One of the topics to be discussed at tomorrow’s PPAC meeting is USPTO operations following the Supreme Court’s 2021 Arthrex decision.  In Arthrex, the Supreme Court created an additional layer of review by the PTO Director in Inter Partes Review (IPR) proceedings following a PTAB final written decision.  PTO Acting Director Drew Hirshfeld has considered the first two request for Director Review, and denied both requests. (IPR2020-00081 and IPR2020-00320).  It appears that the Director personally considered both cases rather than delegating the decision back to the PTAB or another Official.  Neither decision reach the merits but rather perfunctorily state:

It is ORDERED that the request for Director review is denied; and FURTHER ORDERED that the Patent Trial and Appeal Board’s Final Written Decision in this case is the final decision of the agency.

I expect that this approach will be the standard for almost all cases going forward.

This is often couched as a patent issue, but it is really a technology transfer (knowhow) issue.

Patents are territorial (country-by-country). There are currently no issued patents in any less-developed country that would prevent people from making/using the vaccines there.
2/

— Dennis Crouch (@patentlyo) April 29, 2021

via twitter.

As expected, the Federal Circuit has announced the upcoming transition of Chief Judge from Judge Prost to Judge Moore scheduled for May 22, 2021.  Judge Prost has served as chief for seven years, and Judge Moore will begin her seven year term.  According to the court announcement, Judge Prost will continue in active service. Congratulations to the Court on a successful transition.

Earlier this year, Judge Wallach announced his upcoming move to senior status set for May 31, 2021.  President Biden has nominated Tiffany Cunningham as his replacement.

The Next Chief Judge: Judge Moore

Tiffany Cunningham: Nominee for the United States Court of Appeals for the Federal Circuit

by Dennis Crouch

Christy, Inc. v. US (Supreme Court 2021)

This is a super interesting patent-as-property case. In 2018, Christy filed a class-action lawsuit asserting that the cancellation of its patent via Inter Partes Review was taking subject to the due process requirements of the Constitution as well as the Fifth Amendment requirement of “Just Compensation.”

… nor shall private property be taken for public use, without just compensation.

Christy also argued that the payment of USPTO maintenance fees, without refund, constitutes an “illegal exaction.”   The Court of Federal Claims rejected Christy’s argument as did the Court of Appeals for the Federal Circuit.

• Christy, Inc. v. United States, 141 Fed. Cl. 641 (Ct. Fed. Clm. 2019);
• Christy, Inc. v. United States, 971 F.3d 1332 (Fed. Cir. 2020).

Now, Christy has the case up to the Supreme Court with the following two questions:

Petitioner Christy, Inc. obtained a patent after following all the steps and rules and paying all of the fees demanded of it. Upon trying to assert its property rights embodied in the patent against an accused infringer, the Government invalidated the patent during Inter Partes Review (“IPR”) initiated by the accused infringer because it had allegedly been mistakenly issued. Christy, Inc. received no compensation for its property nor return of the fees it paid. In that context, the Questions Presented are:

1) When a duly-issued patent is invalidated through a post-grant review process (such as an IPR), must compensation be paid under the Takings Clause?

2) When a duly-issued patent is invalidated through a post-grant review process (such as an IPR), should the issuance and maintenance fees that were demanded by the government by mistake be returned?

[Christy-v-USPTO_Petition4Cert].

The Federal Circuit offered a very low quality opinion on the issues here.  In particular, the Federal Circuit simply stated that it was bound by a prior decision holding that “cancellation of patent claims in [an] inter partes review cannot be a taking under the Fifth Amendment.”  The prior decision is Golden v. U.S., 955 F.3d 981 (Fed. Cir. 2020) where Larry Golden represented himself pro se. In that decision, the court also did not explain its decision but rather simply cited to another prior case, Celgene Corp. v. Peter, 931 F.3d 1342 (Fed. Cir. 2019).  In Celgene, the court likewise did not examine the issue of takings, but rather cited to its older decision of Joy Technologies, Inc. v. Manbeck, 959 F.2d 226 (Fed. Cir. 1992) and Patlex Corp. v. Mossinghoff, 758 F.2d 594 (Fed. Cir. 1985).  However, neither of these cases addressed the takings clause they focused instead on alleged violation of due process.  So, as is often the case, the trail Federal Circuit self-citation leads nowhere.

