Case: 23-118 Document: 2 Page: 1 Filed: 01/24/2023
`
`No. 2023-
`
`United States Court of Appeals for the Federal Circuit
`
`In Re
`
`PATENT QUALITY ASSURANCE LLC,
`
`Petitioner.
`
`On Petition for a Writ of Mandamus to the Director of the United States Patent
`and Trademark Office in Case No. IPR2021-01229.
`
`PETITION FOR A WRIT OF MANDAMUS WITH
`
`NONCONFIDENTIAL APPENDIX
`
`Brian C. Banner
`Principal Attorney
`Truman H. Fenton
`SLAYDEN GRUBERT BEARD PLLC
`401 Congress Avenue, Suite 1650
`Austin, TX 78701
`(512) 402-3552
`
`IPR2021-01229
`Ex. 3044
`
`

`

`Case: 23-118 Document: 2 Page: 2 Filed: 01/24/2023
`
`CERTIFICATE OF INTEREST
`Pursuant to Federal Circuit Rule 47.6, counsel for Petitioner Patent Quality
`Assurance LLC (“PQA”) certifies the following:
`
`I.
`
`The full name of the party represented by me:
`
`Patent Quality Assurance LLC
`
`II.
`
`The name of the real party in interest represented by me is:
`
`Not applicable
`
`III. Parent corporations and publicly held companies that own 10% or more of
`stock in the party:
`
`None
`
`IV. The names of all law firms and the partners or associates that appeared for
`the party or amicus now represented by me in the trial court or agency or are
`expected to appear in this court (and who have not or will not enter an
`appearance in this case) are:
`
`Slayden Grubert Beard, PLLC: Bruce W. Slayden II, Brian C.
`Banner, Truman H. Fenton, Tecuan Flores
`
`V.
`
`The title and number of any case known to counsel to be pending in this or
`any other court or agency that will directly affect or be directly affected by
`this court’s decision in the pending appeals.
`
`Patent Quality Assurance LLC v. VLSI Technologies LLC, Case No.
`IPR2021-01229 (Patent Trial & Appeal Board)
`
`Dated: January 24, 2023
`
`
`
`
`
`/s/ Brian C. Banner
`
`Counsel for Petitioner
`Patent Quality Assurance LLC
`
`
`
`
`
`
`
`
`
`
`
`i
`
`

`

`Case: 23-118 Document: 2 Page: 3 Filed: 01/24/2023
`
`TABLE OF CONTENTS
`RELIEF SOUGHT ..................................................................................................... 1
`INTRODUCTION ..................................................................................................... 1
`ADDITIONAL FACTS NECESSARY TO UNDERSTAND THE
`ISSUES PRESENTED .................................................................................... 9
`ISSUES PRESENTED .............................................................................................14
`REASONS FOR ISSUING THE WRIT ..................................................................15
`I. LEGAL STANDARD ..................................................................................15
`II. PQA HAS NO OTHER ADEQUATE MEANS TO ATTAIN
`RELIEF .....................................................................................................16
`III. PQA’S RIGHT TO MANDAMUS RELIEF IS CLEAR AND
`INDISPUTABLE IN LIGHT OF THE DIRECTOR’S
`ULTRA VIRES ORDERS ........................................................................20
`A. The Sanctions Decision Ignores the Regulations Governing
`Sanctions .............................................................................................20
`B. The Sanctions Decision Manifestly Misapprehends the Law
`Governing IPR Discovery ...................................................................23
`1. The Governing Statue Does Not Grant the Director Power
`to Order the Mandated Discovery ..................................................24
`2. The Regulations Do Not Grant Power to Issue the
`Mandated Discovery ......................................................................24
`37 C.F.R. § 42.51 does not authorize the Mandated
`Discovery ..................................................................................24
`37 C.F.R. § 42.5(a) does not authorize the
`Mandated Discovery .................................................................26
`C. The Director Violated PQA’s Due Process Rights
`Announcing a Novel Standard for Abuse of Process and
`Simultaneously Sanctioning PQA Under That New
`Standard ...............................................................................................27
`D. The Director Improperly Took Control of this IPR .................................31
`IV. MANDAMUS IS APPROPRIATE HERE WHERE THE
`DIRECTOR HAS UNDERTAKEN ILLEGAL AND
`UNPRECENDENTED ACTIONS THAT HAVE INJURED
`
`b.
`
`a.
`
`
`
`ii
`
`

