`
`
`
`Nos. 19-1434, 19-1452, and 19-1458
`
`In The
`Supreme Court of the United States
`
`
`United States,
`
`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 AMICUS CURIAE OF
`JOSHUA J. MALONE IN SUPPORT OF
`RESPONDENT IN 19-1434
`
`Timothy J. Haller
`Counsel Of Record
`HALLER LAW PLLC
`230 E Delaware Pl, Ste 5E
`Chicago, IL 60611
`haller@haller-iplaw.com
`(630) 336-4283
`
`
`
`
`
`
`
`
`
`- i -
`
`QUESTIONS PRESENTED
`
`the
`of
`purposes
`for
`1. Whether,
`Appointments Clause, U.S. Const. Art. II, § 2, Cl. 2,
`administrative patent judges of the U.S. Patent and
`Trademark Office are principal officers who must be
`appointed by the President with the Senate’s advice
`and consent, or “inferior Officers” whose appointment
`Congress has permissibly vested in a department
`head.
`
`if administrative patent
`2. Whether,
`judges are principal officers, the court of appeals
`properly cured any Appointments Clause defect in the
`current statutory scheme prospectively by severing
`the application of 5 U.S.C. 7513(a) to those judges.
`
`
`
`
`
`
`
`- ii -
`
`TABLE OF CONTENTS
`
`Page
`
`QUESTIONS PRESENTED ....................................... i
`
`TABLE OF AUTHORITIES .................................... iii
`
`INTEREST OF AMICUS CURIAE ........................... 1
`
`SUMMARY OF THE ARGUMENT ........................... 3
`
`ARGUMENT .............................................................. 4
`
`I.
`
`II.
`
`Introduction ................................................ 4
`
`Adjudicators Of Public Franchise
`Rights ......................................................... 6
`
`III. APJs Have More Power Than
`Article III Judges ....................................... 9
`
`IV. APJs Compared To Magistrate
`Judges ....................................................... 13
`
`V.
`
`APJ Qualifications Are Suspect .............. 15
`
`VI. APJs Are Biased In Favor Of
`Invalidation .............................................. 18
`
`CONCLUSION ......................................................... 19
`
`
`
`
`
`
`
`
`
`- iii -
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`Cases
`
`Apple, Inc., et al. v. Kilbourne,
`No. IPR2019-00233
`(P.T.A.B. Jan. 30, 2020) ........................................ 5
`
`Arthrex, Inc. v. Smith & Nephew, Inc. et al.,
`ECF No. 298, 2:15-cv-01047
`(E.D. Tex., Dec. 12, 2016) ................................... 11
`
`Chrimar Systems, Inc. v. ALE USA Inc.,
`785 Fed. Appx. 854
`(Fed. Cir. Sept. 19, 2019) ...................................... 6
`
`Chrimar Systems, Inc., et al. v. Ale USA Inc.,
`No. 19-1124, Petition For A Writ Of
`Certiorari (Mar. 10, 2020), cert. denied
`Jun. 29, 2020 ....................................................... 10
`
`ePlus, Inc. v. Lawson Software, Inc.,
`789 F.3d 1349 (Fed. Cir. 2015) ............................. 6
`
`Fresenius USA, Inc. v. Baxter Int’l, Inc.,
`721 F.3d 1330 (Fed. Cir. 2013) ........................... 13
`
`Fujitsu Semiconductor Ltd., et al. v.
`Zond, LLC,
`No. IPR2014-00800 (P.T.A.B. Oct. 2, 2015) ....... 17
`
`Oil States Energy Services, LLC v.
`Greene’s Energy Group, LLC,
`138 S. Ct. 1365 (2018) ........................................... 6
`
`
`
`
`
`- iv -
`
`Oil States Energy Services, LLC v.
