[00:00:01] Speaker 04:
here to visit once again a case that has been pending and returned to us, and held by us, and been back and forth several times.

[00:00:11] Speaker 04:
But the case today is Clifton Call Technologies versus Oracle Corporation, case number 151242.

[00:00:20] Speaker 04:
As I understand it, Mr. Ayers, you want five minutes for rebuttal?

[00:00:23] Speaker 01:
Yes, Your Honor.

[00:00:24] Speaker 04:
All right.

[00:00:24] Speaker 04:
And you all are going to split the argument?

[00:00:26] Speaker 01:
Yes, Your Honor.

[00:00:27] Speaker 04:
OK.

[00:00:31] Speaker 04:
OK, and the government's going to go last.

[00:00:33] Speaker 04:
Is that right?

[00:00:34] Speaker 04:
Yes, ma'am.

[00:00:35] Speaker 04:
OK.

[00:00:35] Speaker 04:
All right.

[00:00:36] Speaker 04:
You may begin.

[00:00:39] Speaker 01:
Judge O'Malley, you may please the court.

[00:00:41] Speaker 01:
Peter is on behalf of the appellant.

[00:00:42] Speaker 01:
Click to call.

[00:00:43] Speaker 01:
And despite the length of time it took to get here, we're grateful to be here before this court today.

[00:00:49] Speaker 01:
Your Honor, the board aired as a matter of law in this case by elevating a broad legal fiction over the clear intent of Congress.

[00:00:56] Speaker 01:
The board's interpretation of Section 315B in this case conflicts with the plain meaning of the statute, is contrary to the legislative history, and is inconsistent with the PTO's own regulations.

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As a result, the board's decision is due no deference, and this court should reverse.

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I want to turn first to the language of the statute, as we must, and make three points.

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The first is that 315B is clear and unequivocal.

[00:01:23] Speaker 01:
It says, in a narrow class of cases, an IPR, quote, may not be instituted.

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And as this court said in Wi-Fi 1 versus Broadcom, 315B is a fundamental limit on the agency's authority to act.

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It's not some minor statutory technicality.

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Two, the statute is also unambiguous, and no party is arguing otherwise.

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It's unambiguous both as to the cause and to the effect.

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As this court said, or I guess it was Judge O'Malley in your concurring opinion in Wi-Fi 1, 315B uses an unambiguous phrase, an IPR may not be instituted if.

[00:02:04] Speaker 01:
There's also no ambiguity about what is the trigger, what triggers that consequence, and that is service in this case.

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And there's no factual dispute that service was properly affected in this case.

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Third.

[00:02:18] Speaker 04:
How do you respond to

[00:02:20] Speaker 04:
your friend's arguments on the other side that there is a parade of horribles that might occur if we don't contemplate exceptions to what you say is otherwise unambiguous language.

[00:02:33] Speaker 01:
Worst case litigation or invalidity is litigated in this record as it has been for over a hundred years.

[00:02:42] Speaker 01:
That's the worst case scenario if Oracle is not permitted to go forward with an IPR.

[00:02:47] Speaker 01:
It's not

[00:02:48] Speaker 01:
The sky is not falling in that case, Your Honor.

[00:02:51] Speaker 04:
With that case, with your district court case dismissed, would there be any DJ action that they could bring at that point, or is there really any threat?

[00:03:02] Speaker 01:
Well, there's actually a case pending that's been stayed.

[00:03:06] Speaker 01:
So that case would just move forward.

[00:03:08] Speaker 01:
And in fact, it's going to move forward regardless, because there are claims that were not invalidated by the board in this case.

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So that case is being stayed pending

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the outcome of this appeal.

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So that case is going to move forward.

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And invalidity is going to be litigated in the district court regardless of the outcome in this case.

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So there's certainly not a parade of horribles if this court reverses the IPR.

[00:03:34] Speaker 03:
I'm sorry.

[00:03:36] Speaker 03:
Even if it's not horrible per se for invalidity to be contested in the district court, the statute allows for an IPR.

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So the horrible here would be that you could manipulate things in a way as to lull an accused infringer into thinking that they don't have to worry about challenging your patent ever because you just withdrew, you know, you're dismissed without prejudice or complaint.

[00:04:02] Speaker 03:
And thereby you're effectively eliminating a statutory right that I otherwise have.

[00:04:06] Speaker 03:
Why isn't that horrible?

[00:04:08] Speaker 01:
Well, because frankly, that's the statute that Congress enacted.

[00:04:13] Speaker 01:
that 315B protects patent owners.

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That's what is clear.

[00:04:17] Speaker 01:
It's not meant to protect accused infringers.

[00:04:21] Speaker 01:
If you look at both 315A and 315B, it says an inter-party review may not be instituted.