I don’t expect the patentee to prevail in this case, but that will only be based upon the Supreme Court’s rejection of its own prior statements.

A patent for an invention is as much property as a patent for land. The right rests on the same foundation and is surrounded and protected by the same sanctions. Consolidated Fruit-Jar Co. v. Wright, 94 U.S. 92, 96 (1877).

Briefing in the case will continue through the spring.

= = =

U.S. Patent No. 7,082,640

Parker v. Apple (Fed. Cir. 2020) (non-precedential order)

The Federal Circuit has dismissed Parker’s pro se appeal as frivolous.  Parker described the facts of the case as follows:

On October 29, 2018 Raevon Parkerwent to the Apple Store in the Saint Louis Galleria for a malfunction of his cellular device. The attendant in the Apple Store fixed the device but kept it by deceiving the Plaintiff knowing that it was the first phone to have new features [created by Parker himself].

The damages that the plaintiff is seeking is a trillion dollars.

Parker first sued in Missouri state court asking for $2 trillion and $900 USD as well as return of his priceless phone.  The Missouri court dismissed on the pleadings for failure to state a claim. Later, Parker refiled in Federal Court and that case was also dismissed.

You may have heard of district court’s certifying questions for appeal under 28 U.S.C. 1292(b).  In this case, the district court issued a reverse-certification — certifying that any appeal by Mr. Parker should not be taken in good faith.  Still, Parker appealed.

On appeal to the Federal Circuit, Parker made a takings claim — arguing that his 5th Amendment rights were violated by Apple — “his property was taken for public use and he had not been compensated.”  Despite widespread concern over Apple’s monopolistic practices, Apple is not the government and is not bound by the 5th Amendment takings clause or is incorporation under the 14th Amendment.  Thus, the Federal Circuit dismissed the case and denied Parker’s fee waiver petition (Proceedings in forma pauperis).  The Federal statute guiding the court’s approach to in forma pauperis proceedings indicates that the court should dismiss any case where “the action or appeal is frivolous.”  28 U.S.C. § 1915(e)(2)(B).  Following that guidance the the court has dismissed Parker’s appeal.

= = = =

I will note that the current value of Apple’s publicly traded shares is $2 billion trillion.

The USPTO has started its appeal fast-track program — “Fast-Track Appeals Pilot Program.”  The program includes a $400 cut-in-line progrea launches July 2, 2020. The required petition fee for cutting-in-line is $400. There are already a group of cases that are treated “special” for appeals, including reissues, reexaminations, and cases “made special.”  But, the USPTO Examination Track-1 cases are not currently treated as special on appeal.

The Patent Act provides a right to appeal to the PTAB once your claims have “been twice rejected” and you have “paid the fee.” 35 U.S.C. 134(a).  The fee structure is a bit unusual.  It costs $800 to file a notice-of-appeal at which point briefing begins.  Quite often examiners withdraw their rejections after seeing the patent applicant’s brief.  Once the briefing is complete the case is ready to be “forwarded” to the Board — which requires $2,240. [Current Fees]  There is also a $1300 fee if you want an oral hearing rather than having the PTAB decide your case on the briefs.

This is a good move from the PTO. A modest fee for a modest timing improvement.  The current pilot is limited to 125 per quarter for the next year. 500 total before a reevaluation.

Modest timing improvement.  The petition can be filed only after the case has been forwarded to the PTAB and the applicant has received an appeal docket number.  From that point, the current PTO timeline is about 14-15 months for an ex parte appeal.  The office is expecting that an expedited appeal will take about 6 months.

Note here that most cases are already pretty old by the time they get to an appeal. Folks have gone through a non-final rejection and a final rejection, and typically also one round of an RCE (request for continued examination) to attempt to resolve issues with the examiner. Most appealed cases are also not “original” application filings in that most claim priority to one or more earlier filed applications (US non-provisional; US provisional; PCT international application; or foreign application filing).

After the final rejection, a patent applicant has a six-month deadline for filing a notice of appeal (NOA) followed by an appeal brief within two-months of the NOA. The examiner then has two months to file a responsive brief (answer). And, that may be followed by a reply brief.  The fast-track will not impact these timelines.

