the strength of modern government, can become a monster which rules with no practical limits on its discretion.” Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 167 (1962) (internal quotation marks omitted).

Indeed, regardless of whether the Board’s institution decisions can be appealed, the Board cannot create a black box decisionmaking process. Conclusory statements are antithetical to the requirements of the Administrative Procedures Act (“APA”), which the PTO and its Board are subject to. 35 U.S.C. § 2(b)(2)(B); see also Dickinson v. Zurko, 527 U.S. 150, 154 (1999). The APA requires “reasoned decisionmaking” for both agency rulemaking and adjudications because it “promotes sound results, and unreasoned decisionmaking the opposite.” Allentown Mack Sales & Serv., Inc. v. N.L.R.B., 522 U.S. 359, 374– 75 (1998) (citation omitted). The APA requires that Board decisions evince both its authority to render the decision and a reasoned basis for rendering that decision. Id. at 372 (“Not only must an agency’s decreed result be within the scope of its lawful authority, but the process by which it reaches that result must be logical and rational.”). The problem here is not that the Board’s reasoning is illogical or irrational; the problem is that there is no reasoning at all.

Judge Reyna pushes further by highlighting the impact of the PTO’s non-decision on the eventual estoppel issues. The PTO suggested in the case that estoppel would not attach to the non-instituted redundant grounds since they were not instituted, but that argument makes little sense to me.[7]   And, as Judge Reyna points out, “[w]hether estoppel applies, however, is not for the Board or the PTO to decide. . . . These tribunals should not have to parse cryptic statements or search out uncited [and denied] doctrines to make this determination.”

= = = = =

Notes

[1] Shaw Industries Group, Inc. v. Automated Creel Systems, Inc., Appeal No. 2015-1116 (Fed. Cir. March 23, 2016), on appeal from the United States Patent and Trademark Office, Patent Trial and Appeal Board in Nos. IPR2013-00132, IPR2013-00584 challenging validity of U.S. Patent No. 7,806,360.

[2] 35 U.S.C. §  315(b).

[3] Achates Reference Publishing, Inc. v. Apple Inc., 803 F.3d 652 (Fed. Cir. 2015).

[4] Opinion authored by Judge Moore and joined by Judges Reyna and Wallach.

[5] Cuozzo Speed Technologies, LLC v. Lee, 136 S. Ct. 890 (2016).

[6] Quoting PTO brief and oral arguments.

[7] The PTO’s argument does have some logical merit. The statute creates estoppel for arguments “raised or reasonably could have [been] raised during that inter partes review.”  Although the denied arguments were actually raised, there were raised during the institution proceeding and not the actual review.  And, since the PTO denied institution on those grounds, the party was then prohibited from raising those grounds during the review itself.

About Dennis Crouch

Law Professor at the University of Missouri School of Law. Co-director of the Center for Intellectual Property and Entrepreneurship.

120 thoughts on “Federal Circuit: Our Muscles Are Not Working :{}

  1. In response to some apparently willful misunderstanding below about what it means for a judge or an agent of the government charged with making legal decisions to have the power of “discretion”, here’s Black’s Law Dictionary:

    What is DISCRETION?

    A liberty or privilege allowed to a judge, within the confines of right and justice, but independent of narrow and unbending rules of positive law, to decide and act in accordance with what is fair, equitable, and wholesome, as determined upon the peculiar circumstances of the case, and as discerned by his personal wisdom and experience, guided by the spirit, principles, and analogies of the law. Osborn v. United States Bank, 9 Wheat 866, 6 L. Ed. 204; Ex parte Chase, 43 Ala. 310; Lent v. Tillson,140 U. S. 316, 11 Sup. Ct. 825, 35 L Ed. 419; State v. C-mmings, 36 Mo. 278; Murray v. Buell, 74 Wis. 14, 41 N. W. 1010; Perry v. Salt Lake City Council, 7 Utah, 143, 25 Pac. 998, 11 L. R. A. 446. substantial equity and justice. Faber v. Bruner, 13 Mo. 543…

    Lord Coke: [D]iscretion is not willful or arbitrary, but legal. And, although its exercise be not purely a matter of law, yet it “involves a matter of law or legal inference,” in the language of the Code, and an appeal will lie. Lovinier v. Pea no, 70 N. C. 171

    1. I daresay, litigants in court both have something to lose. A judge needs to be legal and fair, an explain.

      But, in the case of an IPR, a member of the public has no right to a IPR trial. All they have a right to is a hearing on its petition which they paid for.

      Now take a look at Brennan’s dissent in Heckler. There we see MM’s argument that even here he would require the Government to be “fair” and provide reasons, etc., in denying institution even though the government’s decision is final and cannot be appealed.

      To me, Brennan position makes no sense.