[00:04:28] Speaker 01:
And then it puts the burden on the petitioner in both cases, both in A, where they take an affirmative act, and in B, where they're put on notice of it.

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And the fact that they either can't, as in this case, it is sort of a

[00:04:43] Speaker 01:
odd situation, given the timing, or filed a declaratory judgment action that they're time barred from filing an IPR.

[00:04:55] Speaker 01:
Again, we don't see that as a huge loss in the grand scheme of things.

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This is the one procedural protection that patent owners were afforded in the AIA.

[00:05:08] Speaker 02:
There's no dispute that 315B applies.

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even to cases in which the earlier action was 12 years ago, long before IPRs existed?

[00:05:22] Speaker 01:
No.

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In fact, the board has a case right on point.

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I'm sure the solicitors will back me up on this, where a party made an argument, a statutory argument, that based on the word is served, they argued that that requires service to be affected post-AIA.

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And the board rejected that.

[00:05:42] Speaker 01:
I'm sorry.

[00:05:43] Speaker 01:
The citation for you.

[00:05:44] Speaker 02:
One kind of gamesmanship worry has been that a patent owner could file an action, use the, was it 41A1, dismiss it quickly in the context in which no agreement or court approval is required.

[00:06:10] Speaker 02:
The clock starts running.

[00:06:13] Speaker 02:
the other side doesn't really know whether it's worthwhile to, um, to go file an IPR.

[00:06:22] Speaker 02:
I think that's the, that's the relationship situation.

[00:06:27] Speaker 02:
The one like this case and like other cases where there's a voluntary dismissal without prejudice with agreement, obviously both the court and the other side have substantial control over that and they can kind of take care of that and they can also

[00:06:41] Speaker 02:
take care of situations where they ask, will you please give us a covenant not to sue?

[00:06:45] Speaker 02:
And you say no, and then they know, oh, something might actually be up.

[00:06:50] Speaker 01:
We understand that there's no end to the amount of creative lawyering that can take place.

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And we certainly are sensitive to gamesmanship in that case.

[00:07:02] Speaker 01:
Frankly, again, you look at what happened in the other board's presidential opinion in the LG case where

[00:07:09] Speaker 01:
There was a complaint that was filed.

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It was dismissed with prejudice as to existing products, but dismissed without prejudice as with respect to future products.

[00:07:22] Speaker 01:
And the board in that case held that it triggered 315B.

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And an IPR could not be instituted, even though the patent owner turned around and then sued the defendant again on its

[00:07:37] Speaker 01:
future products.

[00:07:38] Speaker 02:
Can I ask you this, getting away for a minute from the practical consequences, whether they're horribles, whether there's gamesmanship and so on.

[00:07:47] Speaker 02:
The central legal contention, I gather, is not so much that there's ambiguity in the text, but that there's a background tradition of treating involuntary dismissals without prejudice as erasing the action.

[00:08:07] Speaker 02:
Why do you think that that background principle is either inapplicable here or in any event shouldn't lead to the board's and director's conclusions?

[00:08:21] Speaker 01:
Two points, Your Honor.

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First of all, the statute provides an explicit exception to 315B's time limit.

[00:08:28] Speaker 01:
That is a jointer.

[00:08:29] Speaker 01:
So Congress provided a mechanism for parties who were time-barred

[00:08:33] Speaker 01:
to have their IPR heard, albeit only when there's another IPR that has been instituted.

[00:08:40] Speaker 01:
So I think that Congress clearly knew how to provide for exceptions to 315B when it wanted to, and it didn't provide for the one in this case where there was a dismissal without prejudice.

[00:08:51] Speaker 01:
That's the first thing.

[00:08:53] Speaker 01:
Secondly, there are a number of other legal consequences that flow from filing and service

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regardless of whether or not the case is dismissed with prejudice.

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And we've cited several.

[00:09:06] Speaker 01:
Rule 11 is an example.

[00:09:07] Speaker 01:
We contend willfulness, indirect infringement, the knowledge requirement that would accrue having been served with a complaint, that there are legal consequences that flow from being served with a complaint.

[00:09:21] Speaker 01:
But perhaps the best example of that is actually hidden in plain sight in Bonneville itself.

[00:09:28] Speaker 01:
We've been focused on actually the second appeal in Bonneville, which is the second appeal from the board of contract appeals.

[00:09:37] Speaker 01:
But there was actually a first appeal in that case, an appeal from the Court of Federal Claims.

[00:09:43] Speaker 01:
And what happened in that case is that the Court of Federal Claims dismissed the contractor's complaint under the Tucker Act or whatnot, because it had filed the earlier

[00:09:58] Speaker 01:
appeal to the Board of Contract Appeals, and the Contracts Disputes Act contains an election, a binding election that the contractor must make.