`Greene’s Energy Group, LLC,
`584 U.S. ___ (2018) ............................................... 4
`
`Smith & Nephew, Inc., et al. v. Arthrex, Inc.,
`No. IPR2017-00275 (P.T.A.B. May 2, 2018) ...... 12
`
`United States v. Arthrex, Inc., et al.,
`No. 19-1434, Brief For The United States
`(Nov. 25, 2020) .................................................... 14
`
`XY, LLC v. Trans Ova Genetics,
`890 F.3d 1282 (Fed. Cir. 2018) ............................. 6
`
`
`Statutes & Other Authorities:
`
`U.S. Const., Article I, Section 8, Clause 8 ................. 7
`
`U.S. Const., Article III ...................................... passim
`
`28 U.S.C. Chapter 43 ............................................... 13
`
`35 U.S.C. § 103 ........................................................... 9
`
`35 U.S.C. § 112 ........................................................... 9
`
`35 U.S.C. § 261 ........................................................... 7
`
`1790 Patent Act § 1 .................................................... 8
`
`Adam Mossoff, Commercializing Property
`Rights in Inventions: Lessons for Modern
`Patent Theory from Classic Patent Doctrine,
`in. Competition Policy And Patent Law
`Under Uncertainty: Regulating Innovation,
`346 (Geoffrey A. Manne, Joshua D. Wright,
`eds., 2011) ............................................................. 8
`
`
`
`
`
`- v -
`
`Bonnie Berkowitz and Kevin Uhrmacher, It’s
`not just the Cabinet: Trump’s transition
`team may need
`to
`find about 4,100
`appointees, Washington Post (2016) ............. 15-16
`
`Gene Quinn, PTAB Judges Shockingly
`Inexperienced Compared to District Court
`Judges, IPWatchdog (2018) ............................ 4, 16
`
`Gene Quinn, PTAB Phantom Expanded Panels
`Erode Public Confidence and Essential
`Fairness, IPWatchdog (2018) ............................... 5
`
`Invalidated, Dir. Luke Livingston, Ground
`Floor Video, 2018 .................................................. 7
`
`Josh Malone and Steve Brachmann, PTAB
`Errors Fatal to Hundreds of Legitimate
`Patents, IPWatchdog (2018) ............................... 10
`
`Josh Malone, Assessing PTAB Invalidity Rates,
`US Inventor (2020) ......................................... 6, 18
`
`Josh Malone, Chrimar v. ALE: Federal Circuit
`Approves PTAB Nullification of Previously
`Affirmed Jury Verdict, IPWatchdog (2019) ....... 11
`
`Michael Loney, USPTO’s Michelle Lee comes
`bearing good news, leaves mixed response,
`ManagingIP (2014) ............................................ 4-5
`
`Patent Act § 271 ......................................................... 2
`
`PTAB Judge Experience (Preliminary Report),
`US Inventor (2019) ............................................. 17
`
`Steve Brachmann, Apple, APJ Clements and
`final written decisions: a lethal cocktail for
`patents, IPWatchdog (2017).................................. 5
`
`
`
`
`
`- vi -
`
`Transcript of Proceedings, Patent Public
`Advisory Committee Meeting, USPTO,
`Alexandria, Virginia, May 4, 2017 ..................... 17
`
`Transcript of Proceedings, Patent Public
`Advisory Committee Meeting, USPTO,
`Alexandria, Virginia, August 14, 2014 .............. 18
`
`USPTO Patent Classification Classes by Art
`Unit, USPTO ....................................................... 17
`
`
`
`
`
`
`
`
`
`- 1 -
`
`INTEREST OF AMICUS CURIAE1
`
`I quit my corporate job in 2006 to become a full
`time inventor and entrepreneur. It was a huge
`investment and risk for my entire family. We gave up
`my salary as a process engineer, mortgaged our home,
`depleted our retirement fund, and deferred our
`children’s college fund. We knew that financial
`success was statistically unlikely, as most startups
`fail for a variety of reasons. But I believed that if I
`invented a commercially viable solution to the
`problems at hand I would secure ownership of that
`invention by a U.S. patent. Sadly I was mistaken. I
`never dreamed that so-called judges inside the Patent
`Office would take away my patent the moment I
`needed to use it.
`
`My invention, Bunch O Balloons, solved a 63
`year long problem of filling and sealing water balloons.
`The commercial embodiment is comprised of 35
`balloons fastened to the ends of flexible tubes by tiny
`elastic rings, the other ends of tubes joined to a
`garden hose connector. Water flows down each of the
`tubes to simultaneously fill the balloons, and when
`the balloons are detached the elastic ring clinches the
`
`
`1 No counsel for a party authored this brief in whole or
`in part. No person or entity other than Amicus or its counsel
`made a monetary contribution to the preparation or submission
`of this brief. Consent for filing this amicus brief has been
`obtained from all parties, via docket-filed blanket consents.
