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`Case: 16-2523 Page:1_Filed: 05/07/2018Document:51
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`
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`2016-2523, -2524
`
`UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT
`
`DSS TECHNOLOGY MANAGEMENT,INC.,
`
`Appellant
`
`v.
`
`APPLEINC.,
`
`Appellee
`
`Appeals from the United States Patent and TrademarkOffice,
`Patent Trial and Appeal Board Nos. IPR2015-00369 and IPR2015-00373
`
`APPELLEE APPLE INC.’S CORRECTED COMBINED PETITION FOR
`PANEL REHEARING AND REHEARING EN BANC
`
`David K.S. Cornwell
`Jon E. Wright
`Kristina Caggiano Kelly
`Jason A. Fitzsimmons
`William H. Milliken
`Sterne Kessler Goldstein & Fox PLLC
`1100 New York Avenue, NW
`Washington, DC 20005
`202.371.2600
`
`Counselfor Appellee, Apple Inc.
`
`Dated: May 7, 2018
`
`
`
`Case: 16-2523
`
`Document:33
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`Page:2
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`Filed: 08/02/2018
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`FORM9. Certificate of Interest
`
`Case No.
`
`Counsel for the:
`
`Form 9
`Rev. 10/17
`
`
`UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT
`DSS Technology Management, Inc. | AppleInc.
`
`16-2523, -2524
` AMEDNED
`CERTIFICATE OF INTEREST
`
`UO (petitioner) 0 (appellant) O (respondent) @ (appellee) 0 (amicus) D (mameof party)
`
`
`
`
`Apple Inc.
`certifies the following (use “None”if applicable; use extra sheets if necessary):
`
`
`
`2. Nameof Real Party in interest
`3. Parent corporations and
`
`
`1. Full Nameof Party
`(Please only include any real party
`publicly held companies
`
`Represented by me
`that own 10% or more of
`
`
`
`
`
`represented by mein the trial court or agency or are expected to appear in this court (and who have not
`or will not enter an appearance in this case) are:
`
` 4. The namesof all law firms and the partnersor associates that appeared for the party or amicus now
`
`
` Sterne, Kessler, Goldstein & Fox P.L.L.C.: Robert Greene Sterne, Mark W. Rygiel
`
`
`
`
`Case: 16-2523
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`Document: 83
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`FORM9. Certificate of Interest
`
`Page:2_
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`Filed: 08/07/2018
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`Form 9
`Rev. 10/17
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`5. The title and number of any case knownto counsel to be pendingin this or any other court or agency
`that will directly affect or be directly affected by this court’s decision in the pending appeal. See Fed. Cir.
`R. 47. 4(a)(5) and 47.5(b). (The parties should attach continuation pages as necessary).
`The patent at issue in this appeal is also involved in the matter of DSS Technology Management,Inc.
`v. Apple, Inc., C.A. No. 4:14-cv-05330 (N.D. Cail).
`
`cc, Counsel of Record
`
`4/11/2018
`Date
`
`Please Note: All questions must be answered
`
`/s/ Jon E. Wright
`Signature of counsel
`Jon E. Wright
`Printed nameof counsel
`
`
`
`
`
`Case: 16-2523 Page:4_Filed: 05/07/2018Document:51
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`
`
`TABLE OF CONTENTS
`
`STATEMENT OF COUNSEL......e eee ceeccesecesecesseceneeesseneeeneeeneeeesesesenesecssceeeeneeeeas 1
`
`INTRODUCTION o.oo ceeceseccneeessecesseecssecnaeecsaecseaeeesareceeaeeeeeeessuseesesensesssaeenaeees 2
`
`ARGUMENT 0.0... ceccceecccsrsessneceteceseeseseesssceseecaesesaeeseaeecesgesentseceeeesseseseserseoaeees 2
`
`I.
`
`The Panel Majority Contravened the Administrative Procedure Act
`by Refusing to Consider the Whole Record in Determining Whether
`the Board’s Obviousness Conclusion Was Supported by Substantial
`EVidence.........sccceesccseseecescesseesesecensecesneeeaeeseeeceasecsaeecsenecesaeeesaeeceaeerseaeseaeessetenseses 2
`
`A.
`
`B.
`
`|The APA mandates whole record review by the reviewing court;
`the Chenery doctrine does not limit that review to evidence cited
`by the Agency... eeceseccesssecesseeeseseeeesseeeecssaceeersaeesessaeeseesaeersaeeeeereens 3
`‘The panel majority harmfully erred in refusing to consider record
`evidence that supported the Board’s determination..............eeeeeeeeeee 5
`EvenIfthe Board Failed to Sufficiently Explain Its Obviousness
`Conclusion, The Panel Majority Violated Longstanding Supreme
`Court Precedent by Reversing Instead of Vacating and Remanding
`to the Board for Further Proceedings. ...........ccscceccccessseeeceeesnnseceeesesneeeeeesnseesees 9
`A.—The ordinary remandrule requires a court reviewing an
`insufficiently reasoned agency decision to vacate and remand
`for further agency proceedings absent “extraordinary
`CIFCUMSTANCES.”.......eeseceecceenceescecesecenecesaeceneceseaecesacenueeceateceaeesessenaeenees 10
`
`Il.