[00:10:09] Speaker 01:
He can either choose to go to the Board of Contract Appeals or to the Court of Federal Claims.

[00:10:15] Speaker 01:
And once they make that election, it's binding, even if that earlier case is dismissed without prejudice.

[00:10:24] Speaker 01:
And I apologize that this was not developed in

[00:10:28] Speaker 01:
in the briefs, but they actually cite the court to Bonneville versus United States, 43, F, 3rd, 6, 49, Fed, Sir, 1994.

[00:10:38] Speaker 01:
That's the first appeal in Bonneville.

[00:10:41] Speaker 01:
And then there are two lower court opinions, SinnerNet versus United States, 41, Fed claim, 375, Court of Federal Claims, 1998, and Mark Smith, Construction versus United States, 10 claims court, 540 claims court, 1986.

[00:10:59] Speaker 01:
We think that's actually the better analogy in this case, given 315A, which has the exact same election, albeit either to the district court or to the PTAB.

[00:11:11] Speaker 02:
Just so I understand, what you're relying on is that the Court of Federal Claims suit was nixed because of the earlier board

[00:11:25] Speaker 02:
suit, even though the board suit had been voluntarily dismissed without prejudice.

[00:11:30] Speaker 01:
Exactly.

[00:11:30] Speaker 01:
Exactly.

[00:11:30] Speaker 01:
Without prejudice?

[00:11:31] Speaker 01:
Exactly.

[00:11:32] Speaker 01:
Yeah, because that's Bonneville.

[00:11:34] Speaker 01:
And we've been focused on the second appeal, and it didn't dawn on me until I got into Bonneville more carefully.

[00:11:42] Speaker 01:
And as I said, I think that the analogy is a good one, because 315A includes the same election doctrine.

[00:11:51] Speaker 01:
And yet, despite that, the board also invokes the same legal fiction in those 315A cases to allow for an IPR to be instituted, even if that declaratory judgment action is dismissed without prejudice, because it treats it as if it never occurred, just as it did in this case.

[00:12:15] Speaker 03:
If we were to agree with you on these points, what do we do then?

[00:12:21] Speaker 03:
Because I think initially, and admittedly this case has been around a while, initially you said we should remand, now I think you say we shouldn't.

[00:12:30] Speaker 03:
What do we do?

[00:12:31] Speaker 01:
I think that this, given the unique circumstances in this case, that this court can and should reverse, that it can address

[00:12:42] Speaker 01:
Oracle's alternative grounds, I think that's a clear legal question about what effect does the reexamination statute have on 315, if any.

[00:12:52] Speaker 01:
And we think that privity is a red herring in light of the fact that a barred party was named as a real party in interest in the petition.

[00:13:03] Speaker 01:
And despite Oracle's arguments, that 315B is analyzed on a petition by petition basis.

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not a petitioner by petitioner basis.

[00:13:15] Speaker 03:
You cited the tarot mark decision, I think, from a PTAB.

[00:13:19] Speaker 03:
Yes.

[00:13:20] Speaker 03:
They talk about each petitioner is bound by the other if there is evidence of substantial control being exerted by the barred petitioner on the petition.

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Do we have that evidence here that Ingenio exerted substantial control?

[00:13:37] Speaker 01:
That is the proper analysis if

[00:13:40] Speaker 01:
if you're looking at whether or not that party is time barred.

[00:13:44] Speaker 01:
In this case, Your Honor, we don't need to get into the privity relationship between the parties because a barred party filed a petition.

[00:13:57] Speaker 01:
And I want to draw the Court's attention to what the statute says and, more importantly, the regulation.

[00:14:04] Speaker 01:
The statute says an inner party's review may not be instituted

[00:14:08] Speaker 01:
if the petition requesting the IPR is filed more than a year after.

[00:14:13] Speaker 01:
So again, we think it's decided on a petition by petition basis.

[00:14:16] Speaker 04:
That's at least the position that the PTAB took in connection with CBM proceedings, correct?

[00:14:23] Speaker 01:
Yes, Your Honor.

[00:14:25] Speaker 01:
And we, as I described, I think that given the parallelism between 315A and 315B, those two should be treated the same.

[00:14:34] Speaker 01:
But I wanted to turn.

[00:14:36] Speaker 01:
the court's attention to rule 42.101, which is basically the board's verbatim rule that corresponds to 315B.

[00:14:47] Speaker 01:
It says, a person may file a petition unless the petition requesting the proceeding is filed more than one year.

[00:14:59] Speaker 01:
So again,

[00:15:00] Speaker 01:
315b is decided on a petition by petition basis, not a petitioner by petitioner.

