[00:00:00] Speaker 07:
Our case for argument this morning is 2018-2140, Arthrex versus Smith and Nephew.

[00:00:10] Speaker 07:
Mr. Pryde, go ahead and proceed.

[00:00:14] Speaker ?:
Good morning, Your Honors.

[00:00:16] Speaker ?:
May it please the court.

[00:00:18] Speaker 03:
Commissioner Hirschfeld's decision violated the Appointments Clause, the Vacancies Reform Act, and the Separation Powers, and I will start with the statutory claim.

[00:00:27] Speaker 03:
The Vacancies Reform Act

[00:00:29] Speaker 03:
sets forth the exclusive mechanism for temporarily authorizing a subordinate to perform the functions of a vacant principal office.

[00:00:37] Speaker 03:
The government did not comply with any of the three options that statute gave it to make an actual appointment.

[00:00:45] Speaker 03:
Instead, the agency simply came up with its own succession plan and delegated all of the director's functions to Commissioner Hirschfeld, which was not one of the statutory options

[00:00:58] Speaker 03:
That violated the statute for two reasons.

[00:01:02] Speaker 03:
First, the Vacancies Reform Act clearly says that an agency may not rely on general delegation authority to evade the statute's specific mechanisms for making acting appointments.

[00:01:14] Speaker ?:
But that's exactly what the agency did here.

[00:01:18] Speaker 03:
In the government's view, because the director had general delegation authority, none of his functions was exclusive, and therefore he was free

[00:01:27] Speaker 03:
to provide any succession mechanism he please, despite the statutory options.

[00:01:33] Speaker 03:
That theory just can't be squared with the statute because it renders Section 3347B and its prohibition on using general delegation authority to circumvent the statute.

[00:01:44] Speaker 00:
If Congress wanted to prevent the appointee or the acting director from taking specific functions of duties when they have done that,

[00:01:55] Speaker 03:
They did that, Your Honor.

[00:01:57] Speaker 03:
That is what they did in 3347B.

[00:01:59] Speaker 03:
Congress enacted that in response to a specific problem.

[00:02:03] Speaker 03:
Before the 1998 statute, the Department of Justice had been doing this exact same thing.

[00:02:07] Speaker 00:
What was prohibited?

[00:02:09] Speaker 00:
What did Congress prohibit?

[00:02:12] Speaker 03:
Congress prohibited agencies from relying on their general delegation authority to circumvent the acting appointment mechanisms.

[00:02:22] Speaker 03:
That's exactly what the agency did here.

[00:02:24] Speaker 03:
The agency promulgated a regulation that transfers all of the director's functions wholesale to a different officer.

[00:02:32] Speaker 03:
And it's a delegation that kicks in only when there's a vacancy in the principal office.

[00:02:37] Speaker 00:
That's my point.

[00:02:38] Speaker 00:
Couldn't Congress have prohibited or restricted the delegation of certain functions or duties had it wanted to do so?

[00:02:46] Speaker 03:
That's what it did in Section 3347B of the Vacancies Reform Act.

[00:02:50] Speaker 03:
It says, in the clearest possible terms, that an agency cannot

[00:02:54] Speaker 03:
rely on its general delegation authority to circumvent the FDRA's statutory appointment mechanisms.

[00:03:00] Speaker 03:
Yet that is exactly what we need.

[00:03:01] Speaker 02:
Council, could we talk about Section 3348?

[00:03:05] Speaker 02:
Section 3348 seems to arguably narrow the scope of applicability for the Vacancy Reform Act by defining function or duty

[00:03:16] Speaker 02:
in a very tightly specific way to be functions or duties that can only exclusively be done by a particular officer.

[00:03:28] Speaker 02:
And so that raises the question.

[00:03:31] Speaker 02:
The other side raised the argument that

[00:03:33] Speaker 02:
The FVRA is really only applicable to non-delegable functions or duties.

[00:03:40] Speaker 02:
And therefore, delegable functions or duties are still outside the scope of the FVRA.

[00:03:49] Speaker 03:
Your Honor, you're exactly right that that provision raises the question of interpretation.

[00:03:53] Speaker 03:
But in our view, there's only two sensible ways to harmonize those two provisions consistent with the language of the statute and what Congress was trying to accomplish.

[00:04:02] Speaker 03:
First of all, Section 3348 can and should be read to apply only where Congress explicitly vests an authority of multiple officers, or at least provides for a specific delegation of functions, relying on a general delegation authority to transfer all of a principal officer's functions to someone else in the event that they concede.

[00:04:23] Speaker 03:
runs right into section 3347B.

[00:04:25] Speaker 03:
And so if you interpret 3348 to include even general delegation authority, you render section 3347B just totally superfluous.

[00:04:35] Speaker 03:
So that's why I made the case here.

[00:04:36] Speaker 07:
Does it render it superfluous, or is it the case that things which cannot be delegated because they are, by the statutory terms, only to be performed by that certain officer,

[00:04:53] Speaker 07:
would not be things that can be delegated as part of any kind of general delegation.

[00:04:59] Speaker 07:
I mean, doesn't it come down to the nature of the duties and the functions?

[00:05:03] Speaker 03:
But in the real world, every agency has general delegation authority, and it applies to the vast and overwhelming majority of the agency's functions.

[00:05:11] Speaker 03:
So even if it doesn't render it technically superfluous in all cases, it renders the sweep of the statute vanishingly small.

[00:05:19] Speaker 07:
Do you acknowledge that this

[00:05:22] Speaker 07:
function, reviewing decisions by the board, or having the discretion to review decisions by the board, is something that is not established by statute that the director and only the director can perform?

[00:05:39] Speaker 03:
Your Honor, our second argument, and it's an independent ground for ruling in our paper, is that it is not a delegable function.

[00:05:45] Speaker 03:
It is an exclusive function.

[00:05:47] Speaker 03:
Because by statute, no one in the agency can single-handedly review

[00:05:52] Speaker 03:
or decisions, and the Supreme Court held that unconstitutional only as to the director.

[00:05:57] Speaker 03:
So the director cannot delegate that function to someone who the statute prohibits from exercising the function.

[00:06:04] Speaker 03:
And that's what the director attempted to do here.

[00:06:06] Speaker 07:
I'm confused.

[00:06:08] Speaker 07:
I guess I'm just not following, so you better slow down and explain it to me.

[00:06:12] Speaker 07:
Functions and duties as defined under 3348 requires that it be a function or duty that is established by statute.

[00:06:20] Speaker 07:
We're in an unusual uncharted territory because the Supreme Court created director review here out of judicial fiat.

[00:06:27] Speaker 07:
There isn't a particular statutory section that governs it, is there?

[00:06:31] Speaker 03:
There is, Your Honor.

[00:06:33] Speaker 03:
If you look at the Supreme Court's decision, it relied on the director's general authority of review and management over the patent office in section three of the Patent Act.

[00:06:42] Speaker 03:
So that is the statute that's doing the work.

[00:06:44] Speaker 07:
So the function then is the statute.

[00:06:48] Speaker 07:
that attaches to this function, and I don't think you're wrong.

[00:06:51] Speaker 07:
I think your review of Arthrex in the Supreme Court is probably right, is that the Supreme Court found it housed somehow in the director's general oversight authority.

[00:07:01] Speaker 07:
So if that's the statutory section, how does that comport with too little i of 3348, which says, is required by statute to be performed by the applicable officer and only that officer?

[00:07:13] Speaker 07:
It certainly can't be the case that all of the functions that are the general functions that fall within that umbrella provision are only functions that can be performed by the director and therefore not delegatable.

[00:07:26] Speaker 03:
That's right, Your Honor, but it's really the interaction of two statutes that issue here.

[00:07:30] Speaker 03:
Under Section 3A, the director would presumptively have the ability to review board decisions.

[00:07:36] Speaker 03:
Section 6C, however, says that nobody in the office can single-handedly review board decisions.

[00:07:42] Speaker 03:
And it's that latter provision that the Supreme Court in Arthrex held unconstitutional only as applied to the director.

[00:07:49] Speaker 03:
So following Arthrex, you have Section 3, which gives the director power over the agency, including review power.

[00:07:57] Speaker 03:
I'm sorry.

[00:07:57] Speaker 06:
What did you say Section 6C says?

[00:08:00] Speaker 03:
It says that no individual can review a board decision because it says that, hopefully, the board can grant a hearing and the board must act in panels of three.

[00:08:08] Speaker 03:
But that was held unconstitutional as applied to the director in our press.

[00:08:12] Speaker 07:
But you think section 6C has a unilateral type constraint to it?

[00:08:18] Speaker 07:
You think the statutory section itself indicates that no one else can do this?

[00:08:23] Speaker 07:
Or does it just authorize a particular body to be able to do it?

[00:08:27] Speaker 03:
No, it has a constraint, Your Honor, because it says that

[00:08:30] Speaker 03:
Only the board can do it, and the board must act in panels of three when it doesn't.

[00:08:34] Speaker 03:
So under that statute, that would restrict the director's power under Section 3A, and that's why the Supreme Court had to declare Section 60 unconstitutional.

[00:08:43] Speaker 02:
Right, but I don't understand how Section 6C helps you, because the Supreme Court did not rewrite Section 6C to specifically inject the words, and only the director has the authority to review any final written decision by the patent board.

[00:09:00] Speaker 02:
That the Supreme Court did not do, so I don't see how Section 6C as reinterpreted by the Supreme Court helps.

[00:09:08] Speaker 03:
Well, Section 6C does prohibit any individual from reviewing court decisions, because it says only the board can review a decision, then it has to act in panels of three.

[00:09:17] Speaker 03:
And so, but for the Supreme Court's decision, neither the director nor anyone else in the agency would be able to single-handedly review court decisions.

[00:09:26] Speaker 02:
Right, but we're getting back to

[00:09:29] Speaker 02:
Chief Judge Moore's question, the question is, what statute establishes the director's authority to do this particular function of reviewing board decisions?

[00:09:41] Speaker 02:
And I don't think you can point to 6C for that.

[00:09:44] Speaker 02:
The best you have is 3A1, which is just the general authority that all powers are vesting in the director.

[00:09:52] Speaker 03:
It is Section 3A, but it's not just the best we have.

[00:09:55] Speaker 03:
It's what the Supreme Court pointed to, Your Honor.

[00:09:57] Speaker 03:
That is where the Supreme Court rounded the director's power of unilateral review.

[00:10:01] Speaker 03:
And the Court recognized that ordinarily that Section 3A review power would be hedged by Section 16.

[00:10:08] Speaker 02:
Let me get back to my earlier question, which was...

[00:10:11] Speaker 02:
about the effect of 3348 and how to understand 3348 in a larger vacancy reform act.

[00:10:19] Speaker 02:
I mean, there's a pretty straightforward reading of 3348 that says only non-delegable functions that are performed by someone like Drew Hirschfeld

[00:10:35] Speaker 02:
would be void under 3348, because functions or duties are defined as those required by statute be performed by the applicable officer and only that officer.

[00:10:50] Speaker 02:
So why is that a misunderstanding of the Vacancy Reform Act?