`

`Case: 23-118 Document: 2 Page: 4 Filed: 01/24/2023
`
`PQA AND ATTEMPT TO DEPRIVE THIS COURT OF
`THE POWER TO REVIEW HER ACTIONS ..........................................33
`
`
`iii
`
`
`
`
`
`

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`Case: 23-118 Document: 2 Page: 5 Filed: 01/24/2023
`
`TABLE OF AUTHORITIES
`
`
`
`Cases
`
`Aid Association for Lutherans v. USPS,
`321 F.3d 1166 (D.C. Cir. 2003) ...........................................................................27
`Bankers Life & Cas. Co. v. Holland,
`346 U.S. 379 (1953) .............................................................................................16
`Belton v. McDonald,
`636 F. App’x 1011, 2016 WL 46295 (Fed. Cir. 2016) ........................................19
`Bookman v. United States,
`453 F.2d 1263 (Ct. Cl. 1972) ...............................................................................32
`Cheney v. United States Dist. Court,
`542 U.S. 367 (2004) .............................................................................................16
`Christopher v. SmithKline Beecham Corp.,
`567 U.S. 142 (2012) ...................................................................................... 27, 28
`Cooley v. United States,
`324 F.3d 1297 (Fed. Cir. 2003) ..................................................................... 14, 32
`Drumheller v. Dep’t of Army,
`49 F.3d 1566 (Fed. Cir. 1995) ................................................................. 20, 23, 26
`Facebook, Inc. v. Windy City Innovations, LLC,
`973 F.3d 1321 (Fed. Cir. 2020) ............................................................................28
`Gen. Elec. Co. v. United Techs. Corp.,
`928 F.3d 1349 (Fed. Cir. 2019) ............................................................................17
`Gladstein v. McLaughlin,
`230 F.2d 762 (9th Cir. 1955)................................................................................18
`In re BigCommerce, Inc.,
`890 F.3d 978 (Fed. Cir. 2018) ..............................................................................35
`In re Google LLC,
`949 F.3d 1338 (Fed. Cir. 2020) ............................................................................34
`In re Nintendo Co., Ltd.,
`589 F.3d 1194 (Fed. Cir. 2009) ............................................................................19
`
`
`
`iv
`
`

`

`Case: 23-118 Document: 2 Page: 6 Filed: 01/24/2023
`
`In re Syncora Guarantee Inc.,
`757 F.3d 511 (6th Cir. 2014)................................................................................34
`Kisor v. Wilkie,
`139 S. Ct. 2400 (2019) .........................................................................................25
`Lawrence + Mem’l Hosp. v. Burwell,
`812 F.3d 257 (2d Cir. 2016) .................................................................................27
`Mallard v. U.S. Dist. Ct. for S. Dist. of Iowa,
`490 U.S. 296 (1989) .............................................................................................34
`Mathews v. Diaz,
`426 U.S. 67 (1976) ...............................................................................................19
`Medtronic, Inc. v. Robert Bosch Healthcare Sys., Inc.,
`839 F.3d 1382 (Fed. Cir. 2016) ............................................................................33
`Memphis Light, Gas & Water Division v. Craft,
`436 U.S. 1 (1978) .................................................................................................29
`Morton v. Ruiz,
`415 U.S. 199 (1974) .............................................................................................26
`Mote v. Wilkie,
`976 F.3d 1337 (Fed. Cir. 2020)) ..........................................................................33
`Mylan Labs. Ltd. v. Janssen Pharmaceutica, N.V.,
`989 F.3d 1375, 1381 (Fed. Cir. 2021), cert. denied, 142 S. Ct. 874
`(2022) ...................................................................................................................16
`Nat’l Fed’n of Indep. Bus. v. Dep’t of Lab., Occupational Safety &
`Health Admin.,
`142 S. Ct. 661 (2022) .................................................................................... 20, 24
`Patlex Corp. v. Mossinghoff,
`771 F.2d 480 (Fed. Cir. 1985) ..............................................................................29
`Queenan v. Heckler,
`581 F. Supp. 1216 (S.D.N.Y. 1984) .....................................................................16
`SAS Inst., Inc. v. Iancu,
`138 S. Ct. 1348 (2018) .......................................................................... 4, 9, 16, 17
`Schlagenhauf v. Holder,
`379 U.S. 104 (1964) ...................................................................................... 16, 34
`Scott v. D.C.,
`101 F.3d 748 (D.C. Cir. 1996) .............................................................................29
`
`
`
`v
`
`

