Nos. 19-1434, 19-1452, and 19-1458
`
`IN THE
`
`_________
`
`UNITED STATES,
`
`v.
`
`Petitioner,
`
`ARTHREX, INC., ET AL.,
`Respondents.
`
`________
`
`On Writs of Certiorari to the United States Court of
`Appeals for the Federal Circuit
`________
`BRIEF OF CROSS-INDUSTRY GROUPS AS
`AMICI CURIAE IN SUPPORT OF
`PETITIONERS IN NOS. 19-1434 AND 19-1452,
`AND RESPONDENTS IN NO. 19-1458
`________
`
`IAN HEATH GERSHENGORN
`LINDSAY C. HARRISON
`ELIZABETH B. DEUTSCH
`JENNER & BLOCK LLP
`1099 New York Ave. NW
`Washington, DC 20001
`(202) 639-6000
`igershengorn@jenner.com
`
`STEPHEN I. VLADECK
`Counsel of Record
`727 East Dean Keeton Street
`Austin, TX 78705
`(512) 475-9198
`svladeck@law.utexas.edu
`
`(For continuation of the caption, see inside cover;
`for additional counsel, see signature page.)
`
`
`
`IN THE
`
`_________
`
`UNITED STATES,
`
`v.
`
`Petitioner,
`
`ARTHREX, INC., ET AL.,
`Respondents.
`
`________
`
`On Writs of Certiorari to the United States Court of
`Appeals for the Federal Circuit
`________
`BRIEF OF CROSS-INDUSTRY GROUPS AS
`AMICI CURIAE IN SUPPORT OF
`PETITIONERS IN NOS. 19-1434 AND 19-1452,
`AND RESPONDENTS IN NO. 19-1458
`________
`
`IAN HEATH GERSHENGORN
`LINDSAY C. HARRISON
`ELIZABETH B. DEUTSCH
`JENNER & BLOCK LLP
`1099 New York Ave. NW
`Washington, DC 20001
`(202) 639-6000
`igershengorn@jenner.com
`
`STEPHEN I. VLADECK
`Counsel of Record
`727 East Dean Keeton Street
`Austin, TX 78705
`(512) 475-9198
`svladeck@law.utexas.edu
`
`(For continuation of the caption, see inside cover;
`for additional counsel, see signature page.)
`
`
`
`IN THE
`
`_________
`19-1434
`
`UNITED STATES OF AMERICA,
`Petitioner,
`
`v.
`
`ARTHREX, INC. AND POLARIS INNOVATIONS LIMITED,
`Respondents.
`
`_________
`19-1452
`
`SMITH & NEPHEW, INC. AND ARTHROCARE CORP.,
`Petitioners,
`
`v.
`
`ARTHREX, INC. AND UNITED STATES OF AMERICA,
`Respondents.
`
`_________
`19-1458
`
`ARTHREX, INC.,
`
`v.
`
`Petitioner,
`
`SMITH & NEPHEW, INC.; ARTHROCARE CORP.; AND
`UNITED STATES OF AMERICA,
`Respondents.
`
`
`
`i
`TABLE OF CONTENTS
`TABLE OF AUTHORITIES .......................................... ii
`SUMMARY OF ARGUMENT ........................................ 3
`ARGUMENT ...................................................................... 5
`I.
`As Intended, Inter Partes Review Has
`Significantly Increased the Accuracy and
`Efficiency of the Patent System ............................. 5
`A. The America Invents Act Was Largely
`a Response to the Rise in Suits By Non-
`Practicing Entities Against End Users ......... 6
`B. Having Administrative Patent Judges
`Resolve Inter Partes Disputes Was a
`Central Aspect of the 2011 Reforms ............. 12
`C. The America Invents Act Has Largely
`Succeeded at Achieving Its Goals ................. 15
`II. The Text, Purpose, and Structure of the Inter
`Partes
`Regime
`Underscore Why
`Administrative Patent Judges Are “Inferior”
`Officers ..................................................................... 18
`A. Congress Clearly Intended APJs to Be
`Inferior Executive Branch Officers .............. 19
`B. Applying All of This Court’s Criteria,
`APJs Are Inferior Officers ............................. 21
`III. Even if Administrative Patent Judges are
`“Principal” Officers, the Federal Circuit’s
`Severability Analysis is Most Faithful To
`Congress’s Intent .................................................... 27
`CONCLUSION ................................................................ 30
`
`
`
`TABLE OF AUTHORITIES
`
`CASES
`Barr v. American Association of Political
`Consultants, Inc., 140 S. Ct. 2335 (2020) .......... 28
`Bonito Boats, Inc. v. Thunder Crafts Boats,
`Inc., 489 U.S. 141 (1989) ........................................ 6
`Buckley v. Valeo, 424 U.S. 1 (1976) ......................... 25
`Cuozzo Speed Technologies, LLC v. Lee, 136
`S. Ct. 2131 (2016) ................................ 11, 12, 13, 23
`Edmond v. United States, 520 U.S. 651
`(1997) ................................................... 21, 22, 23, 27
`Free Enterprise Fund v. Public Co.
