`
`
`
`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.
`
`
`(Caption continued on inside cover)
`________________
`ON WRIT OF CERTIORARI TO
`THE UNITED STATES COURT OF APPEALS
`FOR THE FEDERAL CIRCUIT
`________________
`BRIEF FOR APPLE INC. AS AMICUS CURIAE
`IN SUPPORT OF NEITHER PARTY
`________________
`Christopher J. Cariello
`Mark S. Davies
`ORRICK, HERRINGTON &
`Counsel of Record
`SUTCLIFFE LLP
`Cesar A. Lopez-Morales
`ORRICK, HERRINGTON &
`51 West 52nd Street
`SUTCLIFFE LLP
`New York, NY 10019
`1152 15th Street, N.W.
`
`Washington, DC 20005
`
`(202) 339-8400
`mark.davies@orrick.com
`Counsel for Amicus Curiae
`
`
`
`

`

`
`
`________________
`SMITH & NEPHEW, INC., ET AL.,
`Petitioners,
`
`
`
`v.
`ARTHREX, INC., ET AL.,
`
`
`________________
`ARTHREX, INC.,
`
`
`
`
`Respondents.
`
`Petitioner,
`
`v.
`SMITH & NEPHEW, INC., ET AL.,
`
`
`Respondents.
`________________
`
`
`
`
`
`

`

`i
`
`TABLE OF CONTENTS
`
`Page
`TABLE OF AUTHORITIES .................................... iii 
`INTEREST OF AMICUS CURIAE .......................... 1 
`SUMMARY OF ARGUMENT ................................... 3 
`ARGUMENT ............................................................. 6 
`I.  Congress Wanted To Provide The Public
`With A Reliable And Efficient System To
`Test The Validity Of Issued Patents. ................ 6 
`A.  Congress devised a reliable and
`efficient system to adjudicate
`challenges to issued patents. ........................ 8 
`1.  Congress designed the IPR system
`to deliver reliable results. ........................ 9 
`2.  Congress designed the IPR system
`to be highly efficient. ............................. 14 
`B.  Innovators depend on the promise of
`the IPR system Congress created. .............. 19 
`II.  If The IPR System Needs Fixing, This
`Court Should Employ Remedial Doctrines
`Designed To Minimize Disruption. .................. 26 
`A.  An IPR system without removal
`protections for APJs is capable of
`functioning. .................................................. 27 
`B.  If congressional intervention is
`necessary, this Court should stay its
`decision to avoid disrupting the
`system’s functioning. ................................... 30 
`
`
`
`

`

`ii
`
`
`CONCLUSION ........................................................ 32 
`APPENDIX
`Chart: Uniloc-Apple Patent Disputes ............ App. 1a
`
`
`
`

`

`
`
`iii
`
`TABLE OF AUTHORITIES
`
` Page(s)
`
`Cases
`Apple, Inc. v. Aylus Networks, Inc.,
`No. IPR2014-01565, 2015 WL
`1870710 (PTAB Apr. 22, 2015) ............................ 23
`Apple, Inc. v. Aylus Networks, Inc.,
`No. IPR2014-01566, 2015 WL
`1870711 (PTAB Apr. 23, 2015) ............................ 23
`Arctic Cat Inc. v. Polaris Indus. Inc.,
`No. CV 13-3579, 2015 WL 6757533
`(D. Minn. Nov. 5, 2015) ........................................ 22
`Aylus Networks, Inc. v. Apple Inc.,
`856 F.3d 1353 (Fed. Cir. 2017) ............................ 23
`
`Barr v. Am. Ass’n of Political
`Consultants, Inc.,
`140 S. Ct. 2335 (2020) .......................................... 28
`Bowsher v. Synar,
`478 U.S. 714 (1986) .............................................. 31
`Buckley v. Valeo,
`424 U.S. 1 (1976) .................................................. 31
`Castro v. United States,
`540 U.S. 375 (2003) .............................................. 10
`Chestnut Hill Sound, Inc. v. Apple Inc.,
`714 F. App’x 1020 (Fed. Cir. 2018) ...................... 21
`
`
`
`