`
`B.
`
`Because there are no “extraordinary circumstances”here, the
`panel majority’s decision to reverse, instead of vacating and
`remanding, violated the ordinary remandrule. ..............c:ceeeeseeeeseerees 14
`CONCLUSION AND RELIEF SOUGHT.... eee ccs sesecsecesecseereeeenensenserees 16
`
`
`
`Case: 16-2523
`
`Document:51
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`Page:5
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`Filed: 05/07/2018
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`TABLE OF AUTHORITIES
`
`Cases:
`
`A.L. Pharma,Inc. v. Shalala,
`62 F.3d 1484 (D.C. Cir. 1995) ..occecccccsccccsssceesseccesscecccsssseceesssseesseeesesesseeenseeessreess 13
`
`Am. Fed’n of Gov’t Emps., AFL-CIO v. Fed. Labor Relations Auth.,
`778 F.2d 850 (D.C. Cir. 1985) oo. cee cceesccssseessesseesseessecceecesesesseseeeeeseeesseeseeensens 13-14
`
`Ariosa Diagnostics v. Verinata Health, Inc.,
`805 F.3d 1359 (Fed. Cir. 2015)... ee eeeeeeeneessenseeveeeseeeeseeessseonseersnaeecensessseessaeeseees l
`
`Bailey v. Dart Container Corp. ofMich.,
`292 F.3d 1360 (Fed. Cir, 2002)... ecacscccsscereencssscseesescssecsecessseessseesseesesseseasenseercaes 4
`
`Bd. of Trs. ofLeland Stanford Junior Univ. v. Chinese Univ. ofHong Kong,
`860 F.3d 1367 (Fed. Cir. 2017). ...c.ccccccsssccsecseessessceseeseecseesseecssssecssessesesssssssesesessuses 4
`
`Castatieda-Castillo v. Gonzales,
`488 F.3d 17 (1st Cir, 2006)... cc cccccecccscceesseceesecesecesseessesssuessssecesssessnensesesseoes 12
`
`Coronadov. Holder,
`759 F.3d 977 (9th Cir. 2014) ooo. ceccesccccecsssseceesssceecessnesesccessessecessessscesccenseccsersees 12
`
`Droplets Inc. v. E*Trade Bank,et al.,
`-- F.3d --, 2018 WL 1866903 (Fed. Cir. 2018) 0.0... .ccceccccesccsssccsscessesssseesscesseeseeseeens 4
`
`Florida Power & Light Co. v. Lorion,
`A470 U.S. 729 (1985)... ceecseseeenecseessecseeseesscsseeseeseeseecsecessenaecseeesecseeeseeeneeeseess 1,9, 11
`
`Fogo De Chao (Holdings) Inc. v. U.S. Dep’t ofHomeland Sec.,
`769 F.3d 1127 (D.C. Cir. 2014) ee eceseseeecscescseeseeseesesesseeseeseesessseeesaeeesseeenenees 12
`
`Gonzales v. Thomas,
`S47 U.S. 183 (2006)... cece cecccessceesseeeecesseeesseeessecssecersseceeeceseeecsssscasesessnssenneeees 1,11
`
`In re Applied Materials, Inc.,
`692 F.3d 1289 (Fed. Cir. 2012)... eceesessesesscsseceeseseeseeseeseeeseesscsecsseeceeceseseeeesseteaes 5
`
`il
`
`
`
`
`
`Case: 16-2523 Page:6_Filed: 05/07/2018Document:51
`
`
`
`In re Hodges,
`882 F.3d 1107 (Fed. Cir. 2018)... cee eccecceseeeeeeeesseeeeceaeecaeseeesessseceseseaeseesaeeateeeeees 2
`
`Inre NuVasive,
`842 F.3d 1376 (Fed. Cir. 2016)... cee ceecccccsseseceeseceeccssecseeeetsersestieessessettestersteeeee 3
`
`Inre Sang-Su Lee,
`277 F.3d 1338 (Fed. Cir, 2002)... ce ecesessceeceeecseeereseesesesresecseesaeseseeeeesaeetesaeseeaas 12
`
`Inre Van Os,
`844 F.3d 1359 (Fed. Cir. 2017)... ccccccccccsssesccesstseeeeenssesecesseseseeeeseeseeeesesseesenaes 2,12
`
`INS v. Orlando Ventura,
`S37 U.S. 12 (2002)... cece ceeccccessceeesececssseecessecessececaseceeesseeescsseeecestseseseeseesesesas 1,9, 11
`