[00:10:57] Speaker 02:
In other words, any delegable function can still be performed by someone like

[00:11:04] Speaker 02:
Mr. Hirschfeld and wouldn't violate the Vacancy Reform Act.

[00:11:09] Speaker 02:
Any act by Mr. Hirschfeld wouldn't be considered null and void.

[00:11:15] Speaker 03:
Your Honor, because if you adopt that reading, you read Section 3347B out of the statute entirely, and you read the statute powerless to address the very abuse Congress was trying to reach, which was the Department of Justice doing the exact same thing.

[00:11:28] Speaker 03:
I see I've exhausted my opening argument time.

[00:11:30] Speaker 03:
I'm happy to continue answering the panel's questions, but I also

[00:11:33] Speaker 03:
My colleague has issues of patentability to address.

[00:11:36] Speaker 07:
Well, when you argued your approach, you spent your entire time on your FVRA argument, your statutory argument, you have some overarching appointments clause challenge, which I find difficult to comprehend in light of the Supreme Court's Arthrox decision.

[00:11:53] Speaker 07:
The Supreme Court's Arthrox decision expressly acknowledged

[00:11:59] Speaker 07:
that remand to an acting director would satisfy the Appointments Clause concerns.

[00:12:06] Speaker 07:
An acting director is not a principal officer who has been nominated by the president and confirmed by Congress.

[00:12:15] Speaker 07:
So in light of that in the Supreme Court case, can you please explain to me what your Appointments Clause general argument is, the lead argument in your brief, not your FERA argument, but your overarching Appointments Clause argument?

[00:12:31] Speaker 03:
Certainly, Your Honor.

[00:12:32] Speaker 03:
If the president had appointed an acting officer

[00:12:36] Speaker 03:
and that officer was serving for a reasonable time.

[00:12:39] Speaker 03:
We agree that that acting officer could exercise the functions of the director.

[00:12:43] Speaker 03:
But Eaton has some important limits built into it, and the main one that matters here is that Eaton applies only where Congress authorizes the president to name an acting officer.

[00:12:54] Speaker 03:
In this case, the agency didn't rely on the statutory options of the FDRA.

[00:13:01] Speaker 03:
Instead, it simply made up its own succession plan, not only without congressional support, but contrary,

[00:13:07] Speaker 03:
to Congress's expressed design.

[00:13:08] Speaker 03:
The patent act says that upon a vacancy of the director's office, the deputy director exercises the functions and duties of that office.

[00:13:18] Speaker 03:
It also, under the Vacancies Reform Act, there's three specific options for the executive branch to fill that office temporarily.

[00:13:26] Speaker 03:
So if the president for the agency had followed one of those statutorily specified routes, we agree we have a very difficult argument underneath it at that point.

[00:13:37] Speaker 03:
because Congress would have authorized the president to fill the office temporarily.

[00:13:42] Speaker 03:
The problem here is there was no congressional authorization for what the agency did.

[00:13:47] Speaker 03:
It simply made up its own succession plan in the teeth of the statute, in the teeth of the vacancies reform act, and nothing in Eaton or any subsequent decision allows an agency to simply make up its own miniature version of the vacancies reform act in that fashion.

[00:14:03] Speaker 02:
Do you agree that,

[00:14:06] Speaker 02:
At any point in the past year, President Biden could have returned Mr. Hirschfeld back to his permanent position as commissioner of patents and selected someone else to be the acting director?

[00:14:22] Speaker 03:
Certainly not.

[00:14:24] Speaker 03:
And the fact that that could have been done.

[00:14:25] Speaker 02:
And he still continues to have that power and therefore that kind of oversight authority over the PTO.

[00:14:35] Speaker 03:
That may be relevant to the separation of powers issue, your honor, but on the appointments clause, what matters is whether Commissioner Hirschfeld himself was duly appointed to the office he's now exercising, and he wasn't, because with respect to Commissioner Hirschfeld, the president never appointed him.

[00:14:50] Speaker 03:
He was not the first assistant to the director, so the vacancies reform act doesn't apply, the PADM Act doesn't apply.

[00:14:56] Speaker 07:
I guess my problem is, it seems like your appointments clause issue would actually render the Vacancy Reform Act unconstitutional.

[00:15:07] Speaker 03:
I don't think so, Your Honor.

[00:15:10] Speaker 03:
Certainly not every aspect of our challenge.

[00:15:12] Speaker 03:
The basic and most important problem for the appointments clause here is that Congress did not provide for the appointment mechanism that the agency relied on.

[00:15:20] Speaker 03:
So if the court rules with us on that ground, there's certainly no problem with the Federal Agencies Reform Act because that's very clearly a congressionally authorized appointment mechanism.

[00:15:30] Speaker 03:
You know, I realize there are other aspects to our arguments in terms of whether the president personally has to be the one making the appointment.

[00:15:36] Speaker 03:
I take the government's point.

[00:15:38] Speaker 03:
If the court ruled in our favor on those grounds, it might call into question

[00:15:42] Speaker 03:
certain aspects of the Vacancies Reform Act.

[00:15:44] Speaker 03:
But it's not an issue the court needs to reach in this case.

[00:15:46] Speaker 02:
But could you just briefly explain what's the principle behind why the Congressional enactment of the Vacancy Reform Act somehow makes it OK under the Appointments Clause?

[00:16:00] Speaker 02:
Because under your theory, there still wouldn't be a presidentially appointed officer that was Senate confirmed.

[00:16:10] Speaker 03:
Right, Your Honors, the reason why congressional authority matters is that the structure of the Constitution is that Congress has to create offices, whether principal or interior, under the Constitution.

[00:16:20] Speaker 03:
So it is one thing for Congress to set up a mechanism where an interior officer can temporarily exercise the functions of a vacant principal office.

[00:16:30] Speaker 03:
It's another thing where Congress has not created that mechanism, or it's created the mechanism, but provided an acting appointment to a different person entirely.

[00:16:39] Speaker 03:
and the agency simply makes up its own succession plan.

[00:16:43] Speaker 03:
That defies a different aspect of Deployment Clause, which is the rule of Congress in defining federal offices.

[00:16:49] Speaker 00:
Is there any statute or law that precludes a director of the USPTO from delegating the duties of the officer director?

[00:16:59] Speaker 03:
So there are two provisions that grants

[00:17:03] Speaker 03:
the director of general delegation authority.

[00:17:05] Speaker 03:
And I realize one of the court's questions before argument was whether those are restricted to situations.

[00:17:10] Speaker 00:
I'm not referring to grants that preclude the director.

[00:17:15] Speaker 03:
OK, so the Vacancies Reform Act, by its terms, precludes an agency from relying on general delegation authority to effectively create a succession plan.

[00:17:24] Speaker 03:
So that's 3347B.

[00:17:26] Speaker 03:
In addition, the appointments clause limits the ability of an agency to rely on delegation authority.

[00:17:33] Speaker 03:
Because as I've explained, one of the structural premises of that clause is that Congress has to create offices.

[00:17:40] Speaker 03:
And I don't think Congress creates an office just by granting an agency general delegation authority, which would then supposedly allow that agency head to create its own inferior offices and for acting appointments and whatnot.

[00:17:54] Speaker 03:
So I do think both that BRA is an explicit limitation on that delegation authority and the appointments clause is a structural limitation on that authority.

[00:18:05] Speaker 03:
I have to analyze no further questions, all reserved the rest of my time for rebuttal.

[00:18:09] Speaker 07:
OK, that's fine.

[00:18:11] Speaker 07:
I'm sorry, Your Honor.

[00:18:13] Speaker 01:
Would you like to hear about patentability?

[00:18:15] Speaker 07:
No, you have to be at the podium.

[00:18:17] Speaker 07:
You need to come to the podium.

[00:18:19] Speaker 01:
My apologies, Your Honor.

[00:18:22] Speaker 01:
As to patentability, the central question in this case is whether Arthrex had written description support for a generic eyelet that threads sutures throughout its priority chain.

[00:18:34] Speaker 01:
Notably absent from this claim term is any requirement that the suture slide freely.

[00:18:40] Speaker 01:
All that was required was that the eyelet merely thread suture, and that is all that was required to demonstrate written description support for the generic eyelet.

[00:18:53] Speaker 01:
In this regard,

[00:18:54] Speaker 01:
in the board's decision, they made three legal errors.

[00:18:58] Speaker 01:
The first legal error was the ignoring of evidence and argument that we put forth of the common function of threading and at least one structure for accomplishing that function throughout the entire priority chain.

[00:19:13] Speaker 01:
And that should have been considered under the theory of Amgen and Inrei Smythe.

[00:19:18] Speaker 01:
Despite that,

[00:19:19] Speaker 01:
The board did not look at that argument or evidence.

[00:19:22] Speaker 01:
An in-ray nuvasive requires the board answer that question.

[00:19:26] Speaker 01:
And for that reason, this case must go back.

[00:19:31] Speaker 01:
In addition, the second legal error is the board's misreading, I would say, of PACE.

[00:19:39] Speaker 01:
During the course of this case,

[00:19:44] Speaker 01:
the course of the specification of the 707 application, there are a number of comments made about the ability of rigid eyelets to slide better than flexible eyelets.

[00:19:55] Speaker 01:
First of all, I would submit that is irrelevant to the claim term about whether an eyelet merely threads.

[00:20:01] Speaker 01:
And for that reason, it should go back.

[00:20:03] Speaker 01:
But I would also submit that the board discounted the written description support that was provided by the incorporation

[00:20:12] Speaker 01:
by reference of the 280 application.

[00:20:15] Speaker 01:
Where there is a broad incorporation by reference, this court in both Pace and Harare have indicated that narrowing or even critical language do not eliminate that written description or that incorporated reference as written descriptions before.

[00:20:35] Speaker 01:
And that, I would say, Your Honor, is legal error because the board did ignore the 280 application and never looked at the question of whether the incorporated reference could provide written description support for the generic island.

[00:20:50] Speaker 01:
And that is something that's been acknowledged by Brother Council.

[00:20:53] Speaker 02:
Well, my understanding of the board's decision is a little different from that.

[00:20:58] Speaker 02:
accepted the fact that the 280 application was incorporated by reference into the 707.

[00:21:05] Speaker 02:
But then it noticed that the 280 application was incorporated by reference into the background of the invention, section of the 707.

[00:21:13] Speaker 02:
And then the 707 proceeded to

[00:21:16] Speaker 02:
criticized the invention described in the 280, as incorporated by reference, and talked about how it impedes slideability.

[00:21:29] Speaker 02:
That's a big disadvantage of the 280.

[00:21:32] Speaker 02:
And then it went on and said, what we want to do, the object of this invention is to have the suture

[00:21:39] Speaker 02:
freely slide and then use the term freely slide over and over and over again through the detailed description of convention.

[00:21:47] Speaker 02:
And so therefore, for that reason, my understanding is the board found that the true invention contemplated by the inventors in the 707 was about a rigid eyelet, which would permit freely sliding of a suture going through it, which the flexible loop does not do.

[00:22:07] Speaker 02:
It does not freely slide.