Federal Register Notice: https://www.federalregister.gov/documents/2020/07/02/2020-14244/fast-track-appeals-pilot-program

USPTO Announcement: https://www.uspto.gov/about-us/news-updates/uspto-announces-fast-track-appeals-pilot-program

Guest post by Arti K. Rai, Elvin R. Latty Professor of Law and Faculty Director, The Center for Innovation Policy, at Duke Law.

Last Thursday, in Arthrex v. Smith & Nephew (Fed. Cir. 2019), a panel of the Federal Circuit held that the administrative patent judges (APJs) at the PTAB are “principal officers” who must, under the Appointments Clause of the Constitution, be appointed by the President and confirmed by the Senate.  In contrast, the current patent statute provides for APJs to be appointed by the Secretary of Commerce in consultation with the PTO Director.  The panel further determined that it could remedy the constitutional defect by severing APJ removal protections, thereby rendering them inferior officers who can be appointed by “Heads of Departments” like the Commerce Secretary.

As this post details, the panel did a careful job of addressing one of the most knotty constitutional issues raised by PTAB adjudication.  But precisely because the issue is knotty, the panel’s decision is unlikely to represent the last step in the road.  Indeed, the USPTO has already indicated that it may seek en banc review.

All parties agreed, as did the panel (citing Professor John Duffy’s prominent 2007 Patently-O paper), that APJs are officers within the meaning of the Appointments Clause.  The only question was whether APJs are principal or inferior officers.

The panel’s conclusion regarding principal officer status rested on Justice Scalia’s 1997 opinion for the Court in Edmond v. United States.  In that case, the Court held that inferior officers must be “directed and supervised at some level by others who were appointed by Presidential nomination with the advice and consent of the Senate.”

According to the panel, PTAB judges lack adequate direction and supervision for two reasons: first, “presidentially appointed officers” cannot “review, vacate, or correct decisions by the APJs”; and, second, these presidentially appointed officers (specifically the Secretary of Commerce and Director) have only “limited removal power.” Although severing APJ removal protections would not give the Director review power over individual decisions, it would, according to the panel, be sufficient to demote APJs to inferior status.

The road ahead will likely be tumultuous.  At the Supreme Court, administrative law has long been a battlefield between various flavors of formalist and functionalist reasoning about how agencies fit into the executive branch and interact with the legislative and judicial branches.  Indeed, in taking its relatively formal approach to the distinction between principal and superior officer, the Edmond Court had to distinguish the considerably less formalist opinion in Morrison v. Olson, written only 9 years earlier.  In Morrison, Justice Scalia had written a stinging dissent, castigating the majority for relying on multiple indicia of inferiority, including limited responsibility, and for not recognizing that “inferior” necessarily means subordinate. Nine years later, Justice Scalia was able to secure 8 votes for his position. (Justice Souter concurred only in part.)

The Arthrex decision also comes during a period of even greater-than-usual Supreme Court turmoil over administrative adjudication.  Most relevant for present purposes, the Court has already decided a steady stream of constitutional and nonconstitutional cases involving the PTAB.  In the most prominent of these cases, Oil States Energy Services v. Greene’s Energy Group, an ideologically diverse coalition of seven Justices ultimately concluded that administrative adjudication of granted patents survived constitutional scrutiny.  But Justice Gorsuch, joined by Chief Justice Roberts, dissented in strong terms, warning against the perils of adjudication by judges who don’t enjoy Article III protections.

Of course, as the Arthrex opinion illustrates, under more formal versions of Appointments Clause jurisprudence, decisions made by actors who are not subject to significant direction and control by a presidentially appointed official may themselves be unconstitutional.  The Supreme Court’s 2018 decision in Lucia v. SEC makes it clear that the Court’s more formalist Justices, including Justices Gorsuch and Roberts, continue to take the Appointments Clause very seriously.  In that decision, all of the Justices who tend to embrace formalism, joined by Justice Kagan, held that as a constitutional matter the administrative law judges of the SEC were officers (albeit inferior officers) who had to be appointed by the politically accountable Commission.

As commentators have discussed, the juxtaposition of Oil States and Lucia in the 2018 term illuminates potential constitutional tensions in administrative adjudication.  Some formalist academics who are particularly concerned about the tension have suggested simply removing large swaths of adjudication from the administrative state and placing it instead in Article III.