[00:15:06] Speaker 01:
Oracle wants to argue that, I don't know, you can look at each petitioner in isolation.

[00:15:10] Speaker 01:
No, you can't do that under the statute.

[00:15:13] Speaker 03:
If they had simply filed four pieces of paper instead of one, the patent would be invalid.

[00:15:19] Speaker 01:
Well, it depends.

[00:15:20] Speaker 01:
Then there might be a factual question about if they were acting on behalf of the other party or if there was some control by a time-barred party.

[00:15:30] Speaker 01:
That's where you get into the whole real party in interest analysis.

[00:15:35] Speaker 01:
We don't need to go there.

[00:15:36] Speaker 01:
But it's not true that Oracle necessarily could have filed on its own behalf.

[00:15:42] Speaker 01:
That's the RPX situation where Apple goes out and hires a third party to do its bidding for them.

[00:15:50] Speaker 01:
And it's quite possible.

[00:15:53] Speaker 01:
We would need discovery in that case.

[00:15:55] Speaker 01:
that Oracle could have been doing Ingenio's bidding for them in them, even if Ingenio wasn't named on the petition.

[00:16:06] Speaker 01:
But we don't think the court needs to go there.

[00:16:09] Speaker 01:
All right, you're out of time.

[00:16:13] Speaker 04:
I'll give you four minutes for rebuttal.

[00:16:15] Speaker 01:
Thank you, Your Honor.

[00:16:29] Speaker 00:
Good afternoon, your honors.

[00:16:30] Speaker 00:
Stanley Panachowski on behalf of Oracle and the other appellees.

[00:16:34] Speaker 00:
The merits of the board's substantive decision invalidating the 836 patent are uncontested.

[00:16:40] Speaker 00:
So the only issue is section 315B.

[00:16:44] Speaker 00:
And on the dismissal without prejudice issue, that is the basis of the board's decision apart from our alternative grounds, the fundamental flaw in CTC's argument was stated at the beginning of council's presentation today.

[00:16:58] Speaker 00:
Council for CTC said that the board elevated a broad legal fiction over the clear intent of Congress.

[00:17:05] Speaker 00:
However, Your Honor, under this court's and the Supreme Court's precedent in cases like Cannon versus the University of Chicago, Morgan v. Principi, Bond versus the United States.

[00:17:16] Speaker 04:
But didn't the Supreme Court very recently say that in fact

[00:17:21] Speaker 04:
A dismissal without prejudice does not mean that the case never existed and that a defendant can still be a prevailing party even when the action is dismissed without prejudice.

[00:17:32] Speaker 00:
Your Honor, there are circumstances like that where you may have certain collateral consequences from what happened during a lawsuit even though it was dismissed without prejudice.

[00:17:44] Speaker 00:
However, here, Your Honor, we're not talking about collateral consequences like attorney's fees or sanctions.

[00:17:50] Speaker 00:
Rather, we're talking, Your Honor, about something that was very integral to the act of filing the lawsuit itself.

[00:17:57] Speaker 00:
We know from the advisory committee's note three to federal rule of civil procedure four that serving the complaint is part and parcel of bringing the action.

[00:18:08] Speaker 00:
It immediately follows upon filing it.

[00:18:10] Speaker 04:
And a case... But you're asking us to read words into the statute.

[00:18:14] Speaker 04:
You're asking us to say that the statute says

[00:18:17] Speaker 04:
that it runs from when a party is served with a complaint, unless that complaint is later dismissed.

[00:18:24] Speaker 04:
But it doesn't say that in the statute.

[00:18:27] Speaker 00:
Your Honor, you're correct.

[00:18:28] Speaker 00:
It does not expressly say that.

[00:18:29] Speaker 00:
However, we are not asking the court to read words into the statute.

[00:18:33] Speaker 00:
Rather, what we are asking the court to do is what the Supreme Court and this court have done repeatedly, including as recently as Aqua Products v. Mittal, which is to read the statutory language against the backdrop.

[00:18:47] Speaker 00:
of a broad general and fundamental legal principle that a voluntary dismissal without prejudice leaves the action as if it had never been brought.

[00:18:56] Speaker 02:
But as you just referred to fees, perhaps willfulness, which I think at least I don't remember whether you agree with that, but I think the director does.

[00:19:10] Speaker 02:
It's not as if the action was never brought for all purposes.

[00:19:15] Speaker 02:
It is for some.

[00:19:16] Speaker 00:
So why for these?

[00:19:18] Speaker 00:
You are correct that it is for some purposes.