[00:22:09] Speaker 02:
And so that's the problem.

[00:22:11] Speaker 02:
So in that sense, it did consider the 280 application.

[00:22:16] Speaker 02:
The problem was the context in the way that the 280 application contents were treated in the 707 application that led the board to conclude that a person of ordinary skill and the art would not understand the contents of the 280 as being part of the 707.

[00:22:33] Speaker 02:
So could you please respond to that?

[00:22:35] Speaker 02:
I think if everything

[00:22:38] Speaker 02:
is factually true about that understanding of how the 280 was treated.

[00:22:43] Speaker 02:
What is wrong, then, with the conclusion that the 280 could not be considered as part of the contemplating invention in the 707?

[00:22:52] Speaker 01:
Your Honor, the most salient fact is set forth in the board's decision where they said about the 707 application that it could not even support

[00:23:03] Speaker 01:
or provide written description support for the flexible eyelet.

[00:23:08] Speaker 01:
So one can only come to that conclusion if you consider the fact that the board considered it enough to discard it, which is precisely what Pace and Harari teach against.

[00:23:20] Speaker 01:
Furthermore, if they had actually examined the written description, they would have seen the benefits.

[00:23:26] Speaker 01:
of a flexible loop, which are set forth in the 280 application.

[00:23:30] Speaker 01:
And the opinion is absolutely silent about whether that single embodiment could provide support for the written description.

[00:23:38] Speaker 01:
And for that reason, the board never actually examined

[00:23:41] Speaker 01:
And we know that it's not only the question of the incorporation by reference, but it's the extent of the corporation that matters.

[00:23:49] Speaker 01:
And those are both questions of law.

[00:23:51] Speaker 01:
And while the board may have answered the question, the reference is incorporated, they also, as in PACE, disregarded the content and all the benefits of a flexible loop.

[00:24:02] Speaker 02:
Well, in Tronzo, I mean, the big challenge you have is the Tronzo case.

[00:24:08] Speaker 02:
There were prior art patents that were incorporated by reference into the parent patent in Tronzo that in fact contemplated and disclosed hemispherical shaped cup hip implants and ultimately

[00:24:24] Speaker 02:
the Federal Circuit said, no, that is not part of the written description.

[00:24:28] Speaker 02:
That's not adequate written description support in that parent application, given the way that specification described hemispherical-shaped cups to be inferior.

[00:24:42] Speaker 02:
And then how did the advantages of a conical-shaped hip implant?

[00:24:45] Speaker 02:
And so therefore, that was what the written description was.

[00:24:49] Speaker 02:
It was for conical shape, not for hemispherical shape.

[00:24:53] Speaker 02:
That's why the board, I think, arguably was reasonable in concluding.

[00:24:58] Speaker 02:
We have the exact same situation here, which is unique.

[00:25:02] Speaker 02:
But nevertheless, when you're denigrating a certain kind of embodiment and you're touting the advantages of a second embodiment, your written description of support is really for that second embodiment and not for both the first and second embodiment.

[00:25:17] Speaker 01:
May I address that, Your Honor?

[00:25:18] Speaker 01:
Yes.

[00:25:19] Speaker 01:
With respect to Tronzo, it was very clear that the initial incorporation by reference was narrow.

[00:25:26] Speaker 01:
The district court said as much that the prior art references were incorporated only for prior art purposes.

[00:25:32] Speaker 01:
That is a sharp contrast to the broad incorporation, which is indiscriminately broad in this case.

[00:25:37] Speaker 01:
And so this case falls in the same ambit as Pace, where you have a broad incorporation, and you have later comments set forth in the patent

[00:25:47] Speaker 01:
that suggests that perhaps something else was left behind.

[00:25:51] Speaker 01:
But Harari states and Pace state that we must look at the entire broad incorporation and not simply discard it just because negative comments are made.

[00:26:02] Speaker 01:
And I would also submit that in Tronzo, as this court held in Quartus, there was no express disclosure of a species that could support the generic claim term, as this court itself had said.

[00:26:15] Speaker 01:
And what the issue really boiled down to was a question of inherency.

[00:26:19] Speaker 01:
All this to say that... Hold on, hold on.

[00:26:22] Speaker 02:
The patents that were incorporated into the parent patent in Tronzo, those incorporated patents, they disclosed the hemispherical shaped cup hip implant, right?

[00:26:32] Speaker 01:
I can only go with what the court said, which was there was only one disclosed embodiment, which was that kind of thing.

[00:26:38] Speaker 02:
Well, the Tronzo opinion itself talks about the hemispheroidal cup shape of the prior art patent.

[00:26:47] Speaker 02:
That was not part of the written description of that patent, ultimately, because of the way it was criticized.

[00:26:56] Speaker 01:
And I would submit that those references were narrowly incorporated as the district court indicated and as the opinion states.

[00:27:05] Speaker 02:
Well, I mean, it's the Federal Circuit opinion that's binding on us.

[00:27:08] Speaker 02:
Well, I understand that, Your Honor, but the distinguishing fact was that- But I don't see any distinguishing fact like that described in the Federal Circuit opinion.

[00:27:15] Speaker 01:
Your Honor, I would submit that, well, we can all agree, Your Honor, that every case must be decided on its own facts.

[00:27:24] Speaker 01:
And that there is case law from this court that says prior art, as well as disparaged or criticized embodiments,

[00:27:33] Speaker 01:
can provide written description support.

[00:27:36] Speaker 01:
And the simple discarding of those under Pace and Harari is improper as a matter of law.

[00:27:41] Speaker 01:
You cannot cut those out.

[00:27:41] Speaker 02:
Can you explain the prosecution strategy here?

[00:27:43] Speaker 02:
Because I've never seen this before in 30 years in patent law, where you file a patent application, and then you file a continuation in part application, where you erase all of the detailed description of the invention from the parent application.

[00:28:03] Speaker 02:
And then you incorporate it by reference into the background section of your new application.

[00:28:08] Speaker 02:
And then you have a completely new, different detailed description of the invention in your new application with brand new figures.

[00:28:17] Speaker 02:
What was the point of that?

[00:28:19] Speaker 02:
Normally, typically, a CIP, you stick with the original specification and then you add on to it.

[00:28:27] Speaker 02:
because you have a new embodiment that you want to disclose and describe.

[00:28:32] Speaker 01:
Well there's no dispute that the material that was in the incorporation by reference is the very same that was set forth expressively.

[00:28:39] Speaker 02:
My question is why?

[00:28:41] Speaker 02:
Why would someone do that?

[00:28:43] Speaker 02:
Unless they were making the conscious effort to express and communicate that everything that was in the original application is now something that's background prior art that

[00:28:55] Speaker 02:
has some serious disadvantages that they now want to improve upon with the newly disclosed environment.

[00:29:01] Speaker 02:
Well, I would submit, first of all, that- What's an alternative reading to that choice that was made in filing the 707?

[00:29:08] Speaker 01:
The alternative reading is, frankly, so that everyone can understand what the incorporation by reference sets forth, because it's so frequent with the case that people don't understand it.

[00:29:16] Speaker 02:
No, my question is, why didn't you just leave the 280 application content as is and then add on new material and new figures

[00:29:25] Speaker 02:
that would support the rigid eyelet in the 707?

[00:29:28] Speaker 01:
Because there didn't need to be, since those were all part of the incorporated material.

[00:29:32] Speaker 01:
But I would also submit very quickly that simply because it's in the background as this court is held, and as we step forth in a brief, you can still rely on that content for 112 support.

[00:29:42] Speaker 01:
And simply because of location, it should not change the question.

[00:29:45] Speaker 01:
But putting all this aside, how does any of this relate to the question of whether there's support for an eyelet that threads?

[00:29:51] Speaker 01:
Perhaps if we had claimed an eyelet

[00:29:53] Speaker 01:
that slides freely, we would be out of luck.

[00:29:56] Speaker 01:
But we did not do that.

[00:29:57] Speaker 01:
What we claimed was a common subject matter.

[00:30:00] Speaker 01:
And for that reason, the board never got to that question of whether or not that support could be provided by the written description support.

[00:30:07] Speaker 01:
And it was wrong for the board not to consider that, in the first instance, as Pace and Harari teach, putting aside the question that they never got to the question of whether there was common function and structure under Amgen and Henry's life.

[00:30:21] Speaker 02:
What if the 707 application said,

[00:30:23] Speaker 02:
We invented the 280 contents, but it's terrible.

[00:30:28] Speaker 02:
Don't use it.

[00:30:31] Speaker 02:
Use our new embodiment that we're disclosing here in the 707, because now you can have a suture that freely slides, and now you get a lot of advantages with that over our 280, which is no good.

[00:30:45] Speaker 02:
Would you say under those circumstances that we would find that there's written description for both?

[00:30:53] Speaker 02:
the flexible loop embodiment and the rigid eyelet embodiment.

[00:30:58] Speaker 01:
I would say that there is that instance in support in here because you have the broad incorporation.

[00:31:02] Speaker 01:
I would say that there is support here for the broad incorporation.

[00:31:05] Speaker 02:
So a person of ordinary skill in the art would think that the inventors of the 707 would think yes, they

[00:31:12] Speaker 02:
have possession and are communicating that their invention that they want in the 707 is both the 280 and the 707 and the rigid eyelet.

[00:31:21] Speaker 01:
And that's precisely why there's a broad incorporation at the very top that I would read that broad incorporation and all the advantages and benefits that twist.

[00:31:31] Speaker 06:
Katrina?

[00:31:32] Speaker 00:
Yes, I was going to ask you, it seems to me that the Tronsol case is directly on point here and does not favor your position.

[00:31:41] Speaker 00:
Explain to me why you would disagree with that.

[00:31:44] Speaker 01:
primarily for the two reasons, which is the incorporation of transa was very narrow.

[00:31:50] Speaker 01:
But putting aside the question of whether there was a narrow incorporation, which the case law has been cited at this point, the fact of the matter is there was no specific issue of a genus or species that was supported by the genus, which is in contrast to here.

[00:32:04] Speaker 01:
So all the cases that they cite do not stand for the notion that where there is expressed disclosure of a supportive species, that that should be negated.

[00:32:14] Speaker 01:
by disparaging critical or even differentiating remarks.

[00:32:18] Speaker 01:
If every CIP, we could look at every CIP in the world and somehow say the original idea was inferior to the improvement.

[00:32:25] Speaker 01:
But PACE teaches us that we take these applications together, that the original concept isn't necessarily discarded, especially when the inventor claims priority to that and continues to sacrifice patent term.

[00:32:38] Speaker 01:
to preserve that original idea.

[00:32:41] Speaker 01:
And the original idea was an outless suture anchor.

[00:32:45] Speaker 01:
And although it might work better to have that suture slide more freely, it was not what we claimed.

[00:32:51] Speaker 01:
And for that reason, I submit the board should have that question, should look at that question, rather than for us to decide these facts, which the board has not even looked at.

[00:33:00] Speaker 01:
which they acknowledge.

[00:33:01] Speaker 01:
And each 112 and written description case must be decided on its own facts, as this Court has held.