Conventional administrative law has taken a different, but still relatively formal, approach.  Conventionally, whether the judge is an administrative law judge (ALJ) (a specific type of judge who enjoys very strong protections against removal) or some other type of administrative judge, she has some level of decisional independence and protection against firing.  However, the judge’s decisions are subject to a right of review by a politically appointed agency head.

What about the patent statute? The statute gives the Director overall responsibility for USPTO “policy direction and management supervision” as well as power to promulgate regulations by which the PTAB is bound.  As for specific PTAB decisions, it provides for “rehearing” of such decisions.

Consistent with the academic literature (for example, this article I coauthored) suggesting that the rehearing mechanism be used to distill from the hundreds of PTAB opinions issued each year certain precedential opinions that bind the agency, the Director has set up an elaborate “Precedential Opinion Panel” (POP) process to rehear PTAB cases that raise important issues. The POP is selected by the Director and by default consists of the Director, the Commissioner for Patents, and the Chief Judge.

The Arthrex panel did note the Director’s general supervisory powers over the PTAB, his regulatory authority, the rehearing provision, and the POP procedure. It emphasized, however, that neither the statute nor the POP procedure explicitly provide for a right of rehearing over specific cases by the Director only.  Presumably, any functional ability the Director might have to persuade the Commissioner for Patents and the Chief Judge is insufficient.

If the Supreme Court were to take the case, what it might decide is anyone’s guess. The cleanest path forward is therefore surgical Congressional intervention that gives the Director an explicit, unilateral right of review.  This approach would cure any perceived constitutional infirmity without subjecting APJs to at-will firing.  If subordination is the key to inferior status, then both formalists and functionalists might agree that, for adjudication, subordination through transparent and reasoned review of the adjudicator works better than subordination through firing.

by Dennis Crouch

We have a more complete post coming on Monday, but wanted to highlight Arthrex v. Smith & Nephew (Fed. Cir. 2019). In Arthrex, the Federal Circuit held that the PTAB Judge (APJ) appointments process “violates the Appointments Clause, U.S. Const., art. II, § 2, cl. 2.”  In particular, the court held that APJs are “principal officers” and thus require appointment by the President rather than merely the Secretary of Commerce.  The court cited and relied upon Prof. John Duffy’s paper that started this whole process: John F. Duffy, Are Administrative Patent Judges Constitutional?, 2007 Patently–O Patent L.J. 21, 25 (2007) (concluding that administrative patent judges are officers as opposed to mere employees).

In the case, the court also provided a remedy — invalidating a portion of the statute that limited the PTO’s ability to remove APJs from the board. By making removal easier, the PTAB Judges are then re-classified as inferior officers — and thus were properly appointed.

[Decision]

by John M. Golden, Professor in Law at the University of Texas School of Law 

As noted in a Patently-O post of September 18, in Facebook, Inc. v. Windy City Innovations, LLC, Nos. 2018-1400 et al. (Fed. Cir. Aug. 12, 2019), the U.S. Court of Appeals for the Federal Circuit requested supplemental briefing on the extent to which it should give deference to the precedential interpretation of a Patent Act joinder provision that the Precedential Opinion Panel (“POP”) of the Patent Trial and Appeal Board (PTAB) adopted in Proppant Express Investments, LLC v. Oren Technologies, LLC, IPR2018-00914 (P.T.A.B. Mar. 13, 2019).  As explained in the earlier post, in Proppant, the POP interpreted the language of 35 U.S.C. § 315(c), which permits the Patent and Trademark Office (PTO) Director, in instituting an inter partes review (IPR), to “join as a party to that inter partes review any person who properly files a petition under section 311 that the Director … determines warrants the institution of an inter partes review under section 314.”  This post is not concerned with the substance of the POP’s interpretation but instead the different ways in which the Federal Circuit might resolve or avoid the deference question, which could determine more generally (i.e., in cases involving interpretation of other provisions of the Patent Act) the extent to which the Federal Circuit gives deference to statutory interpretations of the POP.  The deference question is relatively easily stated, but arguments about it can become intricate.