`Counsel of record for Amicus notes that in relevant portions of
`the brief, Amicus, Mr. Malone, wanted his argument presented
`in the first person.
`
`
`
`
`
`- 2 -
`
`neck of the balloon shut. You can make 100 water
`balloons in a minute.
`
`invention on the
`launched my
`When I
`Kickstarter crowdfunding platform, a notorious
`knock-off company surreptitiously purchased a first
`edition product, reverse engineered it, went into
`production at their Chinese factory, and flooded the
`market with copies. They sold millions of infringing
`copies on television, the internet, Walmart, Target,
`Bed Bath & Beyond, Toys R Us, Walgreens, Kroger,
`and Home Depot.
`
`That’s what courts are for, I thought. I took the
`infringer to court under Section 271 of the Patent Act
`and won several preliminary injunctions, multiple
`appeals, a jury verdict, and a final judgment – all
`upholding my patents as not invalid. Meanwhile, the
`Patent Office’s Patent Trial and Appeal Board
`(“PTAB”) instituted review of my same four patents
`and issued a final written decision invalidating the
`first one. 2 Among many spurious rulings, PTAB
`“judges” determined that my claims were indefinite in
`a Post Grant Review because one of ordinary skill
`cannot determine when a balloon is substantially
`filled with water and that my invention was an
`
`
`2 I am the sole owner of Tinnus Enterprises, LLC. The
`relevant matters are styled Tinnus Enterprises, LLC v.
`Telebrands Corporation in the District Court for the Eastern
`District of Texas and the Court of Appeals for the Federal
`Circuit; for PTAB matters the parties are reversed; others
`include In re Telebrands Corporation, In re Tinnus Enterprises,
`LLC, and Telebrands v. Iancu. In short, there were eight
`separate proceedings before the PTAB involving six of my
`patents.
`
`
`
`
`
`- 3 -
`
`obvious combination of a prior balloon filler, a
`sprinkler, and a gastric dietary balloon.
`
`In my case the PTAB did not serve as a faster
`or less expensive alternative to district court. Rather
`it added more than 2 years and approximately $1.5M
`in extra legal expense by duplicating and extending
`the district court litigation, eventually forcing us to
`settle for a fraction of the damages. It duplicated,
`contradicted, and confounded the proceedings and
`decisions of the district court. It inspired arrogance
`and confidence in an adjudged willful infringer.
`
`I have completed the entire innovation circuit
`from invention conception to $31M judgment in a
`widely known and cited patent litigation. I was
`involved daily in the entire process. I have written
`dozens of articles, been featured in dozens of news
`reports from Today Show to Wall Street Journal. I
`have participated
`in several professional
`legal
`conferences as a panelist, have authored several
`amicus briefs, testified in USPTO hearings, and
`participated in USPTO rulemaking. I have spoken
`and/or corresponded with over one hundred other
`inventors whose patents have been challenged at the
`PTAB, and I have reviewed the key pleadings and
`decisions in their cases. Perhaps most importantly, I
`am not a lawyer.
`
`SUMMARY OF THE ARGUMENT
`
`Administrative Patent Judges (“APJs”) are
`acting as Officers of the United States, even though
`they were not confirmed by the Senate and may in
`fact lack the qualifications for approval. I contrast the
`
`
`
`
`
`- 4 -
`
`adjudication of my patents before PTAB APJs with
`proceedings before a magistrate judge who was
`supervised by a Senate-confirmed district court judge.
`For patents to promote progress in the useful arts by
`securing to inventors like me the exclusive right to
`our inventions, revocations must be overseen by
`highly
`qualified,
`transparently
`vetted
`and
`independent Officers of the United States.
`
`ARGUMENT
`
`
`
`I.
