Dr. Thomas E. Sawyer
`3626 E. Little Cottonwood Lane
`Sandy, Utah 84092
`
`
`October 23, 2017
`
`The Honorable David P. Ruschke
`Chief Judge for the Patent Trial and Appeal Board
`Patent Trial and Appeal Board
`P.O. Box 1450
`Alexandria, VA 22313-1450
`
`Joseph Matal
`Acting Director of the USPTO
`P.O. Box 1450
`Alexandria, VA 22313-1450
`
`Dear Judge Ruschke and Mr. Matal,
`Having dedicated much of my life to public service, including having had the honor to serve four
`US presidential administrations, I well understand the difficulties you each face on a daily basis.
`As public servants, we have the utmost responsibility to preserve our shared values and protect
`America’s position of prominence in the world. The world has always looked up to the United
`States as a symbol of freedom, democracy, and justice.
`As the media has extensively reported, the passage of the America Invents Act, which brought
`about the PTAB and the IPR, was the direct result of years of aggressive lobbying and large
`financial contributions to politicians by the Silicon Valley and pharmaceutical industry. I am
`disturbed that large private corporations may have exercised undue influence on an agency
`which was intended to stimulate and protect the inventive process.
`Over the last several months, I have participated in a series of meetings and consultations with
`attorneys for Voip-Pal, a software development company for which I served as CEO for several
`years, and for which I continue to serve as an adviser. Their perceptions suggest very serious
`concerns that the Patent Trial and Appeals Board (PTAB) and implementation of the Inter Partes
`Review (IPR) process have deviated far from the initial purposes of the America Invents Act.
`The shared perception of the attorneys was that the administration of the process has included
`practices leading to results that are inequitably administered and anticompetitive.
`However, before sharing my concerns, I wish to express thanks for the conscientious and capable
`Patent Examiners with whom the Voip-Pal engineers have had the opportunity to work. They
`have reported that the examiners have been skillful and unbiased. Given this very positive
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`experience, I am frustrated to have to share my concerns about some most unfortunate matters
`concerning the Patent Trial and Appeals Board.
`I am aware that the United States Supreme Court has recently granted a Writ of Certiorari in the
`Oil States Energy Services LLC v. Greene’s Energy Group, LLC, which challenges the
`constitutionality of the PTAB and its IPR process. As those issues are before the Supreme Court,
`I will not share the concerns that I heard that are fundamentally constitutional in nature, but there
`are additional concerns, some of which may impact constitutional issues, but which were
`primarily discussed in the context of possible civil litigation against the USPTO and the
`individual administrators and judges who have allegedly engaged in behavior that may
`support a civil Racketeering Influenced and Corrupt Organizations Act (RICO) action.
`I sincerely hope that these concerns are ill-founded, as I believe that perceptions of collusion and
`misrepresentation would greatly weaken the trust of our citizens and harm the image of the
`United States in the eyes of the world. My hope is that this letter will provide you notice of their
`concerns and prompt a discussion that will lead to a satisfactory resolution for all parties. (So
`that my letter would be clear, I asked my legal colleagues to identify the sections of the law that
`they feel have been offended by the current implementation of the PTAB.)
`I. Racketeering Influenced and Corrupt Organizations Act (RICO)
`
`
`a. The first concern they shared with me involved actions that appear to violate the
`Racketeering Influenced and Corrupt Organizations Act (RICO). Racketeering is
`defined in U.S. Code › Title 18 › Part I › Chapter 95 › § 1951 as:
`(a) Whoever in any way or degree obstructs, delays, or affects commerce or the
`movement of any article or commodity in commerce, by robbery or extortion or
`attempts or conspires so to do, or commits or threatens physical violence to any
`person or property in furtherance of a plan or purpose to do anything in violation of
`this section shall be fined under this title or imprisoned not more than twenty years, or
`both. [Emphasis added.]
