Mapping the Patent Office Intervenor Power

Guest post by Saurabh Vishnubhakat, Associate Professor at the Texas A&M University School of Law and the Texas A&M College of Engineering.  Although Prof. Vishnubhakat was an advisor at the USPTO until June, 2015, his arguments here should not be imputed to the USPTO or to any other organization. This post is based on a new paper forthcoming in the N.Y.U. Annual Survey of American Law.  Read the draft at https://ssrn.com/abstract=3113844.

***

Since the AIA, the Patent Office has had a relatively little-known power in post-issuance proceedings. Once a PTAB decision is appealed to the Federal Circuit, the Patent Office can intervene in the appeal as a matter of statutory right under 35 U.S.C. § 143:

With respect to an appeal described in section 142, the Director shall transmit to the United States Court of Appeals for the Federal Circuit a certified list of the documents comprising the record in the Patent and Trademark Office. The court may request that the Director forward the original or certified copies of such documents during pendency of the appeal. In an ex parte case, the Director shall submit to the court in writing the grounds for the decision of the Patent and Trademark Office, addressing all of the issues raised in the appeal. 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. The court shall, before hearing an appeal, give notice of the time and place of the hearing to the Director and the parties in the appeal.

In the past few years, the Patent Office has exercised this intervenor authority frequently and with specific apparent policy objectives. In Knowles Electronics v. Matal, the Federal Circuit is now considering the extent to which the agency must establish Article III standing in order to exercise its intervenor authority—specifically in cases where the prevailing party below is absent from the appeal. Also in question, assuming agency standing, is whether the Director must defend the PTAB’s decision below or is free to take other positions on appeal.

Patent Office Interventions: An Empirical Summary

New data on Federal Circuit intervenors shows that the Patent Office’s pattern of strategic intervention intersects in important ways with constitutional limits on the agency’s power.

  • Among 96 observed disputes (across 145 docketed appeals) in which the agency intervened, every intervenor brief that the Patent Office has filed has been in full or partial defense of the PTAB’s position or of some larger structural value associated with administrative adjudication, never in opposition to the PTAB’s stance.
  • Where the Patent Office did choose to intervene on appeal, the outcomes below were usually defeats for the patent owner (about 80%), and the agency’s position was to affirm the defeat.
  • Where the Patent Office intervened specifically to stand in for a litigant who was absent on appeal, the absent litigant was always a prevailing patent challenger—never a prevailing patent owner.

This is constitutionally important because the agency’s ability to intervene often will rest on its ability to show Article III standing. The Patent Office as intervenor may be able avoid having to show its own standing—but only if (1) the agency has entered the case on the side of a party that does establish standing, and so long as (2) the agency does not seek relief that is different from what that friendly party seeks.

Patent Office Intervention and Article III Standing

The Supreme Court explained in Arizonans for Official English v. Arizona, that standing “must be met by persons seeking appellate review, just as it must be met by persons appearing in courts of first instance.” 520 U.S. 43, 64 (1997). Where the friendly party with proven standing declines to appear, the intervenor “cannot step into the shoes of the original party unless the intervenor independently fulfills the requirements of Article III”—even where the intervenor takes the same position as that of the absent party. Id. at 64–65.

Importantly, adverse parties must also have standing independently of each other. It is a common shorthand to say that a plaintiff’s duty to show standing means that standing is required only from plaintiffs. But in fact, standing to defend is necessary as well. It is true that any given defendant probably can establish standing, as a defendant’s potential injury from an adverse judgment is generally enough to satisfy Article III. Still, the case-or-controversy requirement does not merely demand standing to sue. As the Court explained in Arizonans for Official English, what is needed is standing “to sue or defend.” Id. at 64.

This view also calls into question the Federal Circuit’s recent panel decision in Personal Audio, LLC v. Electronic Frontier Found. (Fed. Cir. 2017). It also calls into question the Patent Office position in Knowles. In its briefing on the Article III standing questions, the agency has adopted an expansive view of its own authority and a very limited view of its constitutional limits. In its first supplemental brief, the Patent Office argued that it need not show its own Article III standing because it can piggyback on the standing of Knowles Electronics, the patent owner mounting the appeal—even though the Patent Office as intervenor is adverse to Knowles. The agency also argued, apparently quite broadly, that “the Director may take any substantive position he likes” on appeal. The agency’s second supplemental brief clarified, however—in light of the Chenery doctrine—that this freedom to choose “any substantive position” pertained only to “an issue [actually] decided by the Board.”