[00:33:08] Speaker 01:
And for that reason, I believe that this case must go back to the Patent Office.

[00:33:12] Speaker 01:
Thank you, Ron.

[00:33:12] Speaker 01:
I reserve any time, if any, for rebuttal.

[00:33:16] Speaker 07:
Yes, we don't have any.

[00:33:17] Speaker 07:
Mr. Salzman?

[00:33:19] Speaker 04:
Thank you, Your Honor.

[00:33:20] Speaker 04:
May it please the court, Joshua Salzman for the United States.

[00:33:24] Speaker 04:
Unless the court wants me to begin elsewhere, I'll follow Mr. Kreis' lead and start with the statutory argument.

[00:33:29] Speaker 02:
Could you just tell us, what is Mr. Hirschfeld's current title?

[00:33:33] Speaker 04:
He is performing the functions and duties of the director.

[00:33:37] Speaker 04:
The office to which he is appointed is Commissioner for Patents.

[00:33:40] Speaker 04:
But he is pursuant to it.

[00:33:42] Speaker 02:
It would be wrong to call him Commissioner Hirschfeld, right?

[00:33:45] Speaker 02:
Today, it would be wrong to call him Commissioner.

[00:33:48] Speaker 04:
I don't believe that is the title he is currently using.

[00:33:50] Speaker 04:
It would also be wrong to call him Director Hirschfeld.

[00:33:53] Speaker 04:
It would be wrong to call him Director Hirschfeld.

[00:33:55] Speaker 02:
Would it be wrong to call him Acting Director Hirschfeld?

[00:33:57] Speaker 02:
Yes, it would.

[00:33:58] Speaker 02:
So, what do I call him?

[00:34:01] Speaker 00:
Well, wait a minute.

[00:34:02] Speaker 00:
He's occupying both positions right now, right?

[00:34:04] Speaker 00:
He's Commissioner.

[00:34:06] Speaker 04:
I believe he still occupies the office of commissioner.

[00:34:12] Speaker 04:
He is performing the functions and duties, or I should stress this, the delegable functions and duties of the director.

[00:34:20] Speaker 00:
Can the president fire him at will?

[00:34:21] Speaker 04:
So the president can remove him from those functions by invoking the Federal Vacancies Reform Act.

[00:34:27] Speaker 04:
I believe Judge Chen had a colloquy earlier during Mr. Cry's argument explaining how that would work.

[00:34:33] Speaker 04:
He can't remove him from federal service altogether except

[00:34:37] Speaker 04:
pursuant to the protections that apply to under 5 USC section 3 governing the removal of the commissioner for patents.

[00:34:47] Speaker 04:
So that would be for misconduct or failure to perform under a performance improvement plan.

[00:34:52] Speaker 04:
But at any time, if President Biden is dissatisfied, from January 2021 up through the present day, if at any point the president had been dissatisfied with the way Commissioner Hirschfeld was exercising the functions and duties assigned to him,

[00:35:13] Speaker 04:
or wanted somebody else in the position, he would have had the ability to invoke the Federal Vacancies Reform Act and put in place anyone else who has Senate confirmation or anybody who meets the requirements of a jury.

[00:35:25] Speaker 07:
It can't be the case that the Appointments Clause is satisfied and the FVRA is satisfied because President Biden could act but didn't.

[00:35:37] Speaker 07:
Those are affirmative obligations.

[00:35:40] Speaker 07:
The fact that he could act to rectify something doesn't mean that what's happening now is legitimate.

[00:35:46] Speaker 04:
I completely agree with that, Your Honor.

[00:35:48] Speaker 07:
So why don't you focus on why what has happened now is in fact legitimate.

[00:35:52] Speaker 07:
It does not cause a conflict with either the Appointments Clause or isn't

[00:35:57] Speaker 07:
I guess, under your argument, the FVRA doesn't even apply here because are there any non-delegatable duties that the director executes?

[00:36:06] Speaker 04:
Not as far as I'm aware for the director of the family and trademark office.

[00:36:10] Speaker 07:
So in your view, there are no non-delegatable duties of the director.

[00:36:14] Speaker 07:
And therefore, the obligations, the duties and functions of the director can be completely delegated to a non-principal officer.

[00:36:25] Speaker 04:
That's correct.

[00:36:26] Speaker 04:
There may be constitutional constraints at some point under Eaton or one of those precedents.

[00:36:32] Speaker 04:
But certainly, everything that has happened to date conforms to both the Appointments Clause and all statutory restrictions.

[00:36:40] Speaker 04:
And I'm happy.

[00:36:41] Speaker 04:
I'll begin with the statute first, given that's where most of the argument was earlier.

[00:36:46] Speaker 00:
So the commissioner has the authority to issue patents as acting director.

[00:36:53] Speaker 04:
All of the patents that have been signed by Mr. Hirschfeld over the last 14 months are valid, because that is a delegable function.

[00:37:00] Speaker 04:
It was delegated to him, and he duly exercised that function, and legitimately exercised that function.

[00:37:06] Speaker 04:
That conformed with the Appointments Clause, and it also conformed with any applicable statute.

[00:37:11] Speaker 00:
Walking through the statutory... Are there any functions or duties that a director at the PTO has that, in your view, are not delegable?

[00:37:19] Speaker 04:
No, I don't believe there are any.

[00:37:20] Speaker 04:
But that doesn't mean there are other agencies, there are other circumstances where Congress has expressly said a certain officer and only that officer can exercise that duty or function.

[00:37:32] Speaker 04:
But that hasn't happened specifically with regards to the director of the PTM.

[00:37:36] Speaker 07:
Would you agree that there are very, very, there's, OK, so your view is there are zero duties and functions performed by the director which are not delegatable?

[00:37:47] Speaker 04:
That's correct.

[00:37:48] Speaker 07:
Would you agree that in general, with regard to heads of agencies, it's a very small subset of duties that are, in fact, would satisfy the government's view of what things are non-delegatable?

[00:38:02] Speaker 04:
Yes, it's a small subset, but it is an existing subset.

[00:38:05] Speaker 04:
I can give the court examples if the court wants an idea of what we see as being covered by it.

[00:38:11] Speaker 07:
Paul, the DC Circuit case had two examples.

[00:38:13] Speaker 07:
The one in Wilkins, right?

[00:38:15] Speaker 04:
Yeah.

[00:38:16] Speaker 04:
Stand up for California.

[00:38:18] Speaker 07:
Stand up for California.

[00:38:21] Speaker 07:
Yeah.

[00:38:22] Speaker 07:
What I'm struggling with is the notion that Congress adopted the FVRA

[00:38:27] Speaker 07:
and intended in its adoption for it to apply in that excruciatingly narrow set of circumstances that you just articulated, and not at all to apply to the USPTO.

[00:38:39] Speaker 07:
That's your view, right?

[00:38:40] Speaker 07:
Your view is the FVRA doesn't apply to the PTO because it only applies to constrain non-delegatable duties, and there are none at the PTO.

[00:38:51] Speaker 04:
Well, I think you can conceptualize.

[00:38:54] Speaker 07:
Is it your view that the FBI does not apply to the PTO?

[00:38:57] Speaker 04:
It certainly applies to the PTO in an affirmative sense.

[00:39:00] Speaker 04:
It provides President Biden with a mechanism for installing an acting official of his choice.

[00:39:06] Speaker 04:
If you're reading it, when you ask the question, whether you're saying whether the FBI imposes constraints

[00:39:12] Speaker 04:
as opposed to an affirmative grant of authority to President Biden, as it pertains to the Patent and Trademark Office, I'd say no.

[00:39:19] Speaker 04:
And I attribute that to the language Congress chose in Section 3348.

[00:39:23] Speaker 07:
Under your view of the FVRA, not only does it not, it does not provide any constraints.

[00:39:32] Speaker 07:
You say it provides a mechanism.

[00:39:34] Speaker 07:
But your view is it's not the exclusive mechanism.

[00:39:36] Speaker 07:
And President Biden need not even concern himself.

[00:39:39] Speaker 07:
The PTO can, of its own accord,

[00:39:42] Speaker 07:
appoint successors to act as principal officers.

[00:39:46] Speaker 07:
Is that not your view?

[00:39:48] Speaker 04:
Unless and until Congress passes a statute, which it certainly could, that vested some duty or function in the director and only the director.

[00:39:56] Speaker 04:
And then that would be exempt from any possible delegation.

[00:40:00] Speaker 07:
But why do you think the Supreme Court in the Arthrex decision said director or acting director?

[00:40:06] Speaker 07:
Why do you think it's so narrowly tailored?

[00:40:09] Speaker 07:
It was not oblivious to the idea that there could be a vacancy in the position of the director.

[00:40:15] Speaker 07:
Why else would it use the words acting director?

[00:40:17] Speaker 07:
But it did.

[00:40:18] Speaker 07:
It expressly said an acting director would be authorized to do this.

[00:40:23] Speaker 07:
I think, trying to obviate a potential future challenge, so they were cognizant of the idea and they let us know that this function would not be restricted to the director.

[00:40:36] Speaker 07:
they included an acting director, even though there was no acting director at the time, correct?

[00:40:40] Speaker 04:
There was no.

[00:40:41] Speaker 07:
Right.

[00:40:42] Speaker 07:
So the Supreme Court went out of its way to tell us either a director or an acting director, even though there wasn't one at the time, so it wasn't like they just defaulted to the position that was in existence, would satisfy the Appointments Clause concerns.

[00:40:57] Speaker 07:
What do you think that tells us about whether somebody, I don't know, why don't you just make this guy acting director?

[00:41:05] Speaker 04:
So I think that's a fair question, Your Honor.

[00:41:07] Speaker 04:
How far would it be?

[00:41:08] Speaker 04:
So, well, I think it's important to remember.

[00:41:10] Speaker 04:
What would it entail?

[00:41:11] Speaker 04:
What it would entail is the president signing a piece of paper saying that if he wanted to invoke his authority under 345 to name Andrew Hirschfeld the acting director.

[00:41:24] Speaker 04:
But I think it's important to remember.

[00:41:25] Speaker 07:
So it's just the president signing a piece of paper.

[00:41:27] Speaker 07:
That's it.

[00:41:28] Speaker 04:
That is, but it's important to remember that when you have a presidential transition, you have huge turnover in more than 1,000 offices across the government that require Senate confirmation.

[00:41:39] Speaker 04:
Now, in order to ensure continuity of government, to ensure that operations don't grind to a halt in the months following.

[00:41:47] Speaker 07:
So you think that when the Supreme Court went out of its way to say, not just would a director satisfy the Appointments Clause, but an acting director would also,

[00:41:56] Speaker 07:
even though we all agree there was no acting director at the time, you think that I should give no import to the notion that that's not meant to be a constraint, in your view.

[00:42:07] Speaker 07:
The Supreme Court was not signaling to the world that a director or an acting director would be able to do this, consistent with the FVRA, for example.

[00:42:16] Speaker 07:
You don't think I should interpret their opinion as authorizing only those sorts of people.

[00:42:23] Speaker 07:
You think it was just a throwaway.

[00:42:25] Speaker 04:
No, I'm not asking the court to treat it as a throwaway.