`
`Introduction
`
`This case is about the APJs of the PTAB. The
`Chief Justice of this Court correctly noted that they
`are in fact not judges, but rather are executive branch
`employees. 3 They are not independent – neither
`before nor after removal of their Title 5 civil service
`protections in the decision below. Their experience
`and credentials are substantially less than Article III
`judges.4 A large number of them were selected by the
`former head of patents at Google.5 Many of them work
`
`
`3 Oil States Energy Services, LLC v. Greene’s Energy
`Group, LLC, 584 U.S. ___ (2018), Tr. of Oral Arg. (Nov. 27, 2017),
`available at https://www.supremecourt.gov/oral_arguments/arg
`ument_transcripts/2017/16-712_7kh7.pdf at 47.
`
`4 Gene Quinn, PTAB Judges Shockingly Inexperienced
`Compared to District Court Judges, IPWatchdog (2018),
`https://www.ipwatchdog.com/2018/03/06/ptab-judges-shockingly
`-inexperienced/ (last visited Dec. 27, 2020).
`
`5 Michael Loney, USPTO’s Michelle Lee comes bearing
`good news,
`leaves mixed response, ManagingIP
`(2014),
`https://www.managingip.com/article/b1kc24h2bv8d62/usptos-m
`
`
`
`
`
`- 5 -
`
`for petitioners before and after their time at the PTAB.
`One individual worked as litigation counsel for Apple,
`then sided with Apple in 96% of decisions as an APJ6,
`and now works for Apple again, representing them at
`the PTAB. 7 APJ employment is contingent on
`deciding a sufficient number of cases against
`inventors, and they get bonuses based on their output.
`On average their legal experience and qualifications
`are substantially less than an Article III judge. At
`times they appear to be instructed by other officials
`(who likewise are not properly appointed and
`confirmed) on what to write in their opinions.8 They
`don’t hear testimony or observe cross-examination of
`witnesses; they don’t follow the Federal Rules of
`Procedure; and they limit hearings to 1 or 2 hours.
`
`the APJs believe
`the other hand,
`On
`themselves to be judges. They require that all rise
`when they enter and leave a hearing room and are
`addressed as “your honor.” They wield near-absolute
`power in deciding ownership of trillions of dollars in
`
`
`ichelle-lee-comes-bearing-good-news-leaves-mixed-response
`(last visited Dec. 27, 2020).
`
`6 Steve Brachmann, Apple, APJ Clements and final
`written decisions: a lethal cocktail for patents, IPWatchdog
`(2017), https://www.ipwatchdog.com/2017/06/22/apple-apj-cleme
`nts-final-written-decisions-lethal-cocktail-patents (last visited
`Dec. 28, 2020).
`
`7 Apple, Inc., et al. v. Kilbourne, No. IPR2019-00233
`(P.T.A.B. Jan. 30, 2020), Paper 38 at 2 and 3:15.
`
`8 Gene Quinn, PTAB Phantom Expanded Panels Erode
`Public Confidence and Essential Fairness, IPWatchdog (2018),
`https://www.ipwatchdog.com/2018/03/22/ptab-phantom-expand
`ed-panels/ (last visited Dec. 27, 2020).
`
`
`
`
`
`- 6 -
`
`intellectual property rights. They often overrule
`Article III judges and juries. They make the final
`decision for the executive branch in AIA trials –
`revoking one or more claims in 84% of the 3,000
`patents they have reviewed.9
`
`My response to the first question presented is
`that APJs carry the duties and responsibilities of
`Officers of the United States, but many are in fact
`unfit for such a position. This is not a mere
`technicality. This Constitutional violation precludes
`inventors from relying on the patent system and
`undermines the justice system as a whole (e.g., when
`they nullify judgments of Article III courts).10 There
`is no point in applying for a patent as long as the
`current pool of APJs have the power to take it back
`and overrule Article III courts. The decisions in these
`high stakes matters should be made by properly
`vetted Officers of the United States.
`
`II.
`
`Adjudicators Of Public Franchise Rights
`
`I have read this Court’s decision in Oil States
`Energy Services, LLC v. Greene’s Energy Group, LLC,
`138 S. Ct. 1365 (2018), and I understand that the
`Court considers patents to be public franchise rights
`granted by the government. Under that view, perhaps
`it does not matter who handles disputes over patent
`
`9 Josh Malone, Assessing PTAB Invalidity Rates, US
`Inventor (2020), https://usinventor.org/assessing-ptab-invalidity
`-rates (last visited Dec. 27, 2020).