`

`Case: 23-118 Document: 2 Page: 7 Filed: 01/24/2023
`
`Stark v. Wickard,
`321 U.S. 288 (1944) .............................................................................................27
`United States v. Arthrex, Inc.,
`141 S. Ct. 1970 (2021) .................................................................................. 18, 31
`United States v. Tillman,
`756 F.3d 1144 (9th Cir. 2014) .............................................................................18
`Woods Svcs, Inc. v. Disability Advocates, Inc.,
`342 F. Supp. 3d 592 (E.D. Pa. 2018) ...................................................................29
`Yellow Bus Lines, Inc. v. Drivers, Chauffeurs & Helpers Local Union
`639,
`883 F.2d 132 (D.C. Cir. 1989) .............................................................................29
`
`
`
`Statutes
`
`5 U.S.C. § 706(2)(A–D) .............................................................. 5, 15, 16, 18, 26, 33
`28 U.S.C. § 1651(a) .................................................................................................15
`35 U.S.C. § 6(c) .................................................................................... 14, 15, 31, 33
`35 U.S.C. § 314(b) ............................................................................................ 14, 32
`35 U.S.C. § 314(d) ........................................................................................ 2, 17, 34
`35 U.S.C. § 316(a)(5) .................................................................................. 15, 24, 27
`35 U.S.C. § 316(a)(6) ...............................................................................................28
`35 U.S.C. § 316(c) ................................................................................ 14, 15, 31, 33
`35 U.S.C. § 318(a) ............................................................................................ 17, 28
`
`
`Other Authorities
`
`The Mangrove Partners Master Fund v. Virnetx Inc.,
`IPR2015-01047, 2015 WL 5921228 (PTAB 2015) .............................................29
`
`
`
`Regulations
`
`37 C.F.R. § 42.5 .......................................................................................... 24, 26, 27
`
`
`
`vi
`
`

`

`Case: 23-118 Document: 2 Page: 8 Filed: 01/24/2023
`
`37 C.F.R. § 42.11(d) ........................................................................................ passim
`37 C.F.R. § 42.12(b)(6), (8) ....................................................................................... 6
`37 C.F.R. § 42.51 ........................................................................................ 24, 25, 26
`37 C.F.R. § 42.100(c) ........................................................................................ 32, 33
`
`
`
`
`vii
`
`

`

`Case: 23-118 Document: 2 Page: 9 Filed: 01/24/2023
`
`TABLE OF ABBREVIATIONS
`
`
`Parties
`Petitioner Patent Quality Assurance LLC
`
`VLSI Technologies LLC
`
`Patent-at-Issue
`U.S. Patent No. 7,523,373
`
`Other
`Leahy-Smith America Invents Act, Pub. L. No.
`112-29, 125 Stat. 284 (Sept. 16, 2011)
`
`Administrative Procedure Act, 5 U.S.C. §§ 551–59
`
`Final Written Decision
`
`Patent Trial & Appeal Board
`
`IPR2021-01229
`
`Three-Judge Panel Presiding over the ’373 IPR
`
`Katherine K. Vidal, Under Secretary of Commerce
`for Intellectual Property and Director of the United
`States Patent and Trademark Office
`
`Paper 101, Patent Quality Assurance, LLC et al. v.
`VLSI Techs. LLC, No. IPR2021-01229. Appx1-67.
`
`Paper 35, Patent Quality Assurance, LLC et al. v.
`VLSI Techs. LLC, No. IPR2021-01229. Appx68-
`81.
`
`Consolidated Trial Practice Guide November 2019
`(https://www.uspto.gov/about-us/news-
`updates/consolidated-trial-practice-guide-
`november-2019).
`
`viii
`
`
`
`
`
`PQA or petitioner
`
`VLSI or patent owner
`
`
`’373 patent
`
`
`AIA
`
`APA
`
`FWD
`
`PTAB
`
`’373 IPR
`
`Panel
`
`Director
`
`Sanctions Decision
`
`
`Scheduling Order
`
`
`CTPG
`
`