    2. My Black’s Law Dictionary has this to say about “arbitrary:”

      arbitrary, adj. 1. Depending on individual discretion; specif., determined by a judge rather than by fixed rules, procedures, or law. 2. (Of a judicial decision) founded on prejudice or preference rather than on reason or fact.

      You were saying….?

      1. anon, have you read Heckler? If Congress puts an institution decision in the hands of the administrator and Congress says that the institution decision cannot be appealed, then it appears that Congress has authorized decisions that can be arbitrary and abuse of discretion.

        1. The limits of Congress’s authorizations (as protections for property exist under other Constitutional guidelines) is the right focus, Ned.

          Of course, since Congress was explicit in considering and rejecting the amendment for separability, there is NO legitimate option for the court to salvage the entire AIA as that law was passed.

          All those “voices” under Citizen’s United will just have to line up again and “speak” to the pockets of Congress for the coming “re-do.”

  2. If the Federal Circuit really wishes to make a mountain out of a procedural molehill, they might want to take a look at their own writings first.

    I seem to recall at least a few instances (LOL) of “we have considered the other arguments and deem them without merit” type of statements showing up in their own opinions.

    There really is a difference between “discretion”, on one hand, and “whimsy” and “capriciousness” on the other . Most of the time it’s pretty easy for reasonable people to figure it out.

      1. He still does not grasp that the only thing provided under the law is the “asking.”

        There is no “guarantee” of anything else for the party wanting to bring the property right that is a patent back into the Office.

        So to satisfy his “view,” there is one question: did the party get to ask?

        Easy question.

        As I have indicated, the easy questions are not the “Right” questions.

        1. “anon” He still does not grasp that the only thing provided under the law is the “asking.”

          And a rational, Constitutionally permitted response to the asking. That response can certainly include “we are not persuaded” but it doesn’t permit whimsy or racism, as Reyna carefully explained.

          1. Asking is it.

            The response – if there is one MAY implicate something else going on.

            You seem unable to recognize that there is NO right to a response.

            1. The response – if there is one MAY implicate something else going on.

              An implication of “something else going on” can be made even in the absence of a response. I would have expected a paranoiac like you to appreciate that much.

              So .. are you going to keep digging? It’s starting to get amusing. Please don’t stop!

          2. And a rational, Constitutionally permitted response to the asking.

            I see that you have confused yourself with the insertion of “permitted” while we are talking about the concept of “required.”

            This difference is in accord with my post at 10.1.1.1.1 – which you could only try to obfuscate, instead of simply acknowledging that I am correct.

            It must gall you so to realize that once again I speak true – and speak differently than what you feel that you want.

  3. “anon” AT THE INITIATION POINT, the execute branch performs a taking of some of those sticks.

    Which “sticks” are being taken, “anon”.

    Please identify at least two.

    You’re a very serious person so we are all dying to know what your super serious point is.

    1. More of the 1ame “serious” C R P…

      How about these two: presumption of validity and the the application of BRI…

      Further, do you have any evidence of a patent that has been initiated into post grant review that separately is then put into play in a federal court for enforcement against someone else? Would not any such attempt simply be stayed until the post grant review is completed?

      Maybe you want to T H I N K instead of merely seeing the post by “anon” and throwing a conniption.

      1. How about these two: presumption of validity and the the application of BRI…

        ROTFLMAO

        Your “presumption” is addressed by the fact that the petitioner has to come forward with evidence. And “BRI” is nothing more than a procedural method for forcing applicants to clarify what the terms in their own claims actually mean.

        Nice try, though! I knew you didn’t have a serious answer but I actually expected even more laughs than the mild laughs you provided here.

        Now go ahead and pretend that your “counterpoints” were never addressed like a good little psych0.

        1. This is not a “nice try” per your twisted attempt to somehow have those items NOT by sticks in the bundle of property rights.

          Your reply is NOT a proper consideration – as I have told you in the past, your version of “address” often does not count because it is not inte11ectually honest or even on point.

          Petitiner’s evidence does not supplant the provision of law and nature of property right which was in effect before the last legal change in the AIA, and the “procedural method” is NOT a proper method based on that same characteristic of property right.

          You only “get to your position” by engaging in the very things I point out that do not meet the Constituonal protections afforded property rights that even Congress’s laws cannot violate.

          Even Congress – the proper branch of the government authorized by the Constitution to write the statutory law that is patent law CANNOT write law that violates other Constitutonal protections.

          That’s a rather important point that you are trying really really hard not to understand.

          Try better TO understand.

          1. omehow have those items NOT by sticks in the bundle of property rights

            “Somehow”? LOL

            There’s a difference between my rights to do stuff with my property (“the sticks”), on one hand, and the requirements for ownership of that property, on the other.