For starters, there are two basic forms of deference that the Federal Circuit might apply to the POP’s precedential interpretation.  First, the court may determine that the Chevron deference framework applies.  See generally Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).  Under United States v. Mead Corp., 533 U.S. 218 (2001), the Chevron deference framework applies if two threshold conditions are met: (a) Congress delegated to an agency relevant authority “to make rules carrying the force of law” in relation to a statutory scheme and (b) “the agency interpretation claiming deference was promulgated in the exercise of that authority.”  Id. at 226–27; see also Gonzales v. Oregon, 546 U.S. 243, 258–59 (2006).   If the Chevron deference framework applies, the court is to defer to the agency’s interpretation of the statute if two further conditions are met: (1) the statute is ambiguous after all the traditional tools for statutory interpretation are brought to bear and (2) the agency’s interpretation is reasonable.  See, e.g., Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2142 (2016); Horvath v. United States, 896 F.3d 1317, 1321 (Fed. Cir. 2018).   The court’s assessment of whether the statute is ambiguous is often described as Chevron Step One analysis, and the court’s assessment of whether the agency’s interpretation is reasonable in light of any found ambiguity is often described as Chevron Step Two analysis.  Finally, even if the court determines that the threshold conditions for the Chevron deference framework—sometimes characterized collectively as “Chevron Step Zero,” see, e.g., Cass R. Sunstein, Chevron Step Zero, 92 Va. L. Rev. 187, 191 (2006)—are not satisfied, the court should consider giving substantial, albeit presumably less decisive, weight to the agency’s statutory interpretation in accordance with Skidmore v. Swift & Co., 323 U.S. 134 (1944); see also Mead, 533 U.S. at 234 (“Chevron did nothing to eliminate Skidmore’s holding that an agency’s interpretation may merit some deference whatever its form ….”).

In light of the Chevron and Skidmore frameworks, the Federal Circuit could resolve its deference question in any of various ways:

• The court could duck the question of what deference framework applies by determining that its holding on statutory interpretation will be the same regardless of any potentially applicable deference or lack thereof. For example, the court could conclude that, even without giving any weight to the POP’s statutory interpretation, the Court agrees with and therefore upholds that interpretation.  Alternatively, the court could duck the deference-framework question by (a) assuming that the Chevron framework applies (i.e., that Chevron Step Zero is fully satisfied) but (b) determining that the POP’s interpretation nonetheless must be overridden because that interpretation is contrary to unambiguous statutory language (failure at Chevron Step One) or otherwise unreasonable (failure at Chevron Step Two).  Because Skidmore deference is generally understood to be weaker than Chevron deference, the court could conclude that the POP’s interpretation likewise fails any potentially applicable deference under Skidmore.  Such a decision would resolve the statutory-interpretation question at issue but would leave unanswered questions about the degree of deference, if any, that the POP’s interpretations of the Patent Act might more generally warrant.
• The court could determine that the POP’s precedential statutory interpretation satisfies Chevron Step Zero and thus that the Chevron deference framework applies to the court’s review. The United States argues for such a ruling in its amicus curiae brief and further contends that the POP’s statutory interpretation should be upheld under Chevron because it “is not foreclosed by the text and is ‘reasonable in light of the text, nature, and purposes of the statute’ ” Brief for the United States as Amicus Curiae 11–12 [hereinafter “U.S. Brief”] (quoting Cuozzo, 136 S. Ct. at 2142).  Even after determining that the Chevron deference framework applies, however, the Federal Circuit could rule against the POP’s statutory interpretation if the court finds this interpretation to be clearly contrary to the statutory language or an unreasonable reading of ambiguous statutory language (i.e., not within a set of alternative interpretations that the ambiguous language reasonably permits).  Moreover, the Federal Circuit might limit a holding that the POP’s precedential statutory interpretations may satisfy Chevron Step Zero to apply only for interpretations resolving questions that fall within the ambit of express statutory grants of PTO rulemaking authority.  See 35 U.S.C. § 316(a)(4) (“The Director shall prescribe regulations . . . establishing and governing inter partes review. . .”); see also id. §§ 2(b)(2)(A) (“The Office … may establish regulations, not inconsistent with law, which … shall govern the conduct of proceedings in the Office”).  By disclaiming an effort to claim Chevron deference for “the POP’s interpretations of patentability provisions of the Patent Act,” U.S. Brief, supra, at 5 n.2, the Government appears to seek only such a limited holding on Chevron Step Zero.
• The court could determine that the POP’s precedential statutory interpretation does not satisfy Chevron Step Zero. The court would then need to determine how much weight to give the POP’s interpretation in accordance with Skidmore as well as what interpretation of the statute ultimately controls.  See Mead, 533 U.S. at 234 (“Chevron did nothing to eliminate Skidmore’s holding that an agency’s interpretation may merit some deference whatever its form ….”); Merck & Co. v. Kessler, 80 F.3d 1543, 1550 (Fed. Cir. 1996).  The significance of Skidmore deference is sometimes questioned, but Yoav Dotan discusses in a forthcoming article how Skidmore deference may be viewed as a form of deference that is distinct from that of Chevron but still meaningful, Yoav Dotan, Two Concepts of Deference, 71 Admin. L. Rev. (forthcoming 2020); John M. Golden, The USPTO’s Soft Power: Who Needs Chevron Deference?, 66 SMU L. Rev. 541, 549 (2013).

