[UPdate] Dr. Andrew Williams at PatentDocs does a great job discussing the oral arguments in his post titled “Of Patent Trolls and Hot Dog Stands.”

In the following essay, Dr. David Longo discusses the PTAB’s indefiniteness decision in Ex parte McAward. The decision is important because it was recently made precedential by the Board. – DC

Guest Post by David M. Longo[i]

We have a statutory provision that requires “one or more claims particularly pointing out and distinctly claiming the subject matter” regarded as the invention.  35 U.S.C. § 112(b) (pre-AIA § 112, ¶2).  But how do we determine what constitutes “particularly pointing out and distinctly claiming”?  And how do we apply it consistently, regardless of whether we are in the midst of patent prosecution, litigation, or in one of the post-grant proceedings established under the AIA?  Unfortunately, the answers are not clear.

We typically refer to § 112(b) as constituting the “definiteness requirement,” the “definiteness command,” or the “definiteness standard.”  See Nautilus, Inc. v. Biosig Instruments, Inc., 134 S.Ct. 2120, 2128-2130 (U.S. 2014).  And, we refer to a claim that does not satisfy § 112(b) as being “indefinite” or “invalid for indefiniteness.”  See Interval Licensing, LLC v. AOL, Inc., 766 F.3d 1364, 1369-1372 (Fed. Cir., 2014).  However, as Judge Plager explained in his concurring opinion in In re Packard, “as a matter of legal terminology there is, under current law, no statutory reference to a definiteness requirement, nor a statutory provision that invalidates a patent or a patent claim for “indefiniteness”,” whether under § 112 or its predecessor, 35 U.S.C. § 33.  In re Packard, 751 F.3d 1307, 1319 (Fed. Cir., 2014).  Rather, the concept of definiteness/indefiniteness is a “judicially crafted law … regarding the standard for clarity of claims in an issued patent” in view of “the overriding policy considerations that claims must unambiguously define any invention over the prior art, and provide notice to the public….” Id., 751 F.3d at 1307, citing to Brooks v. Fiske, 56 U.S. 212 (U.S. 1853).

Before we can assess the “definiteness” of a claim, we must first attempt to interpret/construe the claim language.  Over time, more than one approach emerged for doing so, depending on whether the claims at issue were under examination or whether they were already patented.

On the one hand, the USPTO’s approach is that “[d]uring patent examination, the pending claims must be “given their broadest reasonable interpretation [“BRI”] consistent with the specification”” as they would be interpreted by a person of ordinary skill in the art.  M.P.E.P. § 2111 (emphasis added), citing to Phillips v. AWH Corp., 415 F.3d 1303, 1316 (Fed. Cir. 2005, en banc).  BRI also applies to unexpired patent claims in an inter partes review (IPR) proceeding (affirmed by the U.S. Supreme Court in Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131 (U.S. 2016)), and in a post-grant review (PGR) proceeding (although this issue is being appealed to the Federal Circuit in Tinnus Enterprises, LLC v. Telebrands Corp., Appeal No. 2017-1726).

On the other hand, in litigation, “the basic principles of claim construction” provide “that the ordinary and customary meaning of a claim term is the meaning that the term would have to a person of ordinary skill in the art in question at the time of the invention….”  In re Packard, 751 F.3d at 1317, quoting from Phillips v. AWH Corp., 415 F.3d 1303, 1312–13 (Fed. Cir. 2005, en banc).

So, “[c]laim definiteness is intertwined with claim construction, and the broadest-reasonable-interpretation (BRI) standard used by the USPTO differs from the Phillips claim construction standard used during patent litigation in the federal courts.”  Tinnus Enterprises, LLC v. Telebrands Corp., Appeal No. 2017-1726, USPTO Brief at p. 13.  [TinnusTelebrandsPTOBrief] According to the USPTO, the U.S. Supreme Court approved of the difference in standards used:  “we cannot find unreasonable the Patent Office’s decision to prefer a degree of inconsistency in the standards used between the courts and the agency, rather than among agency proceedings.”  Cuozzo, 136 S. Ct. at 2146.

