Does the PTO have a Right to Intervene in IPR Appeals?

Knowles Electronics v. Matal (Fed. Cir. 2017)

In an interesting sua sponte order, the Federal Circuit has demanded briefing on whether the USPTO has the right to intervene in an appeal from an inter partes reexamination decision by the Patent Trial and Appeal Board (PTAB).

Analog Devices filed for the inter partes review against Knowles’ U.S. Patent No. 8,018,049 covering a Silicon Condenser Microphone Package.  The PTAB agreed with the challenge and found a substantial number of the claims unpatentable.

The setup here is that the patentee is appealing the PTAB unpatentability decision, but Analog has dropped its case.  As such, the PTO has stepped-in as an intervenor in the case.  The Federal Circuit then asks:

When the prevailing party in an inter partes reexamination proceeding before the USPTO’s Patent Trial and Appeal Board (“Board”) declines to appear before this court to defend the decision below, is the USPTO’s Director required to possess Article III standing in order to intervene?

If yes, does the Director possess such standing in this appeal?

Additionally, if the Director does in fact possess standing; must the Director defend the Board’s decision? Alternatively, what are the ramifications if the Director declines to defend the Board’s decision?

Although the case here focuses on the vestige inter partes reexamination system, it has obvious and direct implications for the replacement inter parties reviews.

[Order: KnowlesOrder]

Dennis Crouch

About Dennis Crouch

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

77 thoughts on “Does the PTO have a Right to Intervene in IPR Appeals?

  1. This one has been bothering me for a coupla weeks. It just dawned on me why..

    Perhaps a better title would have been:

    If ya like it, then ya shoulda took a license on it

  2. MM will be glad to know that the STRONG PATENTS act is unlikely to get passed. Anon and Gene less so.

    link to law360.com

    1. Behind a paywall – no way to tell what the article actually says.

      Nonetheless, the electronic frontier foundation (for example) has been actively proselytizing “how bad” this bill is “for innovation.”

      By that of course, they mean how bad this would be for the Infringers’ Rights groups that are known to be anti-patent.

      1. It’s basically a wish list of your wildest dreams re IPRs and injunctions etc.

        1. I am familiar with the bill, 6.

          I am not familiar with the particular view as to why that bill “is unlikely to get passed

          1. Just standard stuff, busy congress, last one took 8yrs to pass etc. etc.

            1. Thanks 6.

              I was wondering if there were any (finally) substantive points against the bill.

              All that I have seen is the mealy propaganda blatherings that reflect a desire to simply not have a strong patent system.

              I have seen zero meaningful points as to why a strong patent system is a bad thing.

              The way that you phrased “unlikely to get passed” made me think that I might finally see a counterpoint worth discussing.

    2. “What they’re really trying to do away with is having conflicting validity determinations or parallel validity determinations,” Bowser said.

      LOL Nobody believes that, Bowser. Not even you. The point is to eliminate all the advantages of PTAB for the purpose of making it harder to tank all the junk patents that are getting tanked now (or which aren’t reaping enough windfalls for their owners).

      a more strict standing requirement by requiring that a challenger or a related entity either be sued for infringement or be threatened with a lawsuit.

      LOL

      the act would also make it easier to get an injunction in district court, re-establishing a presumption of injunctive relief when a patent is found valid and infringed. This would, in effect, overturn the Supreme Court’s 2006 decision in eBay Inc. v. MercExchange LLC.

      ROTFMLAO

      Because rich patent tr0lls don’t have enough money! And they make the world go around. They told us so! And they’re very very serious people. Totally not script-reciting frauds who really should be spending their time scraping gum off the shoes of ethically superior attorneys (e.g., ambulance chasers).

      the Biotechnology Innovation Association publicly expressing support.

      Most patent attorneys don’t go near these half-@ssed associations with a ten foot pole. They’re filled with c r e e ps.

      The Electronic Frontier Foundation, a nonprofit digital rights group, said the bill has “many terrible ideas.” A headline in technology blog TechDirt read, “Could You Design A Worse Patent Reform Bill Than The STRONGER Patent Act By Senator Coons? Don’t Think So.”