`

`iv
`
`Chestnut Hill Sound, Inc. v. Apple Inc.,
`774 F. App’x 676 (Fed. Cir. 2019) ........................ 21
`Cuozzo Speed Techs., LLC v. Lee,
`136 S. Ct. 2131 (2016) ................................ 9, 11, 15
`eBay Inc. v. MercExchange, L.L.C.,
`547 U.S. 388 (2006) .............................................. 24
`Edmond v. United States,
`520 U.S. 651 (1997) .............................................. 29
`
`Free Enter. Fund v. Pub. Co. Acct.
`Oversight Bd.,
`561 U.S. 477 (2010) .............................................. 28
`Kaley v. United States,
`571 U.S. 320 (2014) ................................................ 9
`New York v. Cathedral Acad.,
`434 U.S. 125 (1977) .............................................. 30
`
`N. Pipeline Constr. Co. v. Marathon
`Pipe Line Co.,
`458 U.S. 50 (1982) .......................................... 31, 32
`NFC Tech. LLC v. HTC Am., Inc.,
`No. 2:13-cv-1058-WCB, 2015 WL
`1069111 (E.D. Tex. Mar. 11, 2015) ..................... 18
`
`Oil States Energy Servs., LLC v.
`Greene’s Energy Grp., LLC,
`138 S. Ct. 1365 (2018) ........................ 3, 7, 8, 11, 15
`
`
`
`

`

`v
`
`Regents of the Univ. of Minn. v. LSI
`Corp.,
`926 F.3d 1327 (Fed. Cir. 2019) .............................. 6
`Ryder v. United States,
`515 U.S. 177 (1995) .............................................. 30
`Thryv, Inc. v. Click-to-Call Techs., LP,
`140 S. Ct. 1367 (2020) ............................................ 2
`Weinberger v. Romero-Barcelo,
`456 U.S. 305 (1982) .............................................. 31
`Winter v. Nat. Res. Def. Council, Inc.,
`555 U.S. 7 (2008) .................................................. 30
`Constitutional Provisions
`U.S. Const. art. I, § 8, cl. 8 ........................................ 19
`U.S. Const., art. II, § 2, cl. 2 ..................................... 27
`Statutes & Regulations
`5 U.S.C. § 7513 .......................................................... 27
`35 U.S.C. § 3(a)(2)(A) ................................................ 29
`35 U.S.C. § 3(c) .......................................................... 27
`35 U.S.C. § 6(a) .................................................... 11, 32
`35 U.S.C. § 6(c) .......................................................... 12
`35 U.S.C. § 302 ............................................................ 7
`35 U.S.C. § 303 ............................................................ 7
`
`
`
`

`

`Vi
`
`vi
`
`35 U.S.C. § 311(a) ........................................................ 8
`35 U.S.C. § 311(a) ........................................................ 8
`35 U.S.C. § 311(b) ...................................................... 11
`35 U.S.C. § 311(b) ...................................................... 11
`35 U.S.C. § 313 ............................................................ 9
`35 U.S.C. § 313 ............................................................ 9
`35 U.S.C. § 314(a) ...................................................... 11
`35 U.S.C. § 314(a) ...................................................... 11
`35 U.S.C. § 315(e) ...................................................... 16
`35 U.S.C. § 315(e) ...................................................... 16
`35 U.S.C. § 316(a) ...................................................... 11
`35 U.S.C. § 316(a) ...................................................... 11
`35 U.S.C. § 316(a)(2) ................................................. 11
`35 U.S.C. § 316(a)(2) ................................................. 11
`35 U.S.C. § 316(a)(5) ................................................... 9
`35 U.S.C. § 316(a)(5) ................................................... 9
`35 U.S.C. § 316(a)(8) ................................................. 10
`35 U.S.C. § 316(a)(8) ................................................. 10
`35 U.S.C. § 316(a)(10) ............................................... 10
`35 U.S.C. § 316(a)(10) ............................................... 10
`35 U.S.C. § 316(a)(11) ............................................... 17
`35 U.S.C. § 316(a)(11) ............................................... 17
`35 U.S.C. § 316(d)(1)(A) ............................................ 15
`35 U.S.C. § 316(d)(1)(A) ............................................ 15
`35 U.S.C. § 316(d)(1)(B) ............................................ 15
`35 U.S.C. § 316(d)(1)(B) ............................................ 15
`35 U.S.C. § 316(e) ................................................ 10, 11
`35 U.S.C. § 316(e) ................................................ 10, 11
`35 U.S.C. § 317 .......................................................... 15
`35 U.S.C. § 317 .......................................................... 15
`35 U.S.C. § 318 .......................................................... 10
`35 U.S.C. § 318 .......................................................... 10
`35 U.S.C. § 318(b) ...................................................... 15
`35 U.S.C. § 318(b) ...................................................... 15
`35 U.S.C. § 319 .......................................................... 10
`35 U.S.C. § 319 .......................................................... 10
`
`
`
`