[00:42:29] Speaker 04:
I think when the court said we ran remand to the acting director to consider whether to review the decision here, I think the court was certainly saying an acting director could perform this function, which I think is devastating to their constitutional argument.

[00:42:44] Speaker 04:
But I don't think you can read a negative inference into that, saying that somebody who has been duly delegated the functions and duties of that position can't perform that.

[00:42:53] Speaker 07:
I guess, but that's the whole problem.

[00:42:55] Speaker 07:
Were they duly delegated to functions and duties when they were not selected by the president or confirmed by Congress, the Supreme Court made it clear the confirmed by Congress part's not necessary when they included the language acting director.

[00:43:08] Speaker 07:
So I agree with you.

[00:43:09] Speaker 07:
It dooms their constitutional argument.

[00:43:10] Speaker 07:
I'm already there.

[00:43:12] Speaker 07:
Because their constitutional argument, as I interpret it, would conflict with the Supreme Court's

[00:43:17] Speaker 07:
affirmative statement that an acting director could do it, and it would also make the federal vacancy reform act unconstitutional.

[00:43:22] Speaker 07:
I'm there.

[00:43:23] Speaker 07:
So my problem, though, for me is I don't know what to make of the idea that your view of the FVRA is it's got a minuscule application in the world.

[00:43:34] Speaker 07:
It is virtually inapplicable to the world as we know it.

[00:43:38] Speaker 07:
And not at all applicable to the PTO.

[00:43:40] Speaker 04:
So I think Congress was balancing concerns when it enacted the FVRA.

[00:43:44] Speaker 04:
It certainly wanted to impose some constraints and also to create a framework through which it could create more constraints in the future by specifically investing authorities in the president.

[00:43:55] Speaker 04:
But it's also an atom bomb.

[00:43:56] Speaker 04:
to say that a government agency has to stop operating.

[00:44:00] Speaker 04:
And I think Congress wanted to ensure continuity of government as well.

[00:44:04] Speaker 04:
So it struck a balance in 3348.

[00:44:06] Speaker 07:
I don't think anybody in this case is suggesting that an agency has to stop operating.

[00:44:11] Speaker 07:
I think what the suggestion is is that there are certain duties and functions which

[00:44:18] Speaker 07:
are required to be performed by a principal officer or, in the absence of a principal officer, somebody authorized by Congress and by the president to perform those duties, which is exactly what would be satisfied by an FVRA-type appointment.

[00:44:37] Speaker 04:
So I think the question then is whether you're talking about all the duties and functions or whether there's something special about this duty or function.

[00:44:45] Speaker 04:
I'd like to take those in turn.

[00:44:46] Speaker 04:
In general, the way statutes are normally structured, including at PTO, but across the executive branch, is that most of the authority is vested in an agency head.

[00:44:56] Speaker 04:
And then all of the operations of the agency occur through an exercise of delegated authority.

[00:45:01] Speaker 04:
And many agencies have statutes, including PTO has two statutory provisions that we've cited that provide for the delegation of authority.

[00:45:10] Speaker 04:
If you believe that only a Senate confirmed principal officer or somebody who is serving under the FDRA can be in place for the delegation to be effective, then that would basically mean in the wake of every presidential transition,

[00:45:26] Speaker 07:
Agencies would need to stop operating for weeks or months until such time number two No under the FVRA the number two person in the agency in this case not a political appointee Not somebody who needed to necessarily tender their resignation not somebody Senate confirmed

[00:45:42] Speaker 07:
would have just stepped into the role.

[00:45:43] Speaker 07:
And every agency has people in positions.

[00:45:48] Speaker 04:
It will often be the case that the first assistant, unfortunately, will also either be a political appointee or will be somebody who will leave in times of transition.

[00:45:56] Speaker 04:
The FBRA is designed to provide continuity of government.

[00:45:59] Speaker 04:
And A1, the first assistant provision of Section 3345, reflects that because it works by operation of law.

[00:46:07] Speaker 02:
But the problem is- So if the other side is correct, if our threat is correct, then what

[00:46:13] Speaker 02:
is President Biden on January 20th, 2021, signing some sheet with a list of, I don't know, a thousand names.

[00:46:26] Speaker 02:
authorizing a whole bunch of different people and a lot of different agencies and departments to serve as the acting principal officer to carry out all the functions and duties throughout the executive branch.

[00:46:39] Speaker 02:
Is that right?

[00:46:40] Speaker 04:
I think you would have to identify all of the individuals who you would want to serve.

[00:46:45] Speaker 04:
And then the president would, as you say, have to invoke his authority under 8283.

[00:46:50] Speaker 02:
Otherwise, the work of the PTO would have to stop.

[00:46:55] Speaker 02:
Because as I understand the statute, somebody has to occupy the director position at all times in some way or function.

[00:47:03] Speaker 02:
Because it's that office of the director that is the one that's authorized to delegate everything that happens in the PTO.

[00:47:14] Speaker 02:
And so if there's nobody occupying the director position, then there's no authority to have the patent examiners do their work or the trademark examining attorneys to do their work.

[00:47:25] Speaker 04:
Is that right or wrong?

[00:47:27] Speaker 04:
I actually don't quite agree with that, Your Honor.

[00:47:30] Speaker 04:
I think it is important, just as an administrative matter, that somebody be performing those functions and duties.

[00:47:37] Speaker 04:
I don't think somebody needs to occupy the office.

[00:47:39] Speaker 04:
One of the questions this court asked in its court order for Monday.

[00:47:43] Speaker 04:
Let me ask you this.

[00:47:44] Speaker 00:
I'm looking at the delegation paper, as you call it, signed by Teresa Stanak-Rayer, dated 11-15, 2013.

[00:47:54] Speaker 00:
And then she says, I hereby delegate the non-exclusive functions and duties of the undersecretary and goes on and uses the term non-exclusive functions again.

[00:48:04] Speaker 00:
What's an example of that non-exclusive function that she's talking about?

[00:48:10] Speaker 04:
I think exclusive here is synonymous with delegable.

[00:48:13] Speaker 04:
And as I explained earlier, as of this time, we don't think Congress has created any.

[00:48:20] Speaker 00:
Excuse me.

[00:48:20] Speaker 00:
What does non-exclusive mean?

[00:48:22] Speaker 00:
non-exclusive functions.

[00:48:24] Speaker 04:
That means delegable.

[00:48:26] Speaker 04:
It means something that can be performed by somebody other than the occupant of the office.

[00:48:31] Speaker 00:
Apparently some functions can be delegable and some cannot.

[00:48:36] Speaker 04:
I think as it happens, as the law stands currently, all of the offices, all of the duties and functions of the PTO director are delegable.

[00:48:46] Speaker 00:
This order contemplates that Congress should... Why isn't this decree or statement of delegation authority, it must be in firm?

[00:48:55] Speaker 00:
Because apparently it says, I hereby delegate the non-exclusive functions and you say that there are none.

[00:49:02] Speaker 04:
No, I'm saying all of them are non-exclusive.

[00:49:04] Speaker 04:
I'm sorry if I misspoke, Your Honor.

[00:49:06] Speaker 04:
I'm saying all non-exclusive means delegable.

[00:49:10] Speaker 04:
And I'm saying that all of the duties and functions of the office are delegable.

[00:49:13] Speaker 04:
The order contemplates that Congress could create, Congress could pass a statute that says the director and only the director may review decisions of the patent trial and appeal board.

[00:49:24] Speaker 04:
And if that had happened,

[00:49:25] Speaker 04:
then pursuant to Section 33-48, that would be something that wouldn't be a non-exclusive function.

[00:49:33] Speaker 04:
It would be an exclusive function.

[00:49:35] Speaker 04:
And because it wouldn't be delegable, then that would need to not be performed by somebody who is operating under a delegation.

[00:49:43] Speaker 04:
But that's not the case here.

[00:49:44] Speaker 04:
I would, if I may, like to return to Judge Chen's question from a moment ago, though.

[00:49:48] Speaker 07:
Before you do, let me ask you this.

[00:49:50] Speaker 07:
Your view is that this very function

[00:49:55] Speaker 07:
reviewing board decisions, which in this case caused this whole case to go to the Supreme Court and the Supreme Court to agree, no, the director has to do this.

[00:50:05] Speaker 07:
What did the Supreme Court conclude?

[00:50:08] Speaker 04:
I'm glad you asked, Your Honor.

[00:50:09] Speaker 04:
So what the Supreme Court said was the restraint on director review was unconstitutional.

[00:50:15] Speaker 04:
And therefore, and I'm going to quote from page 1987 of the Supreme Court's decision,

[00:50:23] Speaker 04:
What you need to have is a means of reviewing so that you can adopt the almost universal model of adjudication in the executive branch.

[00:50:32] Speaker 04:
Now, what is the almost universal model of adjudication in the executive branch?

[00:50:36] Speaker 04:
That often includes delegation of final decision-making authority from the agency head.

[00:50:41] Speaker 04:
The attorney general doesn't issue the final decision in most immigration cases.

[00:50:45] Speaker 04:
The commissioner of social security does not decide most benefits.

[00:50:49] Speaker 04:
There's a delegation to an entity called the appeals council.

[00:50:52] Speaker 07:
So is it your view then, as I understand it, just so that we're clear, that this Arthrex decision does not stand for the proposition that the director has to review.

[00:51:05] Speaker 07:
It's just that he has to have an adequate opportunity to review, correct?

[00:51:11] Speaker 07:
So far you and I are in agreement.

[00:51:12] Speaker 04:
I certainly agree with that.

[00:51:14] Speaker 07:
Now, could he delegate full throttle to the board?

[00:51:20] Speaker 07:
Allah put us back in the situation we were in pre-Arthrex.

[00:51:25] Speaker 07:
Could the director comply with the appointments clause but nonetheless say I hereby delegate review authority to the board such that exactly what was happening before this whole mess of a case came along

[00:51:40] Speaker 07:
is put back into place in practice even though the director could theoretically withdraw that delegation at some point if he or she so chose.

[00:51:49] Speaker 07:
But is it your view that since this is a delegatable power the director does not have to delegate it to an individual but could in fact delegate it right back to the board?

[00:51:58] Speaker 04:
Yes, and I don't think that your question assumed that it would put us back in the exact same situation we were in before, and that's where I take issue.

[00:52:07] Speaker 04:
Because what the Supreme Court said was so offensive about the original scheme was the restraint on review because it blurred accountability.

[00:52:16] Speaker 04:
Once the director has the power and has made that delegation, the director is then accountable for it.

[00:52:22] Speaker 04:
And the mere act of invalidating Section 6C insofar as it precluded director review is a fundamental change because it restores accountability to the director.

[00:52:34] Speaker 04:
So once that's removed, then the director can delegate, just as the commissioner of social security has delegated her final decision-making authority to the appeals council, just as the attorney general has delegated to the Board of Immigration Appeals decision-making authority in immigration cases,

[00:52:52] Speaker 04:
And on and on, across the executive branch, I think another example we cite in our brief is the judicial officer at the U.S.

[00:52:58] Speaker 04:
Department of Agriculture has been delegated that authority.