`Lugo-Resendez v. Lynch,
`831 F.3d 337 (Sth Cir. 2016) occ cecececccssceseceseeseeeseeessecscecsaeessesessecsessesessessseeeaseas 12
`
`Matute v. U.S. Att’y Gen.,
`366 F. App’x 982 (11th Cir. 2010) oe eeceneeeneceeseeeesseeceseeseeeecsateesesenesesaeeees 12
`
`Mickeviciute v. INS,
`327 F.3d 1159 (LOth Cir. 2003) oo... ccceeseccessseecceeessseecesecssaseccsessseesescsessesesseaees 12
`
`Nebraska ex rel. Bruning v. U.S. Dep’t ofInterior,
`625 F.3d 501 (8th Cir. 2010)ee seceecsecesesseeeseeeceaeeeecaeceseeeeseaeeaeeeseeeeaeeaeenes 12
`
`Negusie v. Holder,
`S55 U.S. S11 (2009)... eeccsseseeseeceeessececseceaesseeseseeeeaseaeeeaeesaeeeeeeeeeeeeeeaseneees 1,11
`
`Personal Web Techs., LLC v. Apple Inc.,
`848 F.3d 987 (Fed. Cir, 2017)... eee eescessecsecesecsseceeectecessaeesaeeeseesneessesesseseeeengs 1, 12-13
`
`Ping Sai Zian v. BIA,
`2008 WL 5120681 (2d Cir. Dec. 8, 2008)... ec ccscceesseeeseeesseeessesessceesnscenseesees 12
`
`PowerIntegrations, Inc. v. Lee;
`797 F.3d 1318 (Fed. Cir. 2015)... cccccceccssecessecssseceseeeceeseeeesseseecsesssasessssesessteenseeees 13
`
`iil
`
`
`
`Case: 16-2523
`
`Document:51
`
`Page:7
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`Filed: 05/07/2018
`
`Rovalma, S.A. v. Bohler-Edelstahl GmbH & Co. KG,
`856 F.3d 1019 (Fed. Cir. 2017).......ccecccccesssssssesssceseceesecssecsscecesecseecsnevsaeeeseeeaeenees 1, 13
`
`SAS Inst. Inc. v. Iancu,
`-- S. Ct. --, 2018 WL 1914661 (Apr. 24, 2018)... cee ceceeeeseeeteeersaneerseceneeenneeens 15
`
`SEC v. Chenery Corp.,
`318 U.S. 80 (1943). eeeecescesecseecseecesecseecsecssecesecneeeeseecasesuecsaceaeceneeesasesseeaeens 10, 11
`
`SEC v. Chenery Corp.,
`332 U.S. 194 (1947) oo... eeececesscccsnseecesseccesnceesseecesensecseneeseeeaeeeneeseeaaeeesnerenespassim
`
`Shalom Pentecostal Church v. Acting Sec’y U.S. Dep’t ofHomelandSec.,
`783 F.3d 156 (3d Cir. 2015)... eeeessecssecssscesseecssecesctecseeeeeseeeeesessseeessaeeseneessssesseeens 12
`
`Treichler v. Comm’r ofSoc. Sec. Admin.,
`775 F.3d 1090 (3d Cir. 2014)... eececcesceseeeseceseceeeeceeeceneecsseceeecaeeeseeeteeeseseaeeeaees 11
`
`Villatoro-Lopez v. Holder,
`445 F. App’x 881 (7th Cir. 2011) oo. ceceeceeccscscneceneeceseceseesseeeeesensesenseesteeceeeseesseeaes 12
`
`Ward v. Holder,
`733 F.3d 601 (6th Cir, 2013) oo. ceeecesccesecesseeesceescneceeseessneeeesteesueeessecesereeseeesenss 12
`
`Yan Dan Li v. Gonzales,
`222 F. App’x 318 (4th Cir, 2007) oo... ceeecescesecseecsnecsseceseessneeeeseeneeeeseeseeeeeeeceneeees 12
`
`Statutes:
`
`S US.C. § 706 wee ceeeesccseceseesscecsecssecesecesecssecseecseeceneceaeeeseeeaeessaeenaesesensesesaeens 3, 5, 6, 8
`
`
`
`
`
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`
`
`STATEMENT OF COUNSEL
`
`Based on my professional judgment, I believe the panel majority opinionis
`
`contrary to the following decisions of the Supreme Court of the United States and
`
`precedents of this Court:
`
`e SEC v. Chenery Corp., 332 U.S. 194 (1947);
`e
`INS v. Orlando Ventura, 537 U.S. 12 (2002);' and
`© Rovalma, S.A. v. Bohler-Edelstahl GmbH & Co. KG, 856 F.3d 1019
`(Fed. Cir. 2017).”