[00:19:20] Speaker 00:
And in fact, every case that CTC cited at pages 30 and 31 of its reply brief that gives an example like fees or sanctions, where there can be some collateral consequences, starts with the broad proposition that the dismissal with prejudice means that the action had never been brought.

[00:19:38] Speaker 00:
And one of the examples of the situation- No, don't possibly start with the broad proposition that

[00:19:43] Speaker 04:
that a dismissal without prejudice is not a merits determination.

[00:19:47] Speaker 04:
It doesn't start with the broad proposition that these two cases that you rely upon seem to say.

[00:19:54] Speaker 04:
It doesn't say the broad proposition of law is that the action was never broad.

[00:19:59] Speaker 00:
Your Honor, yes, that is the broad proposition of law that this court articulated in Bonneville and Gray's.

[00:20:05] Speaker 04:
But all those other cases you're talking about, the broad proposition that they start with is that normally a dismissal with prejudice is not considered a dismissal on the merits.

[00:20:14] Speaker 04:
And then they say, but that doesn't matter for a variety of circumstances.

[00:20:17] Speaker 04:
But they never say that we believe there is this fiction that the action never existed.

[00:20:23] Speaker 00:
Your honor, there is more to the proposition than just the notion that it's not a disposition on the merits.

[00:20:29] Speaker 00:
For example, the Seventh Circuit and Eighth Circuit cases that this court cited in Bonneville are applying this fraud legal principle in other contexts.

[00:20:38] Speaker 00:
And tying this to Judge Taranto's question about

[00:20:41] Speaker 00:
What are the some purposes for which the action is treated as it's never been brought?

[00:20:46] Speaker 00:
One of the most prominent examples is the very situation we have here today, and that is a statute of limitations.

[00:20:54] Speaker 00:
We had that in Bonneville and Graves, and also in one of the cases cited in CTC's supplemental brief at page eight, the Seventh Service Decision in Elmore v. Henderson, the court said, a suit dismissed without prejudice is treated for statute of limitations purposes as if it had never been filed.

[00:21:11] Speaker 02:
If I remember right, almost lots and lots of the cases are statute of limitations cases, but none of them work in the way that this does.

[00:21:20] Speaker 02:
They all say that if you bring an action that has to be within three years and you voluntarily dismiss it, then the clock has not in fact stopped running.

[00:21:33] Speaker 02:
And when you later bring an action and say, well, here I am, the question is, is it timely?

[00:21:40] Speaker 02:
And that question is answered by asking whether the later filing was timely.

[00:21:46] Speaker 02:
You disregard the first one.

[00:21:47] Speaker 02:
That would be as if the counterpart to that here would be the filing of a timely IPR petition voluntarily dismissed, followed by a untimely IPR petition.

[00:22:03] Speaker 02:
We have a question about whether an action that starts a clock,

[00:22:09] Speaker 02:
is to be disregarded as, in fact, not really starting it.

[00:22:14] Speaker 00:
Your Honor, you are correct that this situation appears to be unique relative to the other cases cited in that it involves the act of service triggering a limitations period.

[00:22:24] Speaker 00:
And there are two reasons, Your Honor, why the dismissal without prejudice still has the same legal effect here.

[00:22:32] Speaker 00:
One is the breadth of the legal principle as articulated, cited, and applied in cases like

[00:22:38] Speaker 00:
Bonneville engraves.

[00:22:39] Speaker 00:
And the second reason, Your Honor, is because the act that triggers the running of the limitations period is not simply general notice, but is rather service, an official act that is integral to the bringing of the action.

[00:22:55] Speaker 00:
In fact, a case that CTC itself cited at page 18 of its reply brief, Murphy Brothers from the Supreme Court says that service of process is the official trigger for responsive action.

[00:23:07] Speaker 00:
And that, your honor, is why it's more appropriate to treat service for purposes of triggering the statute of limitations like these other statute of limitations situations for purposes of whether the action ever existed than it is to treat it like all these other cases where courts have said, even if you dismiss without prejudice, it doesn't get you off the hook for your frivolous arguments.

[00:23:30] Speaker 00:
It doesn't keep you out of jail for throwing a pie in your adversary's face.

[00:23:34] Speaker 00:
I think that because this statute talks about a legal consequence of a legal act of service integral to filing, it falls on the same side of the line as Bonneville and Graves.

[00:23:47] Speaker 00:
And that is why, Your Honors, Congress did not need to specifically say that service triggers a statute of limitations except when there's a dismissal without prejudice.

[00:23:58] Speaker 00:
That is the nature of a presumption, Your Honors, if Congress wanted to overcome

[00:24:04] Speaker 00:
that broad fundamental presumption, it would have needed to say that that presumption does not apply.

[00:24:09] Speaker 00:
And that is why, Your Honor, this is not a situation where congressional silence simply means silence.