[00:53:01] Speaker 02:
But in all cases... Even here in the PTO, when it comes to IPRs, the director has delegated his or her authority to institute an IPR to the patent board.

[00:53:12] Speaker 04:
Yes, it has, and this court upheld that necroton.

[00:53:17] Speaker 02:
Can you get back to my question?

[00:53:18] Speaker 04:
I'd like to.

[00:53:19] Speaker 04:
Yes, thank you, Your Honor.

[00:53:20] Speaker 04:
So you asked a question, and I think this goes to the fourth question that this court posed in its order from Monday about what happens to a delegation when the person who made the delegation leaves office.

[00:53:33] Speaker 04:
And we haven't had a chance to brief this, but I have done some research.

[00:53:37] Speaker 04:
I have some citations I can read to the court from other circuits, not from this one.

[00:53:42] Speaker 04:
But that basically stands for the proposition that a delegation of authority survives the resignation of the person who issued the delegation.

[00:53:50] Speaker 04:
So that's from a Seventh Circuit case called Champaign County versus US law enforcement assistant administration.

[00:53:57] Speaker 04:
That's 611F21200.

[00:54:00] Speaker 04:
There's a Fourth Circuit case called United States versus wider 674F2224.

[00:54:05] Speaker 04:
And I have more of these.

[00:54:09] Speaker 02:
The fundamental idea is- Yeah, what's the principle behind why that is so?

[00:54:14] Speaker 04:
So the principle is that when the government takes an act, including by, for example, enacting a regulation or issuing a legally binding order, that takes effect even after the authority of the person who issued the order has

[00:54:33] Speaker 04:
expired even after that person leaves office.

[00:54:37] Speaker 04:
And I think that the consequences of contrary rule would really be shocking because it would mean, as we were talking about earlier, government operates, the executive branch operates on delegated authority.

[00:54:50] Speaker 04:
And that means if it were true that a delegation stopped being effective, it would mean that if the director

[00:54:58] Speaker 04:
leaves office or if an agency head leaves office.

[00:55:02] Speaker 04:
Everything that agency does or almost everything the agency does would slip into paralysis.

[00:55:07] Speaker 04:
There would be nothing the agency could do until the office was filled.

[00:55:11] Speaker 04:
And as we know and as the Supreme Court recognized in Southwest General, the process of

[00:55:17] Speaker 04:
going through a presidential nomination and Senate confirmation can be quite time consuming.

[00:55:24] Speaker 02:
So what we have.

[00:55:24] Speaker 02:
But I'm just trying to understand what the other side is trying to argue and what the consequences of that are.

[00:55:30] Speaker 02:
And what the other side is trying to argue is that for the PTO to have been able to remain in operation on January 20, 2021, then President, you know, new President Biden needed to sign a piece of paper authorizing

[00:55:47] Speaker 02:
Andrew Hirschfeld to be acting director.

[00:55:50] Speaker 02:
That's my understanding of their position.

[00:55:52] Speaker 04:
I think they do make that argument.

[00:55:54] Speaker 02:
And then because that did not happen, not only was Mr. Hirschfeld without the authority to review the adverse patent board decision they got, but I think just about under their view, everything that has happened in the PTO under the past year has been invalid.

[00:56:14] Speaker 04:
I think that's right.

[00:56:15] Speaker 04:
I think they make two arguments.

[00:56:17] Speaker 04:
The implication of one would be devastating to everything that the Patent Office has made over the last 14 months.

[00:56:23] Speaker 02:
Wouldn't you agree that if we adopt their position that the 350,000 patents that have been granted over the past 14, 15 months are

[00:56:36] Speaker 02:
invalid or at least dubious.

[00:56:39] Speaker 04:
I think I'm loathe to say that because we'd have to look at what you say and potentially try to distinguish it.

[00:56:46] Speaker 04:
I think there's one way you could rule for them without having that consequence.

[00:56:50] Speaker 04:
And the one way you could do that is to say that there is something about this specific duty or function that made it nondelegable.

[00:57:00] Speaker 04:
Now, I don't agree with that argument, but I heard Mr. Pride argue.

[00:57:05] Speaker 04:
I heard Mr. Pryde argue that if you read Section 3, which is the source of the director's authority, and as an overlay, look at Section 6C as modified by the Supreme Court, there is something special about this duty or function that makes it non-delegable.

[00:57:21] Speaker 04:
Now, if you said that,

[00:57:22] Speaker 04:
it would at least cabin the fallout of the implication to just the failure to provide direct review.

[00:57:28] Speaker 04:
It wouldn't suggest that everything that has happened under Mr. Hirschfeld's watch is invalid.

[00:57:33] Speaker 04:
But unless you said that, I do think the consequences of their argument are really quite striking.

[00:57:40] Speaker 04:
There's one point on the statute that I really want to make sure I get out before I sit down, because I see my time is dwindling.

[00:57:51] Speaker 04:
their argument about why I mean I'm significantly over time but I would ask the court's indulgence for one more moment.

[00:57:59] Speaker 04:
Thank you your honor.

[00:58:02] Speaker 04:
Their argument about exclusive about why our FBRA position has to be wrong

[00:58:08] Speaker 04:
hinges not on 3348, which defines function and duty narrowly.

[00:58:13] Speaker 08:
It's 3347B.

[00:58:14] Speaker 04:
So there's two things wrong with their 3347B argument.

[00:58:18] Speaker 04:
The first is it's a technical point, but the statute says that any statutory provision providing general authority to the head of an executive agency

[00:58:30] Speaker 04:
to delegate duties statutorily vested in the agency head doesn't qualify.

[00:58:36] Speaker 04:
As it happens, the director of PTO is not the head of an executive agency.

[00:58:41] Speaker 04:
That is a statutorily defined term.

[00:58:43] Speaker 04:
The definition is found in 5 U.S.C.

[00:58:46] Speaker 04:
105.

[00:58:46] Speaker 04:
As it pertains here, the relevant head of an executive agency would be the secretary of commerce, not the director of the PTO.

[00:58:55] Speaker 04:
So a statute that vests authority in the director of PTO, who is not the head of an executive agency, falls outside the scope of 3347B.

[00:59:04] Speaker 02:
You still have 3347A to contend with.

[00:59:09] Speaker 02:
I do, Your Honor.

[00:59:11] Speaker 02:
That's right.

[00:59:18] Speaker 04:
I think the key language there then becomes acting official.

[00:59:22] Speaker 04:
An acting official, we would say, is somebody who is serving in that capacity and therefore authorized even to perform

[00:59:28] Speaker 04:
the non-delegable duties.

[00:59:30] Speaker 04:
When somebody comes in under the FDRA, they can perform if there are any.

[00:59:35] Speaker 04:
And obviously, we're saying that the two collapse here because there are no.

[00:59:40] Speaker 02:
My understanding of your argument is when it says functions and duties in 3347, we should understand that phrase as it is defined in 3348.

[00:59:53] Speaker 02:
Function or duty is that fair to say or that's not quite that that's not quite accurate 3348 it leads with the phrase in this section Yes, so that makes this definition of function or duty in 3348 section centric

[01:00:09] Speaker 04:
I agree with that.

[01:00:10] Speaker 02:
So what do we do now with 3347?

[01:00:13] Speaker 04:
So I think the key to understanding 3347A is the phrase acting official.

[01:00:18] Speaker 04:
And we've tried to be very clear here in saying that Andrew Hirschfeld is not the acting director of the PTO.

[01:00:25] Speaker 04:
He would not be able to perform any non-delegable duty should Congress have created one.

[01:00:31] Speaker 04:
And that's the key distinction.

[01:00:34] Speaker 04:
But Delegate?

[01:00:36] Speaker 02:
Are you saying if 3348 did not exist,

[01:00:40] Speaker 02:
and it was just 3345 to 47, you could still prevail?

[01:00:45] Speaker 04:
Absolutely, Your Honor.

[01:00:46] Speaker 02:
Because of how we should understand the

[01:00:49] Speaker 02:
term acting official?

[01:00:51] Speaker 04:
Yes, because we're construing this against a backdrop.

[01:00:55] Speaker 04:
And this is reflected at page 18 of the Senate, to the extent the court cares to look at legislative history.

[01:01:01] Speaker 04:
But in page 18 of the Senate report that accompanied the bill that became the FVRA, Congress expressly recognized that nothing in the FVRA was going to prevent deletion.

[01:01:13] Speaker 07:
Congress did or the Senate did?

[01:01:14] Speaker 07:
I'm just hoping you'll be a little more precise.

[01:01:16] Speaker 04:
uh... that that that only people participating in the senate or actually not even that absolutely correct so few senators concluded go ahead please continue with your point yes uh... so that it's reflected in the senate report uh... that delegations of authority could still happen when the office of legal counsel issued its first analysis of what the impact of the federal vacancies reform act had been in the immediate wake of that statute it said it recognized that uh...

[01:01:47] Speaker 04:
Delegable duties could still be performed even in the absence of an acting official.

[01:01:52] Speaker 04:
And likewise, the Government Accountability Office, which is statutorily charged by Congress under the FVRA with monitoring FVRA compliance, likewise has understood, as we note in our brief, that delegable duties can still be performed.

[01:02:07] Speaker 04:
Because as we were discussing earlier, were it otherwise, the entire agency would need to shut down.

[01:02:14] Speaker 02:
How consistent is this practice inside the PTO with every other agency?

[01:02:21] Speaker 02:
Is this the way it works everywhere inside the executive branch?

[01:02:25] Speaker 02:
All these little administrative orders saying, OK, if this person and that person is gone, then we're going to make this person

[01:02:33] Speaker 02:
inside the agency.

[01:02:34] Speaker 07:
We're going to make Joe the person who performs the duties.

[01:02:37] Speaker 02:
A guy named Joe performed the functions and duties of the office.

[01:02:40] Speaker 07:
We're not positive on his last name, but he's going to be the one.

[01:02:42] Speaker 04:
Well, I think we don't say Joe, but in terms of, is this something that was PTO specific?

[01:02:47] Speaker 04:
The answer is no.

[01:02:48] Speaker 04:
I can't tell you it's universal across the branch, but I think it's laudable that in order to ensure continuity of government, agencies put contingency plans in place.

[01:02:56] Speaker 04:
And they say, if the head of the department leaves and the first assistant isn't there to step in, we want to make sure that the business of the agency can go forward to the extent practicable.

[01:03:08] Speaker 04:
And so you put in an order that says, here is, it puts a succession plan.

[01:03:13] Speaker 04:
It ties it not normally to an individual, but to an office.

[01:03:16] Speaker 04:
And you say, essentially, if the first assistant isn't there, who should be next in line to just sort of

[01:03:24] Speaker 04:
be the caretaker, to oversee the ship, to keep things moving until a new officer can be put in place.

[01:03:30] Speaker 04:
So this is not a PTO-specific thing.

[01:03:33] Speaker 04:
We cited a law review article by Professor O'Connell called Actings, which describes how this practice has been adopted.

[01:03:41] Speaker 07:
But you do agree that cases like Eaton and others put some constraints on an agency's ability.