`
`In addition, based on my professional judgment, I believe this appeal
`
`requires an answerto the following questions of exceptional importance:
`
`1.
`
`The APA requires a reviewing court to consider “the whole record or
`
`those parts ofit cited by a party.” 5 U.S.C. § 706. Does the Chenery doctrine
`
`confine that review to the evidence explicitly relied upon by the agency?
`
`2.
`
`Whether, under the Supreme Court’s “ordinary remandrule,” the
`
`proper remedy following review of an agency decision that lacks sufficient
`
`explanationis (a) reversal or (b) vacatur and remand.
`
`' Andother casesthat explain the “ordinary remand”rule, such as Florida
`Power & Light Co. v. Lorion, 470 U.S. 729 (1985), Gonzales v. Thomas, 547 U.S.
`183 (2006), and Negusie v. Holder, 555 U.S. 511 (2009).
`* And othercasesthat have vacated and remandedinsufficiently explained
`agency decisions in AIA cases, such as Ariosa Diagnostics v. Verinata Health,
`Inc., 805 F.3d 1359 (Fed. Cir. 2015), and Personal Web Techs., LLC v. Apple Inc.,
`848 F.3d 987 (Fed. Cir. 2017).
`
`
`
`
`
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`
`
`These questions are exceptionally important, and they recur frequently. This
`
`Court reviews hundreds of PTAB appeals each year. The Court’s recent struggles
`
`with determining properrelief following an insufficiently reasoned Board decision
`
`are reflected in three recent split-panel decisions—Jn re Hodges, 882 F.3d 1107
`
`(Fed. Cir. 2018), In re Van Os, 844 F.3d 1359 (Fed. Cir. 2017), and the present
`
`case. The Court and the bar would thus benefit from en bancclarification on these
`
`issues.
`
`/s/ David K.S. Cornwell
`David K.S. Cornwell
`Counsel for Appellee, Apple Inc.
`
`INTRODUCTION
`
`It cannot be the case that a party can satisfy its burden before the agency,
`
`have the agency find each of the party’s arguments persuasive, and yet lose on
`
`appeal as a result of the agency’s failure to fully support or explain its decision.
`
`That is what happened to Apple here. It will happen to other parties if the majority
`
`decision stands.
`
`ARGUMENT
`
`I.
`
`The Panel Majority Contravened the Administrative Procedure Act by
`Refusing to Consider the Whole Record in Determining Whether the
`Board’s Obviousness Conclusion Was Supported by Substantial
`Evidence.
`
`The panel majority erred in relying on “the Chenery doctrine” to “decline
`
`Apple’s invitation to consider evidence that the Board did notcite in its decision,”
`
`2
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`but that supported the Board’s ultimate conclusion of obviousness. Slip Op. at 15
`n.4. Chenery forbids a reviewing court from affirming an agency decision on
`
`alternate grounds, but it does not foreclose review ofthe entire record (including
`
`evidence not cited by the agency) when deciding whether substantial evidence
`
`supports the ground upon which the agencyactually relied. In fact, the APA
`
`requires that the reviewing court examinethe entire record in reviewing agency
`
`action. The majority erred in reaching a contrary conclusion.
`
`A.
`
`The APA mandates whole record review by the reviewing court;
`the Chenery doctrine doesnot limit that review to evidencecited
`by the agency.
`
`Chenery establishes that a court reviewing an agency action “must judge the
`
`propriety of such action solely by the grounds invoked by the agency.” SECv.
`
`Chenery Corp., 332 U.S. 194, 196 (1947) (“Chenery IP’). “If those groundsare
`
`inadequate or improper, the court is powerless to affirm the administrative action
`
`by substituting what it considers to be a more adequate or properbasis.” Jd. But
`
`Chenery does not require an agencyto cite every piece of evidencethat justifies
`
`the ground upon which the agencyrelied, nor doesit forbid a reviewing court from
`
`looking at other evidencein the record that can justify “the basis upon which[the
`
`agency decision] clearly rests.” Jd. at 204.
`
`Indeed, the directives of the APA are explicitly to the contrary. The statute
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`requires that a court reviewing agency action “review the whole record or those
`
`
`
`
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`
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`parts of it cited by a party.” 5 U.S.C. § 706. Put differently, what Chenery forbids
`
`is a court devising an alternative basis (such as a different legal doctrine or
`
`rationale) to support an agency action. It does not (and cannot, in view of § 706)
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`forbid a court from examining alternative evidence that supports the basis upon
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`whichthe agencyrelied.
