Federal divided. Circuit Panel Rejects Patent Board Bias Attacks (1)
The Federal Circuit accepted the argument of patent owner Mobility Workx LLC that his case should be referred to the patent office for review by the Director in light of a recent United States Supreme Court case finding that Administrative patent judges had been unconstitutionally appointed.
In a previous opinion, the United States Federal Circuit Court of Appeals remanded Unified Patents LLC’s challenge to Mobility’s wireless patent under United States v. Arthrex, who given the Director of the Patent Office the power to overrule decisions made by the Patent Trial and Appeal Board as part of the inter partes examination process.
Two judges on the three-member appeal panel rejected Mobility’s broader arguments that the board is structured in such a way as to create due process problems for patent holders.
Justice Pauline Newman supported these arguments, in particular Mobility’s concerns that the agency’s decisions to institute an inter partes review are “duplicative, costly, delaying and biased” because the institution is decided by the same panel which ultimately decides on the validity of a patent. .
“These aspects require more attention than my colleagues have given them, and raise new constitutional concerns” after Arthrex, she said in partial dissent.
The Patent Office welcomed “the Federal Circuit ruling that the alleged constitutional challenges to the Patent Trial and Appeal Board (PTAB) are without merit and rejecting the argument that PTAB judges have an interest financial to institute reviews of patent claims challenges, ”a spokesperson for the agency said in an email.
This is the second recent case to raise concerns that the PTAB is constitutionally flawed because its process for initiating patent examinations is based on incentives that create an appearance of bias.
In the previous case, New Vision Gaming vs. SG Gaming, the court ordered Arthrex pre-trial detention without engaging in arguments of bias. Here, the majority responded to the arguments but were not influenced by them.
New Vision attorney Matthew Dowd of Dowd Scheffel PLLC in Washington said he was hopeful.
“The case of New Vision remains pending in view of Arthrex, and we’re waiting for our result, ”Dowd said in an email. “Although Mobility Workx subsequently adopted many of the same arguments that we first raised for New Vision, our due process argument is significant enough to warrant further consideration if the New Vision panel addresses the issue. due process and arrives at a different result or invokes a different reasoning. “
Unified challenged U.S. Patent No. 8,213,417 on proactive wireless resource allocation methods after Mobility sued Unified T-Mobile and Verizon Wireless members for infringement. The board considered that most of the contested patent claims were invalid as obvious.
On appeal, Mobility raised for the first time constitutional challenges to the structure of the agency. He said administrative patent judges have an ineligible financial interest in initiating review proceedings.
The federal circuit found “no basis” for Mobility’s argument that the fee-generating structure of the America Invents Act creates a temptation for the board of directors to institute a review to collect a post-fee. institution to finance the agency.
The role of APJs in budgeting is “too remote to constitute a violation of due process” because they are not responsible for the agency’s finances and Congress controls the agency’s budget.
The majority also rejected Mobility’s argument that individual APJs have a personal interest in instituting an exam to increase their performance bonuses. There are other ways to earn a bonus, the court said.
The tribunal noted a statistical study “allegedly showing that there are more meritorious institution decisions in September (at the end of the APJ’s performance appraisal year) than in October (at the beginning of performance appraisal period) “presented by amicus curiae US Inventor Inc. The tribunal said in a footnote that the study” barely establishes “that the APJ Institute is reviewing for earn bigger bonuses.
Robert Greenspoon of Dunlap Bennett & Ludwig PLLC, who represented US Inventor, called the court’s rejection of the analysis “an unfortunate mistake”. The study actually showed a “consistently higher ratio of questionable institutions in October,” he said in an email.
“The point about ratios is that it controls everything except judgment of results,” said Greenspoon. “We linked a bias in judgment to the precise moment the salary performance measures are reset.”
The court agreed with Mobility that pre-trial detention is required under Arthrex to allow the director to review the board’s decision below according to the agency’s new procedures. He gave Mobility 30 days to request a new hearing.
Judge Timothy B. Dyk drafted the opinion, joined by Judge Alvin A. Schall.
Newman agreed with the majority’s decision to send the matter back for review by the Director. But she disagreed with “her colleagues’ approval of the status quo” regarding Mobility’s other constitutional arguments.
The Arthrex The decision raises another potential appointment clause concern, as the decision to institute a patent examination has been delegated by the director to the same group of lower officers who ultimately decide the fate of the patent, she said. declared.
“The question is not whether the members of the PTAB have the skills to make the decision of the institution and to do so impartially, as the PTO argues,” she said. “The question is whether this final, final decision requires the authority of a senior officer.”
She argued that the majority erred in its “superficial ratification of current practice”, rather than handing the institution’s decision to the director to resolve constitutional issues.
Hackler Daghighian Martino & Novak represented Mobility. Erise IP PA represented Unified.
The case is Mobility Workx, LLC v Unified Patents, LLC, Fed. Cir., N ° 20-1441, 10/13/21.