`

`Case: 23-118 Document: 2 Page: 10 Filed: 01/24/2023
`
`RELIEF SOUGHT
`
`Petitioner PQA requests the Court immediately stay the underlying Director
`
`review and rule on this petition for a writ of mandamus. Time is of the essence as
`
`the Director has unlawfully sanctioned PQA with dismissal and prohibited the Board
`
`from issuing the FWD, due January 27, 2023. PQA seeks mandamus (1) vacating
`
`the sanctions unlawfully imposed on PQA in the attached Sanctions Decision, (2)
`
`vacating the Director’s order staying the IPR and prohibiting the Board from issuing
`
`a FWD,1 and (3) directing the Board to comply with statutory and regulatory
`
`requirements. In the alternative, because further agency consideration is futile, PQA
`
`seeks a writ (1) vacating the attached Sanctions Decision, and underlying ultra vires
`
`orders,2 and (2) directing the Board to issue the FWD.
`
`INTRODUCTION
`
`The underlying IPR proceeding is off the rails, and PQA needs this Court to
`
`get it back on track. The Director took control of the proceeding; issued ultra vires
`
`discovery orders without statutory or regulatory authority; unlawfully sanctioned
`
`PQA, drawing adverse inferences and dismissing PQA from the proceeding; and
`
`indefinitely (and unlawfully) stayed the Board’s review so it cannot issue its FWD.
`
`Further, even though PQA is dismissed, the Director asserts without authority that
`
`
`
`1 Appx92.
`2 Appx68, Appx82, Appx88, Appx92.
`
`
`
`

`

`Case: 23-118 Document: 2 Page: 11 Filed: 01/24/2023
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`jurisdiction over PQA is retained to allow her to impose potential attorney fee
`
`sanctions.
`
`In an apparent attempt to insulate the Director’s ultra vires actions from
`
`judicial review under 35 U.S.C. § 314(d), the Sanctions Decision is improperly
`
`labeled a “review of the Board’s institution decision.” Moreover, as a dismissed
`
`party and because PQA has not been sued by VLSI, PQA may not be able to appeal.
`
`Mandamus is the only way to invoke this Court’s jurisdiction to review and correct
`
`the agency’s unprecedented and unlawful actions during the IPR proceeding.
`
`Some history provides context. In 2019–2020, Intel filed IPR petitions
`
`challenging the validity of two VLSI patents asserted against Intel.3 The PTAB,
`
`citing
`
`its Fintiv policy, discretionarily denied
`
`institution without merits
`
`consideration. Appx7; Appx192. Subsequently, VLSI obtained a record judgment of
`
`approximately $2.175 billion against Intel. Appx8. Thereafter, commentators
`
`criticized the PTAB for not hearing Intel’s meritorious IPRs.4 The Director has now
`
`determined Intel’s rejected petitions presented “compelling merits.” Appx61,
`
`
`3 IPR2020-00158 challenged the ’373 patent. IPR2020-00106 and IPR2020-00498
`both challenged U.S. Pat. No. 7,725,759 (“the ’759 patent”).
`4 See, e.g., https://www.patentprogress.org/2021/03/one-case-all-the-problems-vlsi-
`v-intel-exemplifies-current-issues-in-patent-litigation/,
`https://www.patentspostgrant.com/pop-panel-to-consider-profiteers-gaming-ptab/.
`2
`
`
`
`