`
`The panel majority here cited Bd. of Trs. ofLeland Stanford Junior Univ.v.
`
`Chinese Univ. ofHong Kong, 860 F.3d 1367 (Fed. Cir. 2017), in support ofits
`
`invocation of Chenery to preclude examining the additional evidence that Apple
`
`cited, but that the Board did not. The panel majority’s reliance on Leland Stanford
`
`was misplaced.In that case, the Board and the appellee failed to cite any evidence
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`supporting the Board’s decision, and the appellee instead tried to present a
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`different ground for affirmance on appeal. Jd. at 1376-77. This Court (properly)
`
`rejected the appellee’s attempt to do so, citing the passage of Chenery quoted
`
`above, and vacated and remanded the Board’s decision.Jd. at 1378.°
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`Those are not the facts here. Apple does not present an alternative ground
`
`for affirmance;’ it simply points to other evidencein the record supporting the
`
`3 Notably—andconsistent with the ordinary remand rule—the Leland
`Stanford Court did not reverse. See infra SectionII.
`* The panel majority suggested that Apple might have cross-appealed the
`Board’s rejection of Apple’s argumentthat Natarajan expressly discloses the
`allegedly missing feature. Slip Op. at 11 n.2. But this Court’s precedent
`unambiguously forbids a cross-appeal in cases—like this one—wheretherelief
`
`4
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`ground upon whichthe Board relied (obviousness in view ofNatarajan and Neve)
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`but did notitself cite. It cannot be the case that a party can satisfy its burden before
`
`the agency, yet be doomed onreview by the agency’s failure to fully justify its
`
`decision.
`
`An agencyis not obligated to cite every piece of the record, nor even every
`
`piece of evidence that it considered;all the agency mustprovide is enough of an
`
`explanation to serve as a predicate for meaningful review. In re Applied Materials,
`
`Inc., 692 F.3d 1289, 1294 (Fed. Cir. 2012). But once the agency has doneso,the
`
`reviewing court is still required to examine the “whole record or thoseparts ofit
`
`cited by a party” to determineif the decision is supported by substantial evidence.
`
`See 5 U.S.C. § 706.
`
`B.
`
`The panel majority harmfully erred in refusing to consider record
`evidence that supported the Board’s determination.
`
`The majority erred in refusing to considerthe full scope of record evidence
`
`that Apple cited in support of the Board’s decision. The Board summarized the
`
`parties’ argumentsin its decision and concludedthat it was “persuaded by each of
`
`sought would not expand the scope of the judgment. Droplets Inc. v. E*Trade |
`Bank,et al., -- F.3d --, 2018 WL 1866903, *10 (Fed. Cir. 2018); Bailey v. Dart
`Container Corp. ofMich., 292 F.3d 1360, 1362 (Fed. Cir. 2002). In any event,
`whether Apple’s express disclosure argumentconstitutes the kind of alternative
`grounds precluded under Cheneryis irrelevant to the issue presented here: whether
`the Court can consider additional evidence in support of the grounds on which the
`Board in fact relied.
`
`
`
`
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`
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`Apple’s arguments.” Appx0031 (emphasis added); see Appx0023-0034. The Board
`
`also found that Apple’s expert Dr. Hu wascredible, while DSS’s expert lacked
`
`credibility. Appx0032. Yet despite the Board’s statements, the panel majority
`
`determined that “[t]he full extent of the Board’s analysis is contained in a single
`
`paragraph,” andthat “only one paragraph of the Board’s summary of Apple’s
`
`arguments is relevant to the Board’s obviousness conclusion.” Slip Op. at 13. As a
`
`result, the majority severely and improperly restricted its review of the record
`
`evidence supporting Apple to encompass only what the Boardcited in that “single
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`paragraph.” Slip Op. at 13-15. The panel majority’s invocation of Chenery in
`
`support ofits refusal to consider other record evidence supporting the Board’s
`
`conclusion violated § 706’s requirement of whole-record review.
`
`That error was not harmless. Apple, recognizing that the Board did not
`
`explain every piece of evidence supporting Apple’s case, compiled in its appeal
`
`brief additional record evidence that supported the Board’s decision. Red Br. 15-
`
`19, 39-41, 44-47. The panel majority’s self-imposed Chenery blinders preventedit
`
`from considering this evidence in determining whether the Board’s decision was
`
`sufficiently supported by the record. Slip Op. at 15 n.4 (“Under the Chenery
`
`doctrine, we decline Apple’s invitation to consider evidence that the Board did not
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`cite in its decision.”’). If this evidence had been considered—asit should have
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`been—the correctness of the Board’s obviousness determination would have been
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`clear.