`

`vii
`
`Appointment of Administrative Patent
`Judges and Administrative
`Trademark Judges, Pub. L. No. 110-
`313, 122 Stat. 3014 (2008) ................................... 32
`37 C.F.R. § 42.51 ....................................................... 16
`37 C.F.R. § 42.100(c) ................................................. 17
`Legislative History
`157 Cong. Rec. S1376 (daily ed. Mar. 8,
`2011) ..................................................................... 16
`H.R. Rep. No. 112-98 (2011) ............... 6, 7, 8, 9, 15, 16
`Other Authorities
`AIPLA, Report of the Economic Survey
`2019 (Sept. 2019) ..................................... 17, 18, 21
`John R. Allison & Mark A. Lemley,
`Empirical Evidence on the Validity
`of Litigated Patents, 26 AIPLA Q.J.
`185 (1998) ............................................................. 13
`John R. Allison, et al., Our Divided
`Patent System, 82 U. Chi. L. Rev.
`1073 (2015) ........................................................... 13
`Amended Complaint for Declaratory &
`Injunctive Relief, Apple Inc. v.
`Iancu, No. 5:20-cv-6128-EJD (N.D.
`Cal. Nov. 9, 2020), Dkt. 54 .................................... 3
`
`
`
`

`

`viii
`
`Marsha S. Berzon, Dissent,
`“Dissentals,” and Decision Making,
`100 Cal. L. Rev. 1479 (2012) ............................... 12
`Brief for Apple Inc. as Amicus Curiae in
`Support of Respondents, Oil States
`Energy Servs., LLC v. Greene’s En-
`ergy Grp., LLC, 138 S. Ct. 1365
`(2018) (No. 16-712)................................................. 3
`Brief for Apple Inc. as Amicus Curiae in
`Support of Neither Party, Octane
`Fitness, LLC v. Icon Health & Fit-
`ness, Inc., No. 12-1184 (Dec. 9, 2013) .................. 24
`Complaint, Chestnut Hill Sound Inc. v.
`Apple Inc., No. 1:15-cv-261-RGA (D.
`Del. Mar. 25, 2015), Dkt. 1 .................................. 21
`John F. Duffy, Are Administrative
`Patent Judges Unconstitutional?,
`2007 Patently-O Patent L.J. 21
`(2007) .................................................................... 32
`Joseph Farrell & Robert P. Merges,
`Incentives to Challenge and Defend
`Patents: Why Litigation Won’t
`Reliably Fix Patent Office Errors
`and Why Administrative Patent
`Review Might Help, 19 Berkeley
`Tech. L.J. 943 (2004) ............................................. 7
`
`
`
`