After interpreting/construing the claim language, the USPTO’s approach to assessing “definiteness” “requires a determination of whether those skilled in the art would understand what is claimed when the claim is read in light of the specification.”  M.P.E.P. § 2173.02.  “The essential inquiry pertaining to this requirement is whether the claims set out and circumscribe a particular subject matter with a reasonable degree of clarity and particularity.”  Id., § 2173.02(II).  The USPTO acknowledges that making such a determination after applying a BRI “may effectively result in a lower threshold for ambiguity than a court’s determination.”  Id., § 2173.02(I), citing to In re Packard, 751 F.3d at 1323-24.  The USPTO reasons that “[t]he lower threshold is … applied because the patent record is in development and not fixed during examination, and the agency does not rely on it for interpreting claims.”  Id., § 2173.02(I), citing to In re Packard, 751 F.3d at 1325 (Plager’s concurrence).

In contrast, a court’s approach to assessing “definiteness” in litigation “require[s] that a patent’s claims, viewed in light of the specification and prosecution history, inform those skilled in the art about the scope of the invention with reasonable certainty.”  Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120, 2129 (U.S. 2014) (emphasis added).  Here, the court may avail itself of the benefit of a completed and fixed prosecution history.

Note that both approaches have the word “reasonable” in common.  It appears, though, that the concept of what is considered “reasonable” is expanding as a function of time—along with the rest of the universe but without knowledge of a patent-equivalent to the Hubble constant.  We sense this expansion, and it gives us agita as we attempt to make sense of seemingly conflicting guidance from the USPTO, the Federal Circuit, and the U.S. Supreme Court.

Perhaps being sensitive to our collective anxiety, the USPTO went to great lengths to explain its approach in sustaining an indefiniteness rejection under § 112, ¶ 2 (pre-AIA) in Ex parte McAward (Appeal No. 2015-006416, Aug. 25, 2017, precedential).  (Four days later, in its brief intervening in Tinnus, the USPTO went to similar lengths to argue that its approach is also ideally suited for assessing indefiniteness during PGR.)  Or, perhaps it viewed the facts of Ex parte McAward as a textbook example of why the USPTO’s “lower threshold for ambiguity” is ideally suited for assessing whether claims “set out and circumscribe a particular subject matter with a reasonable degree of clarity and particularity” during the examination process.  M.P.E.P. § 2173.02(II).

In Ex parte McAward, the USPTO acknowledged that the BRI “standard differs from the claim interpretation standard used during patent litigation….”  Ex parte McAward, p. 7.  According to the PTAB, this is of no consequence, because the distinction was condoned in Cuozzo, and because “[i]t would be inconsistent with the role assigned to the [USPTO] in issuing a patent to require it to interpret claims in the same manner as judges who, post-issuance, operate under the assumption the patent is valid.”  Id., at 7-8 (internal citation omitted).  According to the USPTO, when BRI is applied in the interactive environment of prosecution to resolve ambiguities, it “naturally results in an approach to resolving questions of compliance with§ 112 that fundamentally differs from a court’s approach to indefiniteness.”  Id., at 8 (emphasis in original).

The USPTO’s main point in Ex parte McAward is essentially that the “different approaches to indefiniteness before the [USPTO] and the courts stem not from divergent interpretations of § 112, but from the distinct roles that the [USPTO] and the courts play in the patent system.”  Id. (emphasis added).  In McAward, the Board asserted that its “lower threshold” approach to claim interpretation during examination “makes good sense,” precisely because “an applicant may freely amend claims” in response to broadly interpreted claims.  Id., citing to Plager’s concurrence in In re Packard, 751 F.3d at 1325.  The Board contrasted this with a court’s approach in litigation, where there is presumption of validity, “simple amendments are impossible, the full prosecution record is available, and courts endeavor to adopt saving constructions.”  Id., at 9, citing to In re Swanson, 540 F.3d 1368, 1377-78 (Fed. Cir. 2008).

Extending this to “definiteness,” the Board acknowledged that “reasonable certainty” governs the “definiteness command” of § 112(b) for claims in issued patents.  Id., citing to Nautilus, 134 S.Ct. 2120, 2129.  But the Board asserted that Nautilus does not “mandate a change in the [USPTO]’s approach to indefiniteness in patent-examination matters in which … claims are interpreted under the broadest reasonable interpretation standard and an opportunity to amend the claims is afforded.”  Id., citing to Plager’s concurrence in In re Packard, 751 F.3d at 1323-1324.  According to the Board, the USPTO is also “justified in using a lower threshold for indefiniteness.”  Id., at 10, quoting the USPTO’s Brief as Amicus Curiae Supporting Respondent in Nautilus.  And, a court “should be particularly loath to disturb the settled distinction that the [USPTO] and the courts have recognized between the pre-and post-issuance contexts….”  Id. at 11 (internal citation omitted).