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`Indeed, the panel dissent details numerous facts—over seven pages—that
`
`support the Board’s final determination on the only disputed issue—whetherit
`
`would have been obvious to operate Natarajan’s base station transmitter in the
`
`same manneras the disclosed mobile unit transmitters, which undisputedly operate
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`in “low duty cycle RF bursts,” as claimed. Blue Br. 20-21, 41-42; see Appx0020-
`
`0023. See Dissent at 4-11. Rather than rehash that wealth of evidence, Apple
`
`providesthree illustrative examples of overlooked evidence:
`
`First, the hardware in Natarajan’s base station and mobile units is the
`
`same—justas it is in the ’290 patent. Red Br. 11 (citing Appx1160, 3:7-8); Red Br.
`
`16 (citing Appx1994 ¥ 45; Appx0093, 4:16-18; Appx2427, 23:10-19). This much
`
`the panel majority recognized. But Apple also cited additional evidence that
`
`Natarajan’s base station is a “conventional microcomputer,” as well as Dr. Hu’s
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`testimony that the base station may thus be battery powered and portablelike the
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`mobile units, and would thus benefit from the same power-saving techniques. Red
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`Br. 16 (citing Appx2427, 23:10-19).
`
`Second, exactly like the purported invention of the ’290 patent, Natarajan
`
`transmits data using an HDLC packetstructure, which is consistent with the
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`claimed low duty cycle RF burst communications. Red Br. 12 (citing Appx1160,
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`3:34-46); Red Br. 44-45 (citing Appx1995-1996 4§ 47-49; Appx0096, 9:66-10:4);
`
`see Dissent at 7, 9. This is further supported by the Schwartz book, expressly
`
`referenced in Natarajan, which explains the HDLCprotocol and describesthat
`
`even in the maximum data transmission scenario, the transmitter does not transmit
`
`continuously. Red Br. 45 (citing Appx1942-1966, Natarajan at 3:28-40; Appx1996
`
`q 51; Appx1997-1998 FF 52-53); see Dissent at 7.
`
`Third, Dr. Hu explained other examples of “dynamic” and “static”
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`subframes for Natarajan’s system that would have been knownorobviousto a
`
`person skilled in the art. Red Br. 42 (citing Appx2549, 145:7-12; Appx2553-2554,
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`149:18-150:11; Appx1993-1994 4 44; Appx2015 § 86). She based these examples
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`on Natarajan’s express suggestion that “different frame divisions and header
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`lengths and content maybeutilized in the practice of the invention, and the scheme
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`set forth here is merely exemplary.” Red Br. 42 (quoting Appx1160, 4:23-26).
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`Eachofthese pieces of evidence supports the Board’s conclusionthatit
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`would have been obvious to operate Natarajan’s base station transmitter in the
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`same manner as the mobile unit transmitter; but because the Board did notcite this
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`evidence in the single paragraph the panel majority relied on to reach its decision,
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`the panel majority did not consider it. The panel majority’s refusal to consider this
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`evidence violated the longstanding principle of whole-record review enshrined in
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`§ 706 of the APA. The en banc Court should reverse the panel majority and affirm
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`the Board’s decision.
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`Il.
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`Even If the Board Failed to Sufficiently Explain Its Obviousness
`Conclusion, The Panel Majority Violated Longstanding Supreme Court
`Precedent by Reversing Instead of Vacating and Remandingto the
`Board for Further Proceedings.
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`In the alternative, even if the panel majority were correct that Chenery bars
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`the Court from considering the full record below in determining whetherto affirm
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`the Board’s decision, the panel majority’s decision to reversestill violates the long-
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`established doctrine of administrative law knownasthe “ordinary remandrule.”
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`That portion of the panel opinion should be overturned.
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`The Supreme Court and every Court of Appeals (including this one) have
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`held that, if a reviewing court concludes that an agency decision is flawed, the
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`proper course is to vacate the decision and remandto the agency for further
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`proceedings. The court is vot entitled simply to decide the issue itself and reverse
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`(exceptin the rare instance in which the ultimate outcomeis not in doubt). Doing
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`so amounts to an impermissible judicial intrusion into a domain entrusted to the
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`agency by Congress.
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`Yet that is exactly what the panel majority did here. Having cabinedits
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`review of the record evidence in view of Chenery, and having concludedthat the
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`Board’s obviousness conclusion wasinsufficiently explained, the majority
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`reversed—essentially finding that the claims are not obvious despite having no
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`basis to do so. The panel majority does not even address the ordinary remand rule
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`or its very limited exception.
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`A.
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`The ordinary remand rule requires a court reviewing an
`insufficiently reasoned agency decision to vacate and remandfor
`further agency proceedings absent “extraordinary
`circumstances.”