`

`Case: 23-118 Document: 2 Page: 12 Filed: 01/24/2023
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`Appx74. And under the Director’s new Fintiv guidance5—issued during PQA’s
`
`IPR—the PTAB would not now deny Intel’s petitions. See Appx7 (“compelling …
`
`challenges will be allowed to proceed…”). Thus, VLSI obtained record judgments
`
`on likely invalid patents the PTAB now implicitly admits it should have reviewed.
`
`Following VLSI’s windfall record verdict, two unrelated entities, OpenSky
`
`and PQA, independently filed IPR petitions based on Intel’s denied petitions. In
`
`OpenSky’s proceeding on the ’759 patent, the Director determined OpenSky abused
`
`the process by, inter alia, (1) “offering to undermine and/or not vigorously pursue
`
`this matter in exchange for a monetary payment” from VLSI (Appx190); (2) seeking
`
`“monetary payment from Intel in return for success in the IPR” (Appx197); (3)
`
`suggesting OpenSky “may decide not to depose VLSI’s expert or file a reply brief”
`
`(Appx198); (4) offering Intel the lead position in exchange for “remuneration” (id.);
`
`(5) not requesting oral argument; and (6) “not meaningfully participat[ing] in the
`
`oral hearing” (Appx199).
`
`PQA did none of those things. Instead, PQA did everything an IPR petitioner
`
`should do and normally does, including: (1) exclusively engaging the expert
`
`witnesses, (2) filing a compelling merits petition, (3) preparing and presenting
`
`PQA’s expert witness for deposition, (4) deposing VLSI’s expert witness, (5)
`
`
`5 See https://www.uspto.gov/about-us/news-updates/director-vidal-provides-clarity-
`patent-trial-and-appeal-board-practice.
`
`
`
`3
`
`

`

`Case: 23-118 Document: 2 Page: 13 Filed: 01/24/2023
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`presenting arguments, (6) requesting an oral hearing, and (7) solely arguing the
`
`merits at the hearing. PQA did all this without compensation from VLSI or Intel.
`
`Shortly before the Board instituted PQA’s ’373 IPR, VLSI requested
`
`settlement discussions, entered into an NDA with PQA, agreed to maintain
`
`settlement discussions in confidence, then breached the NDA by publicly disclosing
`
`those discussions in a public filing6 and arguing PQA tried to extort VLSI. Appx151,
`
`Appx154, Appx136. Rather than commend PQA for bringing a compelling merits
`
`petition, the Director faults PQA for, inter alia, a confidential counteroffer made
`
`during settlement discussions with VLSI. Appx31. But again—those negotiations
`
`were at VLSI’s request (Appx30)—and the Board, like the courts, encourages
`
`settlement (CTPG, 86). Regardless, PQA responded by publicly stipulating it would
`
`not accept money from VLSI. Appx201.
`
`Then came the “shenanigans.” See SAS Inst., Inc. v. Iancu, 138 S. Ct. 1348,
`
`1359 (2018). After surprising Congressional interest in OpenSky and PQA’s IPRs7
`
`(and over five months after the Board’s institution decision), the Director took over
`
`by ordering Mandated Discovery not authorized by statute or regulation and inviting
`
`objections to the Mandated Discovery order based on “lawful grounds.” Appx76-78;
`
`Appx85. Another five months later (11 months after institution), the new Director
`
`
`6 The Director has not sanctioned VLSI for its misconduct.
`7 Appx124; Appx128.
`
`
`
`4
`
`

`

`Case: 23-118 Document: 2 Page: 14 Filed: 01/24/2023
`
`simultaneously overruled PQA’s objections and sanctioned PQA (1) with adverse
`
`inferences and (2) by dismissing PQA from the proceeding. The Director’s actions,
`
`labeled a “review of the Board’s institution decision,” are unlawful, “contrary to
`
`constitutional right, power, privilege, or immunity,” “in excess of statutory
`
`jurisdiction, authority, or limitations,” and “without observance of procedure
`
`required by law.” 5 U.S.C. § 706(2)(A–D).
`
`For example, the Director failed to comply with Office regulations which
`
`require giving a party an opportunity to explain why sanctions should not be imposed
`
`prior to imposing sanctions. See 37 C.F.R. §§ 42.11(d)(1) & (3). PQA sought
`
`rehearing and asked the Director to withdraw the sanctions and give PQA an
`
`opportunity to explain why the adverse inferences and dismissal sanctions should
`
`not be imposed. Appx167. In response, the Director admitted PQA was not given a
`
`chance to address the sanctions before they were imposed. Appx94 (the sanctioned
`
`conduct “would not readily have been the subject of a previous round of briefing”).
`
`However, the Director did not withdraw the unlawfully imposed sanctions. Appx92-
`
`95. Instead, giving mere lip service to the regulations, the Director informed PQA—
`
`still a dismissed party—that it “may submit” a ten-page paper in response to the 60-
`
`page Sanctions Order, due in seven days. Appx95. The Director also stayed the
`
`underlying IPR indefinitely and expressly prohibited “the panel” from issuing a
`
`
`
`5
`
`