The Board then applied “the approach for assessing indefiniteness approved by the Federal Circuit in Packard, i.e., [a] claim is indefinite when it contains words or phrases whose meaning is unclear”  Id. (internal citations omitted).  Absent a “satisfactory response” from the applicant, “the USPTO can properly reject [a] claim as failing to meet the statutory requirements of § 112(b)” when “the language in a claim is ambiguous, vague, incoherent, opaque, or otherwise unclear in describing and defining the claimed invention….”  Id. (internal citations omitted).  According to the Board, § 112 requires “that claims be written in clear and unambiguous terms,” which “necessarily invokes some standard of reasonable precision in the use of language in the context of the circumstances.”  Id., at 12, citing to In re Packard, 751 F.3d at 1313 (emphasis added).

The Board considered the claims in Ex parte McAward within this framework.  The claim language at issue in the § 112 ¶2 (pre-AIA) rejection was “wherein the water detector is configured to be reliably installed by an untrained installer or a homeowner and to not require the services of a plumber or electrician to perform installation, thereby permitting widespread and cost effective adoption.”  The Board rightly called this claim language “unusual,” in that the claim does not further define the water detector’s structure or function, and instead “attempts to further define the water detector’s structure by the skill level required to install the water detector.”  Id.  The Board determined that the claim language “fails to provide adequate clarity to the required structure because the skill level of “an untrained installer or a homeowner” is ambiguous and vague, and thus, the meaning of a structure configured to be “reliably installed” by such an installer is unclear.”  Id.

It is worth mentioning that the applicant added this recitation and others by amendment in an attempt to overcome two separate anticipation rejections under 35 U.S.C. § 102(b), and a § 103(a) rejection.  The amendment language initially also included a requirement that the “plumber” be a “licensed professional plumber,” and that the “electrician” be a “licensed electrician.”  The applicant argued that the prior art reference “does not disclose the context” of the amended feature, and that it “does not do the same or any similar thing as that of the claimed invention.”  Applicant’s Amendment of Mar. 14, 2014, p. 7.  Of course, the Examiner responded with a 35 U.S.C. § 112 ¶2 rejection, asserting that the

limitation is unclear and indefinite since the claim language does not provide any structure to the apparatus or system that would allow it to be “configured” to function as described in the claims; as such one having ordinary skill in the art cannot determine the metes and bounds of the claimed subject matter.  Furthermore the limitations of “to not require the services of a licensed professional” can potentially be in violation of a region’s building and electrical codes and laws depending where the claimed invention could be potentially used.  The examiner suggests deleting these limitations since it does not appear to add patentable weight to the claim language other than explain that the device or system can be “easily installed”.  Office Action of May 30, 2014, pp. 3-4.

The Examiner’s rejection closely tracked the guidance in M.P.E.P. § 2173.02(II) and (III).  Yet there were several rounds of prosecution before the Appeal.  It is worth noting that an Examiner interview likely could have helped to clarify each side’s position early in the process and perhaps avoided some of the problems in this case.  See M.P.E.P. § 2173.02(III)(D), encouraging Examiners to initiate an interview to discuss BRI and definiteness, “potentially eliminating the need for the examiner to resort to making a rejection under [§] 112(b).”

On Appeal, the Board rejected the applicant’s argument that “the claims are directed to the simple, straightforward concept of a ‘do-it-yourself’ device installed by an amateur,” because the Specification did not “provide support for this definition.”  Ex parte McAward at 12-13.  Such a distinction “is insufficient to provide clarity to the claim language [requiring] the water detector to be configured to be “reliably installed” by the [homeowner].  A person having ordinary skill in the art would appreciate that a “homeowner” can encompass a wide range of people of all skill levels.  As such, the claim suffers from general vagueness and ambiguity.”  Id. at 13.  Even assuming the applicant’s “proffered understanding to be correct, the claim language of the “configured” limitation, when read in light of the Specification, fails to further clearly define the structure encompassed by the limitation.”  Id.  Therefore, because the applicant “failed to provide a satisfactory response that apprises us of error in the Examiner’s rejection,” the Board sustained the § 112 ¶2 rejection of the claims as being indefinite.  Id. at 15-16.

