[00:00:03] Speaker 04: The United States Court of Appeals for the Federal Circuit is now open and in session. [00:00:08] Speaker 04: God save the United States and this honorable court. [00:00:13] Speaker 04: The first case for argument this morning is 19-20-40, Kaneklake Phillips versus Yanku. [00:00:21] Speaker 04: Mr. Oliver, whenever you're ready. [00:00:25] Speaker 01: Thank you, Your Honor. [00:00:26] Speaker 01: Good morning, and may it please the court. [00:00:28] Speaker 01: This appeal involves a situation in which first, the board failed to follow its own precedent intended to ensure basic fairness. [00:00:35] Speaker 03: Mr. Oliver, you filed your opening brief before our decision and clicked the call and made these various arguments about the impropriety of the initiation. [00:00:47] Speaker 03: Now that click the call has been decided, what's left of that argument? [00:00:55] Speaker 01: Well, I believe what's left of that argument is based on what we've argued in our reply brief, and that is the decision in the Department of Homeland Security case from this summer. [00:01:05] Speaker 01: Specifically, in that case, agency discretion does not preclude review of, and I quote, the procedure the agency followed in rendering its decision. [00:01:16] Speaker 01: That included, in that case, an agency policy memorandum concerning the DACA case. [00:01:21] Speaker 01: What the Supreme Court said there was that even if the ultimate [00:01:26] Speaker 01: determination is within the discretion of the board and is unreviewable. [00:01:31] Speaker 01: The agency's actions and procedures in following its own rules are reviewable under both due process and under the APA. [00:01:43] Speaker 01: And that's something that's been confirmed. [00:01:45] Speaker 03: That may be true, but in other areas of the law, we have a special situation here [00:01:54] Speaker 03: where there's a non-appealability rule which the Supreme Court didn't click to call, that applies to the very kinds of issues that you're raising. [00:02:05] Speaker 01: Well, we believe that the Department of Homeland Security case is the one that controls here. [00:02:09] Speaker 01: And it is not the determination that we're appealing. [00:02:12] Speaker 01: There is still APA review and constitutional review under the Department of Homeland Security, regardless of whether or not the ultimate determination is that issue. [00:02:22] Speaker 01: There has to be, unless [00:02:24] Speaker 01: Congress says that there is not reviewability of a constitutional question. [00:02:29] Speaker 01: Both APA and constitutional review are applicable here. [00:02:33] Speaker 01: Again, we're not... Is there a constitutional issue here? [00:02:37] Speaker 01: Due process. [00:02:39] Speaker 01: Due process. [00:02:39] Speaker 01: And that was the... And that was the... Well, the process here must be fair. [00:02:46] Speaker 01: Where the agency has a policy or procedure in place, it must fairly apply that policy or procedure. [00:02:54] Speaker 01: regardless of the ultimate discretion that the agency has over the decision. [00:02:58] Speaker 03: So every agency decision which is challenged for failure to be consistent with earlier agency rulings raises a due process issue? [00:03:10] Speaker 01: I don't know that everyone would, but I think we certainly have in this case. [00:03:14] Speaker 01: In this case, we have a policy or a presidential decision. [00:03:18] Speaker 01: And specifically, looking at the, I believe it's the, [00:03:24] Speaker 01: Webster and Thorpe decisions. [00:03:26] Speaker 01: In Webster, the agency's own guidelines can act as law, and constitutional review remains in place unless explicitly precluded by Congress. [00:03:38] Speaker 01: In this case, we have... Sorry, Your Honor, please. [00:03:43] Speaker 02: So, click to call just missed the due process issue? [00:03:49] Speaker 01: I don't know that it missed the due process issue, but we're raising due process here under [00:03:53] Speaker 01: the specific guidance from the Supreme Court in the Department of Homeland Security case, where it said a due process issue may be raised with respect to the agency's procedures, regardless of whether or not it has ultimate discretion. [00:04:10] Speaker 01: We're not arguing here that the agency must be told whether to institute or not. [00:04:14] Speaker 01: But when the agency missupplies its own policy guidelines in a way that is either arbitrary and capricious, [00:04:22] Speaker 01: or a violation of the due process clause. [00:04:25] Speaker 04: Can I just get some clarification of what you're arguing on the due process violation? [00:04:33] Speaker 04: I was a little