            See, e.g., link to en.wikipedia.org

            “Bundle of rights,” … implies rules specifying, proscribing, or authorizing actions on the part of the owner. A “bundle of sticks” – in which each stick represents an individual right – is a common analogy made for the bundle of rights. Any property owner possesses a set of “sticks” related directly to the land (citing United States v. Craft, 535 U.S. 274, 278, 152 L.Ed. 2d 437, 446, 122 S.Ct. 1414, 1420 (2002))

            But, hey, you’re a super serious person. Words mean whatever you say the mean and you’re never wrong about anything! We all must bow down to your awesomeness.

          2. I know this is going to come as a huge shock to you, “anon”, but pretending that I don’t understand the US legal system or the Constitution is not a great play for you.

            The fact is that you’re a habitual well-documented bigtime l o s er on nearly all of the major issues relating to our patent system and I’m sure that’s going to continue to be the case for the rest of both our lives.

            The sad irony is that at the same time you and your cohorts posit yourselves as the great guardian of “the proper means” you sit there and (feebly, but you can’t help that) condemn critics of the br0ken system that you advocate for and defend as naive and misguided. Somehow all these reasonable people who predicted and documented the glaring problems with the system are protecting some imaginary “field of rye” but it’s your concerns which nobody appreciates. Sorry, bud. Wave the flag and the Constitution around all you like. Any two year old can do that. We’re not impressed. Pretty much nobody who isn’t a halfwit is impressed. Unfortunately, patent law is filed with greedy halfwits. That’s what happens when you open the door to b0tt0m feeders.

            Petitiner’s evidence does not supplant the provision of law and nature of property right which was in effect before the last legal change in the AIA

            Ex parte and inter parte re-examinations existed before the AIA. Do you want to move the goalpost back further?

            1. There is no “pretending” on my part – I can only go by the LACK of acumen you constantly show here with your vapid and vacuous short script.

              You are the one pretending – and accusing another of doing what you do.

              Your number one motif.

              So predictable.
              So sad.

  4. The CFAC has been letting the PTO get away with abuses like that for years, why expect accountability now?

  5. There is a fine line bluntly being missed in the discussions here.

    Some want to focus on the action of the Office (and hang their hat on those actions not being allowed to be arbitrary, through either the APA, or “just because,” or some other thing).

    That is simply not the point that the courts are talking about.

    What the courts are talking about is the law itself – as written by Congress – that on its face plainly gives an unlimited discretion.

    It is NOT a matter of the Office employing that plainly written unlimited discretion in an untowards manner – it IS very much a matter that Congress wrote a law that – again, on its face – fully allows such unlimited discretion.

    You (the Royal you) are going to have to ask the court the right question, the question directly on point as to what the actual law plainly written by Congress is itself constitutional. Does the law – plainly written – good enough to withstand any level of scrutiny?

    The plain fact of the matter is that the CAFC is just saying “Hey, not our mess.”

    To that end, the title of this article is woefully misleading. The court cannot be saying: “Ourmuscles are not working” because they are saying “Our muscles are not being asked to be used.” What is being asked is a far too easy question for the court, and they will avoid – unless directly cornered – answering the REAL question here.

    And I believe that it is no small matter that that real question has some fricken tremendous implications, given the plain fact that for THIS law Congress explicitly rejected the notion of separability.

    The court simply does not have as a legitimate available remedy anything that would in effect re-write the law as Congress has affirmatively created to be inseparable.

    Leastwise, no one has advanced a cogent legally sound position explaining how such would not be a clear violation of separation of powers.

    Still waiting (and making money when certain people are not actually giving any cogent arguments 😉 ).

    1. t is NOT a matter of the Office employing that plainly written unlimited discretion in an untowards manner – it IS very much a matter that Congress wrote a law that – again, on its face – fully allows such unlimited discretion.

      You (the Royal you) are going to have to ask the court the right question, the question directly on point as to what the actual law plainly written by Congress is itself constitutional. Does the law – plainly written – good enough to withstand any level of scrutiny?

      Or as I said in 2.2.1.2 (my very first post on this article) – there needs to be an as-applied due process attack on the statute granting discretion. There’s nothing to grapple or come to terms with…

  6. Are people actually debating about whether some facet of the federal government can engage in arbitrary action? What does the PTO think is going to happen when it states that it doesn’t have to give any reasoning for what it does?

      1. Heckler is distinguishable. There is demonstrated arbtirariness here. Congress can’t be arbitrary itself, so what makes you think they can legally delegate someone else to be arbitrary in their stead? What’s the distinction between telling someone else to be arbitrary versus simply allowing them to be arbitrary, followed by that person actually doing it?

        Here’s an analogous situation I know exists: A legislature cannot deligate unlimited discretion to, e.g. the police to issue concealed carry permits if the police actually behave in an irrational manner in doing it.

        1. There is very much a distinction – here, given the express desire of non-separability, if the constitutional fault is with Congress and the AIA itself, the entire AIA falls.