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`It is a black-letter principle of administrative law that if an agencyfails to set
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`forth a sufficient basis for a decision, then “the proper course, except in rare
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`circumstances, is to remandto the agency for additional investigation or
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`explanation.” JNS v. Orlando Ventura, 537 U.S. 12, 16 (2002) (quoting Florida
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`Power & Light Co. v. Lorion, 470 U.S. 729, 744 (1985)). This principle is known
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`as the “ordinary remand requirement”or the “ordinary remand rule.” Jd. at 17.
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`The ordinary remandrule hasa historical pedigree reaching at least as far
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`back as the Supreme Court’s decision in Chenery. Thefirst time the Chenery case
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`reached the Supreme Court, the Court concluded that the SEC’s decision to block a
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`proposed reorganization of the Federal Water Service Corporation was improper
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`because the equitable principles invoked by the agency did not support the
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`agency’s decision. SEC v. Chenery Corp., 318 U.S. 80, 88 (1943) (“Chenery I’).
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`The Court rejected the SEC’s argumentthat it could affirm the agency on statutory
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`grounds, articulating the principle that, because “a judicial judgment cannot be
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`madeto do service for an administrative judgment” on a matter that Congress has
`entrusted to the agency,“[t]he srounds upon which an administrative order must be
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`judged are those upon whichthe record discloses that its action was based.”Jd. at
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`87.
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`Althoughit determined that the SEC erred in its decision, the Court did not
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`reverse the decision and hold that the reorganization should be allowedto proceed.
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`That course (like an affirmance on alternative grounds) would have improperly
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`encroached upon the agency’s authority. Jd. at 88 (“For purposes ofaffirming no
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`less than reversing its orders, an appellate court cannot intrude upon the domain
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`which Congresshas exclusively entrusted to an administrative agency.”) (emphasis
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`added). Instead, the Court vacated the agency’s decision and remandedthe case for
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`further proceedings. See id. at 95. Then, “[o]n remand, the Commission
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`reexamined the problem,recastits rationale and reached the sameresult.” Chenery
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`IT, 332 U.S. at 196. When the SEC’s decision reached the Supreme Court again in
`Chenery IT, the Court affirmed, concluding that this time, the agency’s action was
`“based on substantial evidence and ... consistent with the authority granted by
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`Congress.” Id. at 209.
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`The lesson from Chenery I and Chenery IT is simple: if a reviewing court
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`finds that an agency’s decision cannot be affirmed because the agency misapplied
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`the law,erred in finding the facts, or insufficiently explained the reasoning leading
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`to the result, the proper remedy, in almostall circumstances, is vacatur and remand
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`for further proceedings at the agency level.
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`The Supreme Court hasreiterated this principle time and again. See, e.g.,
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`Negusie v. Holder, 555 U.S. 511 (2009) (vacating and remandingfor further
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`proceedings before the Board of Immigration Appeals in light of the ordinary
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`remand rule); Gonzales v. Thomas, 547 U.S. 183 (2006); (reversing the Ninth
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`Circuit for failing to follow the ordinary remand rule); Orlando Ventura, 537 U.S.
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`12 (same); Florida Power & Light, 470 U.S. 729. See generally Treichlerv.
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`Comm r ofSoc. Sec. Admin., 775 F.3d 1090, 1099 n.4 (3d Cir. 2014) (“[T]he
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`Supreme Court has frowned upon deviations from the ordinary remand rule and
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`has reversed decisions where [appellate courts] declined to remand to the agency
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`after detecting an error.”). And every circuit has similarly recognized the propriety
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`of the ordinary remandrule.” While the exact formulationsdiffer, the principle is
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`the same: if an “agency decision is flawed by mistaken legal premises,
`
`unsustainable subsidiary findings, or doubtful reasoning, remandingto give the
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`agency an opportunity to cure the error is the ordinary course.” Castarieda-
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`° See Lugo-Resendez v. Lynch, 831 F.3d 337, 344 (Sth Cir. 2016); Shalom
`Pentecostal Church v. Acting Sec’y U.S. Dep’t ofHomeland Sec., 783 F.3d 156,
`167-68 (3d Cir. 2015); Fogo De Chao (Holdings) Inc. v. U.S. Dep’t ofHomeland
`Sec., 769 F.3d 1127, 1139 (D.C. Cir. 2014); Coronado v. Holder, 759 F.3d 977,
`987 (9th Cir. 2014); Ward v. Holder, 733 F.3d 601, 608-09 (6th Cir. 2013);
`Villatoro-Lopez v. Holder, 445 F. App’x 881, 883 (7th Cir. 2011); Nebraska ex rel.