`Accounting Oversight Board, 561 U.S.
`477 (2010) .............................................................. 28
`Freytag v. Commissioner, 501 U.S. 868
`(1991) ..................................................................... 23
`Intercollegiate Broadcasting System, Inc. v.
`Copyright Royalty Board, 684 F.3d 1332
`(D.C. Cir. 2012) ..................................................... 26
`Lucia v. SEC, 138 S. Ct. 2044 (2018) ....................... 18
`Morrison v. Olson, 487 U.S. 654 (1988) ............ 22, 23
`Myers v. United States, 272 U.S. 52 (1926) ............ 20
`Oil States Energy Services, LLC v. Greene’s
`Energy Group, LLC, 138 S. Ct. 1365
`(2018) ............................................. 11, 13, 23, 24, 27
`Polaris Innovations Ltd. v. Kingston
`Technology Co., 792 F. App’x 820 (Fed.
`Cir. 2020) ......................................................... 19, 20
`
`
`
`Pope Manufacturing Co. v. Gormully, 144
`U.S. 224 (1892) ........................................................ 6
`Return Mail, Inc. v. United States Postal
`Service, 139 S. Ct. 1853 (2019) ...................... 10, 11
`SAS Institute, Inc. v. Iancu, 138 S. Ct. 1348
`(2018) ..................................................................... 10
`Seila Law LLC v. Consumer Financial
`Protection Bureau, 140 S. Ct. 2183
`(2020) ..................................................................... 28
`TC Heartland LLC v. Kraft Foods Group
`Brands LLC, 137 S. Ct. 1514 (2017) .................. 14
`Thryv, Inc. v. Click-to-Call Technologies,
`LP, 140 S. Ct. 1367 (2020) ....................... 10, 13, 24
`STATUTES
`28 U.S.C. § 44(a) ......................................................... 14
`35 U.S.C. § 6(a) ............................................... 11, 12, 19
`Act of Aug. 12, 2008, Pub. L. No. 110-313, §
`1(a), 122 Stat. 3014, 3014 ..................................... 19
`Leahy-Smith America Invents Act, Pub. L.
`No. 112-29, 125 Stat. 284 (2011) ........................... 3
`LEGISLATIVE MATERIALS
`Abusive Patent Litigation: The Impact on
`American Innovation and Jobs, and
`Potential Solutions: Hearing Before the
`Subcomm. on Courts,
`Intellectual
`Property, and the Internet of the H.
`Comm. on the Judiciary, 113th Cong.
`(2013) ....................................................................... 9
`
`
`
`H.R. REP. No. 112-98, pt. 1 (2011), as
`reprinted in 2011 U.S.C.C.A.N. 67 ........ 10, 11, 13
`S. REP. No. 110-259 (2008) ........................................ 12
`The State of Patent Eligibility Law in
`America: Hearing Before the Subcomm.
`on Intellectual Property of the S. Comm.
`on the Judiciary, 116th Cong. (2019)
`(statement of Stephanie Martz, General
`Counsel, Nat’l Retail Federation) ....................... 9
`OTHER AUTHORITIES
`AIPLA REPORT OF THE ECONOMIC SURVEY
`2019 (2020) ............................................................ 17
`John R. Allison, Mark A. Lemley & David L.