          Think applied versus facially in your constitutional analysis…

          1. There is very much a distinction – here, given the express desire of non-separability, if the constitutional fault is with Congress and the AIA itself, the entire AIA falls.

            I don’t have the same issue with that you do. It wouldn’t be as disruptive as you think, the court can do all sorts of things. They could issue a ruling and stay the ruling for a year to give Congress a chance to rewrite the discretion and render their judgement moot.

            The law compels an outcome, the outcome should occur. You’re trying to raise the stakes when there are no stakes.

            1. Not sure what you mean by “not have the same issue with that you do

              The issues is not “my” issue – it is a Constitutional issue. You don’t have a choice in the matter.

              The stakes being raised – or not – is likewise NOT about “what I am doing” – the stakes ARE what they are.

              It is a mistake to attempt to “personalize” this. I advise you to not do so.

              (as to the issue a ruling and stay – there be problems with that, including the old “advisory opinion” matter and the fact that the court cannot make a ruling on how it would want the law to be, and the INABILITY of the Court to force Congress to take any action (your ‘give Congress a chance***’) – what if Congress does not listen? Do you hold the Court’s decision in limbo forever?). Your offered year passes… what then?

              But I will give you credit – you are the very first to give a decent and approaching a legally cogent response.

              *** I will note here that this is still in accord with the sinking of the good ship US AIA Titanic – you have just provided that Congress still MUST act and pass a different law.

            2. (please keep in mind as well, that this is NOT the only torpedo heading towards that bulkhead-less ship known as the good ship USS AIA Titanic – any one hit below the waterline will do – based on the explicit intentions of Congress).

        2. Random, I agree that when life, liberty or property is at issue, Congress cannot delegate unlimited discretion.

          But you seem to miss the point I am making, Random. We are talking about denying the institution of an IPR, something the petitioner has no right to in the first place and the denial of which does not cause him legal harm. Heckler stands for the proposition that in these situations, the decision not to institute can be entirely within the discretion of the government. That means, the government can be arbitrary if they want to.

          1. something the petitioner has no right to in the first place

            There clearly is a harm (the lesser cost and expertise of an IPR) and that harm cannot be visited on someone in an arbitrary manner.

            That means, the government can be arbitrary if they want to.

            The government never has discretion to be arbitrary. The government is always held to a minimum rational basis standard. The government isn’t empowered to do a single thing if the act is admittedly arbitrary. This is a free society.

            1. Your “clearly is harm” is just not there under the law as written, Random.

              The law as written gives you the right to ask – nothing more.

              You STILL get to exercise that right to ask – there is NO harm done to the actual right (you still have your eyes clenched tight).

              Again – see my post at 7 – your are bluntly missing the point here. It matters very much if the law – as written – is being followed. It matters because any redress must be aimed at the properly offending item. That is why the “right question” has to be asked.

  7. I think the Federal Circuit is not realizing how far their holding regarding estoppel will reach. The court stated that the petitioner is not bared from bringing its “Payne-based ground” because the ground could not be brought up during the IPR stage. In particular, because the petitioner “did not raise–nor could it have reasonable raised–the . . . ground during the IPR.” It would seem that this rationale would equally apply to cases where a petitioner chooses not to include a certain ground in a petition . In other words, the courts rationale would apply not not just for grounds which the board decided not to institute over, but also for grounds that were not even petitioned. Clearly one cannot raise a ground at the IPR stage if it was not at least included in the petition during the institution phase.

    1. The very fact that the two IPR estoppel statutes say that it applies to “any ground that the petitioner raised or reasonably could have raised during that inter partes review” provides adequate statutory distinction between a ground that WAS raised by the petitioner but IPR APJ denied trial on it [as here] versus a ground that a petitioner reasonably could have raised but did not raise.

      1. I disagree. The opinion asserts that the grounds in question in the case was not “raised” during the IPR even though the grounds was included in the petition. In other words, having petitioned under that grounds (stage 1) is not the same as raising the grounds during the IPR (stage 2).

      1. Imagine a scenario where you request to institute IPR as to claim 1 as being anticipated by Reference A. Then at the district court you wish to invalid claim 1 as being obvious over Reference A in view of Reference B. I think the present Fed Circuit opinion would not bar the second grounds at the district court because the second grounds could not have been put forth “during the IPR.”

        In the case present in the opinion, the petitioner sought a first and second grounds or invalidity, only one of which was initiated by the Board. The opinion holds that the second is not bared at the district court, not because the board chose to not use it, but because the petitioner did not and could not raise the second grounds “during the IPR.”

        1. Mike, I think this is the basic argument of Phil Johnson that an IPR was intended to as low cost alternative to litigation and that that purpose is frustrated if trial is not instituted on all grounds on all claims because the full range of estoppels that were intended will not apply.

