throbber
Nos. 19-1434, 19-1452, 19-1458
`In the Supreme Court of the United States
`UNITED STATES OF AMERICA,
`Petitioner,
`
`
`
`
`
`v.
`ARTHREX, INC., ET AL.,
`Respondents.
`
`
`
`SMITH & NEPHEW, INC., ET AL.,
`Petitioners,
`
`v.
`ARTHREX, INC., ET AL.,
`Respondents.
`
`ARTHREX, INC.,
`
`
`
`Petitioner,
`
`v.
`SMITH & NEPHEW, INC., ET AL.,
`Respondents.
`
`
`
`On Writs of Certiorari to the
`United States Court of Appeals for the Federal Circuit
`
`
`BRIEF OF AMICI CURIAE ENGINE ADVOCACY
`AND ELECTRONIC FRONTIER FOUNDATION
`IN SUPPORT OF PETITIONER
`
`Jef Pearlman
`Abigail A. Rives
`ENGINE ADVOCACY
`Counsel of Record
`INTELLECTUAL PROPERTY &
`700 Pennsylvania Ave. SE
`TECHNOLOGY LAW CLINIC
`Second Floor
`UNIVERSITY OF SOUTHERN
`Washington, DC 20003
`CALIFORNIA GOULD
`
`SCHOOL OF LAW
`Alexandra H. Moss
`699 Exposition Blvd.
`ELECTRONIC FRONTIER
`Los Angeles, CA 90089
`FOUNDATION
`
`(213) 740-7088
`815 Eddy Street
`jef@law.usc.edu
`San Francisco, CA 94109
`
`Counsel for Amici Curiae
`
`
`
`

`

`
`
`
`
`
`
`TABLE OF CONTENTS
`TABLE OF AUTHORITIES ....................................... iii
`INTEREST OF AMICI CURIAE ................................. 1
`SUMMARY OF ARGUMENT ..................................... 2
`ARGUMENT ................................................................ 4
`I. The Federal Circuit Misclassified APJs Because
`It Overstated APJ Authority and Oversimplified
`the Principal Officer Analysis. .............................. 4
`A. Reading Too Much into Edmond, the
`Federal Circuit Manufactured a Rigid
`Test Inconsistent with Precedent and
`Practical Reality. ............................................ 5
`B. The Federal Circuit’s Failure to Consider
`the Similarities Between APJs and
`USPTO Employees Led It to Misclassify
`APJs as Principal Officers. ............................ 7
`C. A Healthy and Efficient Patent System
`Relies on Examiners and APJs Applying
`Policy Without Creating It. .......................... 14
`II. If the Court Concludes APJs are Principal
`Officers, Judicial Severability Should be Used to
`Preserve the IPR System Congress Created to
`Stem the Tide of Abusive Patent Litigation. ...... 16
`A. IPRs Increase Patent Quality, Promote
`the Public Interest, and Benefit Small
`Businesses. ................................................... 17
`
`
`
`
`
`
`
`
`
`
`
`

`

`ii
`B. IPRs are Critical to Startups and the
`Economy Because They Reduce Costs,
`Reduce Abusive Litigation, and Protect
`Innovation ..................................................... 22
`CONCLUSION .......................................................... 28
`
`
`
`
`
`

`

`iii
`TABLE OF AUTHORITIES
`
`Page(s)
`
`Cases
`
`Blonder-Tongue Labs. Inc. v. Univ. Of Ill.
`Found.,
`402 U.S. 313 (1971) .......................................... 17, 18
`Cardinal Chem. Co. v. Morton Int’l, Inc.,
`508 U.S. 83 (1993) .................................................. 18
`Consumer Watchdog v. Wis. Alumni Research
`Found.,
`753 F.3d 1258 (C.A. Fed. 2014). ............................ 20
`Cuozzo Speed Techs., LLC v. Lee,
` 136 S. Ct. 2131 (2016). .................................... 14, 21
`Edmond v. United States,
`520 U.S. 651 (1997) ............................................ 5, 11
`Edward Katzinger Co. v. Chi. Metallic Mfg.
`Co.,
`329 U.S. 394 (1947) ................................................ 17
`Freytag v. Comm’r of Internal Revenue,
`501 U.S. 868 (1991) ............................................ 4, 13
`Lear, Inc. v. Adkins,
`395 U.S. 653 (1969) ................................................ 18
`Lucia v. Sec. and Exch. Comm’n,
`138 S. Ct. 2044 (2018) .............................................. 5
`Morrison v. Olson,
`487 U.S. 654 (1988) ........................................ 5, 6, 12
`Oil States Energy Servs., LLC v. Greene’s
`Energy Grp.,
`138 S. Ct. 1365 (2018) .............................. 8, 9, 10, 13
`
`
`
`