`Schwartz, Our Divided Patent System,
`82 U. CHI. L. REV. 1073 (2015) ............................. 6
`ANNUAL REPORT OF THE COMMISSIONER OF
`PATENTS (1950) .................................................... 13
`Gaia Bernstein, The Rise of the End User in
`Patent Litigation, 55 B.C. L. REV. 1443
`(2014) ....................................................................... 8
`Colleen Chien, Patent Trolls by
`the
`Numbers, PATENTLYO BLOG (Mar. 14,
`2013) ....................................................................... 10
`Jonathan J. Darrow, Ameet Sarpatwari &
`Gregory Curfman, Note, Battling Over
`Patents: The Impact of Oil States on the
`Generic Drug Industry, 19 YALE J.
`HEALTH POL’Y, L. & ETHICS 251 (2019) ........... 17
`
`
`
`John F. Duffy, Are Administrative Patent
`Unconstitutional?,
`2007
`Judges
`PATENTLY-O PATENT L.J. 21 ............................. 18
`Federal Trade Commission,
`Patent
`Assertion Entity Activity: An FTC
`Study (2016) ............................................................ 9
`Michael R. Fleming, Two Views of PTAB:
`Past, Present, and Future, LANDSLIDE,
`Jan./Feb. 2017, at 21 ............................................ 13
`Michael D. Frakes & Melissa F.
`Wasserman, Patent Trial and Appeal
`Board’s
`Consistency-Enhancing
`Function, 104 IOWA L. REV. 2417 (2019) .......... 16
`Daniel F. Klodowski & Eric A. Liu,
`Federal Circuit PTAB Appeal Statistics
`Through October 31, 2020, AIA BLOG
`(Nov. 18, 2020) ..................................................... 15
`Josh Landau, Changes Reducing IPR
`Institution Rate Have
`Increased
`Litigation Frequency and Cost, PATENT
`PROGRESS (Nov. 25, 2020) .................................. 29
`Josh Landau, Inter Partes Review: Five
`Years, Over $2 Billion Saved, PATENT
`PROGRESS (Sept. 14, 2017) ............................ 15, 17
`Brian J. Love, Shawn P. Miller & Shawn
`Ambwani, Determinants of Patent
`Quality: Evidence from Inter Partes
`Review Proceedings, 90 U. COLO. L.
`REV. 67 (2019) ............................................ 4, 14, 16
`
`
`
`Brian J. Love & James C. Yoon, Expanding
`Patent Law’s Customer Suit Exception,
`93 B.U. L. Rev. 1605 (2013) .................................. 8
`Shawn P. Miller, Where’s the Innovation?
`An Analysis of the Quantity and
`Quality of Anticipated and Obvious
`Patents (Feb. 10, 2012) .......................................... 7
`Alan B. Morrison, The Principal Officer
`Puzzle, YALE J. REG., NOTICE &
`COMMENT BLOG (Nov. 15, 2019) ........................ 20
`Request for Comments and Notice of
`Roundtable Events for Partnership for
`Enhancement of Quality of Software-
`Related Patents, 78 Fed. Reg. 292 (Jan.
`3, 2013) ..................................................................... 7
`Matthew G. Sipe, Experts, Generalists,
`Laypeople—and the Federal Circuit, 32
`HARV. J.L. & TECH. 575 (2019) ..................... 15, 16
`United States Patent & Trademark Office,
`FY
`2020
`Performance
`and
`Accountability Report (2020) ............................. 14
`United States Patent & Trademark Office,
`What is PTAB? .................................................... 11
`Christopher J. Walker & Melissa F.
`Wasserman, The New World of Agency
`Adjudication, 107 CAL. L. REV. 141
`(2019) ..................................................................... 14
`
`
`
`1
`INTEREST OF AMICI CURIAE1
`ACT | The App Association is a not-for-profit
`international grassroots advocacy and education
`organization representing more than 5,000 small
`business
`software
`application
`developers
`and
`information technology firms. The App Association is
`the only organization focused on the needs of small
`business innovators, and advocates for an environment
`that inspires and rewards innovation, while providing
`resources to help its members leverage their intellectual
`assets to raise capital, create jobs, and continue to grow.
`Internet Association (“IA”) represents over 40 of the
`world’s leading internet companies. IA is the only trade
`association that exclusively represents leading global
`internet companies on matters of public policy. IA’s
`mission is to foster innovation, promote economic
`growth, and empower people through the free and open
`internet.
`The National Retail Federation (“NRF”) is the
`world’s largest retail trade association, representing
`discount and department stores, home goods and
`specialty stores, Main Street merchants, grocers,
`wholesalers, chain restaurants, and internet retailers
`from the United States and more than 45 countries.