          1. So it appears that the phrase Paul points out:

            or reasonably could have raised

            is SERIOUSLY constrained by the modifier “during

            – and that what “could have during” is an exceptionally small item, and just not on par with what Ned (thinks) “were intended.”

              1. Not that I do not agree with what might be better, but why do you think that Congress intended anything other than what their plain words say?

                Here, too after all, the ends do not justify the means…

                1. I don’t think Congress intended to have different rules for different parts of the IPR proceeding. I believe the phrase “during the IPR” should be interpreted to include both the decision to institute stage (includes the petition) and the trial stage. If not, then the estoppel provision carries no weight whatsoever because a petitioner would then only be estopped for the arguments which they raised or reasonably could have raised during the trial stage, irrespective of what arguments they raised or reasonably could have raised during the institution stage (the petition).

                  IMHO that Congress intended that the estoppel provisions be used to force IPR petitioners to set forth all 102 and 103 grounds that they could raise in any proceeding at the petition stage (not the trail stage).This way the district court can relieve themselves of dealing with any 102 and 103 rejections that an IPR petitioner could have brought forward at the Board.

                  But based on the Fed Circuit’s view, it would seem that a petitioner can now bring forth additional 102 and 103 grounds at the district court which they didn’t raise in the IPR. A petition could not raise an argument in the IPR stage of the trial (“during the IPR”) which was not also at least included in the petition stage. Therefore, a petitioner’s choice to exclude matter from the petition, directly affects their ability to “raise” or their ability to have “reasonably could have raised” the argument during the trial.

                  If the Federal Circuit truly believes that the Board is not required to address each and every grounds of rejection of any instituted claim, then I like the Federal Circuit’s opinion above because it at least give the petitioner the opportunity to bring the remaining matters to a district court.

                  1. There are times where discretion is NOT a good thing because the necessary ramifications of discretion are akin to exceptions swallowing the rules.

                    For example, giving the discretion to the Office necessitates a “during” estoppel view that itself necessitates the ability of gaming the ability to play BOTH the IPR game and later court games (opening up serial harassing attacks when the “clear intent” of Congress giving a cheaper option to court action was to be an exclusive either/or choice and not an inclusive BOTH avenues option.

                    The AIA was just p00rly written top to bottom.

                    People should be happy that the good ship USS AIA Titanic was built without internal bulkheads.

                  2. My understanding is that Congress “intent” in this particular area was to leave the discretion up to the Office itself to set up its own rules.

  8. I looked for what in this decision could be applicable in other IPRs or cases, even though everything but the sustained IPR 103 rejection is either a refusal to decide or mere dicta.*
    I only found in that respect the clear statement that when an IPR petition filed on more than one ground is partially denied [for whatever reason, even if not spelled out] the denied grounds [which are not part of the instituted IPR itself] are not subject to any estoppel.

    *[Apparently these are Fed. Cir. judges that would support Couzzo cert petition ground 2?]

    1. Paul, I agree the denied grounds are subject to estoppel just as an issues not litigated or not decided in court is not grounds for estoppel.

      Petitioners have no right to an IPR. They have only a right to petition. If, after full trial there is a final decision on grounds X for claims Y, then and only then should estoppel apply.

  9. The CAFC: The problem here is not that the Board’s reasoning is illogical or irrational; the problem is that there is no reasoning at all.

    Stating that a legal argument is “redundant” could suffice as “reasoning” without further explanation in certain circumstances. For instance, if the claim recites “Combine X and Y” and the petitioner has reference A teaching the desired properties of X (unchanged by the combination) and reference B teaching that Y can be combined with all kinds of stuff — basically a slam dunk 103 — then instituting an IPR on the grounds that Y also anticipates (e.g., according to an inherency argument) could be considered “redundant”.

    But I agree with the CAFC generally that there are limits to “absolute discretion”. The PTO has to provide reasons for its actions and those reasons must be rational.

    1. MM, why?

      I think the following is permissible:

      “We institute on claim X on grounds Y. We deny on other claim and on other grounds.”

      This is simply and institution decision. No explanation at all is necessary or required.

      Now, with respect to 315(b), now that is entirely another matter.

      1. Ned: No explanation at all is necessary or required.

        That depends on whether the agency’s action appears motivated by reason (in which case a reasonable person would have no grounds for complaint) or something else entirely.

        It’s both funny and sad that folks who seem to enjoy running around screeching “unconstitutional! unconstitutional!” about perfectly reasonable laws don’t appear to understand that agencies are, in fact, bound by the Constitution.

        The government doesn’t, in fact, have “the discretion” to reject your petition merely because, e.g., your name looks like it might belong to a black person.