The Federal Circuit’s rulings in Facebook can have significance extending substantially beyond its particular joinder question if the court goes down either routes (2) or (3)—i.e., if the court resolves the question of whether, at least under circumstances like those in Proppant, the POP’s statutory interpretation satisfies Chevron Step Zero.  Various Federal Circuit judges opined on related questions in Aqua Products, Inc. v. Matal, 872 F.3d 1290 (Fed. Cir. 2017) (en banc).  For example, Judge Moore wrote an opinion, joined by Judges Newman and O’Malley, that explicitly contended that, “where Congress has delegated authority to ‘prescribe regulations,’ ” an agency must generally engage in “regulation” in order to exercise Chevron-level interpretive authority.  Id. at 1330–31 (Moore, J.); see also id. at 1316–22 (O’Malley, J.) (indicating a similar view).  By “regulation,” Judge Moore apparently meant a rulemaking process conducted separately from adjudication, rather than the issuance of precedential holdings in adjudication.  See id. at 1331 (Moore, J.).

The United States’ brief rejects the notion that a specific statutory authorization to issue “regulations” implicitly precludes an agency from “issu[ing] binding [statutory] interpretations through other mechanisms Congress also provided”—in this case, PTAB adjudication.  U.S. Brief, supra, at 8.  In support of this position, the Government invokes a principle that agencies generally have a choice of policymaking mode—a principle with long-standing resonance in U.S. administrative law, see, e.g., Peter L. Strauss et al., Gellhorn and Byse’s Administrative Law: Cases and Comments 385 (11th ed. 2011).  U.S. Brief, supra, at 8–11 & n.4.  Alternatively, the United States’ brief might have sought to distinguish Judge Moore’s position in Aqua Products on the narrower ground that this position primarily contemplated substantive “standards,” not “rules on procedure,” which the opinion explicitly noted “are exempt from the notice-and-comment rulemaking requirements of § 553,” 872 F.3d at 1331–32 & n.4.  Perhaps the United States declined to rely on this distinction because the Government wishes to avoid having deference questions turn on sometimes tricky classifications of substance and procedure.  Joinder rules, for example, might on their face seem fundamentally procedural, cf. Luxliner P.L. Export, Co. v. RDI/Luxliner, Inc., 13 F.3d 69, 71–72 (3d Cir. 1993), but there might be an argument that the IPR joinder provision’s relationship with the statutory time bar for IPR petitions under 35 U.S.C. § 315(b) muddles its status, cf. Joseph v. Athanasopoulos, 648 F.3d 58, 65 (2d Cir. 2011) (quoting the New York Court of Appeals’ statement that “the impact of the Statute of Limitations, though often denominated as procedural, in a practical sense may also be said to be substantive,” Smith v. Russell Sage Coll., 429 N.E.2d 746, 750 (N.Y. 1981)).