`

`ix
`
`Daniel F. Klodowski, et al., Federal
`Circuit PTAB Appeal Statistics, AIA
`Blog (Oct. 7, 2020),
`https://bit.ly/3moroqv ........................................... 11
`Josh Landau, A Little More Than Forty
`Percent: Outcomes at the PTAB,
`District Court, and the EPO, Patent
`Progress (May 1, 2018),
`https://bit.ly/3mpI0OF ................................... 13, 14
`Mark A. Lemley, Rational Ignorance at
`the Patent Office, 95 Nw. U. L. Rev.
`1495 (2001) ............................................................. 6
`Perryman Group, An Assessment of the
`Impact of the America Invents Act
`and the Patent Trial and Appeal
`Board on the US Economy (June
`2020), https://bit.ly/36okc8k ................................ 17
`PTAB, Consolidated Trial Practice
`Guide (Nov. 2019),
`https://bit.ly/39uBS3S .......................................... 16
`Status Report, Aylus Networks, Inc. v.
`Apple Inc., No. 3:13-cv-4700-EMC
`(N.D. Cal. May 29, 2015) ..................................... 23
`USPTO, Inter Partes Reexamination
`Filing Data (Sept. 30, 2017),
`https://bit.ly/36ooz3d ...................................... 14, 16
`USPTO, PTAB Brochure,
`https://bit.ly/3qcM9aV (last visited
`Dec. 2, 2020) ......................................................... 12
`
`
`
`

`

`x
`
`USPTO, Trial Statistics: IPR, PGR,
`CBM (Sept. 2020),
`https://bit.ly/36pxQI0 ..................................... 14, 25
`Jason Rantanen, Federal Circuit
`Statistics Update – September 2020,
`Patently-O blog (Sept. 15, 2020),
`https://bit.ly/3fSsjgz ....................................... 12, 13
`
`
`
`
`
`

`

`
`
`INTEREST OF AMICUS CURIAE1
`Amicus Apple Inc. is one of the world’s leading
`technology innovators. Apple designs, manufactures,
`and sells mobile phones and tablets, media devices,
`and personal computers, as well as related products
`and services. Its innovations have revolutionized the
`way we communicate, work, and play. Among the
`market-leading products Apple has launched over the
`past 15 years are the iPhone, iPad, AirPods, Apple
`Watch, and Apple TV. And Apple also develops the
`software that runs on those devices, as well as
`groundbreaking features and services like Apple Pay,
`Apple Music, and Apple Arcade.
`Like any tech company, Apple has a keen interest
`in the U.S. patent system. Apple frequently protects
`its own innovations by securing patent rights. And
`Apple’s success also makes it a frequent target of oth-
`ers who claim that Apple’s inventions implicate their
`patent rights. Because it so often wears both hats, Ap-
`ple has long advocated for a balanced, principled pa-
`tent system. From patent examination to post-
`judgment litigation on attorneys’ fees, Apple has sup-
`ported sensible rules and policies that promote inno-
`vation and competition.
`When it comes to advancing those ends, no policy
`development over the past decade comes close to the
`
`1 The parties have consented to the filing of this brief. No
`counsel for a party authored this brief in whole or in part, and
`no such counsel or a party made a monetary contribution in-
`tended to fund the preparation or submission of this brief. No
`person other than Apple, its members, or its counsel made a
`monetary contribution to the preparation of this brief.
`
`
`
`

`

`2
`
`one at issue here. Congress created the inter partes
`review (IPR) system as part of its 2011 America In-
`vents Act (AIA). “By providing for inter partes review,
`Congress, concerned about overpatenting and its di-
`minishment of competition, sought to weed out bad …
`claims efficiently.” Thryv, Inc. v. Click-to-Call Techs.,
`LP, 140 S. Ct. 1367, 1374 (2020). It devised a system
`of adversarial testing within the U.S. Patent & Trade-
`mark Office (PTO), adjudicated by multimember pan-
`els of administrative patent judges (APJs) with both
`legal and technical training. Through this system,
`members of the public can bring post-grant challenges
`to the validity of questionable patents.
`And no single party has used the IPR system more
`than Apple, likely because no party is as frequent a
`target of litigation as Apple is. Apple’s success makes
`it a favorite patent defendant, especially of so-called
`“non-practicing entities”—parties who exist not to in-
`vent or innovate, but to own and monetize patents by
`asserting them against others. When Apple is sued, it
`typically interposes invalidity defenses through IPR
`petitions, relying on Congress’s promise of a fair and
`efficient forum to challenge what often prove to be
`woefully weak patents that should not have issued in
`the first instance. Apple has used the IPR process to
`successfully challenge nearly 200 such patents. The
`results it has obtained have frequently obviated what
`would otherwise have been protracted, expensive liti-
`gation, conserving the resources of both the parties
`and the court, and speeding resolution of disputes.
`Apple is hardly alone. Less than a decade on, the
`IPR system is humming. Parties have filed petitions
`at a rate of over 100-per-month for six years running.
`
`
`
`