        1. No it doesn’t, MM. They can not institute for any reason and do not have to give one.

          Heckler v. Chaney, 470 U.S. 821, 105 S. Ct. 1649, 84 L. Ed. 2d 714 (1985). link to patentlyo.com

          We therefore conclude that the presumption that agency decisions not to institute proceedings are unreviewable under 5 U. S. C. § 701(a)(2) is not overcome by the enforcement provisions of the FDCA. The FDA’s decision not to take the
          838
          *838 enforcement actions requested by respondents is therefore not subject to judicial review under the APA. The general exception to reviewability provided by § 701(a)(2) for action “committed to agency discretion” remains a narrow one, see Citizens to Preserve Overton Park v. Volpe, 401 U. S. 402 (1971), but within that exception are included agency refusals to institute investigative or enforcement proceedings, unless Congress has indicated otherwise. In so holding, we essentially leave to Congress, and not to the courts, the decision as to whether an agency’s refusal to institute proceedings should be judicially reviewable. No colorable claim is made in this case that the agency’s refusal to institute proceedings violated any constitutional rights of respondents, and we do not address the issue that would be raised in such a case.

                1. Please clarify Random – which decision are you talking about, and in whose favor (or not) are you inquiring as to due process?

                  Let me know when you want to look at the “due process” of a granted patent having a few sticks in its bundle of property rights taken with NO due process….

                  1. Because no explanation other than the redundancy finding was provided by the Board, the lack of a doctrine on redundancy deprives the Board’s decisions of any basis. But the PTO has a ready answer: it need not provide any basis for its institution decisions. Hr’g at 46:13 (“We do not even have to state in our institution decisions why we’re choosing not to go forward.”). The PTO argues this is so because “the Director [of the PTO] has complete discretion to deny institution.”

                    Why doesn’t the PTO just come out and say “Rational basis? We don’t need no stinkin rational basis.”

                  2. Doesn’t help much Random.

                    Maybe you can use your own words and answer my question directly (and not with a re-pasted case quote).

                    Thanks.

                  1. …and which for the patent holder?

                    (or are we still pretending that the patent right is not a propertyright….?)

              1. one cannot deny a government benefit based on race. True. But there is no government benefit here.

                “Government benefit”? Where are you pulling that from?

                The issue in my hypothetical is that the government is denying an individual his/her right to use a Congressionally authorized remedy solely based on the individual’s perceived race.

                Are you seriously going to argue that’s permitted under the Constitution?

                But somehow reasonably instituted IPRs themselves are unconstitutional … because England?

                Good grief.

                1. Remedy?

                  Remedy for what? What legal right or benefit does a petitioner have? A right to drop stock prices and making money off of shorts by filing an IPR?

                  1. What legal right …. does a petitioner have

                    The legal right to use the most effective means created by Congress to expunge an invalid junk patent from the system.

                    You know, so the petitioner and the public can do what they were entitled to do before the PTO f ked up.

                2. Due process: a person cannot be denied life, liberty or property without it. Now a government benefit that affects life or liberty may also have a due process right attached.

                  Equal protection. Now the government cannot give the benefit or the laws to some and deny it to others based on race. I can see the potential here for a violation if there was a race-based denial. But I can tell you that the PTAB is never going to put something like that in writing.

                  1. Ned: I can see the potential here for a violation if there was a race-based denial.

                    Why did this basic proposition seem so difficult to you at first, Ned? Why did I have to drag this admission out of you?

                    I can tell you that the PTAB is never going to put something like that in writing.

                    Last time I checked the equal protection clause applies to discriminatory practices that aren’t “written down.”

                    Anything else, Ned? Maybe time to just admit that you’re wrong.

                3. But somehow reasonably instituted IPRs themselves are unconstitutional … because England?

                  That’s completely bogus “logic” Malcolm, as you presume reason based on the ends, and omit entirely scrutiny on the means.

                  Like usual.

                  Let me remind you (yet again):

                  The ends do not justify the means.

          1. No colorable claim is made in this case that the agency’s refusal to institute proceedings violated any constitutional rights of respondents,

            Is that the factual situation in this case, Ned?

            1. Random, the way I see it is the exactly the way I expressed the issue to MM,

              Under 35 USC 314(b), the decision to institute is discretionary. The Director may deny institution for any reason, even lack of resources. He or she doesn’t even have to say why because the decision is not subject to review. A petitioner is denied nothing he had a right to.

              Now Brennan dissented in Heckler v. Chaney on this point. But that case is controlling law.

              1. The Director may deny institution for any reason, even lack of resources.

                But the reason has to be (1) rational and (2) constitutional. A “lack of resources” can be both of those things.

                The Director can’t say “I deny institution because my astrologer says so.” And the Director can’t say “I deny institution because you’re Jewish.”

                He or she doesn’t even have to say why because the decision is not subject to review.

                It’s certainly subject to review if there is no rational basis for denying the petition but instead there is an apparent constitutional violation. How could it be otherwise?

                1. Contrast

                  It’s certainly subject to review if there is no rational basis for denying the petition

                  with

                  It’s certainly subject to review if there is no rational basis for denying the petition but instead there is an apparent constitutional violation.