`

`iv
`Personal Audio, LLC v. Elec. Frontier Found.,
`867 F.3d 1246 (Fed. Cir. 2017) .............................. 20
`Thryv, Inc. v. Click-To-Call Techs. LP,
`140 S. Ct. 1367 (2020) ............................................ 18
`United States v. Gantt,
`194 F.3d 987 (9th Cir. 1999) .................................... 7
`United States v. Hilario,
`218 F.3d 19 (1st Cir. 2000) ...................................... 6
`
`Statutes and Regulations
`5 U.S.C. § 7513(a) ................................................ 12, 13
`35 U.S.C. § 3 ............................................................... 15
`35 U.S.C. § 3(a)(2)(A) ................................................. 11
`35 U.S.C. § 3(b)(4) ........................................................ 7
`35 U.S.C. § 6 ................................................................. 9
`35 U.S.C. § 134 (2006) ............................................... 15
`35 U.S.C. § 141 (2006) ............................................... 15
`35 U.S.C. § 311(a) ...................................................... 19
`35 U.S.C. § 311(b) ...................................................... 10
`35 U.S.C. § 316(a) ...................................................... 11
`35 U.S.C. § 316(c) ......................................................... 9
`37 C.F.R. § 1.104 ........................................................ 10
`37 C.F.R. § 1.105 ........................................................ 10
`37 C.F.R. § 1.132 ........................................................ 10
`37 C.F.R. § 1.133 ........................................................ 10
`
`Other Authorities
`Am. Intellectual Prop. Law Ass’n, 2019 Report
`of the Economic Survey (2019) ............................... 26
`
`
`
`

`

`v
`Amy L. Landers, The Antipatent: A Proposal
`for Startup Immunity, 93 Neb. L. Rev. 950
`(2015) ................................................................ 23, 25
`Christopher R. Leslie, The Anticompetitive
`Effects of Unenforced Invalid Patents, 91
`Minn. L. Rev. 101 (2006) .................................. 23, 25
`Colleen Chien, Of Trolls, Davids, Goliaths, and
`Kings, 97 N.C. L. Rev. 1571 (2009). ....................... 23
`Collen Chien, Startups and Patent Trolls, 17
`Stan. Tech. L. Rev. 461 (2014) ................... 22, 23, 24
`Cost of Inter Partes Review: Everything You
`Need to Know, UpCounsel,
`https://perma.cc/B63W-F9LM ................................ 26
`Dennis Crouch; Board of Patent Appeals and
`Interferences (BPAI), Patently-O (Mar 4,
`2008), https://perma.cc/LEG3-6LAE ..................... 15
`Engine, Patent Review is Working for Startups,
`https://perma.cc/9AP8-UN9K ................................ 27
`Engine, Startups Need Comprehensive Patent
`Reform Now, https://perma.cc/8E7R-S46Q ........... 25
`Fed. Trade Comm’n, to Promote Innovation:
`The Proper Balance of Competition and
`Patent Law and Policy (2003) ................................ 24
`H.R. Rep. No. 112-98 (2011) ................................ 18, 27
`Ian Hathaway, Tech Starts: High-Technology
`Business Foundation and Job Creation in the
`United States, Kauffman Found. (2013),
`https://perma.cc/P7GX-5Y6D ................................. 22
`
`
`
`