`

`3
`
`There are now over 200 APJs tasked with resolving
`these petitions. Pet. App. 10a. And this extensive use
`of the IPR procedure has induced extraordinary reli-
`ance by all stakeholders in the patent system.
`Apple takes no position on the alleged Appoint-
`ments Clause defect in the IPR system’s design, nor
`on the adequacy of any particular cure. Its interest in
`this case lies in the continued and healthy operation
`of the IPR system.2 Apple files this amicus brief to
`provide its perspective as an innovator and frequent
`user of the IPR process on the benefits of the system
`and the reliance interests placed in it. And if the
`Court decides that the IPR system is indeed in need
`of correction to comply with constitutional require-
`ments, Apple respectfully urges the Court to adopt
`available remedies that avoid significant disruption
`to the system’s functioning.
`SUMMARY OF ARGUMENT
`I. Congress designed the IPR system to be a reli-
`able and cost-effective means for the public to test the
`validity of issued patents.
`
`
`2 Apple has sought to advance this same interest in other
`cases and forums. See Brief for Apple Inc. as Amicus Curiae in
`Support of Respondents, Oil States Energy Servs., LLC v.
`Greene’s Energy Grp., LLC, 138 S. Ct. 1365 (2018) (No. 16-712)
`(amicus brief detailing benefits of IPR system); Amended Com-
`plaint for Declaratory & Injunctive Relief, Apple Inc. v. Iancu,
`No. 5:20-cv-6128-EJD (N.D. Cal. Nov. 9, 2020), Dkt. 54 (lawsuit
`brought by Apple—along with Cisco Systems, Inc., Google LLC,
`Intel Corp., and others—concerning the PTAB’s consideration of
`petitions to institute review).
`
`
`
`

`

`4
`
`A. Several aspects of the IPR system work to-
`gether to promote Congress’s twin aims of reliability
`and efficiency. IPRs are adversarial and adjudicatory
`in nature. They concern only the narrow issue of the
`validity of the challenged patent, and the APJs who
`apply these legal principles have both legal and tech-
`nical training. IPRs also have important structural
`safeguards that promote the uniformity, predictabil-
`ity, and quality of final written IPR decisions—such
`as common rules governing the proceedings and the
`pooling of expert APJs in three-member panels. And
`the IPR system has statutorily prescribed time limits
`that prevent challenges from dragging on for years.
`Available data strongly suggests that the IPR sys-
`tem Congress devised works largely as intended.
`Thousands of IPR petitions have been filed since the
`system’s inception and approximately one hundred
`continue to be filed on average every month. Final
`written IPR decisions are affirmed by the Federal Cir-
`cuit at a high rate. And while the PTAB’s patent in-
`validation rate is comparable to that of district
`courts’, IPR proceedings reach a final disposition
`more quickly and less expensively than district court
`litigation.
`B. Over the past decade, innovators like Apple
`have come to depend on the promise of the system
`Congress created. As Apple’s own experiences con-
`firm, the benefits from using the system are consider-
`able. IPRs conserve resources, narrow patent
`disputes in district court, and level the playing field
`against “non-practicing entities.”
`
`
`
`

`

`5
`
`The IPR system has become indispensable. Inno-
`vators like Apple have placed extraordinary reliance
`in a functioning IPR system. And any disruption in its
`functioning would scuttle vast reliance interests and
`threaten the system’s considerable benefits.
`II. If this Court decides that the IPR system is
`constitutionally defective, it should employ remedial
`doctrines that minimize disruption to the system’s
`functioning.
`A. If the Court concludes that the Federal Cir-
`cuit’s solution of severing APJ removal protections
`from the statute solves any Appointments Clause
`problem, it should not hesitate to apply the severabil-
`ity doctrine. This Court has expressed a strong pref-
`erence for severance over destruction so long as the
`statute in question remains operative and capable of
`functioning. Even if an IPR system without removal
`protections is not optimal as a policy matter, there is
`little question the system would remain capable of
`functioning.
`B. If a legislative fix were necessary, then this
`Court should stay its judgment, as it has done on
`many occasions when facing similar circumstances. A
`stay would afford Congress an opportunity to cure the
`alleged constitutional defect without impairing the
`interim administration of the IPR system.
`
`
`
`