`NRF empowers the industry that powers the economy.
`
`1. Pursuant to Rule 37.6, no counsel for a party has authored this
`brief, in whole or in part, and no person, other than amici or their
`counsel, has made a monetary contribution intended to fund the
`preparation or submission of this brief. Counsel for all parties have
`filed blanket consents to the filing of amicus briefs in these
`consolidated cases.
`
`
`
`2
`Retail is the nation’s largest private-sector employer,
`contributing $3.9 trillion to annual GDP and supporting
`one in four U.S. jobs—52 million working Americans.
`For over a century, NRF has been a voice for every
`retailer and every
`retail
`job, educating and
`communicating the powerful impact retail has on local
`communities and global economies. NRF regularly
`submits amicus curiae briefs in cases raising significant
`legal issues for the retail community.
`The Software & Information Industry Association
`(“SIIA”) is the principal trade association for the
`software and digital information industries. SIIA’s
`membership
`includes more
`than 700
`software
`companies, search engine providers, data and analytics
`firms,
`information service companies, and digital
`publishers that serve nearly every segment of society,
`including business, education, government, healthcare,
`and consumers. As the owners of extensive patent
`portfolios and the frequent targets of suits by non-
`practicing entities, SIIA members are keenly interested
`in the health of the innovation ecosystem.
`United for Patent Reform is a broad coalition of
`diverse American businesses advocating for a patent
`system
`that enhances patent quality, advances
`meaningful
`innovation,
`and protects
`legitimate
`American businesses from abusive patent litigation. Our
`members are small and large—they range from Main
`Street retail shops, REALTORS®, hotels, grocers,
`convenience stores, and restaurants to national
`construction companies, automobile manufacturers, and
`technology businesses. Its members represent over 80
`
`
`
`3
`million U.S. employees, a figure that accounts for nearly
`two-thirds of private-sector jobs in the United States.
`Between them, amici curiae represent a wide array
`of professional interests and business enterprises. They
`find common cause in these consolidated cases in
`supporting the goals and the continuing utility of the
`inter partes review procedure created by Congress in
`the Leahy-Smith America Invents Act (AIA), Pub. L.
`No. 112-29, 125 Stat. 284 (2011) (codified in scattered
`sections of 35 U.S.C.).
`As amici will demonstrate, inter partes review was
`an urgently needed innovation to improve patent
`quality; to increase the efficiency of the post-grant
`patent review process; and to reduce civil litigation costs
`for both plaintiffs and defendants. And
`it has
`succeeded—providing much-needed assistance
`to
`software and internet technology companies as well as
`to Main Street businesses like retailers, restaurants, and
`hotels who had increasingly been targeted by non-
`practicing entities (NPEs) for nothing more than selling
`or using products supplied to them by another. This was
`especially true with respect to low-quality software
`patents covering basic concepts like providing business
`information on a webpage.
`Amici therefore file this brief to provide this
`additional context for the Court, and to explain how and
`why it should factor into the resolution of the Questions
`Presented in these consolidated cases.
`SUMMARY OF ARGUMENT
`These cases call upon this Court to once again
`consider the inter partes review scheme that Congress
`
`
`
`4
`created in the AIA. This time around, the issue is
`whether the administrative patent judges (APJs) who
`preside over inter partes review proceedings as
`members of the Patent Trial and Appeal Board (PTAB)
`are “inferior” or “principal” executive officers for
`purposes of the Appointments Clause of Article II—and
`the proper consequences for the AIA if the answer is the
`latter.2
`The AIA was enacted in immediate and direct
`response to the intersection of two trends. The first was
`a continuing decline in patent quality, especially with
`respect to software and other internet technology
`patents. And the second was a rise in NPE litigation
`against end users—everyday businesses who, unlike the
`original technology provider, often lacked the resources
`or the expertise to vigorously defend against such
`claims.
`And the AIA has had the effects Congress intended:
`numerous studies undertaken since the statute’s
`enactment make clear that it has had a significant impact
`on patent quality (including improvements to the quality
`of patent examination), all while dramatically reducing
`the costs of litigating patent validity—to as little as 10%
`
`2. The Questions Presented in these cases necessarily implicate
`APJs’ role in all three sets of proceedings that the AIA authorized
`the PTAB to hear. Amici nevertheless focus on inter partes review
`proceedings because (1) covered business method review’s sunset
`has passed; and (2) post-grant review has “been used infrequently,
`due in large measure to greater restrictions on [its] availability.”