`

`vi
`Jean O. Lanjouw & Mark Schankerman,
`Enforcement of Patent Rights in the United
`States, in PATENTS IN THE KNOWLEDGE BASED
`ECONOMY 145 (Wesley M. Cohen & Stephen
`A. Merrill eds., 2003).............................................. 24
`Joe Mullin, New Study Suggests Patent Trolls
`Really Are Killing Startups, Ars Technica
`(June 11, 2014), https://perma.cc/5D3U-
`BGVL ...................................................................... 25
`Josh Landau; Inter Partes Review: Five Years,
`Over $2 Billion Saved; Patent Progress
`(Sept. 14, 2007) https://perma.cc/GP5M-
`LVJX ....................................................................... 21
`Manual of Patent Examining Procedure
`§ 2106 ...................................................................... 10
`Manual of Patent Examining Procedure
`§ 716.01(a) .............................................................. 11
`Manual of Patent Examining Procedure,
`Foreword ................................................................. 11
`Mark A. Lemley, Rational Ignorance at the
`Patent Office, 95 N.W. Law Rev. 1495 (2001). ...... 15
`Patents: Improving Quality and Curing
`Defects: Hearing Before the Subcomm. on
`Cts, the Internet, and Intell. Prop, 107th
`Cong. 1 (2001), https://perma.cc/NA3P-YG42 ....... 19
`Robin Feldman, Patent Demands & Startup
`Companies: The View from the Venture
`Capital Community, 16 Yale J.L. & Tech.
`236 (2014) ............................................................... 24
`Ryan Damon et al., Five Years Later: Lessons
`Learned from the First Inter Partes Review,
`ACC Docket (May 3, 2018),
`https://perma.cc/NV72-XYXM ............................... 19
`
`
`
`

`

`vii
`Stuart Graham and David Mowery; Software
`Patents: Good News or Bad News?,
`Intellectual Property Rights in Frontier
`Industries (Robert W. Hahn ed., 2005),
`https://perma.cc/3EGZ-GK2W ............................... 15
`Stuart J.H. Graham, et al., High Technology
`Entrepreneurs and the Patent System:
`Results of the 2008 Berkeley Patent Survey,
`24 Berkley Tech. L.J. 1255 (2009)
`https://perma.cc/8BD2-2AVN ................................ 23
`U.S. Small Bus. Admin. Off. Advoc., Small
`Businesses Generate 44 Percent of U.S.
`Economic Activity (Jan. 30,2019),
`https://perma.cc/PPB2-ACPW ............................... 22
`Unified Patents, 1st Half 2018: Patent Dispute
`Report (June 28, 2018),
`https://perma.cc/QP73-YEGH ................................ 19
`USPTO, U.S. Patent Statistics Chart,
`https://perma.cc/Y86S-XHV3 (2019) ...................... 15
`
`
`
`

`

`1
`
`INTEREST OF AMICI CURIAE
`Amici are
`two organizations
`representing
`innovators and businesses from all sectors of the
`economy. They are dedicated to ensuring that the
`patent system works as intended to foster innovation,
`in part through effective administrative mechanisms
`for voiding invalid patents.1
`is a non-profit
`Engine Advocacy (“Engine”)
`technology policy, research, and advocacy organization
`that bridges the gap between policymakers and
`startups, working with governments and high-
`technology, growth-oriented startups across the
`nation to support the development of technology
`entrepreneurship. Engine has worked with the White
`House, Congress, federal agencies, and state and local
`governments to discuss policy issues, write legislation,
`and introduce the tech community to Washington
`insiders.
`The Electronic Frontier Foundation (“EFF”) is a
`non-profit civil liberties organization that has worked
`for 30 years to protect consumer interests, innovation,
`and free expression in the digital world. EFF and its
`more than 30,000 active members have a strong
`interest in helping the courts and policymakers ensure
`
`
`1 Pursuant to Supreme Court Rule 37, the parties have consented
`to the filing of this brief, and all parties’ consents are on file with
`the clerk. No counsel for a party authored this brief in whole or
`in part, and no party or counsel for a party made a monetary
`contribution intended to fund its preparation or submission. No
`person other than the amici or their counsel made a monetary
`contribution to the preparation or submission of this brief.
`
`
`