`
`10 Chrimar Systems, Inc. v. ALE USA Inc., 785 Fed.
`Appx. 854 (Fed. Cir. Sept. 19, 2019); XY, LLC v. Trans Ova
`Genetics, 890 F.3d 1282 (Fed. Cir. 2018); ePlus, Inc. v. Lawson
`Software, Inc., 789 F.3d 1349 (Fed. Cir. 2015).
`
`
`
`
`
`- 7 -
`
`validity. As fellow inventor and entrepreneur Tom
`Pierson muses in the documentary INVALIDATED,
`“a much better process would be, as soon as a patent
`is issued, somebody at the Patent Office flips a coin:
`heads, the patent is good; tails, it’s no good.”11 The
`Patent Office might hire individuals to flip a coin to
`revoke
`a
`patent, without
`implicating
`the
`Appointments Clause.
`
`On the other hand the Patent Act prescribes
`that “patents shall have the attributes of personal
`property” (35 U.S.C. § 261), and Article I, Section 8,
`Clause 8, of the United States Constitution requires
`that patents be for “securing for limited Times to …
`Inventors the exclusive Right to their … Discoveries.”
`From my experience and observation, I am not
`optimistic that a patent meets these conditions as
`long as a political agency holds the power to both
`grant and revoke it. However, if there is any hope of
`such an arrangement working, the adjudicator must
`be highly qualified, fully vetted, and independent.
`The current approach to selecting and supervising
`APJs is impossible to reconcile with any concept of
`property rights, and it cannot “promote Progress of
`Science and useful Arts.”
`
`I also note that my pursuit of the American
`dream was NOT based on a public franchise system.
`That is not what inventors like me were taught or
`believed. I quit my job, drained my retirement
`
`
`11 Invalidated, Dir. Luke Livingston, Ground Floor
`Video, 2018. Streaming Online Video, https://www.amazon
`.com/Invalidated-Josh-Malone/dp/B07G2WGTK6 (last visited
`Dec. 27, 2020) at 26:46.
`
`
`
`
`
`- 8 -
`
`account, mortgaged my house, and jeopardized my
`family’s financial security – based entirely on the
`expectation that if I solved a problem with a new and
`useful invention that I could enjoy exclusive rights to
`commercialize it through a United States patent.
`Invention patents for anyone based on merit were
`quintessentially American. Our founders broke with
`the aristocratic systems of Europe, where patents
`were reserved for the wealthy elite. Instead we had a
`merit-based system that in Section 1 of the 1790
`Patent Act provided that “any person” might be
`granted a patent if “he, she, or they, hath or have
`invented or discovered any useful art, manufacture,
`engine, machine, or device….”
`
`That dream was truly motivating. Fellow
`inventor Abraham Lincoln once noted that the patent
`system “added the fuel of interest to the fire of
`genius.”12 I wouldn’t just wish there were a solution
`to a given problem. I wouldn’t merely think of a
`solution. I would pursue it tirelessly. Not just as a
`hobby. I would buy materials, hire engineers, build
`equipment, conduct experiments, work late into the
`night, raise capital. All at incalculable risk – in search
`of a solution that might not even exist. This could only
`be justified by my belief that if one of my ventures
`bore fruit I could own it, protect it, nurture it with a
`patent.
`
`
`12 Adam Mossoff, Commercializing Property Rights in
`Inventions: Lessons for Modern Patent Theory from Classic
`Patent Doctrine, in. Competition Policy And Patent Law Under
`Uncertainty: Regulating Innovation, 346 (Geoffrey A. Manne,
`Joshua D. Wright, eds., 2011).
`
`
`
`
`
`- 9 -
`
`The patent system has never been perfect, but
`the implementation of the PTAB is the straw that
`broke the camel’s back. There is no longer any
`rational basis for pursuing that dream. I don’t believe
`it. And now I advise other inventors not to apply for a
`U.S. patent. No matter how carefully they follow the
`law, or how remarkable their invention, a panel of
`PTAB APJs is likely to declare their patent to be
`obvious if they ever attempt to use it. Invent as a
`hobby, yes. Invent as a philanthropist, yes. Invent to
`build a business, not in the USA.