`

`6
`
`ARGUMENT
`
`I. Congress Wanted To Provide The Public
`With A Reliable And Efficient System To
`Test The Validity Of Issued Patents.
`The conditions that necessitated the IPR system
`are no mystery. Congress was responding to “a grow-
`ing sense that questionable patents are too easily ob-
`tained and are too difficult to challenge.” H.R. Rep.
`No. 112-98, at 39 (2011).
`The “too easily obtained” was (and is) the product
`of the PTO’s process of issuing patents. That process
`typically takes place ex parte, between the inventor
`and a patent examiner. There are approximately
`8,000 patent examiners in the agency—all of them
`with varying degrees of training, education, and expe-
`rience—tasked with reviewing over 650,000 patent
`applications. See Regents of the Univ. of Minn. v. LSI
`Corp., 926 F.3d 1327, 1331-32 (Fed. Cir. 2019) (col-
`lecting sources and noting that examiners spend only
`around 22 hours reviewing each application), cert. de-
`nied, 140 S. Ct. 908 (2020). Given this volume of work,
`low-quality patents are inevitable.
`One option for addressing such patents would be
`to prevent them from issuing in the first instance—
`Congress could strengthen the examination corps by
`devoting “more time and more money” to evaluating
`prior art, and so forth. Mark A. Lemley, Rational Ig-
`norance at the Patent Office, 95 Nw. U. L. Rev. 1495,
`1496 (2001). But the return on investment would be
`poor. The reason is that only a small percentage of is-
`sued patents (~5%) are ever monetized and fewer
`
`
`
`

`

`7
`
`(~1.5%) are ever litigated. Id. at 1507 & n.55. “Be-
`cause so few patents are ever asserted against a com-
`petitor, it is much cheaper for society to make detailed
`validity determinations in those few cases than to in-
`vest additional resources examining patents that will
`never be heard from again.” Id. at 1497.
`Which brings us to the other half of Congress’s
`“growing sense”—that “questionable patents” are “too
`difficult to challenge.” Of course, litigation has always
`been one option. But it is “costly and protracted.” H.R.
`Rep. No. 112-98 at 39, 45. An accused infringer must
`spend large sums of money in litigation costs to chal-
`lenge the validity and enforceability of a low-quality
`patent and wait years for the challenge to be resolved.
`And because litigation requires a case or controversy,
`even an innovator that becomes aware of low-quality
`patents before it is sued must risk infringement and
`a multi-front litigation battle to be able to challenge
`the validity of the patents in federal court. See gener-
`ally Joseph Farrell & Robert P. Merges, Incentives to
`Challenge and Defend Patents: Why Litigation Won’t
`Reliably Fix Patent Office Errors and Why Adminis-
`trative Patent Review Might Help, 19 Berkeley Tech.
`L.J. 943, 958 (2004).
`Previous Congresses had recognized as much.
`They had in the past tried to “create[] administrative
`processes that authorize the PTO to reconsider and
`cancel patent claims that were wrongly issued.” Oil
`States, 138 S. Ct. at 1370. First was ex parte reexam-
`ination, which began in 1980, and which permitted
`examiners to take another look at issued patents at
`the prompting of a third party. See 35 U.S.C. §§ 302,
`303. Then, in 1999, came inter partes reexamination,
`
`
`
`