`

`2
`that patent law serves the interests of creators,
`
`innovators, and the general public.
`Amici write to share the perspective of innovation-
`driven communities in general, and high-technology
`startups in particular, that holding administrative
`patent judges (“APJs”) of the Patent Trial and Appeal
`Board
`(“PTAB”)
`unconstitutionally
`appointed
`undermines the critically important inter partes
`review (“IPR”) system. IPRs and other post-grant
`proceedings are vital to a healthy and functioning
`patent system that promotes more innovation than it
`deters. Dismissing current APJs or otherwise
`dismantling, undoing, or delaying IPRs would wreak
`havoc on the patent system by amplifying the
`propagation
`of wrongly
`granted patents
`in
`contravention of Congress’s intent and the public’s
`interest.
`
`SUMMARY OF ARGUMENT
`The questions before this Court are whether APJs
`are inferior or principal officers and, if the latter,
`whether the Federal Circuit’s application of severance
`to save post-issuance review proceedings was correct.
`This Court’s answers are of more than theoretical
`significance: they will have powerful practical
`consequences for startups, innovators, technology
`users, and the administration of the patent system.
`The Federal Circuit’s deeply
`flawed approach
`threatens that system’s overriding goal: to promote
`innovation and economic growth by granting
`statutorily-limited exclusive rights when—and only
`when—the statutory requirements have been met.
`
`
`
`

`

`3
`The Federal Circuit misclassified APJs as
`
`principal officers because it ignored the similarities
`between APJs and patent examiners and overstated
`the similarities between APJs and administrative law
`judges (“ALJs”) in other agencies. This error flows
`directly from the court’s application of a new, rigid test
`that is inconsistent with Supreme Court precedent.
`And the error is critical because it places IPRs at risk,
`potentially harming startups, innovators, and the
`entire patent ecosystem.
`A proper analysis demonstrates APJs are, at
`most, inferior officers. APJs are functionally closer to
`federal employees—in particular, patent examiners—
`than to principal officers like the Director. APJs and
`examiners both have the same core goal: to ensure that
`only valid patents are permitted to enter and remain
`in the marketplace. Both must follow the policies and
`procedures set by the Director of the United States
`Patent and Trademark Office (“USPTO”). Both are
`limited by law in what factors they can consider and
`what determinations they can make, with APJs often
`being more limited. And APJs, like other inferior
`officers, are subject to removal by a principal officer.
`Although the Federal Circuit misclassified APJs,
`it was correct that severance is the best remedy to the
`perceived constitutional problem. IPR is a critical tool
`that helps innovators, startups, and the public at
`large. IPR provides a second layer of examination for
`patents that are being asserted but were wrongly
`granted, resulting in improved patent quality for all.
`Severance is both legally correct and necessary to
`ensure that IPR and other post-grant proceedings
`remain available to innovators.
`
`
`
`

`

`4
`Amici urge the Court to apply a fact-bound,
`
`multifaceted test and classify APJs as, at most,
`inferior officers. However, should the Court classify
`APJs as principal officers, it should affirm the use of
`severance for resolving the constitutional issue to
`ensure IPR remains available to innovators.
`
`ARGUMENT
`I. The Federal Circuit Misclassified APJs
`Because It Overstated APJ Authority and
`Oversimplified
`the Principal Officer
`Analysis.
`In its decision, the Federal Circuit strayed from
`this Court’s precedent and constructed a three-factor
`weighing test derived from the particular facts of
`Edmond v. United States, 520 U.S. 651 (1997). As a
`result, the court failed to consider the role APJs play
`in practice, including the relationship between APJs
`and patent examiner employees. It ignored the
`functional similarities between examiners and APJs,2
`the Director’s supervisory and policy-making powers
`over each role, and critical distinctions between APJs
`and less-analogous ALJs this Court has deemed
`principal officers.
`that
`confirms
`precedent
`This
`Court’s
`distinguishing between employees, inferior officers,
`and principal officers is a multifaceted and fact-bound
`inquiry, not a strict test based on exclusive criteria.
`See Freytag v. Comm’r of Internal Revenue, 501 U.S.
`868, 881 (1991) (argument based only on “authority to
`
`2 Indeed, the Federal Circuit does not mention examiners a single
`time in its opinion. See Pet. App. at 1a-33a.
`
`
`

