Mobility WorkX v. Unified Patents (Fed. Cir. 2021)
In a 2-1 decision, the Federal Circuit has rejected Mobility’s argument that the PTAB Judges have an improper financial interest in instituting AIA proceedings. The baseline here is that the patentee presented evidence that Board members who institute more AIA proceedings receive better performance reviews and more bonus money. A higher institution rate also ensures job stability for administrative patent judges. The argument then is that those incentives to institute constitute a due process violation under cases such as Tumey v. Ohio, 273 U.S. 510 (1927) and Ward v. Monroeville, 409 U.S. 57, 60 (1972).
To be clear, none of the USPTO rules or practices provide expressly give more money or quota-points for initiating IPR. However, the only way to receive points for judging an IPR is to first institute the IPR. And, most of the quota-points are accumulated post-institution. Likewise, the PTO receives substantial fees for institution.
The majority entertained the arguments, but ultimately rejected them after concluding that any financial interest was too remote.
Amicus curiae US Inventor, Inc. presents a statistical study purportedly showing that there are more meritorious institution decisions in September (at the end of the APJ performance review year) than in October (at the beginning of the performance review evaluation period). This hardly establishes that APJs are instituting AIA proceedings to earn decisional units.
Slip Op. at Note 7.
The majority decision was authored by Judge Dyk and joined by Judge Schall.
Judge Newman wrote in dissent arguing that the status quo creates the potential appearance of bias and that it is the Federal Circuit’s responsibility to resolve the concerns.