`(b) As used in this section—
`(1) …
`(2) The term “extortion” means the obtaining of property from another, with his
`consent, induced by wrongful use of actual or threatened force, violence, or
`fear, or under color of official right. [Emphasis added.]
`(3) The term “commerce” means commerce within the District of Columbia, or
`any Territory or Possession of the United States; all commerce between any
`point in a State …. [Emphasis added.]
`
`b. The attorneys explained that any criminal action against any of the involved parties
`could only be initiated by federal police authorities. However, they indicated that 18
`U.S.C. § 1964(c) allows civil suits for:
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`Any person injured in his business or property by reason of a violation of
`section 1962 of this chapter may sue therefor in any appropriate United States
`district court and shall recover threefold the damages he sustains and the cost of
`the suit, including a reasonable attorney’s fee… [emphasis added].
`c. The basis for such civil suit could involve:
`
`
`i. Wrongly invalidating patents is anti-competitive and restrains trade, since
`patents that are invalidated may no longer be used in commerce.
`Consequently, the PTAB “obstructs, delays, or affects commerce or the
`movement of any article or commodity in commerce.”
`ii. Extortion is defined as “obtaining of property … under color of official
`right.”1 The wrongful invalidation of patents occurs “under color of
`official right.” Therefor the process of having an inventor pay for filing,
`searching, examination, and issuing fees, and then having the benefit of any
`of those fees taken away by the same agency invalidating the patent
`constitutes “obtain[ing] of property under color of official right.”
`
`
`An additional claim might involve fraudulent misrepresentation due to the
`illusory benefit received from the fees charged to the patent holder by the
`(USPTO) for filing, examining, and issuing the patent. This same agency then
`charges additional fees for institution of IPR, which in most cases, results in
`the cancellation of the originally issued claims from the same agency.
`
`
`d. In that regard, several attorneys referred, with approbation, to a statement by Randall
`Rader, then Chief Judge of the Federal Circuit Court, who presciently described the
`current USPTO in a 2013 address to the American Intellectual Property Law
`Association as, “An agency with 7,000 people giving birth to property rights, and
`then you’ve got, in the same agency, 300 or so people on the back end . . . acting as
`death squads, kind of killing property rights.”
`
`
`e. After discussing the alleged fraud described in number 1, above, there was additional
`discussion by the attorneys about the role of the Circuit Court of Appeals for the
`Federal Circuit in remedying the due process deficits. The history of the AIA
`suggests that the appeal process was intended to “cure” any of the due process lapses
`of the PTAB. That was countered by a recent article that showed that, given the
`huge increase in patent appeals since the advent of the PTAB, the vast majority of
`appeals of IPR decisions are disposed of by the court, based upon local “rule 36”
`which allows the court to deal with an appeal with a single word, “affirmed,” without
`any discussion of arguments by either side. While the decisions of the Federal
`Circuit Court are not imputable, the knowledge that there exists little likelihood
`of meaningful appeal has allowed the PTAB to make decisions with impunity.
`
`1 https://www.justice.gov/usam/criminal-resource-manual-2404-hobbs-act-under-color-official-right
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`My attorney friends felt that a constitutionally flawed agency court that had no
`meaningful opportunity for appeal except a Writ of Certiorari to the United States
`Supreme Court, would likely be found to fail to provide even the most limited semblance
`of “appellate review.”
`
`II. Manipulating Judicial Panels to Protect a Policy Bias is a Misrepresentation of
`Judicial Independence
`
`The conversation then moved to a discussion of the practice, initiated by Undersecretary
`Lee, of “stacking” the panel of PTAB judges to achieve a particular policy point of view.
`The question of judicial independence is not only a constitutional issue; it may also
`be seen as an unlawful misrepresentation. There are at least three oral arguments in
`appeals to the Federal Circuit, in which USPTO attorneys described the practice which I
`reproduce here:
`
`1. The first is from the oral argument before the Federal Circuit Court in Yissum Research
`Development Co. v. Sony Corp., where the USPTO attorney was quite frank in
`acknowledging that the Director selects judges for a reconfigured panel so as to achieve a
`decision opposite to that of the original panel:
`
`
`PTO: And, there’s really only one outlier decision, the SkyHawke decision, and
`there are over twenty decisions involving joinder where the . . . .