`

`Case: 23-118 Document: 2 Page: 15 Filed: 01/24/2023
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`FWD even though the FWD deadline is January 27—just three days from now.
`
`Appx94-95.
`
`PQA seeks mandamus because PQA has endured unlawful order after
`
`unlawful order after unlawful order. Each one of the Director’s orders, beginning
`
`with the Scheduling Order, is ultra vires. If the harm in having to comply was not
`
`enough to invoke this Court’s jurisdiction and justify mandamus, the real and
`
`immediate harm from the Sanctions Decision and subsequent stay order is.
`
`The Director admitted the failure to follow the regulations but refuses to
`
`withdraw the unlawful sanctions. Thus, (1) the Director’s unfounded adverse
`
`inferences remain in place—harming PQA’s and its counsel’s reputation,8 and (2)
`
`PQA remains a dismissed party. Moreover, without citing to any authorizing statute
`
`or regulation,9 the Director attempts to “retain[] jurisdiction” over PQA for purposes
`
`of issuing additional attorney fee sanctions. Appx4. PQA is aware of no statute or
`
`regulation authorizing this “retain[ed] jurisdiction.” PQA cannot simply object. It
`
`needs this Court to intervene because the Director made it clear that objections to
`
`
`8 The Sanctions Decision wrongly states: “PQA, through its counsel, abused the IPR
`process including by advancing a misleading argument and a misrepresentation of
`fact…” Appx3.
`9 The Director cites only to 37 C.F.R. § 42.12(b)(6), (8), which provides “the Board
`may issue sanctions against a party.” But PQA is no longer a party. The Director
`dismissed PQA and removed PQA from the case caption (relegating it to a footnote).
`Appx92.
`
`
`
`6
`
`

`

`Case: 23-118 Document: 2 Page: 16 Filed: 01/24/2023
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`ultra vires orders are futile. Further, the Director’s refusal to lift the sanctions (even
`
`though admitting failure to follow the regulations) is further confirmation any
`
`response to the 60-page Sanctions Decision will also be futile.
`
`Additionally, the Director’s order indefinitely staying the IPR and expressly
`
`prohibiting the Panel from issuing a FWD is the latest unlawful action that creates
`
`immediate harm by interfering with the Panel’s ability to issue the FWD by the
`
`statutory deadline. If the Director is merely sanctioning PQA for misconduct, why
`
`stop the Board from issuing its FWD?10 PQA fears the answer: if no FWD issues,
`
`this Court may not have jurisdiction to review the Director’s unlawful actions on
`
`appeal. If the Board issues a FWD, however, the Director will be unable to label her
`
`subsequent decision a “review of institution decision,” and that subsequent decision
`
`(along with the unlawful actions described herein) would be reviewable.
`
`At a minimum, PQA asks this Court to review and vacate the unlawful
`
`decisions imposing sanctions and staying the proceedings, direct the agency to
`
`provide PQA an opportunity to respond before imposing sanctions as required by
`
`regulation, and direct the Board to issue the FWD as required by statute. Those
`
`
`10 The Director’s stay order expressly prohibits the Board from issuing the FWD.
`Appx95. Moreover, the deadline for the FWD in OpenSky’s IPR has come and gone
`without a FWD.
`
`
`
`7
`
`