                  ALl you have done is move the goalposts to the “easy” thing that Ned just got done saying would not happen.

                  Maybe you want to try again with the first, shorter quote.

                2. MM, since the petitioner cannot appeal a denial even for arbitrariness, etc., it is a waste of everyone’s time to state the reason. I have no idea why the PTAB even bothers. I think they are on automatic pilot, doing things like they did before IPRs.

                  The PTO attorney had it right here. The Director does not have to explain why they denied a petition.

                  Nor do they have to explain why they granted a petition under 314(a), because that decision is simply preliminary and itself entirely discretionary. All they have to do is state the claims, and the grounds, for trial.

                  An analogous matter would be the denial of summary judgment. That is not appealable. So I think the court could be very conclusory in his denial, just like they are during trial with evidence rulings.

                  1. Ned,

                    You are off into the weeds with your statement of “because that decision is simply preliminary

                    It just is not so. Sticks int he bundle of property rights really are lost at that decision point. There really is a taking at that decision point. There is NO “simple preliminary” about it.

                    Think about this. You are actually in a position to do MORE THAN just talk on a blog with this point.

    1. What relevant Constitutional law would that be? Curious since Reyna primarily cast his comments in terms of the requirements of the APA. Which Constitutional provision, exactly, was mentioned and was gotten all wrong, in your view?

      1. “administrative discretion is not and never can be ‘complete’ because it is always bounded by the requirement that an agency act . . . [does] not violate constitutional safeguards.”

        1. According to “anony”, apparently, the PTO can say “We didn’t even read your petition because, well, you’re gay” and that’s just fine because “discretionary.”

          Meanwhile we have another crew out there howling that the PTO can’t even review it’s own junk when it has great reasons to do so because (wait for it!) that’s also “unconstitutional.”

          1. Lol – lovely spin.

            The ends do not justify the means.

            You want to focus on what you consider (justified) ends and you don’t even bother addressing whether the means are proper or not – but here merely engage in baseless ad hominem.

            What an arse.

                  1. My posts on this sub-thread are directed to the usual blight that is Malcolm – he has some issue with you.

                1. anon – is that you?

                  Trust nobody!

                  LOLOLOL

                  You guys never cease to amuse.

                  Meanwhile we’re still waiting to hear what’s so “embarassing” about the proposition that agencies are “bounded by the requirement … [to] not violate constitutional safeguards”.

        2. There is clearly a due process issue here, and calling the complaint an “embarassment to the judiciary” makes me think you don’t know your law.

          Reyna would have supported an as applied due process attack on the statute granting full discretion, and he’d be right to. That’s why laws generally don’t grant full discretion to someone. When they’re no rationale put forward at all you don’t even meet rational basis scrutiny.

          1. Let me know when you realize that your “sword” cuts both ways.

            And then let me know when you want to discuss the ramifications of that.

            1. This time I actually don’t know what you’re talking about so go ahead anon I’ll listen –

              Where is the patentee being deprived of due process?

              1. Where is the patentee being deprived of due process?

                It’s only been stated like a bajizillion times….

                A granted patent has various sticks in the bundle of property rights.

                AT THE INITIATION POINT, the execute branch performs a taking of some of those sticks.

                Now mind you, the government can (when properly undertaken) perform takings – think eminent domain.

                But there are no such “proper” things here.

                There is NO judicial review – of that takings at the initiation point.

                There is NO recompense for the sticks so taken.

                ALL your focus on this thread has been on one side only – the side AGAINST the patent holder. The side – as Ned is trying to point out to you – that has NO property at stake. And, as I have pointed out, the OTHER side has had sticks in the bundle of property rights taken.

                Unclench your eyes, son.

                1. Whether the IPR as a vehicle is proper at all isn’t the question in this case. Ned presents a compelling argument on that issue and I may agree.

                  But as I’ve told you before, if you raise that issue the most likely outcome is that Congress will simply change the granting scheme to make a conditional property right rather than a full one (if you don’t construe the AIA as having done that already) and within 25 years all the old applications will cycle out of the system anyway.

                  Regardless – I likely agree with you, but that’s not the issue here.

                  1. most likely outcome is that Congress will simply change

                    So…?

                    The point here Random is that Congress is going to have to change – what they have currently wrought violates Constitutional protections of property.

                    That’s kind of an important point in a legal discussion.

                    Further, THAT change to the fundamental nature of what a patent right is – I guarantee you will be NO easy walk in the park to actually get Congress to do. Remember your history (and not my version of history, but the version that historians on the matter, who have won awards for their accuracy) and that the patent right – right from the start of this country was meant to be a fully alienable property right.

                    You are just far too glib in your thinking that Congress will “just shucks” change that into something other than property.

