Pursuant to the Board’s email dated December 3, 2019, Patent Owner CyWee
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`Group, Inc. hereby submits its Patent Owner’s Objection and Motion to Terminate
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`Proceedings Under United States Constitution Article II, Section 2, Clause 2.
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`I.
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`The Panel is Composed of Unconstitutionally Appointed Officers
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`On October 31, 2019, the Federal Circuit Court of Appeals issued its opinion
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`Deleted: Judicial
`Deleted: ¶
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`in Arthrex, Inc. v. Smith & Nephew, Inc., No. 2018-2140, 2019 WL 5616010 (Fed.
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`Deleted: Case
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`Cir. Oct. 31, 2019). In Arthrex, the Federal Circuit held “that APJs1 are principal
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`officers under Title 35 as currently constituted. As such, they must be appointed by
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`the President and confirmed by the Senate; because they are not, the current structure
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`of the Board violates the Appointments Clause.” Arthrex, Inc., 2019 WL 5616010,
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`at *8.
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`Moved (insertion) [1]
`Deleted: .
`Deleted: APJs
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`Deleted: 20
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`The Director of the USPTO has unconditionally delegated the authority to
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`Deleted: ¶
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`make institution decisions to APJs. See 37 C.F.R. § 42.4 (“The Board institutes the
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`trial on behalf of the Director.”); 37 C.F.R. § 42.108 (“When instituting inter partes
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`review, the Board may authorize the review to proceed on all or some of the
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`challenged claims and on all or some of the grounds of unpatentability asserted for
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`each claim.”). The regulations provide no mechanism for oversight by the Director
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`(or any other presidentially-appointed officer), the ability for the parties to appeal
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`the Board’s decision to the Director, or the ability for the Director to overturn an
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`1 APJs refers to Administrative Patent Judges.
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`SONY 1053
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`institution decision by the Board. In this case, the institution determination was made
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`by the Board, and the Board alone without any right of appeal to a constitutionally
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`appointed officer. Effectively, the Director has unconstitutionally abrogated any
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`responsibility for institution determinations and delegated the Board’s APJs
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`complete and unchecked power to make institution determinations.
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`The Board’s lack of oversight when rendering institution decisions is no
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`different than the rendering of final written decisions. As the Federal Circuit noted
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`in Arthrex, “[t]he lack of any presidentially-appointed officer who can review,
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`vacate, or correct decisions by the APJs combined with the limited removal power
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`lead us to conclude . . . [that APJs] are principal officers.” Arthrex, Inc., 2019 WL
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`5616010, at *8. There is no mechanism under the regulations for the Director to
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`“review, vacate, or correct [institution] decisions by the APJs” so when rendering
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`institution decisions APJs are acting as principal officers. Therefore, the unchecked
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`delegation of authority to APJs renders institution determinations under the AIA
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`unconstitutional as applied.
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`II. Administrative Patent Judges are Judicial Officers
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`Inter partes reviews (“IPRs”) replaced the previous reexamination procedure
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`Deleted: ¶
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`by converting the process from an examinational to an adjudicative one. See Abbott
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`Deleted: See Abbott Labs. v. Cordis Corp., 710 F.3d
`1318, 1326 (Fed.
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`Labs. v. Cordis Corp., 710 F.3d 1318, 1326 (Fed. Cir. 2013) (quoting H.R. Rep. No.
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`112–98, pt. 1, at 46–47 (2011)). An adjudicative proceeding is necessarily presided
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`Moved up [1]: Cir.
`Deleted: 2013) (
`Deleted: H.R.Rep. No. 112–98,
`Deleted: federal
`Deleted:
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`over by a judicial officer. APJs are, by the act of Congress that created them, judicial
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`officers of the United States. The Federal Circuit confirmed APJs’ status as judicial
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`officers in Abbot Labs. To hold otherwise would make APJs simply re-titled patent
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`Deleted: federal
`Deleted: ¶
`Administrative Patent Judges (“APJs”)
`Deleted: APJ’s
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`examiners.
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`III.