`Brian J. Love, Shawn P. Miller & Shawn Ambwani, Determinants
`of Patent Quality: Evidence from Inter Partes Review Proceedings,
`90 U. COLO. L. REV. 67, 96 (2019).
`
`
`
`5
`of the average costs of pre-AIA civil litigation. The
`upshot has benefitted not only the amici represented
`herein and other American businesses, but their
`customers.
`Congress’s intent (and its success) in creating inter
`partes review provides more than just relevant
`background to the issues now before this Court. As
`amici demonstrate, it foregrounds the limited and
`discrete functions of APJs compared to both other
`administrative law judges and other officers this Court
`has previously held to be “inferior” for purposes of the
`Appointments Clause. Indeed, the Federal Circuit
`panel’s central error in Arthrex was its failure to account
`for the targeted, discrete role that APJs were intended
`to play—and have played—in inter partes review
`proceedings. Finally, even if this Court nevertheless
`concludes that APJs are principal officers, the intent of
`the AIA underscores why the Arthex panel’s narrow
`severability analysis was correct—and why this Court
`should leave as much of the inter partes review regime
`intact as is possible.
`
`ARGUMENT
`Inter Partes Review Has
`Intended,
`I. As
`Significantly
`Increased
`the Accuracy and
`Efficiency of the Patent System
`To this point, inter partes review has been something
`of a rara avis—a meaningful legislative success story.
`Not only has it significantly improved patent quality, but
`it has dramatically reduced the costs of litigating low-
`quality patents—in a manner that has directly inured to
`the benefit of the diverse businesses amici represent.
`
`
`
`6
`A. The America Invents Act Was Largely a
`Response to the Rise
`in Suits By Non-
`Practicing Entities Against End Users
`As Justice O’Connor explained for the Court over
`three decades ago, “[f]rom their inception, the federal
`patent laws have embodied a careful balance between
`the need to promote innovation and the recognition that
`imitation and refinement through imitation are both
`necessary to invention itself and the very lifeblood of a
`competitive economy.” Bonito Boats, Inc. v. Thunder
`Crafts Boats, Inc., 489 U.S. 141, 146 (1989). Put another
`way, “[i]t is as important to the public that competition
`should not be repressed by worthless patents, as that
`the patentee of a really valuable invention should be
`protected in his monopoly.” Pope Mfg. Co. v. Gormully,
`144 U.S. 224, 234 (1892). Patent law has thus long tried
`to strike a cost-driven balance—with protection of
`innovation on one side and the cost to the public of
`undeserving patents on the other.
`By the 2000s, though, this balance had swung out of
`equilibrium. One study of patent infringement lawsuits
`filed in 2008 and 2009, for instance, found that “roughly
`43.0 percent of patents that went to a final judgment on
`validity were invalidated.” John R. Allison, Mark A.
`Lemley & David L. Schwartz, Our Divided Patent
`System, 82 U. CHI. L. REV. 1073, 1099 (2015). Another
`study estimated that 27% of all patents could be
`
`
`
`7
`invalid—and that, for software or business method
`patents, between 38% and 53% could likewise be invalid.3
`Software patents have been especially prone to these
`validity issues because of the unique difficulties of
`finding good “prior art” in such cases. As the U.S. Patent
`and Trademark Office explained in 2013, “[s]oftware-
`related patents pose unique challenges from both an
`examination and an enforcement perspective,” because
`“[s]oftware by its nature is operation-based and is
`typically embodied in the form of rules, operations,
`algorithms or the like.” Request for Comments and
`Notice of Roundtable Events for Partnership for
`Enhancement of Quality of Software-Related Patents,
`78 Fed. Reg. 292, 294 (Jan. 3, 2013). Thus,
`[u]nlike hardware inventions, the elements of
`software are often defined using functional
`language. While it is permissible to use functional
`language in patent claims, the boundaries of the
`functional claim element must be discernible.
`Without clear boundaries, patent examiners
`cannot effectively ensure that the claims define
`over the prior art, and the public
`is not
`adequately notified of the scope of the patent
`rights.
`
`Id.