`

`5
`enter a final decision . . . ignores the significance of the
`
`duties and discretion that special trial
`judges
`possess.”); see also Lucia v. Sec. and Exch. Comm’n,
`138 S. Ct. 2044 (2018); Edmond, 520 U.S. 651;
`Morrison v. Olson, 487 U.S. 654 (1988). This Court
`should consider all relevant facts and properly apply
`its precedent to them. Doing so will demonstrate that
`APJs are not principal officers.
`A. Reading Too Much into Edmond, the
`Federal Circuit Manufactured a Rigid
`Test Inconsistent with Precedent and
`Practical Reality.
`Instead of engaging in a case-specific inquiry of all
`relevant facts about APJs, including how their role
`compares to that of USPTO employees who also make
`final patentability decisions—patent examiners—the
`Federal Circuit constructed an artificial and rigid
`three-factor test that lacks support in the case law.
`Moreover, the narrow test the Federal Circuit applied
`led it to construct strained analogies between APJs
`and ALJs who carry out different functions in different
`agencies that, unlike the USPTO, are not responsible
`for granting twenty-year monopolies.
`is no
`Despite acknowledging that “[t]here
`‘exclusive
`criterion
`for distinguishing between
`principal and inferior officers for Appointments
`Clause purposes,’” Pet. App. at 37a (quoting Edmond,
`520 U.S. at 661), the Federal Circuit treated three
`factors as effectively dispositive, structuring its
`analysis around those factors and dismissing any
`others as “completely absent” without elaboration. Id.
`at 9a-22a (using three factors discussed in Edmond as
`headings).
`
`
`

`

`6
`The Federal Circuit’s misreading of Edmond flies
`
`in the face of this Court’s precedent, which uses
`entirely different
`factors where appropriate to
`evaluate an officer’s status. As this Court has
`observed, the “line between ‘inferior’ and ‘principal’
`officers is one that is far from clear.” Morrison, 487
`U.S. at 671. In Morrison, the Court held that the
`independent
`counsel was an
`inferior officer,
`performing a case-specific analysis of facts unrelated
`to those it considered in Edmond. See id. at 670-73.
`Instead, the Court stressed multiple
`important
`considerations favoring an inferior officer designation
`for the independent counsel, including:
`• the lack of “authority to formulate policy for
`the Government or the Executive Branch”;
`• the lack of “administrative duties outside of
`those necessary to operate her office”;
`• the provision subjecting her to removal by the
`head of
`the department—the Attorney
`General—for “good cause.”
`Id. at 671-72. Each of these considerations applies
`with equal force to the APJs at issue here.
`As noted in Judge Dyk’s dissent from the denial of
`rehearing en banc, other circuit courts have reconciled
`Edmond with Morrison by conducting a multifaceted,
`fact-specific inquiry—rather than applying a rigid rule
`that turns on the same three factors in each and every
`case. Pet. App. at 274a. For example, in United States
`v. Hilario, the First Circuit held that officers may “be
`considered inferior officers if the nature of their work
`suggests sufficient limitations of responsibility and
`authority,” even if principal officers do not direct and
`supervise them. 218 F.3d 19, 25 (1st Cir. 2000); see
`
`
`

`

`7
`also United States v. Gantt, 194 F.3d 987, 999 n.6 (9th
`
`Cir. 1999) (overruled on other grounds) (recognizing
`that “supervision by a superior officer is a sufficient
`but perhaps not a necessary condition to the status of
`inferior officer”).
`The Court should take this opportunity to confirm
`the path laid out in Edmond and Morrison, and it
`should reject the Federal Circuit’s unduly rigid
`approach.
`to
`B. The Federal Circuit’s Failure
`Consider the Similarities Between APJs
`and USPTO Employees Led It to
`Misclassify APJs as Principal Officers.
`The Federal Circuit’s decision is narrowly
`focused on comparing APJs to other types of “judges.”
`But to properly classify APJs, it is critical to consider
`their role and status within the context of their
`agency, the USPTO, and thus in relation to both
`employee examiners and principal officers like the
`Director. In its analysis, the Federal Circuit ignored
`important
`functional and structural similarities
`between examiners and APJs that, when properly
`considered, compel the conclusion that APJs are not
`principal officers. If anything, these similarities
`strongly suggest that the work APJs do is much closer
`to that of examiners than that of the Director. At most,
`APJs should be classified as inferior officers, but only
`after a full analysis of their role.
`i. APJs Are Functionally Similar to Patent
`Examiner Employees.
`Patent examiners—who are federal employees,
`see, e.g., 35 U.S.C. § 3(b)(4)—perform similar functions
`
`
`