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`Judicial Officers’ Actions are Void if Not Constitutionally
`Appointed
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`In Arthrex, the Federal Circuit effectively applied the de facto officer doctrine
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`Deleted: ¶
`APJs
`Deleted: Do
`Deleted: Qualify for De Facto Officer Doctrine
`Deleted: Judge Moore
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`in an attempt to save all rulings made by the original APJ panel that was
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`unconstitutionally appointed by remanding the case to the Patent Trial and Appeal
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`Board (“PTAB”) with instructions that a new APJ panel properly appointed could
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`decide the case on the same record. See Arthrex, Inc., 2019 WL 5616010, at *12
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`Deleted: 30
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`(“Finally, we see no error in the new panel proceeding on the existing written record
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`but leave to the Board’s sound discretion whether it should allow additional briefing
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`or reopen the record in any individual case.”). The Federal Circuit’s allowance of
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`Deleted: .”) Judge Moore’s
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`the prior orders and decisions of the unconstitutionally appointed APJ panel to stand
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`(but not the final written decision) was effectively a ruling that the de facto officer
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`Deleted: ruling
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`doctrine applied to all such non-final rulings of unconstitutionally appointed APJ
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`panels.
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`But the United States Supreme Court has repeatedly ruled that the de facto
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`officer doctrine does not apply to judicial officers of the United States. Nguyen v
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`United States, 539 U.S. 69, 77 (2003). The Nguyen holding is consistent with and
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`Deleted: by
`Deleted: ¶
`Deleted: US
`Deleted: relies upon Ryder v United States, 515 US
`Moved down [2]: 177 (1995).
`Deleted: The rule that the de facto officer doctrine does not
`apply to Article II administrative law judges (“ALJs”) was
`made clear in Lucia v.
`Moved down [3]: S.E.C., 138 S.
`Moved down [4]: Ct.
`Deleted: 2044, 2055-56 (2018). APJs should not be treated
`any differently than ALJs.
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`relies upon Ryder v United States, 515 U.S. 177 (1995). The rule that the de facto
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`Moved (insertion) [2]
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`officer doctrine does not apply to administrative law judges (“ALJs”) was made clear
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`in Lucia v. S.E.C., 138 S. Ct. 2044, 2055–56 (2018). APJs should not be treated any
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`differently than their ALJ brethren.
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`Moved (insertion) [3]
`Moved (insertion) [4]
`Deleted: ¶
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`The Federal Circuit has unconditionally ruled the decision to institute this IPR
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`was made by an unconstitutionally appointed APJ panel. That institution decision is
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`Deleted: current APJ panels’ decisions
`Deleted: pending IPRs were
`Deleted: judicial officers of the United States. Arthrex at
`20. Those decisions to institute were
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`therefore void from its inception. Nguyen, 539 U.S. at 78 (“This Court succinctly
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`Deleted: their
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`observed: ‘If the statute made him incompetent to sit at the hearing, the decree in
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`which he took part was unlawful, and perhaps absolutely void, and should certainly
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`be set aside or quashed by any court having authority to review it by appeal, error
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`or certiorari.’”) (citing American Constr. Co. v. Jacksonville, T. & K.W.R. Co., 148
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`U.S. 372, 387 (1893)) (emphasis added).
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`IV. Remand is the Only Option and Renders the Proceedings Time-
`Barred
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`Moved (insertion) [5]
`Deleted: )(citing American Constr. Co. v. Jacksonville,
`Deleted: T.
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`Moved up [5]: & K.W.R. Co.,
`Deleted: 148 U.S. 372, 387)(emphasis added).¶
`¶
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`The only option when a judicial officer is found unconstitutionally appointed
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`Deleted: ¶
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`is a remand to have the matter reheard in its entirety by a duly appointed officer in
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`Deleted: judicial officer
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`conformity with the Constitution. Nguyen, 539 U.S. at 83; Lucia, 138 S. Ct. at 2055–
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`56. In this case, however, remand would be futile because the time for an institution
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`decision by a properly appointed APJ panel has long since passed. 35 U.S.C. §
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`314(b)(2); see PersonalWeb Tech., LLC v. FaceBook, Inc., 2014 WL 116350, at *2
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`(N.D. Cal. January 13, 2014) (“The PTO must decide whether to
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`Deleted: accordance
`Deleted: Appointments Clause or by a newly appointed
`lesser officer whose appointment is not subject to Senate
`confirmation.
`Deleted: -
`Deleted: most pending IPRs
`Deleted: and rehearing before a new APJ panel
`Deleted: in most pending IPRs
`Deleted: A.
`Deleted: ). See
`Deleted: )(“
`Deleted:
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`Deleted: .”)(
`Deleted: panels were allowed to decide to institute long-
`pending IPRs after remand
`Deleted: 35 U.S.C.