But while piggybacking on a friendly party’s standing is one thing, piggybacking on an adverse party’s standing—especially where the friendly party is absent—is quite another. Indeed, though Knowles Electronics’s supplemental brief led with this point, the agency’s briefing contained no responsive discussion of Arizonans for Official English.

Implications for Patent Office Policy and Participation in the Patent System

Choosing to intervene only in certain cases, to support only certain positions, and to stand in only for certain absent appellate parties are plainly acts of policy. The plain language of § 143 suggests that it is a policy instrument that Congress intended for the Patent Office. But the constitutional limitations of Article III, as elaborated by the Court, remain a meaningful constraint on how the agency can exercise its statutory powers. This is especially true given the agency’s observed preferences as intervenor, preferences that require standing to sue or defend and that limit the ability to piggyback on adverse or absent parties.

Apart from their inherent importance, these constitutional imitations also matter for broader participation in the patent system. Since the Patent Office began intervening in Federal Circuit appeals, the relative share of interventions by private parties has declined. The remainder has shifted to a pattern of more concentrated, multi-party interventions. Data on non-governmental intervenors during the same period (Dec. 2013–Sept. 2017) as Patent Office interventions shows that 142 private parties intervened in only 43 docketed Federal Circuit cases. By contrast, in an equivalent period of time before the Patent Office began using its intervenor power (Feb. 2010–Nov. 2013), 63 private parties had intervened in 30 docketed cases while the Patent Office apparently did not intervene in any. In other words, there has been a net offloading onto the Patent Office of the responsibility to intervene.

As I argue in my paper, this is significant precisely because private-party intervenors can often show, more than the Patent Office could, enough of a stake to intervene in a given case. However, Congress chose not to entrust the protection of larger social interests diffusely to private-party intervenors. Instead, it recognized the coordinating and policymaking function that agency intervention can properly serve—within constitutional limits. When understood this way, private parties’ interventions are a useful adjunct to the agency’s. This is especially true where parties may be dissatisfied by the agency’s priorities, which may change considerably from one administration to another. If the decline in private-party intervention has reached some equilibrium with agency intervention—or will soon do so—then that outcome seems preferable to a complete abdication by private parties of the effort to intervene. The Patent Office can do much, but it should not be required to do all that intervenors can do.

55 thoughts on “Mapping the Patent Office Intervenor Power

      1. 6.1.1

        Which school of thought? Your abstract is horrible. It doesn’t give one the conclusion of the paper, but rather is a teaser. Trash.

        1. 6.1.1.1

          I’d give it a C+.

          He assumes the conclusion to be proven by giving a citeless proclamation that only one side in an appeal need have standing, and his citations would need to be looked at to make sure they support the propositions for which they are offered, but his form is not that bad, and the structure of the paper does flow nicely.

          I’ve seen much much much worse.

        2. 6.1.1.2

          Further, the thrust of the article is advocacy (of a desired end state of what the law should be – as opposed to some neutral and objective review of what the law IS.

          To the extent that the authors do not make that clear, the paper suffers from a credibility standpoint (hence the downgrade for stating a conclusion to be proven and doing so with no citation).

          1. 6.1.1.2.1

            Sounds like typical vanity press garbage to push a judicial activist’s point of view and make some money.

            1. 6.1.1.2.1.1

              Indeed there is that natural backlash when one purports to provide (or at least leaves the impression of providing) an objective expose of the law, AS IS, while the intent is actually quite different and is the advocating for the law, TO BE.

              Especially when such comes from one such as Stroud, who trumps up some fake umbrage (on another thread) when his position in a company is directly tied to such a money-making animus.

    1. 6.2

      You mean forthcoming vanity publication in a rag called a law journal.

  1. 5

    Meh, the anomaly grows. We have a ‘star chamber’ court without real APJ’s, PTAB court stacking by the Director (perfectly fine because the Appeals Board was a policy ‘court’), and in addition an intervenor right by the Solicitors Office – (PTO becomes a party), to take any position it wants WRT a PTAB record going to a CAFC (which is not a court of record mind you). All the while, ignoring marksman orders, final judgments, res judicata, and giving no comity to the Art III jurisdiction. Can you imagine a Federal Agency of Divorce with the same powers? Probably in your future should this anomaly continue to grow.