[01:03:48] Speaker 07:
Those constraints seem a bit amorphous to me.

[01:03:51] Speaker 07:
And you certainly didn't want to nail them all down nice and neat for me in this case, because your view is whatever those constraints are, they just don't affect this case.

[01:04:00] Speaker 07:
But you agree there do exist some constraints that flow from Eaton on an agency's ability to do this.

[01:04:08] Speaker 04:
So I think there are constraints that both can flow from statute in circumstances where Congress chooses to make a function or duty exclusive.

[01:04:16] Speaker 04:
And likewise, I think we recognize that the service can't be indefinite.

[01:04:22] Speaker 02:
So what's the takeaway principle of how to conform with the Appointments Clause in these sort of transitional periods?

[01:04:30] Speaker 04:
So Eaton provides a mechanism that says you don't need, as they contend though, I didn't hear them to repeat that.

[01:04:38] Speaker 02:
I understand your position of what Eaton doesn't require.

[01:04:43] Speaker 02:
But what is the affirmative principle for what needs to happen?

[01:04:47] Speaker 04:
I think the affirmative principle is that somebody can occupy an office on an acting basis temporarily, and that whatever the outer perimeter of that is, the time that was in place here falls well within.

[01:05:02] Speaker 04:
This was an order that was issued in October, nine months into the tenure.

[01:05:05] Speaker 07:
But the person can just be selected by any mechanism the agency deems appropriate?

[01:05:11] Speaker 07:
That's the problem.

[01:05:12] Speaker 07:
For me right as Congress went to a lot of careful thought intention to come up with You know who is the first runner-up and the second runner-up in the beauty pageant kind of thing So you're saying no none of that matters unless it's a non-delegatable duty Yes, it could be done that way, but it doesn't have to be the agency can sort of

[01:05:34] Speaker 07:
come up with its own mechanism.

[01:05:36] Speaker 07:
You claimed it's laudable for it to do so.

[01:05:39] Speaker 07:
But any mechanism at all by which it appoints somebody who can sit in the seat, but we won't call him acting, because that would be bad.

[01:05:47] Speaker 07:
That would make him an acting official.

[01:05:48] Speaker 07:
And we can't have that.

[01:05:49] Speaker 07:
So he's just sitting in the seat and performing the duties and functions of, a title I had never heard prior to this.

[01:05:54] Speaker 07:
That's the thing that is OK, that every agency can just kind of wing it.

[01:06:00] Speaker 07:
For who runs the agency?

[01:06:02] Speaker 04:
Well, I take issue, I think, with the winging it.

[01:06:05] Speaker 04:
I understand where you're coming from.

[01:06:07] Speaker 04:
Well, this one feels like winging it.

[01:06:08] Speaker 07:
I mean, Judge Raina read the sheet of paper that looks like something I could have written this morning and just named somebody.

[01:06:18] Speaker 07:
So I think that- Doesn't seem like something that went through any kind of process, right?

[01:06:22] Speaker 07:
I mean, it's not like the agency adopted

[01:06:28] Speaker 07:
thorough, thoughtful process of some sort that went through final review or something.

[01:06:33] Speaker 07:
This just feels like a pretty vibrant and important agency decision, and yet, boom, it was just made.

[01:06:44] Speaker 04:
Well, I don't want to speak to the- By the guy walking out the door.

[01:06:48] Speaker 07:
Or the gal walking out the door.

[01:06:49] Speaker 04:
Well, this wasn't issued by Director Iancu.

[01:06:54] Speaker 04:
This has been the agency's policy going back.

[01:06:57] Speaker 04:
I believe the order we have currently was signed by Director Lee.

[01:07:04] Speaker 04:
This or variations of it have been continuously in place.

[01:07:09] Speaker 04:
I think the record shows for more than a decade.

[01:07:14] Speaker 04:
the kind of mechanism the agency has, as I said, to make sure that there's somebody in place to sort of keep the trains running, at least until a new official can be put in.

[01:07:26] Speaker 07:
And every agency can wing it.

[01:07:28] Speaker 07:
Every agency can come up with their own mechanism for a secession plan, regardless of the Appointments Clause.

[01:07:35] Speaker 07:
And that will not conflict with the Appointments Clause unless whatever mechanism they choose goes on for too long.

[01:07:41] Speaker 04:
And well, but it's all subject to presidential control because the president has the ability under the FVRA to put somebody else in.

[01:07:48] Speaker 04:
So I think the key constraint here is political accountability.

[01:07:52] Speaker 04:
And that's really the key takeaway from Arthrex is you need to have accountability.

[01:07:56] Speaker 04:
Is there a way that the public can look at what's going on at PTO and say, if we are dissatisfied with that, can they evade responsibility?

[01:08:04] Speaker 04:
Can the president?

[01:08:05] Speaker 04:
or the Secretary of Commerce or the political chain here evade responsibility for what's going on at PTO?

[01:08:11] Speaker 04:
And the answer is no.

[01:08:12] Speaker 00:
The director, Lee, has said something to the effect, I delegate to, blank, blank, all duties and responsibilities except for, you know, like, except for the issuance of pass.

[01:08:26] Speaker 00:
Does authority go that deep that they can divvy up which duties and which functions are going to be delegable?

[01:08:34] Speaker 04:
Absolutely, Your Honor.

[01:08:35] Speaker 04:
And that's something that happens all the time.

[01:08:37] Speaker 04:
Agency heads or, here, it's not an agency head, but a principal officer, frequently make limited delegations.

[01:08:44] Speaker 04:
They make delegations of some functions, but not others, to different officers.

[01:08:48] Speaker 04:
In fact, that is, as I was saying earlier, how PTO operates, that they have the authority under Section 3 as vested.

[01:08:55] Speaker 00:
What would that look like?

[01:08:56] Speaker 00:
How could we tell that that type of delegation had occurred?

[01:08:59] Speaker 04:
Well, you would look at what the delegation order said.

[01:09:03] Speaker 04:
You need some affirmative act.

[01:09:06] Speaker 00:
I was hoping you'd go there.

[01:09:07] Speaker 00:
Does a delegation order, which I read to you while you go, does it do that?

[01:09:13] Speaker 00:
Does it divvy up functions and duties?

[01:09:16] Speaker 04:
It doesn't, Your Honor.

[01:09:17] Speaker 04:
This one chose to delegate all of what I believe Your Honor said were the non-exclusive duties and functions.

[01:09:24] Speaker 04:
As it happens, there are no duties and functions of the director that are not non-exclusive.

[01:09:29] Speaker 04:
So it ends up encompassing all of the duties and functions.

[01:09:34] Speaker 00:
Why would they say that?

[01:09:35] Speaker 00:
I mean, you're saying that.

[01:09:35] Speaker 00:
But you're an attorney.

[01:09:36] Speaker 00:
The actual politician or the bureaucrat here used specific words.

[01:09:42] Speaker 00:
Why wouldn't we believe that?

[01:09:45] Speaker 04:
A non-exclusive is something of a term of art here, specifically designed to comply with the requirements of the Federal Vacancies Reform Act.

[01:09:52] Speaker 04:
If there had been a delegation that purported to cover exclusive or non-delegable duties, that would create problems because you can't delegate that which you're barred from delegating.

[01:10:05] Speaker 04:
So I think that that was just a carefully worded statement designed to ensure, and avoid any doubt, that there was being an effort made to delegate something that would be impermissible to delegate.

[01:10:19] Speaker 07:
Okay.

[01:10:19] Speaker 07:
Thank you, Mr. Salzman.

[01:10:21] Speaker 07:
You're not using quite all of your time.

[01:10:23] Speaker 07:
Left a little for someone else.

[01:10:24] Speaker 07:
That's very nice of you.

[01:10:26] Speaker 07:
Mr. Steenberg, you've got a little bit of time.

[01:10:29] Speaker 05:
Thank you, Your Honor.

[01:10:32] Speaker 05:
Thank you, Your Honor, and may I face the court?

[01:10:36] Speaker 05:
I'm Charlie Steenberg on behalf of Smith and Nuff, here in Arthur Care, and I'm with my colleague, Gerhan Sarwar.

[01:10:44] Speaker 05:
I'd like to start with the merits, if it's all right.

[01:10:47] Speaker 05:
Although I'll try to be brief, because I think that Judge Chen and Judge Vana hit on the key issues already.

[01:10:53] Speaker 05:
While we have a convoluted entirety claim and unusual prosecution strategy, we have, ultimately, a very simple factual question here.

[01:11:02] Speaker 05:
And that is whether substantial evidence supports the board's finding that the four applications that Arthurx filed over a 10-year period between 2003 and 2013 failed to support this claim, or these claims that Arthurx wrote in 2014,

[01:11:22] Speaker 05:
not the suture anchor with a generic first member.

[01:11:25] Speaker 05:
And as the board determined, based on a combination of affirmative evidence or affirmative statements describing the invention as permitting the free sliding of suture, disparaging comments concerning the prior flexible loop

[01:11:45] Speaker 05:
expert testimony from an expert that the board deemed credible concerning the import of those statements.

[01:11:55] Speaker 05:
And even in venture testimony, the board concluded that Arthrex was not entitled to priority based on those kind of applications.

[01:12:07] Speaker 05:
And it was all the board didn't even reach the separate question of the presentation application.

[01:12:13] Speaker 05:
Our effects makes two main arguments in response.

[01:12:17] Speaker 05:
The first is this question of common function.

[01:12:22] Speaker 05:
But is the board found, for instance, on page 32 of its decision, the function and issue is described in the specification of the applications from 2003 to 2013 was the function of committing the freesiding of suture.

[01:12:39] Speaker 05:
Arthrex cannot now erase that disclosure by a claim-dropping strategy of focusing on the ostensible function of simply threading an islet.

[01:12:57] Speaker 05:
Mr. Chou mentioned the Amgen case, which Arthex didn't even bring to the board's attention.

[01:13:05] Speaker 05:
Arthex also mentioned the Smythe case, which speaks to the need to look at the function, or functions, plural, described in the specification, which here, as I said, is the freesiding of suture.

[01:13:20] Speaker 05:
Even when acknowledging the possibility of alternative embodiments, the applications emphasized the need to prevent the freesiding of suture.

[01:13:27] Speaker 05:
Mr. Charles to mention the corporation my reference and pace of her are you and such but as the board It was not earlier before it did consider in preparation about that instance in some pages 28 and 29 of the decision

[01:13:44] Speaker 05:
and concluded that in context, the provision by reference was providing background for the actual plan dimension here, much like the case in Toronto.

[01:13:59] Speaker 05:
uh... cases like her already he's uh... uh... he's uh... uh... uh... uh... uh... uh... uh...

[01:14:16] Speaker 05:
deemed that something was not incorporated by reference.

[01:14:21] Speaker 05:
There's the second factual question of how a person with a skill in the art would understand the compliant disclosure, which in the case of Pace, because the board had not undertaken that inquiry, this court sent the case back down.

[01:14:36] Speaker 05:
And here, by contrast, the board's already done that work.