confused by the brief. [00:04:36] Speaker 04: Bring in SAS. [00:04:38] Speaker 04: So is your due process argument, is your due process violation predicated on the fact that the board did one thing with respect to SAS? [00:04:47] Speaker 04: and didn't do the same thing with respect to the Valve Corporation case. [00:04:51] Speaker 04: I was just confused about what impact or why you thought that what the board did in SAS somehow affected your due process claim. [00:05:00] Speaker 04: Are you submitting that the two are related and that the SAS issue sort of makes this a due process violation? [00:05:10] Speaker 01: No, Your Honor. [00:05:11] Speaker 01: We raised the SAS anticipating what the arguments from the US Patent Office would be. [00:05:17] Speaker 01: specifically that institution decisions are not reviewable. [00:05:21] Speaker 01: We raised the SAS issue because of the contrast, specifically, that it is clear that under the best-asked decision that the appeals court can rule that a procedure was not followed properly and therefore the board or U.S. [00:05:38] Speaker 01: Patent Office has to revisit its decision on institution. [00:05:41] Speaker 01: The fact that the patent office did so in this case confirms that what we're requesting is in line with SAS. [00:05:49] Speaker 01: But the due process in APA violations are not the contrast between what was done with SAS and what was done with VAL. [00:05:56] Speaker 01: The due process issue is the proper application of general plastic. [00:06:00] Speaker 01: General plastic is a presidential board decision. [00:06:03] Speaker 01: The presidential board decisions are intended, and let me just get the quote here correct, [00:06:12] Speaker 01: to reflect, and I quote, binding agency authority concerning major policy or procedural issues or other issues of exceptional importance. [00:06:21] Speaker 04: So let me just, I'm sorry, let me just interrupt because the time is short. [00:06:25] Speaker 04: So you're, I'm just trying to understand your argument. [00:06:27] Speaker 04: You're arguing that the board violates due process each time it fails to sua sponte apply all relevant intervening, Laura? [00:06:36] Speaker 04: Is that your due process? [00:06:38] Speaker 01: No, Your Honor, the argument is not whether or not it was a suicide to the Board did it or not. [00:06:44] Speaker 01: We are asking for instruction for the Board to properly apply. [00:06:49] Speaker 01: What the due process argument is, is that General Plastik basically said here are the factors that are the USPTO policy for determining whether or not to deny follow-on petitions. [00:07:01] Speaker 01: Regardless of the discretion the Board has in that, the policies under General Plastik say [00:07:06] Speaker 01: that under those factors you can consider prior filings by either the same petitioner or a related petitioner, including co-defendants. [00:07:15] Speaker 01: That is exactly what Phillips argued here. [00:07:17] Speaker 01: It argued that general plastic should be considered because there were prior filings by a co-defendant, specifically Microsoft's customers which had joined the litigation to defend. [00:07:29] Speaker 01: The board or the panel in this case said we're not going to consider general plastics in that regard because general plastic only applies to where the prior petition was by the exact same party. [00:07:42] Speaker 01: Valve confirmed that the panel in this case was absolutely wrong. [00:07:46] Speaker 01: Valve said the USPTO policy is that general plastic applies not only to the where the prior petitions were by the same party, but where they were by a related party. [00:07:57] Speaker 01: And that related party, in this case, may be co-defendants. [00:08:01] Speaker 01: Valve also confirmed that that had been the policy all along. [00:08:05] Speaker 01: So the due process problem here is the general plastic policy, which Phillips asked for application of, was denied to it based on a faulty application of that policy. [00:08:16] Speaker 01: Where the U.S. [00:08:17] Speaker 04: patent... And your view is that... And your... This is Jared Fischprost again. [00:08:20] Speaker 04: And your view is that there's no burden or onus on the petitioner's part [00:08:27] Speaker 04: to either make that argument since the pet, the, the, my understanding is this was pending before the board, the board issues decision like eight days or a week or something after the valve case issue. [00:08:38] Speaker 04: So it's your view that the petition, the, your side had no obligation or responsibility to make that argument or bring that matter to the attention of the board while the proceedings are