In any event, given the background principle invoked by the United States, I tend to agree with Judge Hughes’ opinion in Aqua Products that Judge Moore’s opinion relied too much on the Patent Act’s specific use of the word “regulations” in expressly providing for PTO rulemaking.  See Aqua Products, 872 F.3d at 1364–67 (Hughes, J., dissenting).  The amicus curiae brief from David Boundy shows a way that Judge Moore’s position might be fortified, at least in principle, by reference to such language’s broader statutory context.  Although the Patent Act gives the Director power to act through rulemaking, the Patent Act generally assigns adjudication of proceedings such as IPRs to the PTAB.  See 35 U.S.C. § 6(b)(4); see also id. § 316(c).  Moreover, although the PTO Director can sit as a member of a multi-member PTAB panel such as the POP, the PTAB’s final decisions in such proceedings are not subject to reversal by the Director acting alone, see John M. Golden, Working Without Chevron: The PTO as Prime Mover, 65 Duke L.J. 1657, 1680 (2016), and the PTAB therefore appears to be something other than “a mere alter ego” of the Director, John M. Golden, PTO Panel Stacking: Unblessed by the Federal Circuit and Likely Unlawful, 104 Iowa L. Rev. 2447, 2454 (2019); see also id. at 2456.  Consistent with this apparent separation between the Director and the PTAB, Boundy’s brief suggests that the PTAB should be treated as an adjudicative entity that does not share in any Chevron-level interpretive authority that Congress delegated to the Director.  Brief of Amicus Curiae David E. Boundy, in Support of Neither Party 1–3 [hereinafter “Boundy Brief”]; cf. Martin v. Occupational Safety & Health Rev. Comm’n, 499 U.S. 144, 154 (1991) (stating that, with respect to “traditional agencies—that is, agencies possessing a unitary structure—the Court had “concluded that agency adjudication is a generally permissible mode of lawmaking and policymaking only because the unitary agencies in question also had been delegated the power to make law and policy through rulemaking” (emphasis in original)).

In the context of Facebook, however, there appears to be a problem for Boundy’s invocation of a lack of “consolidated rulemaking and adjudicatory authority,” Boundy Brief, supra, at 5.  Specifically, in contrast to the generality of decisions in an IPR that occur after institution, the Patent Act expressly assigns to the Director the authority to decide on IPR institution and joinder.  See 35 U.S.C.  §§ 314–15.  In combination with the Director’s express power to issue regulations, this original assignment to the Director of case-by-case determination of institution and joinder issues indicates that, from the statutory standpoint, there is “consolidated rulemaking and adjudicatory authority” over these issues.  In deciding institution and joinder issues, the PTAB’s POP apparently exercises authority delegated downward to it by the Director, rather than laterally vested in the PTAB by Congress directly.  Thus, in deciding questions of institution and joinder, the PTAB generally and the POP specifically might be viewed as acting in a manner relatively analogous to that of an adjudicatory body within a more traditionally unitary agency structure—for example, the Board of Immigration Appeals (BIA), an adjudicative body that decides matters based on authority delegated to it by the Attorney General and whose decisions, the Supreme Court has held, may merit Chevron deference.  See Golden, Working Without Chevron, supra, at 1687–89.  In short, even if the Federal Circuit is impressed by the consolidated-authority point, it might still find that the statutory interpretation in Proppant satisfies Chevron Step Zero but at the same time limit the significance of this finding by holding only that the POP’s precedential statutory interpretations are eligible for Chevron deference when those interpretations involve an issue with respect to which the Patent Act has vested both relevant rulemaking and relevant case-by-case decision-making authority in the Director—perhaps, in some circumstances, through an express grant of power to “[t]he Office,” 35 U.S.C. § 2(b)(2), whose “powers and duties” are in turn “vested in” the Director, id. § 3(a)(1).

The intricacies of the above arguments suggest that the Federal Circuit could do the patent community a substantial service by engaging with the question of what deference framework applies to a POP statutory interpretation such as that in Proppant—i.e., by pursuing path (2) or (3) in the three bullets above.  Of course, if the Federal Circuit does answer such a question of general significance, that could increase Supreme Court interest in reviewing the decision.  Several Justices have already signaled interest in reconsidering the reach and validity of the Chevron deference framework.  This past June, five Justices went out of their way to indicate a belief that the framework’s validity is an open question.  See Kisor v. Wilkie, 139 S. Ct. 2400, 2425 (2019) (Roberts, C.J., concurring in part); id. at 2446 n.114 (Gorsuch, J., concurring in the judgment); id. at 2449 (Kavanaugh, J., concurring in the judgment).  Could Facebook be yet another patent case taken up by the Supreme Court?