`

`8
`to APJs. Fundamentally, both serve the same goal:
`
`ensuring the USPTO allows only patents that comply
`with the statutory requirements for patentability to
`exist in the marketplace. They are the gatekeepers
`who can stop deficient applications from unjustly
`restricting competition.
`The essential function of verifying patentability is
`first carried out by an examiner, whose decision is
`“subject to the qualification that the [USPTO] has ‘the
`authority to reexamine—and perhaps cancel—a
`patent claim’ in an inter partes review . . . outside of
`an Article III court.” Oil States Energy Servs., LLC v.
`Greene’s Energy Grp., 138 S. Ct. 1365, 1374 (2018)
`(citation omitted). As this Court has recognized, the
`purpose of pre-issuance examination is fundamentally
`the same as post-grant review. See id. (“The primary
`distinction between [IPRs] and the initial grant of a
`patent is that [IPR] occurs after the patent has
`issued.”).
`In exercising this authority prior to issuance,
`patent examiners perform substantially the same
`tasks the Federal Circuit relied on in classifying APJs
`as principal officers: they hear testimony, issue
`written decisions, and “ultimately decid[e] the
`patentability of the claims at issue.” Pet. App. at 8a.
`While the Federal Circuit noted that IPR has a
`“functional resemblance” to litigation, id. (quotation
`omitted), it ignored the many functional, structural,
`and practical similarities between APJs and USPTO
`employees.
`The Federal Circuit focused on the court-like
`terminology of IPR procedures rather than the
`examination-like substance of what APJs actually do.
`See Pet. App. at 8a (emphasizing that APJs “oversee
`
`
`

`

`9
`discovery,” “hear oral arguments,” and “issue final
`
`written decisions”). But, as this Court has held, these
`appearances can be deceiving: using “court-like
`procedures does not necessarily mean [the agency] is
`exercising the judicial power.” Oil States, 138 S. Ct. at
`1378 (citing Freytag, 501 U.S. at 878). Court-like
`terminology can be similarly misleading. See id. (“This
`Court has rejected the notion that a tribunal exercises
`Article III judicial power simply because it is “called a
`court and its decisions called judgments.”) (citing
`Williams v. United States, 289 U.S. 553, 563 (1933)).
`In substance and in form, what APJs do and what
`patent examiners do is largely the same. Both
`Supreme Court and Federal Circuit precedent confirm
`that these similarities fall squarely within a proper
`Appointments Clause analysis.
`First, APJs and examiners perform the same core
`function: deciding whether claims are patentable
`under controlling U.S. law. See Pet. App. at 8a
`(emphasizing the authority an APJ exercises in
`“ultimately deciding the patentability of the claims at
`issue”) (citing 35 U.S.C. § 318(a)); Oil States, 138 S. Ct.
`at 1370 (“When an inventor applies for a patent, an
`examiner reviews the proposed claims and the prior
`art to determine if the claims meet the statutory
`requirements.”) (citing 35 U.S.C. §§ 112, 131). If
`anything, examiners have more authority to make
`ultimate decisions of patentability: they issue final
`decisions on patentability individually while APJs can
`only do so with the majority support of three-member
`panels. See 35 U.S.C. §§ 6, 316(c).
`Second, APJs and examiners perform that same
`core function in the same manner: by comparing the
`claimed invention to prior art in the relevant field.
`
`
`

`

`10
`Again, APJs have the more limited role: during IPRs,
`
`they assess patentability, but “only under section 102
`or 103 and only on the basis of prior art consisting of
`patents or printed publications.” 35 U.S.C. § 311(b).
`By contrast, a patent examiner “reviews the proposed
`claims and the prior art to determine if the claims
`meet the statutory requirements” of the Patent Act—
`including those beyond sections 102 and 103. Oil
`States, 138 S. Ct. at 1370 (citing 35 U.S.C. §§ 101, 102,
`103, 112, 131). This includes prior art evidence beyond
`patents and printed publications as well as
`enablement,
`indefiniteness, patentable
`subject
`matter, and other non-prior-art reasons for invalidity.
`See, e.g., 37 C.F.R. § 1.104 (directing examiners to
`conduct a “thorough investigation of the available
`prior art”); id. § 1.105 (authorizing submission, inter
`alia, of “any non-patent literature . . . that relates to
`the claimed invention”); Manual of Patent Examining
`Procedure
`(“MPEP”) § 2106
`(“Examiners should
`determine whether a claim satisfies the criteria for
`subject matter eligibility . . . .”).
`Third, APJs and examiners rely on the same kind
`of evidence in making patentability decisions. For
`example, APJs consider “affidavits, declarations, . . .
`written memoranda,” and testimony provided in “an
`oral hearing.” Oil States, 138 S. Ct. at 1371 (citing 35
`U.S.C. §§ 316(a)(8), 316(a)(10)). Patent examiners can
`similarly consider written applications, affidavits,
`declarations, and
`testimony provided
`in oral
`interviews with applicants. See 37 C.F.R. § 1.132
`(authorizing examiners to consider written affidavits
`and declarations); id. § 1.133 (authorizing examiners
`to conduct oral interviews with applicants). Patent
`examiners, like APJs, can even weigh evidence of this
`kind to make factual determinations related to
`
`
`