ongoing. [00:08:54] Speaker 01: Well, Your Honor, the Patent Office argues the Wrentrop case in that regard, and I think there are two important distinctions. [00:09:01] Speaker 01: First and foremost, in that case that the Patent Office relies upon, the issue concerning the jury instruction in that case was no indication that it was ever raised before. [00:09:12] Speaker 01: What requires preserving the right to appeal is that the issue be raised. [00:09:16] Speaker 01: The issue here is the proper application of General Plastid, which Phillips raised and asked for the proper application of. [00:09:24] Speaker 01: the proper application was denied. [00:09:26] Speaker 04: But your whole argument here on due process involves this intervening legal precedent of VALCORP. [00:09:35] Speaker 04: VALCORP simply... I mean, you wouldn't be here, I assume, arguing due process if VALCORP had not been issued and we were just dealing with general plastics. [00:09:46] Speaker 04: I mean, you might be arguing the merits, but I don't think you'd be arguing a due process violation. [00:09:51] Speaker 01: that's possible would certainly be a stronger, would be not as strong of an argument. [00:09:55] Speaker 01: But the valve issuing decision here was just case law that confirmed that Phillips was correct. [00:10:01] Speaker 03: If we reject your argument that there's a constitutional issue here, do you lose under click to call on the initiation issue? [00:10:13] Speaker 01: No, I still think there's an APA violation that's both due process and APA. [00:10:18] Speaker 01: In this case, [00:10:19] Speaker 01: if there is a procedure in place. [00:10:22] Speaker 03: So you can get around and click the call by arguing that it's an APA violation? [00:10:27] Speaker 01: Well, APA remains an issue that can be raised under SAS. [00:10:34] Speaker 01: SAS made clear that APA violations are not necessarily precluded. [00:10:39] Speaker 01: Our argument is that this is primarily a due process concern, but it also might be an APA. [00:10:45] Speaker 01: I don't think that is a problem. [00:10:47] Speaker 01: The issue here is that what the [00:10:49] Speaker 01: what the U.S. [00:10:50] Speaker 03: Patent Office did is that on one day... The question is, are you saying that click to call doesn't apply when there's an APA violation in the initiation? [00:11:03] Speaker 01: We believe that under the Department of Homeland Security case, both APA and constitutional issues can be raised even where the agency has discretion. [00:11:12] Speaker 03: Answer my question. [00:11:13] Speaker 03: Are you saying that click to call does not apply to APA violations? [00:11:19] Speaker 01: I don't believe so, Your Honor. [00:11:21] Speaker 01: I believe, but to answer your question more specifically, we do believe this is a due process concern. [00:11:28] Speaker 01: The procedure that the US Patent Office articulated in general plastic was applied unfairly to Phillips. [00:11:36] Speaker 01: Phillips said, we request the procedure that you have in place, and that procedure applies when the earlier file petition was by the same party or a different party. [00:11:47] Speaker 01: And this panel says, we're not going to apply our own policy where it was a different party. [00:11:52] Speaker 01: But the Patent Office's procedure was to do exactly that. [00:11:56] Speaker 01: Thus, Phillips, in this case, was denied the very US policy that the Patent Office admitted was incorrectly applied, essentially, in VAL. [00:12:07] Speaker 01: And it's the admission in VAL, not the existence of VAL, which is critical to this case. [00:12:14] Speaker 02: Counsel, this is Judge Wallach. [00:12:17] Speaker 02: take you off this subject for a minute. [00:12:21] Speaker 02: On pages 32 to 33 of the interim, PO asserts that, I'm quoting, Phillips argues here, and there's an ellipsis there, but never argued to the board that ANWR restricts test gestures to a single meaning within a particular application such that, quote, each application to be run, that's an internal quote, would use its own gestures to distinguish between commands. [00:12:48] Speaker 02: Where in the record did Phillips raise this argument before the PTAM? [00:12:55] Speaker 01: Well, the idea of using different gestures mapped to the same command was first raised in the reply citation, which was a hypothetical. [00:13:05] Speaker 01: So it would be in the surreply that Phillips addressed the misapplication in that regard. [00:13:15] Speaker 01: I don't have the page specifically, but maybe if I can understand the basis for your question, I can answer more fully. [00:13:22] Speaker 01: Waiver? [00:13:25] Speaker 01: Well, I don't think there