`Deleted: ),
`Deleted: such
`Deleted: panels
`Deleted: deadlines
`Deleted: )(this assumes a six month extension were sought
`and granted before the 1 year
`Deleted: passed). Those deadlines
`Deleted: are
`Deleted: by the express language of the AIA
`Deleted: ¶
`In almost every pending IPR no possibility now exists of an
`institution decisions being made by a newly appointed APJ
`panel within the deadlines mandated by the AIA, nor is there
`any possibility of final written decisions being issued within
`the AIA final decision deadlines.¶
`Because the new panels cannot possibly meet the mandatory
`deadlines, every pending
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`institute IPR within three months of the patent owner's preliminary response, or
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`in the event no response is filed, by the last date on which the response could have
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`been filed.”) (emphasis added). Even if a new APJ panel instituted, this IPR would
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`be in direct violation of § 314(b)(2). Further, the final decision could not possibly be
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`reached by a newly appointed panel within the 18-month deadlines2 of 35 U.S.C. §
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`316(a)(11); 37 C.F.R. § 42.100(c). The deadline for a final written decision, like the
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`institution deadline, is not extendable.
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`The PTAB’s ability to make a new institution decision and, if necessary, issue
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`a final written decision within the statutory deadline is further constrained by the
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`fact that the supposed “fix” provided by the Federal Circuit in Arthrex violates
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`statutory requirements of the Administrative Procedures Act. In Arthrex, the Federal
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`Circuit struck down restrictions on the removal of APJs, thereby permitting the
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`Director to remove APJs without cause. Arthrex, Inc., 2019 WL 5616010, at *10.
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`Administrative
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`law
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`judges presiding over proceedings governed by
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`the
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`Administrative Procedure Act, however, can only be removed in cases where “good
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`cause [is] established and determined by the Merit Systems Protection Board on the
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`record after opportunity for hearing before the Board.” 5 U.S.C. § 7521. The Federal
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`Circuit has already recognized that inter partes review is a formal adjudication
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`2 This assumes a six-month extension was sought and granted before the 1 year
`deadline passed.
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`governed by the Administrative Procedures Act. Belden Inc. v. Berk-Tek LLC, 805
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`F.3d 1064, 1080 (Fed. Cir. 2015). Absent congressional action exempting inter
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`partes review from the formal adjudication requirements of the Administrative
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`Procedures Act, APJs cannot preside over inter partes review proceedings while
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`simultaneously complying with both constitutional and statutory requirements.
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`Because there is no possibility of an institution decision within the time frame
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`prescribed by the America Invents Act (“AIA”) or any possibility of a final written
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`decision being issued within the AIA deadlines if a new panel were to start this
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`process over from scratch as required by Nguyen, Ryder, and Lucia, this IPR must
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`be terminated with prejudice. Any other result would thwart the fundamental
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`purpose of the AIA that created IPRs for the purposes of “providing quick and cost-
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`effective alternatives to litigation.” H.R. Rep. No. 112–98, pt. 1, at 48 (2011), 2011
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`U.S.C.C.A.N. 67, 78; 77 F. Reg. 48680–01 (Aug. 14, 2012); Universal Elecs., Inc.
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`v. Universal Remote Control, Inc., 943 F. Supp. 2d 1028, 1029–30 (C.D. Cal. 2013).
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`Deleted: H.R. Rep. No. 112–98,
`Deleted:
`Moved down [6]: U.S.C.C.A.N. 67, 78; 77 F. Reg. 48680–
`01 (Aug. 14, 2012); Universal Elecs., Inc.
`Deleted:
`Moved down [7]: v. Universal Remote Control, Inc.,
`Deleted: 943 F.
`Moved down [8]: Supp.
`Deleted: 2d 1028, 1029-30 (C.D. Cal. 2013).
`Moved (insertion) [6]
`Moved (insertion) [7]
`Moved (insertion) [8]
`Deleted: ¶
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`Patent Owner CyWee Group, Ltd. objects to these proceedings as being held
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`before judicial officers that were unconstitutionally appointed and asks that these
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`Deleted: Owners should all
`Deleted: any pending IPR
`Deleted: their
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`proceedings be terminated with prejudice.
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`Dated: December 3, 2019
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`Respectfully submitted,
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`/s /Jay P. Kesan
`Jay P. Kesan
`Reg. No. 37,488
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`Counsel for Patent Owner
`Cywee Group Ltd.
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`Deleted: because no possibility exists that the mandatory
`deadlines to institute and/or decide this IPR can be met
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`Deleted: Michael W. Shore
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