`Judge Taranto: And, anytime there has been a seeming other-outlier you’ve
`engaged the power to reconfigure the panel so as to get the result you want?
`PTO: Yes, your Honor.
`Judge Taranto: The Director is not given adjudicatory authority, right, under § 6
`of the statute that gives it to the Board?
`PTO: Right. To clarify, the Director is a member of the Board. But, your Honor
`is correct . . . .
`Judge Taranto: But after the panel is chosen, I’m not sure I see the authority
`there to engage in case specific re-adjudication from the Director after the panel
`has been selected.
`PTO: That’s correct, once the panel has been set, it has the adjudicatory
`authority and the . . . .
`Judge Taranto: Until, in your view, it’s reset by adding a few members who will
`come out the other way?
`PTO: That’s correct, your Honor. We believe that’s what Alappat holds.
`
`
`2. In a subsequent oral argument — Nidec v. Zhongshan — the USPTO attorney was a bit
`less direct with his answer when asked the question of whether judges are selected to rule
`a certain way:
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`Judge Reyna: What kind of uniformity or certainty do we have in that where the
`PTAB can look at a prior decision and say well we don’t like that, let’s jump back
`in there and change that?
`PTO: Well, ….
`Judge Wallach: How does the Director choose which judge to assign to expand
`the panel?
`PTO: Uh, that’s provided, your Honor, by our standard operating procedure.
`And, the Chief Judge actually makes that decision. And, the judges are selected
`based on their technical and legal competency. And, over the years, many panels
`at the Board have been expanded. In fact if you looked at the thirty . . . .
`Judge Reyna: Are they selected on whether they’re going to rule in a certain way?
`PTO: Uh, well, people can be placed on the panel . . . for example, the Director
`can place him or herself on the panel, and certainly the Director knows how
`they’re going to rule. Nidec has not said and they say at their blue brief at page
`43 that they don’t challenge the independence of these judges on this panel. Um,
`these judges were not selected and told to make a particular decision. If judges
`could be told to make a particular decision, there would be no need to expand a
`panel in the first place.
`
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`3. A third occasion where the Federal Circuit noted the issue of panel-stacking was this past
`May in the en banc oral argument of WI-FI One v. Broadcom. During that oral
`argument, Judge Wallach noted that on the list of “shenanigans” — see the Supreme
`Court’s Cuozzo decision for more context on the “shenanigans” reference — was the
`Director appointing judges to come out the way that the Director wanted a case to be
`decided on re-hearing:
`
`
`Judge Wallach: No, no, no . . . according to the Government, it’s not individual
`panels —it’s the Director. Because, on the list of shenanigans, the Director, if the
`Director doesn’t like a decision, and someone seeks an expanded panel, can
`appoint judges who take a different position which is more in line with what the
`Director wants. So, in the long run, what you’re really saying is, it’s the Director
`who decides it, as opposed to this court.
`Later in the oral argument, Judge Wallach would ask the attorney for the
`opposing side similar questions :
`Judge Wallach: The situation I described to your esteemed colleague where in
`effect the Director puts his or her thumb on the outcome . . . shenanigan or not?
`It’s within the written procedures.
`Attorney: So, your hypothetical is the Director stacks the Board?
`Judge Wallach: Yeah, more than a hypothetical, it happens all the time. It’s a
`request for reconsideration with a larger panel.
`Attorney: That’s within the Director’s authority. The make-up of the Board to
`review the petition is within the Director’s authority. Whether that rises to the
`level of shenanigans or not . . . .
