by Dennis Crouch
Starting with my 2017 article chastising the Federal Circuit for its R.36 practice, dozens of parties have challenged the Federal Circuit’s ongoing habit of regularly issuing a large number of no-opinion judgments. So far, the Federal Circuit has refused to address any of the legal process complaints – favoring silent efficiency over transparency.
A new en banc petition in Converter Manufacturing, LLC v. Tekni-Plex, Inc., raises the issue in a new way, particularly focusing on dicta from the Supreme Court’s landmark ruling in Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244 (2024). The petition highlights the tension between judicial efficiency and the court’s constitutional duty to independently review agency actions.
- Read the brief: Converter Manufacturing Petition
Loper Bright and Judicial Independence
In Loper Bright, the Supreme Court rejected the general practice of judicial deference to agency interpretations of ambiguous statutes. The Court declared that “courts decide legal questions by applying their own judgment,” reaffirming the fundamental principle that the judiciary must independently interpret and apply the law. This decision underscores the critical role of courts in our constitutional system, where “[t]he interpretation of the laws” is “the proper and peculiar province of the courts.” Quoting The Federalist No. 78.
The Administrative Procedure Act (APA) codifies this principle, mandating that reviewing courts “shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action” 5 U.S.C. § 706.
The burden of independent review of agency action most often falls first on a district court. However, the patent inter partes review context is somewhat different because Congress cut-out the district court pathway. Rather, IPR final written decisions by the PTAB are then challenged directly to the Federal Circuit.
Although not necessarily direct requirements, The APA’s statutory directive, coupled with the Supreme Court’s guidance in Loper Bright, along with the direct-to appeal nature of IPR cases, and the guidance of 35 U.S.C. § 144 requiring the Federal Circuit to issue “its opinion,” all come together to place additional burden on the Federal Circuit to articulate its reasoning when reviewing USPTO decisions – even outside of the traditional Chevron environment.
Rule 36 and the Federal Circuit’s Approach
Despite mandate, the Federal Circuit continues to employ Rule 36 affirmances in patent cases, including appeals from USPTO decisions. These summary affirmances, which provide no explanation for the court’s reasoning, are particularly problematic in the context of patent law, where the Federal Circuit serves as the primary arbiter of legal issues.
The use of Rule 36 in Converter Manufacturing v. Tekni-Plex is especially concerning because the case involves a complex issue of prior art enablement — something that is lacking guidance in the precedent. By affirming the USPTO’s decision without opinion, the Federal Circuit has arguably deferred to the agency’s interpretation of the law without fulfilling its duty to independently assess the legal questions at hand. “Courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority, as the APA requires” Loper Bright. We simply cannot tell whether the court’s reasoning in Converter Mfg satisfies Loper Bright. That lack of transparency is sufficient justification for a redo.
The Enablement Issue in Converter Manufacturing
While the Loper Bright issue is paramount to the rehearing petition, the filing also raises an important question about the standard for prior art enablement.
CM’s basic argument here is that a key cited reference known as Meadors (U.S. Patent No. 4,228,121) does not enable a skilled artisan to practice the claimed invention because it is limited to methods and apparatus for forming paper stock, not thermoplastics as required by the Challenged Claims. Meadors does make a passing reference to thermoplastic material – and that was relied upon by the Board. However, CM’s argument here is that passing reference is insufficient to enable the claimed thermoplastic articles. The PTAB disagreed – holding that Meadows expressly discloses that the material may be ‘paper’ or ‘thermoplastic.’
CM had provided engineering studies showing operational failures if Meadors’ methods were applied to thermoplastics, but the Board rejected those arguments as “conclusory” and “meritless.” Instead, the PTAB credited Petitioner’s expert opinion that Meadors’ heated dies could be used to thermoform plastic. As mentioned above, the Federal Circuit affirmed without opinion.
In the rehearing petition, petitioner cites Seymour v. Osborne, 78 U.S. 516 (1870), which held that prior art publications must enable a person skilled in the art “to make, construct, and practice the invention to the same practical extent” as if the information were derived from a prior patent. This standard, the petitioner argues, requires evidence that skilled artisans could actually build the prior art embodiment.
The petition also relies on Federal Circuit precedent, including Raytheon Techs. Corp. v. Gen. Elec. Co., 993 F.3d 1374 (Fed. Cir. 2021), which emphasized the need for evidence that a skilled artisan could have “actually built” the prior art embodiment. The petitioner contends that the USPTO’s reliance on post-priority date evidence of alleged practice of the prior art is insufficient to establish enablement.
We should also recognize that IPRs are different than ordinary prosecution because the petitioner has a greater burden to prove its case rather than simply present a prima facie argument.
The Need for Reform
The Federal Circuit’s continued use of Rule 36 affirmances in appeals from USPTO decisions is increasingly difficult to justify in light of Loper Bright and the court’s unique role in patent law. While judicial efficiency is a legitimate concern, it cannot come at the expense of the court’s constitutional duty to independently review agency actions and provide reasoned explanations for its decisions.
Several reforms could address these concerns:
1. Limiting Rule 36 affirmances: The Federal Circuit could modify its local rules regarding no-opinion judgments to instead adopt a policy of issuing at least a brief written opinion in all cases involving appeals from USPTO decisions.
2. Enhanced transparency: When using Rule 36, the court could provide a short statement explaining why the case meets the criteria for summary affirmance.
3. En banc review: The full court could reconsider its approach to Rule 36 affirmances in light of Loper Bright and the unique needs of the patent system.
4. Legislative action: Congress could amend the patent laws to more clearly require written opinions in appeals from USPTO decisions, similar to the requirement for district court decisions under Federal Rule of Civil Procedure 52(a).
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The patents at issue in this appeal are U.S. Patent Nos. 9,908,281; 10,189,624; and 10,562,680. These are all directed to thermoformed food trays, with smooth, non-circular peripheries that avoid sharp edges. “Formed Thermoplastic Article Having Smooth Edges.”
There are several pending infringement lawsuits:
- Clearly Clean Prods. LLC, et al. v. Tekni-Plex, Inc., et al., United States District Court for the Eastern District of Pennsylvania, Civil Case No. 2:20- cv-04723.
- Clearly Clean Prods. LLC, et al. v. Eco Food Pak USA Inc., et al., United States District Court for the Central District of California, Civil Case No. 5:20-cv-01054.
- In re Certain Rolled-Edge Rigid Plastic Food Trays, United States International Trade Commission, Investigation No. 337-TA-1203.
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Joseph Farco (Norris McLaughlin) argued the appeal for the patentee and also filed the rehearing petition. He was joined on the brief by Benjamin Schwartz.
Michael Fisher (Dechert) argued for the patent challenger and was joined on the brief by Robert Ashbrook, Diane Danoff, Kevin Flannery, and Luke Reilly.