by Dennis Crouch
In a significant ruling, the Merit Systems Protection Board (MSPB) granted corrective action to PTAB Administrative Patent Judge (APJ) Michael Fitzpatrick in his whistleblower retaliation case against the USPTO associated with his complaints about PTAB panel expansion (i.e., ‘panel stacking’). The decision issued back in 2023, but has only just now been published following a settlement between Fitzpatrick and the USPTO. This post will delve into the details of Fitzpatrick’s claims, the MSPB’s reasoning, and the implications of this decision for patent practitioners and the USPTO.
The MSPB decision by Administrative Judge Andrew Niedrick, found that the USPTO had retaliated against Fitzpatrick for making protected disclosures about the agency’s practices in inter partes review (IPR) proceedings and representations to the Supreme Court. Fitzpatrick v. Department of Commerce, DC-1221-21-0423-W-2, 2023 MSPB LEXIS 2397. The case is helpful for transparency in the patent system and highlights some whistleblower protections that have been built into the system.
Judge Fitzpatrick and his Protected Disclosures
Michael Fitzpatrick was a patent attorney for many years at the McAndrews firm in Chicago before hearing Dir. Dave Kappos call for building an excellent PTAB after passage of the AIA. He has been part of hundreds of PTAB decisions during his 10+year tenure at the agency. But, he received some negative treatment at the agency for airing some issues outside of the agency.
The first disclosure concerned the USPTO’s handling of the Adidas AG v. Nike, Inc. IPR (No. IPR2013-00067). Fitzpatrick alleged that agency management illegally interfered with the IPR process by secretly expanding the PTAB panel from three to five judges after the original panel had fully decided the case for the purpose of altering the outcome, improperly delaying the issuance of the final decision, and failing to notify the parties of the panel expansion.
The second disclosure related to statements made by Deputy Solicitor General Malcolm Stewart during oral arguments before the Supreme Court in Oil States Energy Service, LLC v. Greene’s Energy Group, LLC. Fitzpatrick contended that Stewart provided erroneous information to the Court regarding the USPTO’s practice of expanding PTAB panels.
In its decision, the MSPB found these disclosures protected under the Whistleblower Protection Act (WPA), 5 U.S.C. § 2302(b)(8), and that the USPTO had improperly taken personnel actions against Fitzpatrick in retaliation.
Legal Standard for Protected Disclosures
The MSPB is an independent, quasi-judicial agency within the executive branch of the US government. Its primary functions include adjudicating appeals of certain federal personnel actions, such as removals, demotions, and suspensions, as well as hearing whistleblower retaliation claims. As with the USPTO, Appeals from the MSPB go to the Federal Circuit.
The WPA protects federal employees who disclose information they reasonably believe evidences wrongdoing in the government. Protected disclosures include those revealing “any violation of any law, rule, or regulation, or gross mismanagement, a gross waste of funds, an abuse of authority, or a substantial and specific danger to public health or safety.” The statute specifically states that a disclosure shall not be excluded from protection because it was made to a supervisor, was previously disclosed, or due to “the employee’s or applicant’s motive for making the disclosure.” See Lachance v. White, 174 F.3d 1378 (Fed. Cir. 1999) (explaining the “disinterested observer” test).
The board found that Fitzpatrick’s disclosures met this standard. Regarding the Adidas v. Nike IPR, the MSPB concluded that a disinterested observer could reasonably believe that the Chief Judge’s expansion of the panel after the original panel had rendered its decision exceeded the scope of authority provided by 35 U.S.C. § 6, the Manual of Patent Examining Procedure (MPEP) § 1002.02(f), and the PTAB’s Standard Operating Procedure 1 (SOP 1). The MSPB also found that the USPTO’s actions in delaying the IPR decision for nearly two years could reasonably be seen as an abuse of authority under 5 U.S.C. § 2302(b)(8), a violation of the Administrative Procedure Act (APA), and a violation of the parties’ due process rights under the Fifth Amendment.
Concerning the Oil States disclosure, the MSPB determined that a disinterested observer could reasonably conclude that the USPTO, through the Solicitor General, provided inaccurate or incomplete information material to the issue before the Court (and also failed to correct the mistake), potentially violating the Supreme Court’s Rules, professional responsibility obligations, and ethical duties.
Personnel Actions and Contributing Factor Analysis
Fitzpatrick alleged that the USPTO took several personnel actions against him in retaliation for his disclosures. The MSPB found that two of these actions qualified as covered personnel actions under the WPA: (1) removing Fitzpatrick from all AIA panels, including the Adidas v. Nike IPR, and reassigning him to a docket of ex parte appeals; and (2) giving him a negative verbal performance appraisal on May 30, 2018.
The USPTO had argued that that Fitzpatrick was reassigned for other reasons (timeliness and lack of judgment in interactions), but the MSPB found the agency failed to prove these allegations and rather that the alleged performance deficiencies were contrived and pretextual. The agency also failed to provide evidence that it had taken similar actions against non-whistleblowers in comparable situations.
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Earlier this year, the USPTO modified its SOP1 and struck-out the option of expanded panels. The USPTO also issued formal rules prohibiting the USPTO Director influencing the paneling or repaneling of any proceeding prior to issuance of the panel decision. Likely, none of these changes would have happened without the thorn known as Judge Fitzpatrick.
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John L. Abramic from Steptoe argued the case for Fitzpatrick, along with his team of Robert Kappers and Christopher Suarez. William Horrigan argued for the USPTO/DOC.
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I’m happy to report that Judge Fitzpatrick is back to hearing AIA trials as well. Recently Judge Fitzpatrick issued a final written decision in Duration Media LLC v. Rich Media Club LLC, 2024 Pat. App. LEXIS 3067, IPR2023-00953, Paper 74 (Aug 19, 2024) IPR2023-00953 FWD.
The Fitzpatrick majority found that the petitioner failed to prove that claims 1-10 of US11443329 were obvious. The claimed invention covered a method and system for determining whether an advertisement displayed on a webpage is actually visible within a user’s browser window for a predefined period of time, and serving a replacement advertisement in response to that determination. The majority excluded expert testimony submitted in petitioner’s reply brief — finding that it should have been included within the original petition. That exclusion meant the downfall of the case.
Judge Karl Easthom dissented an argued that the petitioner should have been allowed to submit reply evidence to respond to the patent owner’s enablement arguments. But, the dissent also argued that, even without the excluded reply declarations, the petition and reply show persuasively that Badros discloses the disputed limitation.
Judge Jason Repko was the deciding vote.
This IPR was handled by Kevin Greenleaf and Joel Bock from Dentons for the petitioner; Ragnar Olson with David Berten from Global IP Law Group represented the patentee.