`
`III. APJs Have More Power Than Article III
`Judges
`
`In district court, we won a preliminary
`injunction against the company that stole my
`invention. The infringer argued against likelihood of
`success on the basis that my patent claims were
`indefinite under 35 U.S.C. § 112 because no one
`knows when a balloon is “substantially filled with
`water.” Additionally they argued that my claims were
`invalid under 35 U.S.C. § 103 as an obvious
`combination of a prior art balloon filler, a garden
`sprinkler, and a gastric dietary balloon. The district
`court judge found that we were likely to prevail and
`ordered the infringing products enjoined. The Federal
`Circuit affirmed and we later prevailed in a jury trial
`and final judgment.
`
`In parallel, the infringer asked the PTAB for a
`second bite at the apple to invalidate my patent on the
`same grounds. The APJs ignored the findings of the
`district court and invalidated my patent on the
`identical issue of indefiniteness. While the decision
`
`
`
`
`
`- 10 -
`
`ended up reversed on appeal, on remand the APJs
`refused to give preclusive effect to a final judgment of
`the district court on the obviousness issue. In another
`case, the PTAB instituted review on grounds which
`the district court had previously determined lacked
`merit.13
`
`I am aware of hundreds of other cases where
`the APJs invalidated a patent that was held to be not
`invalid by an Article III judge.14 This conflict between
`the branches was highlighted by a recent petition for
`certiorari by my friend and fellow inventor John
`15
`Austermann.
` His
`invention provided
`for
`simultaneously sending power and data over the
`same ethernet channel. PTAB APJs accused Mr.
`Austermann of claiming to have invented the
`technology that causes a 1930’s era telephone to ring,
`called “phantom power.” Of course, that was not his
`
`13 In the end all of my patents survived despite intense
`litigation and early losses at the PTAB. The first PTAB
`proceeding languished for almost 4 years until terminated in a
`settlement. I prevailed in the other PTAB cases after I burned
`my patents in the first protest in USPTO history, a new Director
`of the Patent Office was appointed to replace the former head of
`patents for Google, and the lead APJ on my case was replaced. I
`survived and am able to participate in the present case as an
`amicus not because of the merits, but because I had sufficiently
`deep pockets and political influence to stand up to the company
`that stole my invention.
`
`14 Josh Malone and Steve Brachmann, PTAB Errors
`Fatal to Hundreds of Legitimate Patents, IPWatchdog (2018),
`https://www.ipwatchdog.com/2018/01/07/ptab-errors-fatal-legiti
`mate-patents/ (last visited Dec. 27, 2020).
`
`15 Chrimar Systems, Inc., et al. v. Ale USA Inc., No. 19-
`1124, Petition For A Writ Of Certiorari (Mar. 10, 2020), cert.
`denied Jun. 29, 2020.
`
`
`
`
`
`- 11 -
`
`invention and the examiner would never have
`awarded him a patent for such an outrageous claim.
`The real judges and juries understood this, but PTAB
`technocrats are not bound by common sense.16
`
`The present case is especially troubling.
`Petitioner Smith & Nephew challenged the validity of
`the ‘907 patent at trial and lost as detailed in the
`verdict form returned by the jury below:17
`
`II. VALIDITY
`2. Did Smith & Nephew prove by clear
`and convincing evidence that any of the
`following
`claims
`are
`invalid
`as
`anticipated by the prior art?
`
`Claim 11 of the ‘541 patent
`Claim 4 of the ‘907 patent
`Claim 8 of the ‘907 patent
`Claim 16 of the ‘907 patent
`Claim 27 of the ‘907 patent
`
`Yes No
`✓
`
`✓
`
`✓
`
`✓
`
`✓
`
`
`Final judgment was entered by the district court on
`December 12, 2016. 18 The underlying dispute was
`resolved more than 4 years ago by an Article III court.
`
`
`16 Josh Malone, Chrimar v. ALE: Federal Circuit
`Approves PTAB Nullification of Previously Affirmed Jury
`Verdict, IPWatchdog (2019), https://www.ipwatchdog.com/2019/
`09/20/chrimar-v-ale-ptab-federal-circuit-rule-36-continue-
`threaten-u-s-patent-system/ (last visited Dec. 27, 2020).