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`Judge Wallach: Aren’t there fundamental rule of law questions there . . . basic
`things like predictability and uniformity and transparency of judgments and
`neutrality of decision makers? And don’t we review that kind of thing?
`
`4. Whatever the rationale of Ms. Lee for the “shenanigans,” the principle of an
`independent judiciary is tied directly to transparency and fairness. Since the
`neutrality of decision makers represents a fundamental expectation of any litigant in
`an American court (either Article I or Article III judges), the issue is that this is a
`hearing in an American court that reflects the basic standards of the judiciary as
`articulated in Department of Commerce 2015 Summary of Ethics Rules. The Ethics
`Rules begin with this statement, “As an employee of the U.S. Department of
`Commerce, you have been placed in a position of trust and are held to a high
`standard of ethical conduct. You not only have an obligation to perform your duties
`to the best of your abilities but also to familiarize yourself with Government ethics
`rules and policies and to comply with applicable restrictions....”2 To provide a
`hearing that meets the reasonable expectations of the litigants that the hearing will
`be fairly conducted is inherent. To fall below that standard in a process that exacts
`money, or other property “under the color of official right,” is unlawful.
`5. A further concern is that the judges all tacitly approved of the “shenanigans” by the
`director, since no one reported it to the “appropriate authority” as required by the
`Department of Commerce Ethics Rules 11 and 14 and by the American Bar
`Association Rule 8.3.
`
`
`
`The Killing Field
`
`Acting Director Matal, in a recent speech before a group of inventors you were quoted as
`saying, “It kills us to see a small inventor being ripped off.” While I believe those
`sentiments to be honest, it is difficult to reconcile the sincerity of those comments with the
`history of adversarial practices by the PTAB towards “small inventors” which have been
`continuously “ripped off” since the passing of the AIA, for which you are credited as being
`the principal staff drafter and negotiator. Since its inception, the PTAB has had the dubious
`distinction of being labeled the “killing field” of patents. It has rendered thousands of once
`valuable patents developed by “small inventors” virtually worthless, invalidating all or some
`of the claims of more than 80% of issued patents3 reviewed by IPR and over 97% of patents
`undergoing CBM.4
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`2 http://2010-2014.commerce.gov/sites/default/files/documents/2015/january/commerce-summary_of_ethics_rules-
`2015_0.pdf
`3 https://www.uspto.gov/sites/default/files/documents/AIA%20Statistics_March2017.pdf
`4 Kevin Madigan and Adam Mosoff, “Turning Gold to Lead: How Patent Eligibility Doctrine Is Undermining U.S.
`Leadership In Innovation,” George Mason Law & Economics Research Paper No. 17-16, p. 16,
`https://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=345663, (posted Mar. 30, 2017).
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`On May 22, 2017, I was copied on a letter sent to Commerce Secretary Wilbur Ross and
`several other government officials from two concerned Voip-Pal shareholders, one of which
`is an attorney. The letter raised valid concerns regarding the lack of public disclosure of then
`USPTO Director Michelle Lee’s financial holdings, specifically with regard to any stock or
`options holdings of her former employer Google or any other Silicon Valley company.
`Shortly thereafter, we saw the abrupt resignation of Michelle Lee as Director.
`
`The issue of her potential stock holdings is vitally important, since the unusually high rate of
`claims cancelled by the PTAB overwhelmingly benefits Silicon Valley companies, including
`Ms. Lee’s former employer Google. Did Ms. Lee incur any direct financial benefit from the
`invalidation of so many patents during her tenure at the USPTO? It is important to know if
`rigging of the judges has ever resulted in personal financial gains for the Director or anyone
`else involved in those decisions.