`

`Case: 23-118 Document: 2 Page: 17 Filed: 01/24/2023
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`sanctions, however, flow from other ultra vires agency action regarding
`
`unauthorized discovery.
`
`Thus, PQA alternatively asks this Court to review and vacate the Sanctions
`
`Decision and all other ultra vires orders underlying that decision. Further
`
`consideration by the Director of her own unlawful discovery orders is futile because
`
`the Director already overruled PQAs objections to that discovery. Additionally, PQA
`
`already asked the Director to withdraw the sanctions and follow the agency’s own
`
`regulations (Appx165-167), but the Director refused and only authorized additional
`
`briefing “out of an abundance of caution” (Appx94). If simply remanded for further
`
`sanctions proceedings, PQA will be defending itself against the vacated sanctions
`
`for the same reasons presented in this petition. The Director is unlikely to change
`
`her mind (she has already ruled on the issues), and PQA will be back in this Court
`
`seeking the same relief.
`
`PQA’s right to relief is clear. The Director’s unlawful actions are not
`
`authorized by any statutes or regulations, have deprived PQA of due process (e.g.,
`
`sanctioning PQA based on a newly-minted standard of “abuse of process”), and have
`
`left PQA in an untenable defenseless position.11 The Director’s unlawful
`
`involvement has created a procedural morass that will only get worse without Court
`
`
`11 PQA sought clarification from the Director as to whether the dismissal order is
`“final” or “non-final,” but the Director refused to provide an answer. Appx161-162.
`8
`
`
`
`