`

`11
`patentability, such as secondary considerations of non-
`
`obviousness. See MPEP § 716.01(a).
`Thus, the Federal Circuit overestimated the
`limited responsibilities that in fact make APJs much
`more like patent examiners than the principal officers
`who supervise them both.
`ii. The Director’s Supervisory Power Over
`Both APJs and Examiners Demonstrates
`APJs Are Not Principal Officers.
`Both APJs and patent examiners must follow the
`policies and procedures set by the Director, who is a
`principal officer. This supervision further illustrates
`the absurdity of classifying APJs as principal officers
`when they, like patent examiners, are inferior to the
`Director within the context of the USPTO.
`In Edmond, the Court held that judges of the
`Coast Guard Court of Criminal Appeals were inferior
`officers largely because of the Judge Advocate
`General’s “administrative oversight,” including the
`power to “prescribe uniform rules of procedure” and
`“formulate policies” for the court. 520 U.S. at 664
`(quotation omitted). Here, like the Judge Advocate
`General, the Director provides “policy direction . . . for
`the Office” and “prescribes regulations” setting forth
`standards and procedures for APJs to follow during
`IPRs. 35 U.S.C. §§ 3(a)(2)(A), 316(a). And critically,
`the Director has the power to set policy that governs
`both APJs and examiners. See MPEP, Foreword
`(“Examiners will be governed by the applicable
`statutes, rules, decisions, and orders and instructions
`issued by the Director . . . .”).
`APJs and patent examiners must follow policies
`and procedures that the Director sets and cannot
`
`
`

`

`12
`themselves set rules. The fact that APJs are much
`
`more like employees than principal officers highlights
`the inferior nature of their role.
`iii. The Secretary of Commerce’s Power to
`Remove APJs Demonstrates APJs are
`Inferior Officers.
`By law, APJs receive the same employment
`protections as USPTO employees and, therefore, may
`be terminated for “such cause as will promote the
`efficiency of the service.” 5 U.S.C. § 7513(a). The
`Federal Circuit concluded this factor weighs in favor
`of classifying APJs as principal officers, even though it
`also applies to examiner-employees. See Pet. App. at
`20a.
`In Morrison, however, the Court held that the
`same type of removal provision supported classifying
`the independent counsel as an inferior officer. 487 U.S.
`at 672. The Court held that the Attorney General’s
`power to remove the independent counsel for good
`cause “indicates that [the independent counsel] is to
`some degree ‘inferior’ in rank and authority.” Id. at
`671. It explained that the “good cause” removal
`provision does not “impermissibly burden[] the
`President’s power to control or supervise the
`independent counsel” and leaves the executive “ample
`authority to assure that the counsel is competently
`performing” his or her duties. Id. at 692.
`Under Morrison, the Secretary of Commerce’s
`authority to remove APJs should weigh against
`classifying APJs as principal officers. Like the
`Attorney General in Morrison, who was the only
`officer who could remove the independent counsel, 487
`U.S. at 663, the Secretary of Commerce may remove
`
`
`