  2. 4

    Re: “Where the Patent Office intervened specifically to stand in for a litigant who was absent on appeal, the absent litigant was always a prevailing patent challenger—never a prevailing patent owner.”
    Of course. When IPR petitioners win, they often settle the corresponding litigation, have no need to participate in the appeal, and drop out. These are the appeals the PTO Solicitors Office typically chooses to participate in, since that is no longer an inter partes proceeding, and there would be no one left to defend the PTO decision. Whereas the losing patent owner will normally appeal. E.g., Cuozo.

    1. 4.1

      Also, potential private-party IPR intervenors have the option of filing their own IPRs and requesting “joinder” instead, which has advantages re the page limit restrictions on the original petitioner, the ability to present additional prior art and declarations or new suggested art combinations, etc.

  3. 3

    It is baffling that the PTO is so antagonistic toward patents. They’ve completely lost their way. Along with the standing question is the perplexing question of why would the USPTO argue against itself? It should be defending patents 100% of the time, not attacking them 80%!

    And in many cases such as my own, the Solicitor is going against the examining corps. The SPE. OPQA, and the TC Director, are on the record supportimg my patents. But Joe Matal and Nate Kelley have intervened to ask the Federal Circuit to cancel my patent and help Telebrands steal my invention.

    Here is a first order of business for Director Iancu – stand by the promise embossed on the cover of your patents!

    1. 3.1

      [T]he USPTO… should be defending patents 100% of the time, not attacking them 80%!

      Exactly correct. The right way to set up an IPR system would be for a petitioner to have the right to sue the PTO in a specialized Art. III court that has its own specialized (streamlined) FRCP and FRE. The only relief that this court could grant would be injunctive relief, ordering the PTO to issue a certificate of correction revising the claims to remove unpatentable claims. This way, the PTO would be in the more tenable position of defending its own work product. The patent owner would have the right to intervene in the suit to assist the PTO in defending the issued patent (or to argue validity separately where the owner feels that the PTO is making a hash of it).

      Ideally, there would be a statutory requirement for judges to serve in this court that they have worked so many years at the USPTO in an examination capacity.

      1. 3.1.1

        Not too bad of a setup there, but there will be some people that cry foul over your last line.

      2. 3.1.2

        Greg, seriously.

        1. The government has no stake in the outcome. Why would or should it get involved in a patent dispute between two private parties.

        2. The patent owner, at a minimum, is a necessary party. Unless the patent owner happened to live in Virginia, how are you going to get personal jurisdiction over both the Director and the patent owner?

        1. 3.1.2.1

          Taking your points in order:

          1) I am surprised at this response. What I am describing is essentially the writ scire facias action. The government is involved for the same reasons that the government is always involved in scire facias actions.

          2) You have put your finger on a real problem here. Maybe the law that enacts this system could statutorily obligate the PTO to consent to jurisdiction wherever the complaint is filed. Then the petitioner can file the complaint in the owner’s jurisdiction?

          1. 3.1.2.1.1

            Did the monarch respond to a writ of scire facias? I thought that a scire facias was a private action between two parties: the plaintiff and the patent owner.

            [I have not read the book in the image above.]

            1. 3.1.2.1.1.1

              A petition for a writ scire facias against any patent was filed with the clerk of the Petty Bag where the patent records were kept. The matter was then referred to the Attorney General, who could look into the merits and determine whether the action was meritorious or not. If meritorious, the King brought the writ either in Chancery on its law side, or directly at Kings Bench. The actions was tried in every case at King’s Bench and to a jury.

              The point of this procedure was that the patent owner was protected against harassment. Furthermore, the complaining private party had to post 1000 pounds bond to cover the legal expenses of the patent owner and further had to pay for the crown’s expenses. All told, people did not lightly petition for the writ unless a lot of money were involved and the case was all but slam dunk.

              1. 3.1.2.1.1.1.1

                “clerk of the Petty Bag”

                We need one of those! In case we have any petty bags hanging around.

          2. 3.1.2.1.2

            Greg, the writ was almost always invoked by a private party whose ox was being gored by the patent. The King’s consent was required in order to prevent harassment of the King’s beneficiary. See, Mowry.

            The King could pursue an action independently of an injured subject in the case of fraud (false suggestion). See, Atty. General v. Vernon, relied upon by American Bell (1888) and discussed extensively in the Alliacense brief in Oil States.

            1. 3.1.2.1.2.1

              Sure. I expressed myself poorly in 3.1.2.1, because you are certainly correct that the writ was pursued by the attorney general, not by the private plaintiff. Nevertheless, the government was certainly a party to such actions, and that is really my only meaningful response to your question as to why the government is involved. The government is involved because it is the entity that can issue a certificate of correction on the patent.