Lower threshold or not, I do not think that many would argue that the Board demanded unreasonable precision in its approach to the indefiniteness analysis in this case.  Such a clear case makes it easy for us to nod in agreement with the outcome.  It also makes it easy for the Board to argue that this case is a perfect example of why the USPTO’s “lower threshold for ambiguity” is ideally suited for assessing whether claims “set out and circumscribe a particular subject matter with a reasonable degree of clarity and particularity” during the examination process.  M.P.E.P. § 2173.02(II).  But it does not bring us any closer to addressing the perceived expansion of what is considered “reasonable” regarding “broadest reasonable interpretation,” “reasonable degree of clarity and particularity,” “reasonable certainty,” and “reasonable precision.”  Without some patent-equivalent to the Hubble constant, we continue to live with our agita.

= = = = =

[i]  David M. Longo is a partner at Oblon McClelland Maier & Neustadt LLP.  This post represents the thoughts and opinions of the author alone and not those of his firm.  It is intended to convey general information only and should not be construed as a legal opinion or as legal advice.

The Federal Circuit will very soon return to its full-strength of 12 circuit court judges.  The Senate has confirmed Kara Stoll’s nomination as the next Circuit Judge for the Court of Appeals for the Federal Circuit with a 95-0 vote.  Ms. Stoll will likely be sworn-in within the next few days. Congratulations!

Stoll has a serious patent-law resume, holding a BSEE from Michigan State and a JD from Georgetown earned while working as a patent examiner.  After law school she clerked at the Federal Circuit and then joined the Finnegan Henderson firm where she has worked since 1998. Of late, her practice has primarily focused on patent litigation.

Counting Ms. Stoll, the Court boasts seven Judges appointed by President Obama (a majority).   It will be interesting to watch Stoll’s jurisprudence develop. Her background has many parallels to Judge Chen, although her PTO experience was at the very beginning of her career while he joined the PTO as a fairly senior leader.

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?

Recurring Patently-O contributor Ned Heller has filed his brief in support of petitioners in the Oil States case. Heller represented MCM v. HP in its parallel bid for consideration of the Article III issues.  [16-712 tsac Brief][Filed on behalf of Alliacence where Heller is Counsel]

The basic argument is historic — Inventors had a right to a trial by jury prior to 1791; those rights were guaranteed by the Seventh Amendment of the US Constitution; and Congress cannot now eliminate those established rights.

Heller reflects upon the remedy of scire facias that was at times commenced in the Chancery court.  As the law historians brief reflects, in this particular, the Chancery action operated as a common law court (rather than a court of equity) — “the Chancellor at all times was acting with his ordinary, common law powers, not his extraordinary, equitable powers.”  Thus, a scire facias action is also subject to the right of Jury Trial.

Because Inter Partes Review is effectively scire facias, it is improper without a jury trial.

[IPR] provides the same remedy, revocation, and the same grounds, invalidity as do scire facias, albeit, limited only to the claims challenged. Both are contested proceedings. Both begin with a petition by an interested party to the government. The common law proceeding was pursued in the name of the King, but the real party in interest was the petitioner who had to post a very large bond to pay the attorney’s fees of the patent owner.

Because IPR does not provide a jury trial, the statute authorizing IPR is unconstitutional.

Heller’s brief delves into the “public rights” debate and argues that argument is a red herring.  Regardless of the statutory basis of patent rights, a contested revocation proceeding has a right to a jury trial because it had such a right at common law in England in 1791.

Heller does offers an upper-cut to the Government’s argument at the petition stage:

Because they were filed in Chancery, the government has argued that the actions were equitable (apparently not even knowing that Chancery had a law side) thereby providing no basis for a Seventh Amendment right.

The law historians brief along with Heller’s brief here begin to nail down this historical point. “[E]quity could not and did not revoke patents for invalidity since an adequate remedy at law was available.”

Regarding the privy council’s ability to cancel patents without jury trial. Heller argues that longstanding political battle between the king and courts effectively ended in the 1750’s – in favor of a common law courts. However, in 1779, the Privy Council did cancel one last patent – this one on National Security grounds. (England needed the patented cannons to conduct war against the American colonies).

More amicus briefs in this important case are expected this week.

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A key point in the briefs so far is that IPR is substantially parallel to litigation.  However, in the very recent Cuozzo decision, the Supreme Court held that in “significant respects, inter partes review is less like a judicial proceeding and more like a specialized agency proceeding.”  An upcoming amicus would do well to address this point.