      LOLOLOLOLOLOLOLOLOLOLOLOL

      Please name the simpleton patent attorneys who wrote this dreck. Does this also include the ridiculous “revision” to 101 that is never going to pass?

      1. MM, “Does this also include the ridiculous “revision” to 101 that is never going to pass?”

        No.

        MM, “The point is to eliminate all the advantages of PTAB for the purpose of making it harder to tank all the junk patents that are getting tanked now (or which aren’t reaping enough windfalls for their owners).”

        Gotta love a rigged system.

        1. Gotta love a rigged system.

          We know that you do, Ned.

          What’s the matter? A tax break paid for by the dying poor who can’t afford health insurance isn’t enough for you?

          Maybe we need to shoot a few Muslims in the head, just to keep ’em guessing. What do you think? Would you sleep a little better at night?

          1. MM, when your neighbor get sick and cannot afford his medical bills, does he have a right to take what he needs from you that he might recover?

  3. Judges Newman and Clevenger also were on a panel last year that sua sponte requested briefing on a third-party petitioner’s standing to defend an IPR judgment on appeal. Personal Audio v. EFF was argued last August and remains pending so far as I’m aware.

  4. 35 U.S.C. 142: .. “The Director shall have the right to intervene in an appeal from a decision entered by the Patent Trial and Appeal Board in a derivation proceeding under section 135 or in an inter partes or post-grant review under chapter 31 or 32.” ,

    1. Paul, you do understand the distinction between procedural rights and legal rights?

      1. Ned,

        I see what you want to drive at here.

        Nonetheless, what you want to drive at STILL needs to tie back into the points that I have put to you, points you still have not addressed.

        1. I did address them, anon, in response to the post where you made them. Perhaps the response is being held up in the filter like 80% of my other responses to you.

          1. I hear you about the apparent hold-ups…

            The new “filter” appears to actively dissuade against dialogues actually happening and promote the drive-by nonsense that Malcolm typically specializes in.

            Yet another “editorial” flaw that is driven by the desire to portray a particular narrative here.

  5. This is in view of speculations below as to what happens to a PTAB IPR, reexamination, or interference decision below when there is a settlement and only one party is participating in an appeal unless the PTO intervenes. Including speculations of alleged of “mootness” and “vacatur” eliminating the PTAB decision. Here is a quote from a 11/09 en banc Fed. Cir. order by the Chief Judge in a GlascoSmithKline case:
    “In U.S. Bancorp Mortgage Co. v. Bonner Mall Partnership, 513 U.S. 18 (1994), the Supreme Court held that when a party procures the conditions that lead to a case becoming moot, that party should not be able to obtain an order vacating the lower court decision that was adverse to that party. Vacatur, held the Court, is appropriate if the mootness arises from external causes over which the parties have no control, or from the unilateral act of the prevailing party, but not when the mootness is due to a voluntary act by the losing party, such as a settlement. U.S. Bancorp Mortgage Co., 513 U.S. at 25.”
    [P.S. remitter of federal agency decisions by appellate courts in general is no longer a normal practice either.]

    1. or from the unilateral act of the prevailing party, but not when the mootness is due to a voluntary act by the losing party, such as a settlement.

      Great – but that’s not what we are discussing when one side can – and does – appeal, and the other side (the WINNER) either cannot have standing or bows out and the intervenor ALSO cannot have standing.

      It’s like you have to try really really hard NOT to be getting these things right, Paul.

  6. In Germany it is not seriously disputed, that there is a public interest in culling patents that ought not to have issued. Technical progress is harmed rather than promoted, by assertion of issued rights in patents that are not valid.

    So, in post-grant opposition proceedings at the EPO, if Opponent withdraws, despite citing potent prior art, the EPO will consider whether it should continue the proceedings to revoke the patent. It does so, however, only in cases where the invalidity is glaring.