              I take it that you think the PTO’s involvement superfluous. Perhaps you are correct. The more I think of it, the less confident I am in my 3.1.

    2. 3.2

      I have to update the document entitled USPTO’s New Motto: “You Innovate – We Expropriate!” because anon explained some puzzling aspects of USPTO rulemaking authority in a reply to a comment I made on another thread.

      The main point of the Linkedin article remains true.

      Matal’s interventor brief in the appeal of the first Telebrands v. Tinnus PGR is pitiful, shameful, and vicariously embarrassing.

      1. 3.2.2

        Wow Joachim – that link still is a mess (for attempting TOO much).

        Also, I looked for any type of changes to the rulemaking authority section and did not see any proper reflection of what Congress provided to the Executive branch administrative agency in view of IPRs in the AIA.

        1. 3.2.2.1

          I will update that article because of your extremely useful comments.

          I already replied once, but I analogized the USPTO to a notorious recently convicted criminal.

          In some ways I was being unfair to the criminal.

          That comment was filtered.

          I also need to update How Do I Hate Post Grant Review? Let Me Count the Ways.

          Nevertheless, anon is completely correct that Congress has a big hand in creating the US patent system mess and bringing it to a boil.

          1. 3.2.2.1.1

            In some ways I was being unfair to the criminal.


    3. 3.3

      Josh, central the the problem we are having with this issue is that everyone is assuming that the government (Congress/Executive) has the power to correct is own mistakes in issuing a patent. Even Oil States counsel agreed that the government had this power.

      But it does not.

      I hope you can see that it does not and that even reexaminations are unconstitutional. For if the government has the power to revoke an issued patents on its own authority, then we cannot win this issue, nor Oil States. It is just that simple.

      1. 3.3.1

        It is at once “that simple” and nowhere NEAR that simple.

        The loss of the case indeed is “that simple.”

        The implications are FAR more pernicious.

        As I have dropped hints for the better part of a year and a half, the crux of this comes down to changing the very fabric of patents themselves (to something other than property).

        This will (necessarily) have ripple effects on a wide range of issues.

        1. 3.3.1.1

          anon, why are patents property? Your answer cannot include anything like “because the government says so.” If the government makes something property, it can make that something a revocable privilege by legislation.

          We have never come to grips on this underlying issue.

          1. 3.3.1.1.1

            Your answer cannot include anything like “because the government says so.

            Actually Ned – once made property, OTHER Constitutional protections kick in and “unmaking” may not violate those other protections.

            it can make that something a revocable privilege by legislation.

            Nope. You are absolutely incorrect in this statement. A right, once made, is NOT a privilege.

            This reflects your lack of understanding vis a vis property law and takings law.

            As a parallel – look into voting rights.

            1. 3.3.1.1.1.1

              I think anon is basically right. If the government can undo the right without the courts, then it isn’t a right.

              1. 3.3.1.1.1.1.1

                I would not even go that far, Night Writer – look at real property and eminent domain – the government CAN take – but they must follow well-known restrictions on HOW they take.

            2. 3.3.1.1.1.2

              anon, my I suggest that you are undervaluing Art. I, Section 8. Also, see Marbury v. Madision — a right for a period of time is property, and its validity is a matter for the courts.

              1. 3.3.1.1.1.2.1

                I don’t see why you think that I am undervaluing anything.

                Why would you think that?

                I am not the one pushing for patents to be considered public rights. All that I am doing (rather to the contrary) is stating that the impact of turning patents into a non-property is simply far more extensive than has been given (any) press.

          2. 3.3.1.1.2

            Property is created by lettres patentes (open orders) issued by the executive or monarch. William Penn received lettres patentes to Pennsylvania while the Massachusetts Bay Colony received lettres patentes to Massachusetts territory (rather larger than the current state of Massachusetts).

            The General Land Office issued land patents under the homestead act, and the federal government continues to issue township patents. In addition to IP patents, land patents, and township patents, the US government also issues mineral patents.

            The holder of a patent of any of the above types can lease or sell rights associated with the lettres patentes. Until 1980, when USPTO reexamination was enacted, no patent right could be nullified without action of an Article III court.

            1. 3.3.1.1.2.1

              And, what does Art. I, cl. 8 empower Congress to do with respect to inventions?

              1. 3.3.1.1.2.1.1

                What is the point of your question, Ned?