`
`As a result of these low-quality patents, the 2000s
`also saw a dramatic uptick in civil suits by non-practicing
`
`3. Shawn P. Miller, Where’s the Innovation? An Analysis of the
`Quantity and Quality of Anticipated and Obvious Patents (Feb. 10,
`2012),
`https://papers.ssrn.com/sol3/papers.cfm?abstract_id=
`2029263.
`
`
`
`8
`entities (NPEs)—known in some corners as “patent
`trolls”—against technology businesses that produced
`innovative software and hardware products, as well as a
`relatively new target: the end users of that software and
`those products. Instead of directly suing just the
`manufacturer who allegedly infringed the patent (an
`entity that was usually well-versed in patent law and
`that had plenty of reasons to address infringement
`allegations),
`these
`suits
`deliberately
`targeted
`restaurants, grocery stores, and hotels for offering Wi-
`Fi access to customers; scanning documents and
`attaching them to emails; using Quick Response (QR)
`codes in promotional materials; and so on. See, e.g., Brian
`J. Love & James C. Yoon, Expanding Patent Law’s
`Customer Suit Exception, 93 B.U. L. REV. 1605, 1610–
`11 (2013).
`Poor quality patents were affecting businesses well
`beyond the software industry. Virtually overnight, small
`and large businesses alike found themselves spending
`enormous sums either to litigate patents of questionable
`validity or, more often than not, to settle these cases
`rather than defend technology that wasn’t theirs, and
`with respect to which they had no relevant stake or
`expertise. Gaia Bernstein, The Rise of the End User in
`Patent Litigation, 55 B.C. L. REV. 1443, 1456–58 (2014).
`Indeed, as the Federal Trade Commission found in a
`wide-ranging, multi-year study, NPEs would (and, even
`after the AIA’s passage, still do) often offer to settle
`their infringement suits for just under the projected cost
`
`
`
`9
`of discovery.4 One expert testified before Congress that
`“[b]etween 50 and 60 percent of patent infringement
`cases are brought by NPEs.” The State of Patent
`Eligibility Law in America: Hearing Before the
`Subcomm. on Intellectual Property of the S. Comm. on
`the Judiciary, 116th Cong. (2019) (statement of
`Stephanie Martz, General Counsel, Nat’l Retail
`Federation).5
`In testimony to Congress on the problem of abusive
`patent litigation, one retailer shared that it had
`experienced a tremendous growth in patent litigation—
`and NPE suits in particular—on software patents that
`purported to cover displaying catalog images and having
`drop-down menus on a website, activating gift cards at
`the point-of-sale, being able to browse a mobile website
`on a phone, or the use of electronic shopping bags.6 And
`this company wasn’t alone in its experience, with the
`
`4. See Fed. Trade Comm’n, Patent Assertion Entity Activity: An
`Study
`8–9
`(2016),
`https://www.ftc.gov/system/files/
`FTC
`documents/reports/patent-assertion-entity-activity-ftc-study/p131
`203_patent_assertion_entity_activity_an_ftc_study_0.pdf.
`
`5. The statement is online at https://www.judiciary.senate.gov/
`imo/media/doc/Martz%20Testimony.pdf.
`
`6. See Abusive Patent Litigation: The Impact on American
`Innovation and Jobs, and Potential Solutions: Hearing Before the
`Subcomm. on Courts, Intellectual Property, and the Internet of the
`H. Comm. on the Judiciary, 113th Cong. 36 (2013) (testimony of
`Janet L. Dhillon, Executive Vice President, General Counsel, and
`Corporate Secretary, J.C. Penney Co., Inc.), https://www.govinfo.
`gov/content/pkg/CHRG113hhrg79880/pdf/CHRG-113hhrg7988
`0.pdf.
`
`
`
`10
`retail industry representing the hardest-hit sector
`outside of high-tech firms as NPE litigation grew.7
`Congress responded by enacting the AIA. It is
`familiar sledding that the AIA was motivated by
`Congress’s desire “to establish a more efficient and
`streamlined patent system that will improve patent
`quality and limit unnecessary and counterproductive
`litigation costs.” Thryv, Inc. v. Click-to-Call Techs., LP,
`140 S. Ct. 1367, 1374 (2020) (quoting H.R. REP. No. 112-
`98, pt. 1, at 40 (2011), as reprinted in 2011 U.S.C.C.A.N.