[00:24:16] Speaker 00:
We're not standing here saying that, well, in the event that the complaint is served after the second full moon of a month, we don't know what Congress thinks about the situation.

[00:24:28] Speaker 00:
What happens if the complaint was served in a year when the Cubs won the World Series?

[00:24:32] Speaker 00:
We don't know what Congress was thinking.

[00:24:34] Speaker 00:
Those are all situations where silence equals silence because there is no background presumption relating to those matters.

[00:24:41] Speaker 00:
Here, however, when you're talking about service of the complaint triggering a limitations period, there is a background presumption that governs that situation.

[00:24:52] Speaker 00:
a voluntary dismissal without prejudice.

[00:24:54] Speaker 04:
Even in Shaw, we didn't have to directly address this issue, but we said, how could it be that you would ever nullify the act of service when the act of service is the triggering event in the statute?

[00:25:06] Speaker 00:
Your Honor, the legal effects of the act of service can be nullified in the exact same way that the legal effects of a filing of a complaint or a notice of appeal are nullified when

[00:25:20] Speaker 00:
It is dismissed without prejudice.

[00:25:22] Speaker 00:
No one is saying, your honor, that whether it's filing or service, that you are literally rewinding history and acting as if no one had ever engaged in the physical act.

[00:25:35] Speaker 02:
But to use your language, the Bonneville and similar, many similar cases involve nullifying certain legal effects.

[00:25:45] Speaker 02:
Yes, your honor.

[00:25:45] Speaker 02:
Certain legal effects, like

[00:25:48] Speaker 02:
the obligation to continue if you're on the other side of a case in the case initiated when the case goes away by voluntary dismissal, the legal effect of meeting satisfying the statute of limitations.

[00:26:03] Speaker 02:
That's nullified.

[00:26:05] Speaker 02:
But it's particular legal effects.

[00:26:07] Speaker 02:
And I guess I have not seen a case that said the legal effect, even of the voluntary dismissal of a complaint, if

[00:26:18] Speaker 02:
One legal consequence of the complaint by some statute had been a statute of limitations starts running.

[00:26:25] Speaker 02:
For another unrelated case, I'm not sure where the background principle is for that.

[00:26:32] Speaker 00:
Your Honor, I'm about to cut into the Patent Office's time.

[00:26:35] Speaker 00:
May I?

[00:26:35] Speaker 04:
I'll give you two more minutes since I'm giving him some rebuttal back.

[00:26:39] Speaker 00:
Thank you, Your Honors.

[00:26:41] Speaker 00:
Your Honor, in addition to the integral legal nature of service relative

[00:26:47] Speaker 00:
to the filing of a complaint.

[00:26:51] Speaker 00:
The reason why we don't have cases dealing with precisely this situation in either direction is because this is an unusual statute.

[00:27:00] Speaker 00:
Perhaps it is unique in that you do have won the act of service.

[00:27:06] Speaker 00:
And then two, it is triggering a limitations period.

[00:27:09] Speaker 00:
And we're talking about whether the limitations period is triggered rather than told.

[00:27:15] Speaker 00:
Despite the unusual nature of the statute, the background presumption is the same and has its ordinary operation.

[00:27:24] Speaker 04:
And part of the reason your Honor... Do you think that background presumption applies with respect to all three kinds of 41A dismissals?

[00:27:29] Speaker 04:
I mean, there are lots of different types of dismissals under Rule 41.

[00:27:33] Speaker 04:
Do you differentiate between them?

[00:27:35] Speaker 00:
Your Honor, we think that at a minimum it applies to a dismissal without prejudice by either the plaintiff's own volition before there's an answer or by court order after there's an answer.

[00:27:49] Speaker 04:
So we would say the defendant's exception only is narrow and carved to that and the other types of 41 dismissals don't apply here?

[00:27:56] Speaker 00:
Your honor, the court could frame this decision narrowly to apply to a voluntary dismissal without prejudice after the answer was found as we have here.

[00:28:04] Speaker 00:
Isn't that rewriting the statute?

[00:28:06] Speaker 00:
I'm sorry, your honor.

[00:28:07] Speaker 04:
Isn't that rewriting the statute?

[00:28:09] Speaker 00:
No, your honor, it's not because the court is simply interpreting it against a background presumption.

[00:28:14] Speaker 00:
And if it were rewriting a statute, your honor, we couldn't have had decisions like Cannon versus University of Chicago.

[00:28:21] Speaker 00:
That statute said nothing.

[00:28:23] Speaker 00:
about a private right of action, yet the Supreme Court inferred one.

[00:28:27] Speaker 02:
If the statutory interpretation methodology- Do you think canon on implied rights of action is the prevailing rule for the last 34, 40 years?