    The US Constitution has in it something about promoting “the general welfare” whatever that is. Would it then be un-Constitutional for the USPTO not to continue to ask the court to revoke patents it considers (in the light of prior art cited in the petition for revocation) were wrongly issued?

    1. Your sense of “public interest” based in German law does not – and should not – carry over carte blanche into a discussion of US Constitutional law.

      First and perhaps foremost, our sovereign is set up on the notion of LIMITED government.

    2. Max, there is also no standing requirement for IPRs or other post-grant PTO proceedings here either, and the PTAB here can also optionally continue an IPR after a party drops out, if they want to , to especially if it has already progressed substantially.
      But that is not the issue here, which is the intervention by the PTO in a Fed. Cir. appeal when one party has dropped out. The Fed. Cir. is an Article III court with a Constitutional requirement of an actual case or controversy to be a party, hence “standing,”

      1. Paul,

        Once again you misstate the issue and shortcut items that I have presented.

        Specifically, your statement of “But that is not the issue here, which is the intervention by the PTO in a Fed. Cir. appeal when one party has dropped out.” is NOT entirely true, and is but a half-truth. I have provided the portions of the AIA that tie the two together, and very much carry the issue through where you want to not only separate, but ignore the very links as if no issue where present.

        As such, your statement makes no sense.
        Again.

    3. Max, imagine if any Tom, Dick or Harry could ask a court of law to tell the government to do something, or not do something, based on their own view of the public interest. Who would be running Germany? The elected officials, or the courts?

      Courts are reserved to people whose legal rights are invaded, or who are sued by others for invading them. Allowing courts to intervene in matters of general public interest is plainly unconstitutional in the US.

      1. My long answer, Ned, mentioning habeas corpus attracted the attention of the filter. No idea why. Never mind eh.

        1. Max, I seriously cannot have conversations with people anymore because of the filter. I have no idea what triggers it. But once triggered, every other post in that thread is blocked.

          1. Ned,

            I have surmised that the “once tripping” includes a volume count*** – even if the comments are being made to different people in different sub-threads.

            And yes, this very much inhibits an active dialogue, as the “lifting” does not occur at any fixed time interval, and even comments salvaged because of “time count” have been put back into moderation – for no discernable reasons.

            *** (however, the volume count does not appear to be consistent in number, or consistently applied to various ‘regular’ posters).

  7. As a practical matter, would allowing unopposed ex parte appeals by only one of the parties to an inter parties proceedings encourage more IPR “settlements” in order to be able to do that, unless the Fed. Cir. refuses to take any appeals from any IPR in which either party withdraws at any time beforehand?

  8. From US v. American Bell Tel. 1897

    “Many cases have come to this court, in which patents for lands have been sought to be set aside, and the rules controlling such suits have been frequently considered. Such decisions will naturally throw light upon the question here presented, though before adverting to them it may be well to note the difference between patents for land and patents for inventions. While the same term is used, the same grantor is in each, and although each vests in the patentee certain rights, yet they are not in all things alike. The patent for land is a conveyance to an individual of that which is the absolute property of the Government and to which, but for the conveyance, the individual would have no right or title. It is a transfer of tangible property; of property in existence before the right is conveyed; of property which the Government has the full right to dispose of as it sees fit, and may retain to itself or convey to one individual or another; and it creates a title which lasts for all time. On the other hand, the patent for an invention is not a conveyance of something which the Government owns. It does not convey that which, but for the conveyance, the Government could use and dispose of as it sees fit, and to which no one save the Government has any right or title except for the conveyance. “

    1. But for the patent the thing patented is open to the use of any one. Were it not for this patent any one would have the right to manufacture and use the Berliner transmitter. It was not something which belonged to the Government before Berliner invented it. It was open to the manufacture and use of any one, and any one who knew how could contrive, manufacture and use the instrument. It conveyed to Berliner, so far as 239*239 respects rights in the instrument itself, nothing that he did not have theretofore. The only effect of it was to restrain others from manufacturing and using that which he invented. After his invention he could have kept the discovery secret to himself. He need not have disclosed it to any one. But in order to induce him to make that invention public, to give all a share in the benefits resulting from such an invention, Congress, by its legislation, made in pursuance of the Constitution, has guaranteed to him an exclusive right to it for a limited time; and the purpose of the patent is to protect him in this monopoly, not to give him a use which, save for the patent, he did not have before, but only to separate to him an exclusive use. The Government parted with nothing by the patent. It lost no property. Its possessions were not diminished. The patentee, so far as a personal use is concerned, received nothing which he did not have without the patent, and the monopoly which he did receive is only for a few years.