could be waiver in this issue where there was never a proposal. [00:13:30] Speaker 02: Look at page 33 of the PTEDS brief. [00:13:36] Speaker 02: You can respond to this on your response time. [00:13:44] Speaker 01: buzzer is already run. [00:13:47] Speaker 01: Certainly. [00:13:48] Speaker 01: Do you want me to respond now or wait till the rebuttal? [00:13:52] Speaker 02: You have three minutes. [00:13:54] Speaker 01: I'm sorry? [00:13:55] Speaker 02: Wait till you have your three minutes. [00:13:56] Speaker 02: I'm not going to eat up your time. [00:13:59] Speaker 04: Okay. [00:14:00] Speaker 00: Okay. [00:14:01] Speaker 04: We'll reserve your rebuttal time. [00:14:02] Speaker 04: Let's hear from the other side. [00:14:04] Speaker 04: Ms. [00:14:04] Speaker 04: Stilson? [00:14:06] Speaker 00: Thank you. [00:14:07] Speaker 00: Good morning. [00:14:07] Speaker 00: And may it please the court? [00:14:10] Speaker 00: I guess I'll just [00:14:12] Speaker 00: briefly mention a couple of things about the institution question. [00:14:18] Speaker 00: On the due process issue, here there's just no colorable due process claim. [00:14:25] Speaker 00: The board addressed Phillips' arguments and disagreed with them, but followed the factors laid out in general plastic and approached general plastic as if [00:14:40] Speaker 00: The question was whether the two parties should be deemed the same petitioner. [00:14:44] Speaker 00: So still address whether these two parties are coordinating. [00:14:51] Speaker 00: And then on the questions the court was discussing about APA violations, I just wanted to briefly mention that the Supreme Court in Quozo specifically cited the APA in saying [00:15:09] Speaker 00: that, well, there are two different APA provisions that indicate that it won't override other statutory commands. [00:15:17] Speaker 00: So there's the statutory command that says under Section 314D, the decision is final and non-appealable, the institution decision. [00:15:27] Speaker 00: And then the APA says that it does not override the enabling statute. [00:15:37] Speaker 00: So here, the Patent Act would [00:15:39] Speaker 00: would be the sort of primary statute that precludes APA review. [00:15:44] Speaker 00: And then on the committed to agency discretion, it's Section 314A that commits the institution question to agency discretion, and the APA under 701A2 says that when something's committed to agency discretion, it's not reviewable. [00:16:04] Speaker 00: So I just wanted to sort of [00:16:06] Speaker 00: tie those two things together. [00:16:08] Speaker 00: There's the APA on one hand and the Patent Act on the other hand, but they sort of work in tandem here. [00:16:13] Speaker 00: And QOZO and DRIVE and SAS sort of all point to the same non-reviewability. [00:16:24] Speaker 00: Ms. [00:16:24] Speaker 04: Siltzen, we all agree that QOZO did qualify its decision by saying that an example of the effect of 314D [00:16:37] Speaker 04: The exception might be appeals that implicate constitutional questions. [00:16:42] Speaker 04: Now, I assume your position here is that this doesn't rise to the level of a due process violation of a constitutional question based on what's going on here. [00:16:51] Speaker 04: Can you give us an example of what would or what might? [00:16:56] Speaker 00: Sure. [00:16:57] Speaker 00: And you're right that our position is that this doesn't rise to the level of a constitutional question. [00:17:04] Speaker 00: An example of one that might would be if the agency said, we're declining to institute your petition because you're a woman. [00:17:13] Speaker 00: That would be a sort of clear or equal protection violation. [00:17:19] Speaker 00: And so that could implicate the exception in CLOSO. [00:17:32] Speaker 04: Well, what about if here, in general plastics, if we had a board presidential opinion that said X is Y, and then the next decision that comes out says absolutely the contrary. [00:17:47] Speaker 04: We take it back, we're reversing our position, X does not equal Y, or whatever the reverse of that is. [00:17:54] Speaker 04: Is that a different case than this one? [00:17:57] Speaker 04: Where the board explicitly is saying, we are changing our position entirely. [00:18:02] Speaker 04: And if the board had initially relied on the original not a presidential opinion to say we are relying on this and we're reaching our results and then the board completely reverses itself. [00:18:14] Speaker 00: I think that definitely is a different case from this one where here the board addressed the argument that Phillips made that that Microsoft and Aster and Asus should all sort of be imputed to be the same petitioner. [00:18:31] Speaker 