`
`6. A similar ethical lapse seems to have occurred with respect to the recusal of judges. The
`specific concerns addressed in the conversations are ones that I shared in an earlier letter:
`
`Based on the available information that is available, Voip-Pal has determined that two
`of the assigned judges either represented Apple (the Petitioner) or worked in a law firm
`which has represented Apple in patent litigation. Judge Stacy Margolies represented
`Apple in a 2011 patent litigation case and Judge Barbara Benoit was a principal at Fish
`& Richardson, a law firm which has represented Apple in patent litigation, including a
`case before the Patent Trial and Appeal Board (PTAB). The third judge, Lynne
`Pettigrew, was employed by AT&T for a period of eight years. While AT&T was not
`directly involved in the IPR’s considered by the first panel, they were, at that time, a
`named party in a lawsuit filed by Petitioner in Federal District Court in Nevada
`pertaining to the patents being reviewed in the IPR. They subsequently filed three
`IPR’s against the patents. Thus it appears that each of the judges may have had a
`potential bias, but there no way of ascertaining whether the problem is an appearance or
`a reality.
`
`7. There is also a potential of bias on the part of the administrator, Undersecretary Lee, who,
`prior to becoming the Director of the USPTO, was Deputy General Counsel and Head of
`Patents and Patent Strategy for Google, which is also a defendant in the federal court
`action that is considering these patents. Given her position as the head of the USPTO,
`which now includes the judicial arm, the PTAB, I request that she be asked to provide the
`financial disclosures that are contemplated by 28 USC§455 and that she consider whether
`“ [s]he, individually or as a fiduciary, or [her] spouse or minor child residing in h[er]
`household, has a financial interest in the subject matter in controversy or in a party to the
`proceeding, or any other interest that could be substantially affected by the outcome of
`the proceeding.” For example, it seems likely that her long tenure at Google resulted in
`her owning a number of Google shares and/or options, which may create a circumstance
`where she should “disqualify h[er]self (acting as an administrator over a judicial system)
`in any proceeding in which h[er] impartiality might reasonably be questioned.”
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`8. In the case of Voip-Pal, there were changes made to the panel, as all three judges were
`replaced after the denial for the Unified Patents petition and the institution of the first two
`Apple petitions:
`a.
`UNIFIED PATENTS INC. Case IPR2016-01082, challenging Patent 8,542,815,
`institution denied, 11/18/2016.
`b.
`APPLE INC., Case IPR2016-01201, challenging Patent 8,542,815, instituted
`11/21/ 2016.
`c.
`APPLE INC., Case IPR2016-01198, challenging Patent 9,179,005, instituted
`11/21/2016
`d.
`APPLE INC., IPR2017-01399, challenging Patent 8,542,815, filed 5/ 25/2017
`e.
`APPLE INC., IPR2017-01398, challenging Patent 9,179,005, filed 5/25/2017
`f.
`AT&T SERVICES, INC., Case No. IPR2017-01382, challenging Patent
`8,542,815 filed 5/ 24/2017
`g.
`AT&T SERVICES, INC., Case No. IPR2017-01383, challenging Patent
`9,179,005 filed 5/ 24/2017
`h.
`AT&T SERVICES, INC., Case No. IPR2017-01384, challenging Patent
`9,179,005 filed 5/ 24/2017
`
`There was no reason given for the changes. However, as the new panel did not revisit the
`earlier institution decisions, Voip-Pal must assume that these changes had something to do
`with maintaining the Director’s “Policy Position,” as in the three earlier circuit court oral
`arguments I quoted. Because of the serious consequences associated with RICO violations
`and its potentially criminal liability implications, I ask you both to please consider taking the
`steps necessary to change these unfair and unjust PTAB and IPR procedures which have
`become the “killing field” of thousands of valid patents.
`
`
`As a shareholder of Voip-Pal, I can’t help but ask what chance a small company, with limited
`financial resources, has of successfully defending itself against eight nearly identical IPR’s
`aimed at two patents in the same family, initiated by such giants as Apple and AT&T.
`Will Voip-Pal and other small companies in similar situations ever be able to receive a fair
`hearing on the technical merits of their patents? Do you fully understand the financial harm
`inflicted daily on the “small inventor” by these giant corporations which use IPR’s and the
`PTAB as a weapon against them to run them out of business and eliminate fair competition?