`67, 69).8 To that end, the core provisions of the AIA
`created
`three new and distinct avenues
`for
`administrative review of an issued patent—including
`inter partes review initiated by third parties. See Return
`Mail, Inc. v. U.S. Postal Serv., 139 S. Ct. 1853, 1860–61
`(2019); see also SAS Inst., Inc. v. Iancu, 138 S. Ct. 1348,
`1352–54 (2018).
`Such review would be conducted by the PTAB—
`staffed by four officers of the U.S. Patent and
`Trademark Office and by APJs who, by statute, “shall be
`persons of competent legal knowledge and scientific
`
`7. See Colleen Chien, Patent Trolls by the Numbers, PATENTLYO
`BLOG, Mar. 14, 2013, https://patentlyo.com/patent/2013/03/chien-pat
`ent-trolls.html.
`8. Indeed, the authoritative House Report derived these goals from
`this Court’s pre-AIA jurisprudence. See H.R. REP. No. 112-98, pt. 1,
`at 39 (2011), as reprinted in 2011 U.S.C.C.A.N. 67, 69 (“The Court’s
`decisions have moved in the direction of improving patent quality
`and making the determination of patent validity more efficient. The
`decisions reflect a growing sense that questionable patents are too
`easily obtained and are too difficult to challenge.”).
`
`
`
`11
`ability,” 35 U.S.C. § 6(a), many of whom have extensive
`in-house, private or government practice experience,
`and/or experience as patent examiners.9
`Inter partes review, this Court has explained, “is less
`like a judicial proceeding and more like a specialized
`agency proceeding.” Cuozzo Speed Techs., LLC v. Lee,
`136 S. Ct. 2131, 2143 (2016); see also Oil States Energy
`Servs., LLC v. Greene’s Energy Grp., LLC, 138 S. Ct.
`1365, 1371–72 (2018) (explaining in detail how inter
`partes review works). The core idea was to give expert
`PTAB judges an opportunity, at the request of any
`person other than the patent owner, to review (and
`potentially cancel) a patent “on the grounds that the
`invention lacks novelty or nonobviousness in light of
`‘patents or printed publications’ existing at the time of
`the patent application.” Return Mail, 139 S. Ct. at 1860
`(quoting 35 U.S.C. § 311).
`As this Court put it in Cuozzo, it’s “a second look at
`an earlier administrative grant of a patent,” 136 S. Ct. at
`2144, but in a context in which a far broader class of
`claimants would be able to rely upon a streamlined
`procedure to adjudicate challenges to a patent’s validity
`without having to bring civil suits in district court. See
`H.R. REP. No. 112-98, pt. 1, at 39–40, as reprinted in 2011
`U.S.C.C.A.N. 67, 69
`(underscoring the goals of
`“improving patent quality and providing a more efficient
`system for challenging patents that should not have
`issued; and reducing unwarranted litigation costs”).
`
`9. See U.S. Patent & Trademark Off., What is PTAB?, https://go.
`usa.gov/x7gqr (last visited Nov. 17, 2020).
`
`
`
`12
`And with regard to software patents, in particular,
`inter partes review was directly responsive to the
`difficulties patent examiners often encountered in
`identifying good “prior art” by allowing third parties to
`provide examples of prior art that the original examiner
`had missed. Cf. S. REP. No. 110-259, at 30 (2008) (“Many
`applicants do not search for prior art before filing their
`application. An examiner has only a limited amount of
`time to search for prior art, and the applicant is often in
`the best position to know the invention and the relevant
`art that may apply.” (footnote omitted)).
`B. Having Administrative Patent Judges Resolve
`Inter Partes Disputes Was a Central Aspect of
`the 2011 Reforms
`Congress’s creation of the PTAB and its decision to
`staff it primarily with APJs were two key mechanisms
`through which the AIA sought to curb patent litigation
`abuse. The Patent Act gives the Director of the PTO in
`conjunction with the Secretary of Commerce enormous
`discretion and control in staffing the PTAB. Among
`other things, there is no statutory limit on the number of
`APJ positions; the matter is committed to the discretion
`of the Secretary of Commerce, who appoints APJs as
`necessary in consultation with the Director. See 35
`U.S.C. § 6(a). Giving two principal executive branch
`officers the power to appoint a potentially unlimited
`number of subject-matter experts (sitting in three-judge
`panels) gives life to Congress’s animating goal of both
`expeditiously reviewing patent validity and providing a
`less expensive alternative to federal litigation. See
`Cuozzo, 136 S. Ct. at 2144.