00: And the board addressed that and said, we're not going to impute them to be the same petitioner. [00:18:37] Speaker 00: We're looking at their relationship to each other, and we don't find that they are... The board says we don't find that they're the same petitioner after sort of analyzing whether it should sort of impute them to be the same petitioner, which is exactly the analysis that the valve decision sort of clarified later on that you should be imputing [00:19:02] Speaker 00: deciding whether two petitioners have a sufficiently close relationship that they, or sorry, two parties have a sufficiently close relationship that they should be considered the same petitioner. [00:19:13] Speaker 00: So I think that's a different case. [00:19:17] Speaker 00: I also think even in that case, it would still be hard to get around the review bar of the Thrive case, the Click to Call case, where actually that was the very situation [00:19:30] Speaker 00: So in that case, the board had come out one way and then later on, the agency reconsidered its position and issued guidance coming out the opposite way, but the Supreme Court still said, well, it's still not something that the courts are in a position to review. [00:19:50] Speaker 04: Well, I mean, your recollection may be better than mine, but in quick to call, that reversal took place. [00:19:56] Speaker 04: later on, right? [00:19:57] Speaker 04: Not while the case was pending before the board. [00:20:01] Speaker 04: The change of positions. [00:20:02] Speaker 04: Yes, that's true. [00:20:03] Speaker 04: Okay. [00:20:03] Speaker 04: That's true. [00:20:05] Speaker 00: But it still is, you know, the fact that... Is there any... I'm sorry. [00:20:10] Speaker 04: I appreciate that. [00:20:11] Speaker 04: This is Sijprost again. [00:20:13] Speaker 04: Are there any... I don't... I really don't know the answer to this. [00:20:16] Speaker 04: Are there guidelines or anything that the board panels [00:20:21] Speaker 04: are obligated to follow that address this question of what the board is supposed to do, where there's a new presidential opinion on point that issues pending the board's, the PTAB, a particular PTAB panel's review? [00:20:37] Speaker 00: I'm not sure if there are any guidelines on that specific point. [00:20:43] Speaker 00: I mean, certainly those [00:20:45] Speaker 00: the parties, the board sort of relies on the parties, especially post, you know, the institution question was well out of the way when the valve decision came out. [00:20:56] Speaker 00: And so the board relies on parties just as a court would to raise an issue that, you know, might implicate the earlier institution decision. [00:21:08] Speaker 00: So for example, [00:21:10] Speaker 00: The board does have the authority to withdraw its institution decision if a party comes to it and says, look, this later guidance came out or later precedent of the PTAB came out and you need to apply it here. [00:21:24] Speaker 00: The board certainly can apply the later guidance and withdraw the institution. [00:21:34] Speaker 04: But if Val's issues before the board issues its panel opinion, [00:21:39] Speaker 04: Is it not obligated to follow that new decision irrespective of whether or not it is brought to its attention by the party? [00:21:49] Speaker 00: Well, I mean, I think it would be a closer question if it was an issue that the final written decision was going to address. [00:21:57] Speaker 00: Here, the final written decision doesn't address the institution question at all because nothing about the institution question was raised after institution was granted here. [00:22:08] Speaker 00: So the board was not sort of thinking about its institution decision when issuing its final written decision on the merits of patentability here. [00:22:18] Speaker 00: There are cases where parties do raise institution questions and the board issues a final written decision that addresses some of those institution questions that are still outstanding. [00:22:31] Speaker 03: But that doesn't make it appealable. [00:22:32] Speaker 03: That doesn't make it appealable, does it? [00:22:34] Speaker 03: The fact that the institution decision is readdressed in the final decision. [00:22:39] Speaker 00: Oh, absolutely not. [00:22:40] Speaker 00: You're right. [00:22:41] Speaker 00: But I was just answering the question about whether the board has any obligation to address a decision that comes out during the course of the proceedings. [00:22:52] Speaker 00: And I'm just saying that in this case, where it was a decision only about institutions, that there was certainly no obligation to sua sponte, find it and raise it. [00:23:04] Speaker 00: and analyze it without any prompting from the parties. [00:23:15] Speaker 00: I'm happy to answer questions about the merits of the case or more about the institution decision, or I'm happy to yield the rest of my time. [00:23:30] Speaker 04: Colleagues, anything further? [00:23:31] Speaker 02: No. [00:23:33] Speaker 02: Not from Judge Wallin, no. [00:23:35] Speaker 04: All right. [00:23:35] Speaker 04: Thank you very much. [00:23:37] Speaker 04: Thank you. [00:23:38] Speaker 04: Thanks. [00:23:40] Speaker 04: All right. [00:23:40] Speaker 04: Mr. Oliver, will we store three minutes of rebuttal of your time? [00:23:46] Speaker 01: Thank you, Your Honor. [00:23:47] Speaker 01: First, I'd like to just point to where in the record, to answer the earlier question, the argument may be found concerning the ANWR reference, and that can be found in the serve reply in Appendix 26, or excuse me, 2868 through 2869. [00:24:02] Speaker 01: With that being said, I'll come back to that, but I'd like to address a few of the due process issues. [00:24:07] Speaker 01: First of all, the Patent Office has argued that the original institution decision addressed the relationship between parties, but it did so using the wrong standard. [00:24:19] Speaker 01: It looked to see whether Microsoft was the exact same party as the previous institution file. [00:24:25] Speaker 03: What case suggests that an APA violation [00:24:31] Speaker 03: where the agency act arbitrarily and capriciously rises to a due process violation. [00:24:40] Speaker 03: What case does that? [00:24:43] Speaker 01: Well, I think, I mean, even the Department of Homeland Security case that we cited to addresses both the APA and the due process issue together. [00:24:52] Speaker 01: But let me answer it in this matter, Your Honor. [00:24:54] Speaker 01: I hope that sort of helps clarify it. [00:24:58] Speaker 01: agency policy is to consider any relationship, including co-defendants. [00:25:03] Speaker 01: And the agency said, well, that's our policy, but today's Wednesday, and on Wednesday, we're not going to afford that policy to anybody that argues it. [00:25:12] Speaker 01: Maybe if you argued on Friday, my wife did it. [00:25:14] Speaker 01: We're just going to arbitrarily and capriciously do that. [00:25:17] Speaker 01: Not only would that be arbitrary and capricious, but it would be manifestly unfair with respect to the process. [00:25:25] Speaker 01: And that's essentially what happens here. [00:25:27] Speaker 01: Phillips asked for the correct application of the board's own policy, and it got that policy correct. [00:25:34] Speaker 01: And the panel in this case said, no, we're not going to apply the policy correctly today. [00:25:38] Speaker 01: We're going to only apply the policy today if it was the same petitioners. [00:25:43] Speaker 04: But you're saying that any missed application of general plastics is a procedural due process violation, a mere application of law? [00:25:53] Speaker 04: I don't mean mere in terms of it's not significant. [00:25:55] Speaker 04: but a misapplication of law without more is a due process violation. [00:26:00] Speaker 04: Is that your position? [00:26:01] Speaker 01: I'm not saying any policy is, but this was a policy intended to ensure fundamental fairness for serial attacks. [00:26:09] Speaker 01: And the procedure involved considering any relationship, including co-defendants, to the Bureau of Defense. [00:26:15] Speaker 01: This was inherent in the board's policy, which the board itself stated was to ensure fairness. [00:26:22] Speaker 01: Due process at its heart [00:26:24] Speaker 01: is about ensuring fairness of the process. [00:26:27] Speaker 01: If the agency says, this is our policy for ensuring fairness, but today you don't get it, even though you're arguing the right factor, then that is manifestly a denial of what the board itself admits is its fairness policy. [00:26:44] Speaker 01: And that's what makes this case a due process issue. [00:26:47] Speaker 01: But even if it's not, it is still an APA issue, and I don't believe Flick to call [00:26:52] Speaker 01: changes that because click to call was addressed to a narrow issue of whether 315B should be considered part of institution. [00:27:00] Speaker 01: Thrive was about the termination of institution. [00:27:04] Speaker 01: This is about process and under the Department of Homeland Security case, process matters and it can be both a due process violation and an APA violation to deny the USPTO's own policies. [00:27:17] Speaker 01: For that reason, we asked for a remand to this case. [00:27:20] Speaker 04: We thank both parties and the cases submitted. [00:27:23] Speaker 01: Thank you.