      1. The Government parted with nothing by the patent. It lost no property. Its possessions were not diminished

        I think I see where you want to go with that, but the context is different and you cannot apply the “government loses nothing” with the sense of “case or controversy” of what losing the case might imply.

        The impact to the government – in context – is not, nor is it meant to be – such an aspect.

        Instead, the AIA was aiming for a different context. And, as I have already supplied the particular sections of the AIA to you***, those sections inform the context of the government’s “loss.”

        Please address the particulars already presented, Ned.

        *** see link to patentlyo.com

  9. Meanwhile:

    “Roundabouts are considered to be very challenging for automated vehicle technology,” says Helen Kourous, a Ford engineer. “They are very unstructured. No two are alike. You can find many different configurations. Human drivers can sometimes get confused in them,” she says.

    In geofenced areas, such as the parking lot at Walt Disney World, a gated community, or a college campus, Level 5 self-driving vehicles make perfect sense, and they will work. I can see Level 3 vehicles in a few years where vehicles can drive themselves on highways but must hand off to the human driver if they can’t figure out a situation. And that’s about really all we can expect in the next 25 years.

    News flash: not going to happen in 25 years either. And a so-called “self-driving car” that you need to be constantly monitoring is (1) older than the hills and (2) silly and not worth it.

    But self-driving golf carts. OMG Whoopee! Wherein the gold course includes a tree. Wherein the golf course includes a pond. Wherein the golf course includes an alligator. Wherein the robot golf cart is wirelessly connected to a remote server. Wherein the robot golf cart includes a database configured to recommend what club you should use. S00per d00per techn0! Can I haz patent now?

    1. Your 0bsess10n remains most odd.

    2. What are you talking about?

      1. The “tech” industry which is pretty much not “tech” at all but basically a giant money-scking grift with junk patents playing a substantial role in keeping the grift operating.

        You’re telling me that you’re not aware of this? The “robot car” grift is just the tip of the iceberg.

        1. The relevance of this scam to the health of the patent system doesn’t really need to be pointed out to most people in 2017.

          Of course, the least intelligent attorneys on the planet swarm around junky logic patents like their lives depended on it. Which they do, in a sense, because they aren’t qualified to do much else except draft the worst applications ever written by any patent attorney ever.

          How many new contexts can you imagine for shoving an ad in someone’s face? Very serious stuff. Or so we are led to believe.

          1. You triple down on your odd 0bsess10n with the “shove an ad in your face” (out of nowhere) and your “logic” mantra.

            The “shove an ad in your face” is a pathet1c straw man that you alone bring up to knock down, and we both know how your project to copyright logic is coming along (and why).

            Get a different script. Your feelings as to what should or should not be patent eligible just do not jibe with the top level of innovation in the world today.

        2. I’m well aware of your views on software patents. But why hijack this thread for something unrelated? And where does this stuff come from? Was there a recently issued patent on a self-driving golf cart? If so, please post the patent number so I can take a look and I will provide my objective opinion on it.

          1. Your point, pl, remains accurate (no matter the editing to remove additional accuracies on the topic, even as Malcolm continues to be the same 11 year blight).

            But any comments addressing that are not only lifted (into moderation), but are outright expunged.

            Eppur si muove

            It’s not like these edits do anything other than to reinforce the already p00r perceptions around the editing modes here….

  10. The PTO has for many years intervened to support Board interference decisions when one of the parties drops out of the case and the other party is appealing. Was that ever challenged?