`

`8
`
`which permitted “the third-party requester and the
`patent owner to participate in a limited manner” in
`the process. Oil States, 138 S. Ct. at 1371. But these
`options too proved “costly, taking several years to
`complete,” and indeed turned out to be “a much less
`favored avenue to challenge questionable patents
`than litigation.” H.R. Rep. No. 112-98 at 45.
`So Congress went back to its workshop. It sought
`to fix post-grant review procedures in order to
`“establish a more efficient and streamlined patent
`system that w[ould] improve patent quality and limit
`unnecessary and counterproductive litigation costs.”
`H.R. Rep. No. 112-98 at 40. And what emerged was
`IPR—an adversarial review process that allows the
`public to bring a narrow challenge to the validity of
`an issued patent. 35 U.S.C. § 311(a).
`Nine years on, the IPR system has become a
`viable alternative to district court for challenging
`questionable patents. By and large, it has delivered
`reasoned decisionmaking
`through an efficient
`process. Infra § A. And innovators like Apple have
`used the system just as Congress intended, realizing
`its promise and investing extraordinary reliance
`interests in its continued functioning. Infra § B.
`A. Congress devised a reliable and efficient
`system to adjudicate challenges to
`issued patents.
`The design of the IPR system reflects twin aims:
`reliability and efficiency. By pursuing these goals,
`Congress sought to improve public confidence in U.S.
`
`
`
`

`

`9
`
`patents and provide a cost-effective alternative to dis-
`trict court litigation.
`1. Congress designed the IPR system
`to deliver reliable results.
`a. Several aspects of the AIA work together to ac-
`complish Congress’s goal of producing high-quality re-
`sults.
`First, the IPR system relies upon adversarial ad-
`judication to scrutinize the validity and enforceability
`of issued patents. Deeply engrained in our legal sys-
`tem is the notion that an “adversarial process leads to
`better, more accurate decision-making.” Kaley v.
`United States, 571 U.S. 320, 338 (2014). And Congress
`appreciated that the ex parte examination process
`was yielding wrongly issued patents. See H.R. Rep.
`No. 112-98 at 39-40. So for post-grant IPR proceed-
`ings, it moved “from an examinational to an adjudica-
`tive proceeding,” adversarial in nature. Id. at 46-47.
`Congress also endowed IPR proceedings with “ad-
`judicatory” characteristics and procedures—albeit
`streamlined ones, as discussed below (at 10, 16).
`Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131,
`2143 (2016). After a party petitions for IPR, the pa-
`tent owner may respond and object. See 35 U.S.C.
`§ 313. And if the PTO Director institutes the IPR pe-
`tition, the parties to the new proceeding have at their
`disposal a panoply of trial-like rights. The parties are
`entitled to conduct “discovery of relevant evidence,”
`which includes taking depositions, id. § 316(a)(5); file
`“affidavits or declarations” and present “factual evi-
`dence and expert opinions” in support of their
`
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`10
`
`arguments, id. § 316(a)(8); and participate in an oral
`hearing before a three-member panel of the PTAB’s
`administrative patent judges, id. § 316(a)(10). Lastly,
`the PTAB must determine if the challenger met its
`burden of proving unpatentability, id. § 316(e), and
`issue a written decision accordingly, id. §§ 316(a)(10),
`318, which can then be appealed to the Federal Cir-
`cuit, id. § 319.
`These adjudicative features bolster public confi-
`dence in the PTO’s decisionmaking and the quality of
`U.S. patents. After all, motivated “parties know what
`is best for them,” and surely know to “advanc[e] the
`[best] facts and arguments entitling them to relief,”
`thus leading to better and more reasoned decisions by
`the agency. Castro v. United States, 540 U.S. 375, 386
`(2003) (Scalia, J., concurring in part and concurring
`in the judgment). That is why IPR benefits accused
`infringers and patent owners alike. It gives challeng-
`ers an opportunity to choose which patent claims they
`want to contest before the agency and present their
`best case in support of invalidation. Similarly, it al-
`lows patent owners to test the quality of their patents
`and respond to any filing adverse to their patent
`rights.
`Second, Congress limited IPR proceedings to a
`narrow set of defined issues, the standards for which
`closely track those governing the issuance of patents
`in the first instance. Congress limited IPR to the basic
`question of patentability presented to the initial ex-
`aminer—namely, whether the PTO should “cancel as
`unpatentable 1 or more claims of a patent only on a
`ground that could be raised under section 102 or 103
`and only on the basis of prior art consisting of patents
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`