`

`13
`APJs for “such cause as will promote the efficiency of
`
`the service,” 5 U.S.C. § 7513(a). The Secretary’s broad
`removal power over APJs should likewise indicate that
`APJs are inferior in rank and authority to the
`principal officers, like the Secretary, who can remove
`them.
`
`iv. APJs Are Distinct from Other Types of
`ALJs Because They Adjudicate Matters
`Involving Public Rights.
`APJs differ in critical ways from ALJs in other
`contexts. To be sure, APJs carry out duties that bear a
`semblance to ALJs in other areas of the law. For
`example, the special trial judges of the Tax Court,
`whom this Court deemed inferior officers in Freytag,
`501 U.S. 868, “take testimony, conduct trials, rule on
`the admissibility of evidence,” and hold positions that
`are “‘established by Law.’” Id. at 881-82 (quoting U.S.
`Const. art. II, § 2, cl. 2). But that similarity should not
`be overstated: IPRs are unique proceedings that
`combine aspects of agency examination with trial-like
`features to resolve matters involving public rights.
`As this Court has explained, “[IPR] includes some
`of the features of adversarial litigation,” but “remains
`a matter involving public rights, one ‘between the
`government and others, which from its nature does not
`require judicial determination.’” Oil States, 138 S. Ct.
`at 1378 (citing Ex parte Bakelite Corp., 279 U.S. 438,
`451
`(1929)). APJs are unique because
`their
`determinations—however trial-like the process—are
`fundamentally about the correctness of the agency’s
`decision to grant a monopoly for the twenty years of a
`patent’s term.
`
`
`
`

`

`14
`IPRs exist in order to “offer[] a second look at an
`
`earlier administrative grant of a patent” to the agency
`responsible for granting it. Cuozzo Speed Techs., LLC
`v. Lee, 136 S. Ct. 2131, 2144 (2016). When an APJ
`panel decides a granted patent is invalid, which may
`render private litigation unnecessary, the primary
`benefit is to the public. Cancelling patents that should
`never have been issued “helps protect the public’s
`‘paramount interest in seeing that patent monopolies
`... are kept within their legitimate scope.’” Id. (quoting
`Precision
`Instrument Mfg. Co. v. Automotive
`Maintenance Machinery Co., 324 U.S. 806 (1945) and
`citing H.R. Rep. No. 112-98, at 39-40 (2011) (IPR is an
`“efficient system for challenging patents that should
`not have issued”) (emphasis added)).
`are
` In
`this
`respect,
`IPR
`proceedings
`fundamentally different from adversarial proceedings
`between private individuals and government entities
`accusing them of wrongdoing, such as those before the
`Tax Court in Freytag and the Coast Guard Court of
`Criminal Appeals in Edmond. In IPR proceedings, the
`entity alleged to have acted wrongly is the government
`in issuing a patent that does not comply with the law.
`C. A Healthy and Efficient Patent System
`Relies on Examiners and APJs Applying
`Policy Without Creating It.
`APJs provide a crucial layer of post-issuance
`agency review between the examiners (employees) and
`the Director and federal judiciary (principal officers).
`As described above, this review is defined by law to be
`similar to but even more limited than the initial
`examination.
`
`
`
`

`

`15
`While the details have changed over time, the
`
`structure is old and well-established. Intra-agency
`review traces its lineage to examiners-in-chief and the

This document is available on Docket Alarm but you must sign up to view it.


Or .

Accessing this document will incur an additional charge of $.

After purchase, you can access this document again without charge.

Accept $ Charge
throbber

Still Working On It

This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.

Give it another minute or two to complete, and then try the refresh button.

throbber

A few More Minutes ... Still Working

It can take up to 5 minutes for us to download a document if the court servers are running slowly.

Thank you for your continued patience.

This document could not be displayed.

We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.

Your account does not support viewing this document.

You need a Paid Account to view this document. Click here to change your account type.

Your account does not support viewing this document.

Set your membership status to view this document.

With a Docket Alarm membership, you'll get a whole lot more, including:

  • Up-to-date information for this case.
  • Email alerts whenever there is an update.
  • Full text search for other cases.
  • Get email alerts whenever a new case matches your search.

Become a Member

One Moment Please

The filing “” is large (MB) and is being downloaded.

Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.

Your document is on its way!

If you do not receive the document in five minutes, contact support at support@docketalarm.com.

Sealed Document

We are unable to display this document, it may be under a court ordered seal.

If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.


Access Government Site

We are redirecting you
to a mobile optimized page.





Document Unreadable or Corrupt

Refresh this Document
Go to the Docket

We are unable to display this document.

Refresh this Document
Go to the Docket