    1. BTW, unlike normal litigation, IPRs and interferences are in rem proceedings as to subject patent claims, not just decisions applying to a single party.

    2. Paul, there is a difference between pre-grant and post-grant. Pre-grant, it is applicant vs. government. Both parties have standing and interests.

      Post-grant, the government has lost its interests and has no personal stake in the outcome. The public at large is harmed, but no one has standing to assert the public interest at large including the government. See, US v. American Bell Telephone (1897).

      Personally, I think most patent attorneys do not think about constitutional problems when conducting interferences and never raise these sorts of issues. Perhaps it is not in the interests of the firms involved?

      1. Ned in almost all interferences in years now, one of the parties has an issued patent with patent claims in interference [not pre-grant]. But you may be right that no one thought to challenge the Solicitor’ Office intervening when only one party wanted to appeal and the other dropped out.
        But what about IPR cert petitions in which the Sup. Ct. has asked the Government to participate even though the other party had dropped out below already, like Cuozzo?

        1. Paul – I have already supplied the sections of the AIA itself that are on point (as opposed to your implying that the driver is only because the Supreme Court is asking the Government to participate).

          See link at 7.1.1. on this thread.

      2. Does the PTO ever have a personal stake in the outcome? Both pre-grant and post-grant, the public at large is harmed by an invalid patent. In both cases, what interest does the PTO have on appeal beyond simply defending its decisions? IF the PTO has the power to invalidate a claim in an issued patent against the will of the patent owner, it has standing to defend its decision exercising that power.

  11. I know where the Feds got this idea.

  12. The conundrum lay dormant during the reexam era. The fruit of the AIA is two divisions of the patent office at war with each other. The examining division is issuing patents citing concurrent PTAB trials as references. The PTAB ignores and overrules the examiners on the same or cumulative prior art. Which side does the Director take on appeal? Given its charter, the office should be defending patents – or at least remain neutral. Standing? What is the controversy? Did the patent owner cheat, lie, or steal to obtain the original patent?

    1. IR, exactly. The government has no personal interest in the outcome. But, they take sides against the patent owner if they stand in the shoes of the petitioner.

      This is government v. patent owner over validity post grant.

      1. How the “F” is calling attention to the separate legal point of the initiation decision point something to be placed into moderation?

        On what possible basis is such editing made?

  13. Seems like a clear case where there is standing, because the agency is defending the validity of its own decision. The PTO would always be a properly named appellee in a PTAB case, wouldn’t it? This is different from whether it can challenge the patent’s validity in a DJ.

    1. …and yet, Guest, the portrayal here is not of the Office as “the” party, but instead as the intervenor.

    2. If the agency responsible to administer a statue cannot gain standing when a dispute as to the application of the statue is litigated, there must be a procedural problem with the standing doctrine.

      1. Martin, the government is not defending any challenges to its rules or to its prerogatives. It is has become a party adverse to the patent owner on validity. The position of the government is no different than if it tried to sue the patent owner in a court of law for invalidity. This it cannot do.

        US. v. American Bell Telephone (1897) link to scholar.google.com

        1. Ned, you’re defining this at one very narrow level. The level that I think the court would define this as is that the PTO is adverse to the patent owner in challenging the lawfulness of the agency’s action, in an appeal where a victory would mandate the agency to perform certain actions. As Martin indicated, it would be stunning for the Court to hold that the agency does not have the right to defend the lawfulness/correctness of its own action. The government always has the right to do so.

          American Bell is a case arising out of a very different procedural posture, and those procedural differences are key. That case talks about when and how the government can sue in a district court to invalidate a patent. That’s not the situation we have here. Here, there is a statute that gives the government the agency to perform an action (in this case, invalidating patents). Assuming for the sake of argument that this is constitutional, the question then is whether, once that agency acts, does it have the right to defend its own actions in court (only in the most narrow sense is it about validity). You view this as a very narrow inquiry, but I don’t think the standing inquiry is quite so narrow as you view it.

          1. I hear what you are saying but I have to disagree at least in part to how you’re saying it. To Ned standing is standing there is no “narrow” or “wide.” To Ned, you either have standing or you do not have standing.