`
`17 Arthrex, Inc. v. Smith & Nephew, Inc. et al., ECF No.
`298, 2:15-cv-01047 (E.D. Tex., Dec. 12, 2016).
`
`18 Arthrex, Inc. v. Smith & Nephew, Inc. et al., ECF No.
`299, 2:15-cv-01047 (E.D. Tex., Dec. 12, 2016).
`
`
`
`
`
`- 12 -
`
`Yet the PTAB charged ahead, holding its own
`trial on February 20, 2018, and issuing its decision on
`May 2, 2018, a year and half after the dispute was
`fully resolved by the district court.19 Where the jury
`and Article III judge held the ‘907 patent not invalid,
`PTAB APJs subsequently held it invalid. The present
`case should not even be possible, as the dispute was
`fully resolved by the judicial branch more than 4
`years ago.20 At the very least, APJs ought to submit
`to Senate confirmation if they are to continue to
`exercise such powers as to unwind final judgments of
`Article III courts.21
`
`Federal Circuit precedent holds that PTAB
`determinations have a retroactive effect on earlier
`determinations of district courts. However, Judge
`Newman’s dissent explains,
`
`The court today authorizes the Patent
`and
`Trademark
`Office,
`an
`administrative agency within
`the
`Department of Commerce, to override
`and void the final judgment of a federal
`Article III Court of Appeals. The panel
`
`
`19 Smith & Nephew, Inc., et al. v. Arthrex, Inc., No.
`IPR2017-00275 (P.T.A.B. May 2, 2018), Paper 36.
`
`20 Amicus respectfully suggests that this Court inquire
`of the parties why Smith & Nephew chose to continue this
`dispute, considering they settled the infringement case.
`
`21 Arthrex and Smith & Nephew consented to have their
`case tried by the magistrate judge in the district court. While
`somewhat confounding the analysis, it highlights another PTAB
`peculiarity – parties are forced to appear before “inferior” officers
`who are the final word of the Executive against their will.
`
`
`
`
`
`- 13 -
`
`majority holds that the entirety of these
`judicial proceedings can be ignored and
`superseded by an executive agency’s
`later ruling.
`
`Fresenius USA, Inc. v. Baxter Int’l, Inc., 721 F.3d 1330,
`1347 (Fed. Cir. 2013) (Newman, J., dissenting).
`
`“Inferior” officers who are the final word of the
`Executive should not be able to overturn the decisions
`of principal officers. This makes a mockery of our
`Constitution and system of government, eroding the
`public trust.
`
`IV. APJs Compared To Magistrate Judges
`
`My case was assigned to a magistrate judge.
`Like APJs, magistrates are appointed by Officers of
`the United States (see Chapter 43 of 28 U.S. Code).
`They can adjudicate all pre-trial matters and, if the
`parties consent, preside over trials.
`
`in my case was
`judge
`The magistrate
`respectable,
`and
`experienced,
`knowledgeable,
`impartial. I didn’t agree with all of his decisions,
`especially when he ruled that our licensing agreement
`precluded us
`from collecting
`lost profits
`for
`infringement. Regardless of whether the rulings were
`favorable or not, both parties were given due process
`and afforded fair consideration. This stood in stark
`contrast to my case before the APJs at the PTAB. The
`APJs had no experience in judicial matters, limited
`knowledge, and played an adversarial role in my case.
`Where the district judge presumed my patent to be
`valid, the APJs presumed it was not valid and
`
`
`
`
`
`- 14 -
`
`assumptions
`unreasonable
`adopted
`interpretations to support their skepticism.
`
`and
`
`Paradoxically, the magistrate judge in my case
`who was much more qualified, is merely an “inferior”
`officer. All of his decisions are subject to de novo
`review by his supervisor, a Senate-confirmed federal
`judge.