`
`Director Matal, you recently encouraged inventors to engage their elected officials and push the
`message. You said Congress is listening and is very concerned. I am appealing to you directly
`and hope you are also listening and concerned. It is in your power as acting Director to ensure
`the IPR process is fair and carried out purely on technical merits. It is within your power to take
`corrective actions against these unjust practices that have repeatedly “ripped off” the small
`inventor for the past five years.
`
`Respectfully yours,
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`Dr. Thomas E. Sawyer
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`CC: The President of the United States
`Steven Mnuchin, Secretary of the Treasury
`Wilbur Ross, Secretary of Commerce
`Jeff Sessions, Attorney General of the United States
`Christopher Wray, Director of the FBI
`The Chief Justice of the United States
`Justice Thomas, The Supreme Court of the United States
`Justice Kennedy, The Supreme Court of the United States
`Justice Ginsberg, The Supreme Court of the United States
`Justice Breyer, The Supreme Court of the United States
`Justice Alito, The Supreme Court of the United States
`Justice Kagan, The Supreme Court of the United States
`Justice Sotomayor, The Supreme Court of the United States
`Justice Gorsuch, The Supreme Court of the United States
`Honorable Sharon Prost, Chief Judge, United States Court of Appeals for the Federal
`Circuit
`Honorable Timothy B. Dyk, United States Court of Appeals for the Federal Circuit
`Honorable Richard G. Taranto, United States Court of Appeals for the Federal Circuit
`Honorable Gloria M. Navarro, Chief Judge, United States District Court, District of
`Nevada (Voip-Pal.com Inc. v. Apple Inc. Case No. 2:2016cv00260, Voip-Pal.com v.
`Twitter Inc., Case No. 2:2016cv02338, Voip-Pal.com Inc. v. Verizon Wireless
`Services LLC et al., case number 2:16-cv-00271)
`Honorable Richard F. Boulware II, United States District Court, District of Nevada
`(Voip-Pal.com Inc. v. Apple Inc. Case No. 2:2016cv00260, Voip-Pal.com Inc. v.
`Twitter Inc., Case No. 2:2016cv02338, Voip-Pal.com Inc. v. Verizon Wireless
`Services LLC et al., case number 2:16-cv-00271)
`Andrei Iancu, Nominee, Director of the USPTO
`Judge Josiah Cocks, Patent Trial and Appeal Board
`Judge Jennifer Meyer Chagnon, Patent Trial and Appeal Board
`Judge John Hudalla, Patent Trial and Appeal Board
`Office of the Solicitor General of the United States
`US Senator Orrin Hatch, Utah
`US Senator Mike Lee, Utah
`US Senator Ed Markey, Massachusetts
`US Senator Mitch McConnell, Kentucky, Senate Majority Leader
`US Senator Chuck Schumer, New York, Senate Minority Leader
`US Senator Chuck Grassley, Iowa
`US Senator Marco Rubio, Florida
`US Senator Maria Cantwell, Washington
`US Senator Mike Crapo, Idaho
`US Senator James Risch, Idaho
`US Senator Jeff Flake, Arizona
`US Senator John McCain, Arizona
`US Senator Patrick Leahy, Vermont
`US Senator Chris Coons, Delaware
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`US Senator Tom Cotton, Arkansas
`US Senator Dick Durbin, Illinois
`US Senator Mazie Hirono, Hawaii
`US Representative Paul Ryan, Wisconsin, Speaker of the House of Representatives
`US Representative Nancy Pelosi, California, Minority Leader of the House of
`Representatives
`US Representative Mia Love, Utah
`Director Will Covey, USPTO Office of Enrollment and Discipline
`Patents Ombudsman
`Dr. Colin Tucker, Chairman of the Board, Voip-Pal.com Inc
`Multiple Media Outlets
`CC’s sent via registered US mail and email when available
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