                    Also – this is NO matter of “construing” the AIA as you indicate. There is a clear “means” issue here and this is exactly why the Constitutional protections impinge on the laws written by Congress. They are simply NOT free to do “whatever” – in the area of patent law, which is their express domain by direct word of the Constitution.

                    As I mentioned to Malcolm, Congress could very well decide to abolish the patent system entirely. But doing such does not “carte blanche” mean that the existing property is summarily taken and destroyed.

                    There is SO MUCH more going on here than the drive by monologues will dare to address (and address in a meaningful, inte11ectually honest manner).

                  2. “They are simply NOT free to do “whatever” – in the area of patent law,”

                    should read

                    “They are simply NOT free to do “whatever” – even in the area of patent law,”

                  3. anon, why do you limit your remarks to the “start of this country?”

                    The US is a continuation of colonies which were part of Britain. Under English law, patents were property and alienable.

                  4. Ned,

                    I recognize your position on something that extends beyond the start of this country.

                    I do not go there because I do not NEED to go there (although I will not quibble with your going there).

                    However, your propensity for OVER DOING the English connection and importing TOO MUCH** is at least enough reason to stick with the start of this country.

                    ** we both know that the U.S. system is NOT a carbon copy of the English system and that there are – and are meant to be – significant differences. We need not bog down this thread with that tangent though, and we can BOTH agree that since the very start of the U.S. system, the patent right was a property right – with ALL that such entails by way of other Constitutional protections.

                  5. Quite to the contrary Ned – and also quite apart from the immediate point that we appear to agree on here** – we DO know that significant differences were meant.

                    **Let’s table that discussion, less we obscure the point that we both seem to agree on.

            1. Access to the courts (or in this case an administrative hearing) is a right. If Congress sets up a hearing system and offers it to a single person, it must justify not offering it to other people. That non-offerance requires only a rational basis, but it does require a rational basis. They can’t arbitrarily exclude people. Because Congress could not arbitrarily exclude people itself, they can’t delegate the exclusion to the director if the director is arbitrary.

              1. You do not have a right TO an administrative hearing

                – you have the right to ASK for an administrative hearing.

                Try to understand the difference.

                As I noted – the ability of anyone to ask REMAINS. There is NO exclusion of anybody asking.

          2. Random –

            How is there a deprivation of procedural due process when an Article I administrator exercises full discretion over the resolution of a public right?

            If you have an explanation, I’d like to hear it.

            J. Reyna is suggesting something very different. The CAFC would like for you to believe that you still have some constitutional skin in the game, but that ship sailed with MCM.

            1. Not following you here anony….

              I “get” that you want to play the “patent is not property” game – You have a major problem with 35 U.S. Code § 261 – along with every fiber of the history of US patent law and the well recorded historical fact of the system built to have the property right that is a patent be fully alienable – but where does this “ship sailed with MCM come in…?

              1. Well anon I agree with you – however, you are merely one anonymous blogger – the CAFC has now thrice held that the validity of an issued patent is a public right.

                Until the SCOTUS does something about it, the CAFC view remains controlling law.

                All this stuff that you see from Reyna et al about constitutional rights at the Art III level is merely smoke screen there to hide the massive skeleton in the CAFC’s closet exposed by Cooper and MCM

            2. How is there a deprivation of procedural due process when an Article I administrator exercises full discretion over the resolution of a public right?

              Any Article I power by definition cannot access full discretion, because we live in a constitutional government. All they can wield is constitutional discretion. When the government offers something to one citizen and not another they must justify the distinction. If it is not tied to a suspect class or issue, it only needs a rational basis. Now that’s such a low standard that you’d have to be st*pid to trip over it, and yet the office has managed to make just that argument. Congress can’t act arbitrarily, therefore they cannot delegate arbitrary discretion. The executive can’t act arbtitrarily either.

              Congress can, at most, grant the director the power to rationally discriminate amongst IPR requests. The only thing they can’t grant is the power to discriminate arbitrarily, and that happens to be exactly what she is asserting she has.

              1. Any Article I power by definition cannot access full discretion, because we live in a constitutional government.

                You just need to sharpen your focus just a little bit, my padawan.

              2. And let me repeat this here as well:

                There is NO limitation to anyone of any class to the ONLY right provided by the statute: the right to ask.

                Ask away.

                (I repeat this, because once you grasp this, you can then see why the focus has to be in the right place)

    2. J. Reyna’s understanding of the relevant constitutional law is an embarrassment to the judiciary.

      You’re going to make PatentBob cry with all that denigratin’ talk.

        1. I do think it’s unbecoming of a patent professional and attorney.

          LOL

          Sure you do, PB. You’re the perfect emblem of consistency on that score, too. In your own mind.

  10. I think something’s missing here, D:

    The PTO suggested in the case that estoppel would not attach to the non-instituted redundant grounds because, but that argument makes no sense.

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