`Bruning v. U.S. Dep’t ofInterior, 625 F.3d 501, 511 (8th Cir. 2010); Matute v. US.
`Att’y Gen., 366 F. App’x 982, 985-86 (11th Cir. 2010); Ping Sai Zian v. BIA, 2008
`WL 5120681 at *1 (2d Cir. Dec. 8, 2008); Castafieda-Castillo v. Gonzales, 488
`F.3d 17, 25 (1st Cir. 2007) (en banc); Yan Dan Li v. Gonzales, 222 F. App’x 318,
`324 (4th Cir. 2007); Mickeviciute v. INS, 327 F.3d 1159, 1165-66 (10th Cir. 2003).
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`12
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`
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`Castillo, 488 F.3d at 25 (reversing panel decision that failed to follow ordinary
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`remandrule).
`This Circuit also follows the ordinary remand rule (though withoutcallingit
`by that name), including in the context of PTAB appeals. As the dissent
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`recognized, “when the Board’s action is ‘potentially lawful but insufficiently or
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`inappropriately explained,’ [this Court] ha[s] consistently vacated and remanded
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`for further proceedings.” Dissent at 12 (quoting Jn re Van Os, 844 F.3d 1359, 1362
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`(Fed. Cir. 2017), and In re Sang-Su Lee, 277 F.3d 1338, 1346 (Fed. Cir. 2002));
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`see also Dissent at 15 (collecting cases including Van Os; Sang-Su Lee; Personal
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`Web Techs., LLC v. Apple, Inc., 848 F.3d 1376, 1385 (Fed. Cir. 2016); In re
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`NuVasive, 842 F.3d 1376, 1385 (Fed. Cir. 2016); and Power Integrations, Inc. v.
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`Lee, 797 F.3d 1318, 1325 (Fed. Cir. 2015)); see also Rovalma, S.A. v. Bohler-
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`Edelstahl GmbH & Co. KG, 856 F.3d 1019 (Fed. Cir. 2017).
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`In Rovalma, for example, this Court concluded that the Board had
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`insufficiently explained the basis for its conclusion that the challenged claims
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`would have been obviousin light of the prior art. 856 F.3d at 1025-26. But the
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`Court did not reverse, because, “without more explanation” from the Board, the
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`Court could not “reach a bottom-line judgment”on the issue of patentability. Jd. at
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`1026. Accordingly, the Court vacated the Board’s decision and remanded the case
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`so the Board could supply a more reasonedbasis for its decision, which would
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`afford the Court an opportunity to “confidently review [the Board’s] decision and
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`avoid usurping its fact-finding authority.” Jd. (““[A]s we have concludedin similar
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`circumstances, these deficiencies call for a vacatur and remandfor further
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`explanation from the Board.’’) (collecting cases).
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`The ordinary remand rule has an exceedingly narrow exception. Underthat
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`exception, a reviewing court may decide the issue in the first instance only if
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`remand would bea “futile gesture,” A.L. Pharma, Inc. v. Shalala, 62 F.3d 1484,
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`1489 (D.C. Cir. 1995), because there is “only one rational course for the agency to
`follow on remand.” Am. Fed’n ofGov’tEmps. AFL-CIO v. Fed. Labor Relations
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`Auth., 778 F.2d 850, 862 n.19 (D.C. Cir. 1985). In other words, if the proper
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`outcomeof the agency proceedingis “preordained,” then, and only then, may the
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`appellate court decide the issue itself. A.L. Pharma, 62 F.3d at 1489.
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`B.__Because there are no “extraordinary circumstances”here, the
`panel majority’s decision to reverse, instead of vacating and
`remanding, violated the ordinary remandrule.
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`There are no extraordinary circumstanceshere that justify departure from the
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`ordinary remandrule. Even if the panel majority correctly determined that the
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`Board’s obviousness conclusion was not supported by adequate reasoning or
`
`explanation, the proper remedy is remand,not reversal. The majority did not find
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`that remand would havebeen futile, or that result on remandis preordained. To do
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`so, it would have had to have foundthat the Board, on the entire record, would
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`necessarily have to conclude on remandthat the challenged claims are patentable
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`over Natarajan and Neve.
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`But as explained above, the panel majority refused to consider any evidence
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`in the record other than the evidence cited by the Board; and even then,it appears
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`to have severely restricted its review in view of Chenery. See Section I.B. supra;
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`Dissent at 8 (“The panel majority does not discuss or review the evidencecited by
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`the PTAB inits decision.”) The panel majority therefore could not have made a
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`finding of futility; it would have no basis to do so. Had the panel majority
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`evaluated the full scope of the Board’s decision, or looked beyondthe four corners
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`of the Board’s opinion,as it was obligated to do here, it would have been forced to
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`conclude that additional evidence exists that migh
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