[00:28:38] Speaker 02:
I thought by and large the Supreme Court had said that was then, we're not going to erase what we did, but that's not what we do with implied rights of action anymore.

[00:28:46] Speaker 00:
Right.

[00:28:47] Speaker 00:
Your Honor, that is not the most

[00:28:49] Speaker 00:
vibrant, present-day example.

[00:28:52] Speaker 00:
However, that same methodology is as vital as ever as we saw in this court's decision in opera products v. Matal, which relied on bond versus United States, where the Supreme Court said, there are certain things that go without saying.

[00:29:06] Speaker 00:
And it gave as examples in that case presumptions against extraterritoriality, presumptions against waivers of certain types of immunity.

[00:29:14] Speaker 00:
And in those situations, Your Honor, you can- I've given you three extra minutes, so we need to move on if we want to hear from the Patent Office.

[00:29:22] Speaker 00:
Yes, Your Honor.

[00:29:23] Speaker 00:
Thank you very much.

[00:29:24] Speaker 05:
Thank you.

[00:29:36] Speaker 05:
May it please the court?

[00:29:38] Speaker 05:
I wanted to pick up on the sort of broad breadth of the presumption

[00:29:44] Speaker 05:
in the background principle.

[00:29:46] Speaker 05:
And I think it is very broad.

[00:29:48] Speaker 05:
If you look at there are many cases from many courts of appeals, including in this court, and on multiple different issues that apply this idea that the earlier suit that was dismissed without prejudice is nullified.

[00:30:08] Speaker 03:
But there are none that are like this, where the statutory language says specifically service is what

[00:30:14] Speaker 03:
call what triggers the time bar, correct?

[00:30:17] Speaker 05:
That's right.

[00:30:18] Speaker 05:
But the only exceptions that I've seen to that broader principle are when either the statute explicitly calls out dismissal without prejudice and gives it a different consequence or where it's reopening that very case to do things like assess attorney's fees or sanctions.

[00:30:40] Speaker 05:
Other than that,

[00:30:41] Speaker 05:
the principle has been applied broadly, and the language that is used is broader.

[00:30:47] Speaker 04:
Can you answer the question Judge Toronto asked before, where the question is whether or not the principle has been applied to nullify a triggering action for purposes of the statute of limitations as opposed to addressing a tolling of a statute of limitations?

[00:31:07] Speaker 05:
I haven't seen anything that addresses that particular factual situation, but the point

[00:31:11] Speaker 04:
So that limits the ability to say that it's such a broad generalized proposition that it should necessarily apply here.

[00:31:20] Speaker 05:
Well, the proposition is broad.

[00:31:22] Speaker 05:
I haven't seen it applied either way in this precise situation.

[00:31:26] Speaker 05:
But the principle that is applied in the statute of limitations context is that the earlier suit is considered ineffective.

[00:31:36] Speaker 05:
right, ineffective to stop the statute of limitations once it has later been dismissed without prejudice.

[00:31:42] Speaker 05:
And similarly here, what we're saying is that the earlier suit is considered ineffective for purposes of this statute, which talks about service.

[00:31:52] Speaker 02:
Can I ask, what is your answer to Judge O'Malley's question earlier about whether your principle applies only to

[00:32:03] Speaker 02:
dismissals that are both involuntary and without prejudice or to, there are, I guess, three other possibilities, mixing prejudice, non-prejudice, involuntary, voluntary.

[00:32:15] Speaker 05:
Well, certainly with prejudice would be a different situation as the board decided in the LG case, but it just makes sense.

[00:32:24] Speaker 02:
Different outcome?

[00:32:25] Speaker 02:
Different outcome.

[00:32:26] Speaker 02:
Okay.

[00:32:26] Speaker 02:
You're not just reserving it for a next... Right.

[00:32:29] Speaker 05:
No, different outcome.

[00:32:30] Speaker 05:
In terms of whether it's voluntary or involuntary, I'm not sure what the outcome would be.

[00:32:37] Speaker 05:
Certainly, the voluntarily dismissed without prejudice category is where the case law seems to really focus.

[00:32:46] Speaker 05:
And I just don't know the answer for cases that are involuntarily dismissed without prejudice.

[00:32:51] Speaker 03:
If we were to reach these harmless error arguments, what is the PTO's position on what we should do?

[00:32:58] Speaker 05:
We believe a remand would be appropriate on the issue of whether the proceeding could have been brought in a different way, particularly given the agencies.

[00:33:10] Speaker 04:
Not with respect to the ex parte re-exam.

[00:33:13] Speaker 04:
You don't agree with that proposition.

[00:33:14] Speaker 05:
Right.