`
`
`
`13
`To that end, the AIA necessarily contemplated that
`much more work would be done by APJs relative to
`district judges; indeed, that was the whole point. See
`H.R. REP. No. 112-98, pt. 1, at 39, 2011 U.S.C.C.A.N. at
`69. Thus, with regard to NPEs in particular, the inter
`partes review regime provided America’s businesses
`with a far more efficient and streamlined procedure for
`defending against the enforcement of
`low-quality
`patents—by contesting the validity of the patent before
`APJs rather than federal district judges. Cf. Thryv, Inc.,
`140 S. Ct. at 1374 (“Allowing § 315(b) appeals would tug
`against that objective, wasting the resources spent
`resolving patentability and
`leaving bad patents
`enforceable.”).
`The growth in the number of APJs before and after
`the AIA tells the story. As late as 1950, there were still
`only six “examiners-in-chief” (the predecessor to APJs).
`See ANNUAL REPORT OF THE COMMISSIONER OF
`PATENTS 1 (1950). That total was still only 35 when
`Congress formalized the shift to APJs in 1999, and
`increased modestly to 58 by the end of 2007. Michael R.
`Fleming, Two Views of PTAB: Past, Present, and
`Future, LANDSLIDE, Jan./Feb. 2017, at 21. And prior to
`2011, the Board of Patent Appeals and Interferences,
`staffed partly with APJs, already had the authority to
`conduct inter partes “reexamination.” See Oil States, 138
`S. Ct. at 1370–71 (summarizing the history and structure
`of inter partes reexamination). But the AIA not only
`“changed the standard that governs the Patent Office’s
`institution of the agency’s process,” it also “provides a
`challenger with broader participation rights.” Cuozzo,
`136 S. Ct. at 2137.
`
`
`
`14
`It is therefore no surprise that, since the AIA was
`enacted, the total number of APJs swelled to 275 in 2017.
`See Christopher J. Walker & Melissa F. Wasserman, The
`New World of Agency Adjudication, 107 CAL. L. REV.
`141, 160 & n.112 (2019). Although it has come down some,
`there were still 221 APJs as of the end of Fiscal Year
`2020—compared to 24 administrative trademark judges
`on the Trademark Trial and Appeal Board.10 Put another
`way, there are 42 more APJs today than there are
`United States circuit judgeships. See 28 U.S.C. § 44(a).
`And since the AIA’s passage, the PTAB has
`reviewed over 6,500 inter partes review petitions—
`outstripping the volume of patent infringement suits
`heard by any individual district court except the U.S.
`District Court for the Eastern District of Texas. See, e.g.,
`TC Heartland LLC v. Kraft Foods Group Brands LLC,
`137 S. Ct. 1514 (2017).11
`
`10. U.S. Patent & Trademark Off., FY 2020 Performance and
`Accountability Report 17 (2020), https://www.uspto.gov/sites/
`default/files/documents/USPTOFY20PAR.pdf.
`11. Although inter partes review originated with the AIA, a
`comparison between the number of such proceedings and the
`number of inter partes reexaminations under the pre-AIA regime
`is likewise telling. See, e.g., Love, Miller & Ambwani, supra, at 96
`(“Since it became available in September 2012, parties have filed
`almost 6,500 petitions for IPR, a figure that exceeds the total
`number of patent cases filed in all but one district court during the
`same period of time, as well as the total number of petitions for inter
`partes reexamination that were filed during the thirteen years that
`the process was available.” (footnote omitted)).
`
`
`
`15
`C. The America Invents Act Has Largely
`Succeeded at Achieving Its Goals
`The combination of efficient, time-limited procedures
`and the appointment of administrative judges who are
`subject-matter experts has created a clear policy
`success. By all accounts, inter partes review under the
`AIA has
`largely accomplished what Congress
`intended—as evidenced in the PTAB’s lower reversal
`rate in the Federal Circuit and the increased consistency
`across PTAB decisions. As one expert noted in 2017,
`“[a]ll in all, the IPR system has been incredibly effective
`at achieving [its] goals.”12 With respect
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