            You use a particular phrase that is serving in some sense for a proxy that glosses over the big C question: “assuming for the sake of argument.”

            That’s not a safe assumption as the devil is subsumed in those details.

            1. Sure. But in determining whether you have standing, the question is always about how you define the injury-in-fact. That’s generally the critical piece, because the injury’s definition tends to be outcome-determinative as to the causation/redressability issue. So is the (potential) injury to the government that an invalid patent has been issued, or is it that the government will be forced to undo its own action? That’s the question.

              1. Guest, you are talking about procedural injury. Case and controversy requires an invasion of a legal right owned by one party, or potential infringement of the legal right owned by the other party, here the patent owner.

                How is the government impacted by an invalid patent in any way different than the populace at large?

                Did you read that long quote from American Bell (1897) that says that the government is not harmed at all by the issuance of an invalid patent for invention, in contrast to an granting a land patent to the wrong person? The government owned the land and then lost it. In contrast, the inventor owns the invention and brings something new to the world. The government does not own that invention.

                1. A patentee holding an invalid patent does represent a loss to the people. The people are prevented from acting in that certain manner and so lose the direct and indirect benefits of acting. Ned on that basis, how does the government have standing in a murder case? The government IS the people. When the people’s rights have been infringed, the government stands for the people to assert their rights, in these cases, the rights to practice inventions that belong in the public’s domain.

              2. It’s a good question.

                But phrased straight up like is something granted, but now the Executive branch agency wants to nullify it plays directly into Ned’s hand (and is quite against the other Constitutional protections that inure to the property that is a granted patent.

                1. But phrased straight up like is something granted, but now the Executive branch agency wants to nullify it

                  should read

                  But phrased straight up like that, wherein the point under focus is something granted, but now the Executive branch agency wants to nullify it,

              3. Guest,

                You seem to be doing the very thing noted in the article I provided…

                From page 1557 of the article:

                If the defendant enters into the standing discussion at all, it is typically only in the context of the “causation” and “redressability” of the plaintiff’s injury. Thus, to the extent they recognize the personal stake of the defendant as relevant to Article III jurisdiction, courts typically have sought to force it into the familiar categories of plaintiff standing, rather than recognizing defendant standing as a distinct consideration. Indeed, some courts have even gone so far as to deny that Article III standing limitations apply to defendants at all. Only a very few lower court opinions have recognized the necessity of a defendant’s stake in the outcome to the creation of an Article III case or controversy.

    3. OK, if we take this logic (admittedly, to the extreme), then why don’t we let the Federal Circuit intervene in appeals to the Supreme Court, in order to defend the validity of its own decision? If the PTAB is supposed to replace district court litigation, then why don’t we treat the appeals like we would from a district court? Isn’t the PTAB supposed to be a neutral arbiter? This apparent double-standard has troubled me for sometime.

      1. Don’t Know, double-standard?

        With the Director as a party and a member of the PTAB, we have the prosecutor and trier of fact being one. This is a fundamental violation of due process.

        1. Someone should have told Congress when they set this up with the AIA…

          😉

      2. For purposes of analyzing standing, we have to assume that an inter partes review is an administrative proceeding to grant or deny a petition. Absent that assumption, the constitutionality of the entire inter partes review process becomes a superseding issue.

        1. As noted above, the devil be in those details.

          I would also be remiss to not note that your phrasing hits on a very different (but at least as equal) Constitutional trouble spot. Granting or denying the petition is quite different – and per Congress – THAT item is expressly NON appeal-able.

          You cannot “assume” something that Congress was explicit about (and explicit in the opposite direction).

  14. Although the case here focuses on the vestige inter partes reexamination system, it has obvious and direct implications for the replacement inter parties reviews.

    Implications…?

    Perhaps. And importantly, perhaps not.

    In other words (and continuing a perhaps “not -in-right-legal-form” view first advanced by Invention Rights):

    link to patentlyo.com

    Super-Examiners, anyone…?

    😉

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