[00:33:15] Speaker 05:
That's right.

[00:33:15] Speaker 05:
But with respect to whether different parties could have brought different proceedings in a different way, I think.

[00:33:22] Speaker 04:
How do you deal with the statement in SAS that says there can't be anything harmless about

[00:33:28] Speaker 04:
an agency that acts outside the authority of a jurisdiction?

[00:33:32] Speaker 05:
Well, I think in this case, it would be a question of whether that, I mean, if the board were to address those issues, how it would come out.

[00:33:42] Speaker 05:
And I think the board would need to address those issues in the first instance.

[00:33:45] Speaker 05:
I don't think the PNC bank case that the board has decided already is directly on point, since it's a CBM proceeding.

[00:33:55] Speaker 03:
What about this Terramar case?

[00:33:56] Speaker 03:
That's an IPR.

[00:33:58] Speaker 05:
Well, I just think that the board would need to address this particular case in the first instance.

[00:34:04] Speaker 05:
What about the regulation 4.2?

[00:34:06] Speaker 04:
I mean, 42.1.

[00:34:09] Speaker 04:
The one that says that the question is addressed on a petition by petition basis.

[00:34:19] Speaker 04:
not a petitioner by petitioner.

[00:34:21] Speaker 05:
Right.

[00:34:21] Speaker 05:
And that's something, again, I think that the board should address in the first instance.

[00:34:25] Speaker 05:
I just think that the issues haven't been fleshed out enough in this case.

[00:34:30] Speaker 05:
And the particular facts of this case may lead to a certain outcome.

[00:34:34] Speaker 05:
I just don't know.

[00:34:35] Speaker 05:
And I wouldn't want to decide that in the first instance.

[00:34:41] Speaker 05:
Or I think it would make more sense to have it remanded.

[00:34:48] Speaker 02:
Do you have a response to Mr. Eyre's argument about, let's call it Bonneville 1, that Bonneville 1 was a case in which the court of federal claims proceeding was held to be barred by an involuntarily dismissed board of contract appeals?

[00:35:12] Speaker 05:
I'm not sure.

[00:35:12] Speaker 05:
I haven't looked at Bonneville 1.

[00:35:15] Speaker 02:
I think that's how Bonnie Bonifold too arose when they went back to the board and said, we left you once, but we're back.

[00:35:23] Speaker 05:
Right.

[00:35:24] Speaker 05:
But I guess I'm not sure is the answer.

[00:35:26] Speaker 05:
I haven't looked at it.

[00:35:27] Speaker 05:
And like I said before, the only exceptions that I've seen are where the statute explicitly contemplates the dismissal without prejudice.

[00:35:36] Speaker 05:
And I'm not sure what the situation was there, so I'd have to look.

[00:35:40] Speaker 05:
I wanted to also mention,

[00:35:44] Speaker 05:
that the reason for Congress to rely on the judicial sort of gloss on certain words is particularly strong when the word is service, because service is something that is a creature of the courts.

[00:36:04] Speaker 05:
So it makes a lot of sense that the background principles that courts apply are what Congress intended to apply in writing the statute.

[00:36:14] Speaker 05:
I think the court has this well in hand.

[00:36:23] Speaker 01:
I would just want to make one remark on the remand.

[00:36:27] Speaker 01:
Obviously, this institution decision goes back to 2013.

[00:36:30] Speaker 01:
We've been up to the Supreme Court, back to this court multiple times, and I appreciate that the board hasn't ruled on these alternative grounds, but if

[00:36:41] Speaker 01:
We really believe, given that our case is being stayed pending this IPR, that the proper course is to reverse and just wipe the slate clean and allow invalidity to be tried at the district court.

[00:36:57] Speaker 03:
What happens if you get that?

[00:37:00] Speaker 03:
Are these petitioners then defendants?

[00:37:02] Speaker 03:
Are they stopped from pressing these invalidities?

[00:37:04] Speaker 01:
Not at all, your honor.

[00:37:06] Speaker 01:
A stopple only attaches

[00:37:08] Speaker 01:
to a final written decision and only then on a claim by claim basis.

[00:37:13] Speaker 03:
So here, do we have to vacate the final written decision?

[00:37:20] Speaker 01:
Yes, I believe you would.

[00:37:22] Speaker 03:
But you wouldn't intend to argue that they can't ask the district court to do exactly what the PTAP did?

[00:37:28] Speaker 03:
Not at all, Your Honor.

[00:37:29] Speaker 01:
We can have the same arguments based on the same prior art.

[00:37:32] Speaker 01:
And I presume that that will be the prior art that's at issue in the district court.

[00:37:38] Speaker 01:
We thank you very much for your consideration.