`
`APJs have no such supervision, contrary to the
`assertions of the government Intervenor who argues:
`1) a principal officer appoints APJs; 2) a principal
`officer can remove APJs; 3) a principal officer can
`reassign APJs; 4) a principal officer can bind APJs
`through rulemaking; 5) a principal officer can
`designate decisions as precedential; 6) a principal
`officer can dismiss a petition; and 7) a principal officer
`can order a rehearing by panel stacked with APJs of
`his choosing.22
`
`Except for the possibility of being overruled by
`a stacked panel, magistrate judges have every other
`form of supervision cited by the government
`Intervenor. Magistrate judges: 1) are appointed by
`principal officers; 2) can be removed by principal
`officers; 3) are assigned by principal officers; 4) are
`bound by rules prescribed by principal officers; 5)
`bound by precedential decisions of principal officers;
`6) can see their case dismissed by order of a principal
`officer.
`
`
`22 United States v. Arthrex, Inc., et al., No. 19-1434, Brief
`For The United States (Nov. 25, 2020) at 26-30.
`
`
`
`
`
`- 15 -
`
`Every significant decision by a magistrate
`judge is advisory, and subject to de novo review by a
`principal officer. This
`is the critical missing
`component in the PTAB structure. In my case either
`party could object to the decision of the magistrate in
`district court. When the magistrate ruled that our
`licensing agreement disqualified a lost profits claim,
`I vigorously objected. The presiding judge – an Officer
`of the United States – granted oral argument and
`allowed me to testify. And then proceeded to rule
`against me. But I was heard. I had my day in court
`and pled my case before a full-fledged Officer of the
`United States. Not so at the PTAB. No matter how
`egregious the ruling, it is locked in by the APJs as the
`final decision. Article III appeals court review is no
`salve on this wound. Their review is the most
`deferential possible – substantial evidence review –
`the same deference appellate courts give Seventh
`Amendment jury verdicts.
`
`APJs are acting as principal officers, even
`though they were not confirmed by the Senate and
`probably
`lack the necessary qualifications
`for
`approval.
`
`V.
`
`APJ Qualifications Are Suspect
`
`The question arises, what is the harm in
`subjecting APJs
`to
`the requirements of
`the
`Appointments Clause? More than 1,200 executive
`branch positions require Senate confirmation23 along
`
`
`23 Bonnie Berkowitz and Kevin Uhrmacher, It’s not just
`the Cabinet: Trump’s transition team may need to find about
`4,100 appointees, Washington Post (2016), https://www.washing
`
`
`
`
`
`- 16 -
`
`with 678 district court judges and 169 circuit court
`judges. There is no legitimate obstacle to confirming
`250 administrative patent judges. Who are they?
`What are their qualifications? What qualities did the
`former head of patents at Google see when she hired
`them? Would my Texas Senators who sit on the
`Judiciary Committee agree with her choices? What
`are the Petitioner and Intervenor afraid of, and what
`is so bad about allowing inventors to plead our case
`before a legally appointed Officer of the United States?
`
`It is possible that a large fraction of the current
`pool of APJs cannot pass Senate confirmation. This
`could be a reason that Appointments Clause protocol
`has been circumvented.
`
`Studies have shown that APJs are deficient in
`legal experience and accomplishments. The median
`bench/bar experience of an APJ is 17 years compared
`to 40 years for a federal judge. Nearly half of APJs
`join the PTAB having practiced law for 10 years or
`less, while zero district judges had 10 years or less
`experience prior to appointment. Many APJs join the
`PTAB having only achieved associate status at their
`firms.24
`
`Likewise, APJs are deficient of technical
`experience. This is especially problematic as they
`
`
`tonpost.com/graphics/politics/trump-transition-appointments-sc
`ale/ (last visited Dec. 27, 2020).
`
`24 Gene Quinn, PTAB Judges Shockingly Inexperienced
`Compared to District Court Judges, IPWatchdog (2018),
`https://www.ipwatchdog.com/2018/03/06/ptab-judges-shockingly
`-inexperienced/ (last visited Dec. 27, 2020).
`
`
`
`
`
`- 17 -
`
`overrule examiners who are actual experts in the
`particular technology of the invention. Approximately
`8,000 examiners are divided into around 320 art units
`in which they specialize.25 APJs on the other hand
`take up cases outside of their field, for instance,
`according to the former Chief APJ – “a biochemist
`sitting on an electrical case.” 26 My research shows
`that 60% of APJs have no post-graduate technical
`experience. 27 I have attended many hearings
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