`11
`
`or printed publications.” 35 U.S.C. § 311(b). The bur-
`den is on the challenger of the patent to “prov[e] a
`proposition of unpatentability by a preponderance of
`the evidence,” id. § 316(e). See Cuozzo, 136 S. Ct. at
`2143. Thus, “inter partes review involves the same in-
`terests as the determination to grant a patent in the
`first instance.” Oil States, 138 S. Ct. at 1374.
`Congress also provided for appellate review of the
`PTAB’s legal determinations by the Federal Circuit
`on a de novo standard. As of July 31, 2020, the Fed-
`eral Circuit had considered approximately 764 IPR
`appeals. See Daniel F. Klodowski, et al., Federal Cir-
`cuit PTAB Appeal Statistics, AIA Blog (Oct. 7, 2020),
`https://bit.ly/3moroqv. With greater opportunities for
`de novo review comes a more defined (and binding)
`body of caselaw that predictably governs future deci-
`sions.
`Third, Congress structured the PTAB to promote
`the uniformity, predictability, and quality of its deci-
`sions. For example, Congress empowered the Director
`to promulgate certain regulations prescribing the
`same procedures that will govern all IPR proceedings,
`see 35 U.S.C. § 316(a), including, subject to statutory
`requirements, the “standards for the showing of suffi-
`cient grounds to institute a review under section
`314(a),” id. § 316(a)(2).
` Congress also mandated that the decisionmakers
`working within this system have both “competent le-
`gal knowledge and scientific ability.” 35 U.S.C. § 6(a).
`APJs must have, among other things, “[m]any years
`of experience in the practice of patent law (prosecu-
`tion, litigation, or both),” and “[d]egree(s)/work
`
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`

`12
`
`experience in science or engineering.” USPTO, PTAB
`Brochure, https://bit.ly/3qcM9aV (last visited Dec. 2,
`2020). The PTO has a rigorous hiring process in place
`to make sure that the most qualified candidates are
`selected. See id.
`This expertise is then pooled and channeled
`through three-member panels, further enhancing the
`reliability of their decisions. See 35 U.S.C. § 6(c). As
`our system of appellate law teaches, the use of “mul-
`timember bodies comprised of individuals of equal
`stature” is a structural feature that typically supports
`good and reliable decisionmaking. Marsha S. Berzon,
`Dissent, “Dissentals,” and Decision Making, 100 Cal.
`L. Rev. 1479, 1480 (2012). Generally speaking, then,
`a three-member panel guards against any single
`member’s lapse in judgment or discretion, promoting
`high-quality results.
`In short, Congress devised a system that com-
`bines several of the most powerful guarantors of reli-
`ability in our legal system and provided for its
`operation by dedicated APJs with deep technical ex-
`perience.
`b. Statistics on PTAB decisions strongly suggest
`that Congress’s system has been able to function as
`intended by weeding out questionable patents and im-
`proving public confidence.
`The first clue is in affirmance rates before the
`Federal Circuit. According to one analysis, in the past
`decade, through August 2020, the Federal Circuit af-
`firmed the PTAB in 80% of cases and affirmed in part
`in another 7% of cases. See Jason Rantanen, Federal
`
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`

`13
`
`Circuit Statistics Update – September 2020, Patently-
`O blog (Sept. 15, 2020), https://bit.ly/3fSsjgz. The
`PTAB thus gets it right far more often than not, at
`least according to the Federal Circuit’s standards of
`appellate review—the PTAB’s affirmance rate is
`slightly higher than that of district court patent deci-
`sions, in which the Federal Circuit affirmed about
`70% of the cases and affirmed in part in another 13%.
`Id.
`The second clue is in the IPR system’s rate of in-
`validating patents—and in particular how that rate
`compares with the baseline in district courts. If the
`IPR system were defective in some way, or skewed to-
`wards a particular result, we might expect its compar-
`ative invalidation rate to diverge from that of other
`bodies. But it has not.
`“[A]pproximately 46.5% of challenged patents are
`invalidated in whole or in part by a [PTAB] decision.”
`Josh Landau, A Little More Than Forty Perc