              2. 3.3.1.1.2.1.2

                …and Ned disappears from a possible interesting conversation…

                (one in which we may even have common ground)

          3. 3.3.1.1.3

            How about an understanding of ‘natural rights.’ You know, that concept that animates the Constitution. Ergo, the axiomatic right to ‘sue out a patent’ in an independent Judicial Division.

            1. 3.3.1.1.3.1

              Natural rights only gets you so far.

              The concept that accompanies natural rights is inchoate rights.

      2. 3.3.2

        Patents are property and subject to the requirement that they secure to the inventor his exclusive rights. There was no debate of repealing the Patent Act or restructuring our patent system under the Commerce Clause into a pay to play monopoly. If there were full disclosure I would not have participated in the stupid game. If there had been full disclosure and public debate, then it would not have been a backstabbing and betrayal for Michelle Lee, Joe Matal, Nathan Kelley, and David Ruschke to change their mind after I risked my kid’s college fund on their fraudulent patent promise. If there had been full disclosure that patents had been radically redefined, then it would not have been an outrage for attorneys working for Wilbur Ross and Jeff Sessions to argue as they did in Oil States that patents are not really property rights. Patents can be property rights or public rights. Covertly changing the historic meaning is a fraud and betrayal on America and has destroyed the purpose of our patent system.

    4. 3.4

      It is baffling that the PTO is so antagonistic toward patents.

      It’s not baffling at all.

      It’s called agency capture.

      1. 3.4.1

        Or agency corruption. I have found evidence of connections between USPTO senior officials and investment firms.

        And of course, other USPTO senior officials might simply want to ease to transition to working in private industry.

        1. 3.4.1.1

          Your graphic is fitting.

          Agency capture carries with it the connotation of agency corruption.

          Various forms of that corruption include the items you add.

  4. 2

    “The Supreme Court explained in Arizonans for Official English v. Arizona, that standing “must be met by persons seeking appellate review, just as it must be met by persons appearing in courts of first instance.” 520 U.S. 43, 64 (1997).”

    Wrt 3rd party PTAB challengers:

    Why is there standing for an appeal to the CAFC when the 3rd parties don’t have Article III standing in a district court?

    More shenanigans from the CAFC?

  5. 1

    In prior discussions (led by Ned Heller), the notion of Congress NOT being able to fabricate Article III standing purely from legislation was put forth – without ANY indicators that this was a black-letter statement.

    It would appear then – on its face – that (yet another) portion of the AIA transgresses Constitutional limits…

    1. 1.1

      should read:

      without ANY indicators that this was NOT a black-letter statement

    2. 1.2

      anon, agreed. The government can intervene to defend its rules, or the constitutionality of the statutes. What it cannot do is intervene on the merits of a patent for the reason that it has no stake in the outcome: it suffers no harm not suffered by the general public.

      The very idea that the government (congress/executive) has a right to correct its own mistakes own authority, or to file suit to correct its own mistakes was negatived in 1. McCormick Harvesting; and 2. American Bell (1897). See also, U.S. v. U.S. Gypsum (1943).

      The Federal Circuit is still assuming the constitutionality of reexaminations, which Oil States gratuitously, and remarkably asserted during oral argument, were constitutional, debating that issue with Gorsuch who was obviously on their side. But the Federal Circuit is and was wrong about that, given McCormick Harvesting and American Bell.

      1. 1.2.1

        I sense that you are veering into the “wrong questions” arena.

        There was no “present case of controversy” FOR Oil States in relation to reexaminations, thus anything in that direction FOR THAT CASE is nigh meaningless.

      2. 1.2.2

        I think that more to the point here is that the ONLY way that the Office has standing is the directly legislated path (notwithstanding how guest Prof. Saurabh Vishnubhakat indicates that the Office may have limited its application of what Congress provided to it to (artificially) selected instances.

        The “real question” is not one of “as applied” as it is one of the unfettered statutory law passed by Congress (one should not be f00led by how the Executive branch administrative office may have chosen to use its granted power – so far; instead the issue is that they were granted standing by legislative edict).

        1. 1.2.2.1

          Correct. A facial challenge does not require a result or a decision.

          1. 1.2.2.1.1

            It also eliminates the narrative here of certain professors and their “but the power has been chosen only to be applied in certain circumstances” view.

            It is NOT the “as applied” power that is Constitutionally infirm – it is the very grant by Congress that results in “Standing by Legislative Action.”

            This TOO is an example of my “you must ask the right questions” mantra.

            link to youtube.com

            1. 1.2.2.1.1.1

              Indeed, the facial challenge – was the very standing holding in patlex.

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