`

`Case: 23-118 Document: 2 Page: 18 Filed: 01/24/2023
`
`intervention. PQA may unwittingly lose procedural and substantive rights—
`
`including the right to a FWD or to seek or defend additional agency or even appellate
`
`review.
`
`The Supreme Court has confirmed reviewability of unlawful actions during
`
`the proceedings:
`
`If a party believes the Patent Office has engaged in “‘shenanigans’” by
`exceeding its statutory bounds, judicial review remains available … to
`set aside agency action “not in accordance with law” or “in excess of
`statutory jurisdiction, authority, or limitations.”
`
`SAS, 138 S. Ct. at 1359. PQA seeks immediate mandamus intervention to “set aside”
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`the Director’s unlawful orders and get PQA’s IPR back on track. With a FWD due
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`in just three days, time is of the essence. PQA’s substantive and procedural rights
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`hang in the balance while PQA is unlawfully dismissed and the Director has
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`unlawfully blocked the Board from complying with Congress’s mandate to timely
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`issue the FWD.
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`
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`ADDITIONAL FACTS NECESSARY TO UNDERSTAND THE ISSUES
`PRESENTED
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`The ’373 patent accounted for $1.5 billion in VLSI’s verdict against Intel.
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`Appx7-8. Following the verdict, both PQA and OpenSky filed IPR petitions seeking
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`review of the ’373 patent; OpenSky filed a month before PQA. Appx9. OpenSky’s
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`petition was denied because OpenSky filed a copy of Intel’s expert declaration (Dr.
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`Singh) without engaging the expert. Appx9. In contrast, PQA exclusively engaged
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`Case: 23-118 Document: 2 Page: 19 Filed: 01/24/2023
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`Dr. Singh and submitted a new declaration. Appx10. PQA’s petition expressly
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`invited the Board to proceed with both OpenSky’s and PQA’s IPRs in parallel,
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`stating “[t]he Board can handle OpenSky’s petition at the same time, negating any
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`concerns of wasted effort.” Appx140.12
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`The Board instituted PQA’s petition. Appx12. Four months later, the Board
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`joined Intel to PQA’s proceeding. Appx13. The following day, the Director sua
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`sponte instituted a “review of the Board’s institution decision.” Appx146-147.
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`A month later, the Director entered a Scheduling Order. Appx15. In the
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`Scheduling Order, the Director confirmed:
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`I discern no error in the Board’s decision to institute review of a
`meritorious Petition where the challenged patent was previously
`litigated in district court and was the subject of previous inter partes
`review proceedings, which were not instituted based on Fintiv.5 [n.5:] I
`have reviewed the parties’ pre-institution papers concerning the merits
`and I agree with the Board’s determination that PQA demonstrated a
`reasonable likelihood of prevailing as to at least one challenged
`claim.
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`Appx73 (emphasis added). The Director also confirmed “no error in the Board’s
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`finding and determinations with respect to its analysis of the Fintiv or General
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`Plastic factors.” Appx74.
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`12 Contrary to PQA’s invitation to proceed in parallel, the Director mistakenly
`concludes PQA misled the Board regarding its exclusive engagement with Dr. Singh
`so the Board would deny institution of OpenSky’s IPR. Appx53. PQA explains why
`the Director’s conclusion is unsupported and contrary to the facts in Part III.A, infra.
`10
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`Case: 23-118 Document: 2 Page: 20 Filed: 01/24/2023
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`Nevertheless, the Scheduling Order initiated a new inquiry requiring the
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`parties to produce broad categories of documents and respond to interrogatories as
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`“Mandated Discovery.” Appx75-77. The Scheduling Order did not cite any statute
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`or regulation authorizing the Director-mandated discovery. See generally, Appx68-
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`81.
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`The Director requested input from the parties and amici curiae on, inter alia,
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`how to define an “abuse of process” in the IPR context: “How the Director … should
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`assess conduct to determine if it constitutes an abuse of process or if it thwarts, as
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`opposed to advances, the goals of the Office and/or the AIA, and what conduct
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`should be considered as such?” Appx15 (emphasis added).
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`The Director sought a new record on new issues by expressly forbidding the
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`parties from addressing anything related to the Board’s institution decision:
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`[N]o further briefing is permitted as to the merits of the
`unpatentability challenges as it pertains to institution, or the Fintiv
`or General Plastic factors.
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`Appx74 (emphasis added).
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`PQA emailed objections to the Director. Appx83. PQA specifically objected
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`“to the ordered discovery because the Order issued without citation to a statute or
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`regulation authorizing the Order or requested discovery, and PQA is unaware of any
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`authority under which the Order and requested discovery may issue.” Appx120. The
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`Director “noted” PQA’s objections and confirmed “production of documents as
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`11
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`Case: 23-118 Document: 2 Page: 21 Filed: 01/24/2023
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`required by the Scheduling Order will not constitute a waiver of that party’s
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`objections.” Appx84. The Director stated: “legitimate, lawful grounds for
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`withholding documents may be lodged…” Appx85.
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`PQA timely produced documents and a privilege log, subject to its objections,
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`which PQA filed publicly as Exhibit 1039. Appx19; Appx101-118. PQA also filed
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`an opening brief “maintain[ing] its objections to the Director’s orders as filed in
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`Exhibit 1039…” Appx157.
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`On December 22—eleven months after institution and just five weeks before
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`the statutory FWD deadline, the Director simultaneously overruled PQA’s
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`objections and sanctioned PQA by (1) making unlawful adverse inferences, (2)
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`unlawfully dismissing PQA, and (3) ordering PQA to show cause why it should not
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`be liable for VLSI’s attorney fees. Appx66. The Director issued these sanctions
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`without following the governing regulations that require giving PQA an opportunity
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`to explain why the sanctions should not be imposed before imposition. See 37 C.F.R.
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`§§ 42.11(d)(3) & (1).
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`All but one sanction results from the finding of PQA’s non-compliance with
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`the ultra vires discovery order (i.e., the Director finding PQA failed to produce
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`categories of documents and inadequately/evasively answered interrogatories).
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`Appx25, Appx28. The only non-discovery sanction is based on the incorrect finding
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`regarding Dr. Sing’s exclusivity agreement, i.e., “PQA, through its counsel, …
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`12
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`Case: 23-118 Document: 2 Page: 22 Filed: 01/24/2023
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`advance[ed] a misleading argument and a misrepresentation of fact.” Appx3. As
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`discussed below (see infra, Part III.A), this Court can confirm the agreement was
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`exclusive (even though exclusivity could be waived). Appx98-99.
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`The Director made the following adverse inferences as discovery sanctions:
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`• “PQA did not believe review of the ’373 patent was necessary to instill
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`confidence in ‘the integrity of the patent system’ and t