[01:14:40] Speaker 05:
Harari involved in cooperation by reference in the preferred embodiment section, much like was acknowledged as a possibility in Bamberg, which is another point that was discussed in our briefing, that applied Tronzo and applied and concluded that a similar board decision was supported by substantial evidence.

[01:15:00] Speaker 05:
If there are no questions on the merits, I'd like to turn briefly to the questions concerning Mr. Hirschfeld.

[01:15:09] Speaker 02:
Can I ask you about the 707 application?

[01:15:13] Speaker 02:
Certainly.

[01:15:14] Speaker 02:
There's a statement at 8-12-69.

[01:15:16] Speaker 02:
I just want to understand it.

[01:15:20] Speaker 02:
This is in the background section.

[01:15:21] Speaker 02:
It first says, the flexible loop configuration at the end of the driver disadvantageously impedes sliding of the suture or graft, which is fed through the suture loop.

[01:15:35] Speaker 02:
And then the next sentence says, in addition, because the cannulated driver of 280 is provided with a flexible loop at its distal end, placement of the suture or graft at the bottom of the blind holder socket and the cortical bone must be approximated, thus sometimes necessitating additional removal, tapping, and insertion steps to ensure full insertion of the plug or screw into the blind holder socket.

[01:16:01] Speaker 02:
This, in turn, may abrade the adjacent tissue and or damage the bone or cartilage.

[01:16:09] Speaker 02:
I don't understand what the problem there is.

[01:16:11] Speaker 02:
Can you explain what that means?

[01:16:13] Speaker 02:
Sure.

[01:16:14] Speaker 02:
Sometimes there's something about the flexible loop that necessitates additional removal, tapping, and insertion stops.

[01:16:22] Speaker 05:
Certainly, Your Honor.

[01:16:23] Speaker 05:
It's important to keep in mind, first of all, that there are two sutures in the case of the trigger application.

[01:16:29] Speaker 05:
One is the flexible loop.

[01:16:32] Speaker 05:
The other is the suture patch.

[01:16:34] Speaker 05:
So it's critical that you position the graft ultimately where the surgeon wants it in the body.

[01:16:41] Speaker 05:
To do that, you need tension on the graft suture.

[01:16:51] Speaker 05:
And the concept in 2001,

[01:16:55] Speaker 05:
was to use the separate sutural loop to place tension on the suture graft.

[01:17:04] Speaker 05:
In the end, though, it was described in the 2003 application that didn't work well and there was instead a need for a new invention.

[01:17:11] Speaker 05:
And R6 went out of its way in 2003 to explain why this new invention was patently distinct over the flexible loop, which was already in the prior R given that the given.

[01:17:22] Speaker 02:
You're not explaining to me the technical problem that this sentence is trying to communicate.

[01:17:28] Speaker 02:
Do you understand it?

[01:17:29] Speaker 05:
As best I understand it, Your Honor, when his surgeon was trying to use the flexible dope at the end of this islet, it was not an exact process.

[01:17:41] Speaker 05:
And sometimes you'd have to basically pull it out and start over, which collectively was creating an abrasion and mask the bone damage.

[01:17:50] Speaker 05:
I would like to turn briefly to the issues concerning Mr. Hirschfeld.

[01:17:55] Speaker 05:
begin with the court's question four, which was whether the review of final decisions with the board needs to be done by the director acting director.

[01:18:07] Speaker 05:
And is the government noted?

[01:18:09] Speaker 05:
The answer is no.

[01:18:10] Speaker 05:
And we would submit that, for exactly the same reasons, that the director-at-conductor does not need to lay eyes on every patent application that's approved.

[01:18:20] Speaker 05:
In this case, it's now up to 420,000 applications that have been granted over the last 14 months.

[01:18:28] Speaker 05:
And as the Supreme Court emphasized in oil states, IPR involves the same basic matter as patent grant in the first place.

[01:18:38] Speaker 05:
And while there was a suggestion that perhaps one could distinguish if necessary revoking a patent from granting a patent on the principle that it's a bigger deal to revoke,

[01:18:56] Speaker 05:
Any distinction along those lines would run into the same problem that the Supreme Court noted in Collins when explaining why it was unpersuaded by suggestions that the regulatory authority at issue concerning the FHFA was somehow less significant or impactful than the authority at issue in salient law with the CFPB.

[01:19:23] Speaker 05:
and that that was not a line that court should be drawing.

[01:19:28] Speaker 05:
So if RFLEX's arguments are credited, as we described in our briefing, it would cast a extremely serious cloud over all those patents.

[01:19:42] Speaker 05:
Going back to the Supreme Court's decision in Marsh noting that,

[01:19:45] Speaker 05:
If a patent is missing a necessary signature, it's not operative, and there's no opportunity for damages for the period in question.

[01:19:57] Speaker 05:
Finally, I mentioned briefly question five and the question of whether this is delegable.

[01:20:05] Speaker 05:
I'm sorry.

[01:20:07] Speaker 05:
Let me stop.

[01:20:10] Speaker 05:
Going back to the question of what's delegable and what's not, ultimately this is a matter for Congress.

[01:20:15] Speaker 05:
And for instance, in the AAA, had Congress desired to say that only the director may do certain things?

[01:20:22] Speaker 05:
For instance, say only the director may issue

[01:20:26] Speaker 05:
Only the director and only the director may grant patents, say, that extend the life of a FDA-approved drug because we're building the state.

[01:20:38] Speaker 05:
That certainly would be something that would be subject to the FDRA.

[01:20:44] Speaker 05:
We don't have that situation here, though.

[01:20:46] Speaker 05:
We have, in the case of both issuance and review or final decision, a delegable task that therefore is not subject to the remedial provisions of 3348.

[01:21:10] Speaker 07:
OK, thank you, Mr. Steenberg.

[01:21:12] Speaker 07:
Mr. Cry has some rebuttal time.

[01:21:14] Speaker 07:
Hold on, Mr. Cry, while they move you over.

[01:21:23] Speaker 07:
How much does he have left?

[01:21:25] Speaker 07:
None.

[01:21:26] Speaker 03:
None?

[01:21:26] Speaker 03:
He went over by about three minutes.

[01:21:28] Speaker 07:
Yeah, give him five minutes.

[01:21:30] Speaker 07:
We went over with Mr. Salzman by just a minute or two.

[01:21:34] Speaker 07:
Give Mr. Cry five minutes.

[01:21:36] Speaker 07:
Please proceed.

[01:21:38] Speaker 03:
Thank you, Your Honor.

[01:21:40] Speaker 03:
The Vacancies Reform Act has to be construed according to its text, but it also needs to be construed with some reasonable view about what Congress was trying to accomplish.

[01:21:50] Speaker 03:
Please read the Senate report.

[01:21:52] Speaker 03:
Please read the contemporaneous Congressional Research Service report, because the background for this statute was that Congress was dissatisfied with the fact that agencies were making it up.

[01:22:02] Speaker 03:
Agencies were using their delegation authority to come up with their own succession plans

[01:22:07] Speaker 03:
Congress wanted to restrict it.

[01:22:09] Speaker 03:
Congress wanted to limit agencies and limit the executive branch to specified mechanisms for temporary appointments.

[01:22:17] Speaker ?:
Congress knew that there were burdens associated with trying to do Senate confirmation during the presidential transition.

[01:22:26] Speaker 03:
But the plain import of the statute was that Congress did not think it was particularly burdensome for the president to sign a piece of paper with a bunch of names on it, which is why Congress specified in the statute multiple mechanisms that are not burdensome at all, and that the president can comply with with the stroke of a pen.

[01:22:43] Speaker 03:
There's simply no burden associated with doing that during a presidential transition.

[01:22:48] Speaker 03:
And the executive branch simply disregarded those statutory processes here.

[01:22:53] Speaker 03:
According to the government,

[01:22:55] Speaker 03:
The federal maintenance reform act has zero constraint, zero impact on the PTO at all.

[01:23:01] Speaker 03:
It does not limit what the agency can do in terms of its succession plans in any respect.

[01:23:07] Speaker 03:
And the government conceded that over and over in this argument.

[01:23:10] Speaker 02:
We respect that.

[01:23:11] Speaker 02:
Mr. Krogge, is it your view that Mr. Hirschfeld was without authority to sign off on 420,000 patents?

[01:23:20] Speaker 03:
Your honor, that is a consequence of our view, but there will be serious de facto officer doctrine arguments that the agency could make if somebody challenged those decisions.

[01:23:29] Speaker 03:
Generally, if a person's invalidly holding office, that complaint needs to be raised at the time.

[01:23:35] Speaker 03:
So if nobody at the time the patent was signed raised it, I would think the government would have strong arguments under the de facto officer doctrine.

[01:23:42] Speaker 03:
In terms of the impact or the government's interpretation of the FDRA though, it has no impact on the PTO, no constraint at all, and even for other agencies, it has excruciatingly narrowed impact.

[01:23:56] Speaker 03:
Those were Judge Moore's words, and they are not an exaggeration.

[01:23:59] Speaker 03:
Yes, there are some rare birds out there, exclusive functions that can only be performed by the agency head, but they are extremely rare, and it's just implausible

[01:24:09] Speaker 03:
It is implausible that when Congress saw this problem of agencies making it up, coming up with their own succession plans and pass the statute for the express purpose

[01:24:19] Speaker 03:
of telling agencies to cut it out, that the statute did an act that had essentially zero impact on anyone, and that the executive branch could just continue on with business as usual, making up its own succession plans just like the agency did here.

[01:24:32] Speaker 03:
It's a completely unreasonable interpretation of the vacancies for format, Your Honor, and for reasons that I think the panel's actually already well-highlighted.

[01:24:41] Speaker 03:
I think the government pointed to the definition of an executive agency in 3347B,

[01:24:47] Speaker 03:
the only point I'll make on that is whether or not they're right, the reasonable implication of that provision is that Congress can avoid the statute by general delegation, agencies can avoid the statute by general delegation provisions, and sub-agencies can't do that either.

[01:25:02] Speaker 03:
And I think the latter of those points is certainly the reasonable implication of the former, even if it's not something that happens to fall within the

[01:25:11] Speaker 03:
I don't buy a definition of an executive agency.

[01:25:13] Speaker 03:
It's the exact same principle.

[01:25:16] Speaker 07:
I don't understand.

[01:25:17] Speaker 07:
You think that even if they're correct and 3347B only pertains to people at the level of the Secretary of Commerce, that we should nonetheless infer that congressmen to adopt or enact a rule that applied it to lesser officers as well?

[01:25:33] Speaker 03:
Well, they're both officers in an executive agency.

[01:25:37] Speaker 07:
So you think all officers in an executive agency, not just the one specified?

[01:25:43] Speaker 03:
No, no, Your Honor.

[01:25:44] Speaker 03:
As I understand their arguments, but their point is that these are not actual general delegation clauses within the meaning of this provision, because the provision says any statutory provision providing general authority to the head of an executive agency isn't a substitute for this act.

[01:25:58] Speaker 03:
And so the argument, as I understand them to make it, is that because

[01:26:01] Speaker 03:
These general delegation statutes technically give the head of the TTO general delegation authority rather than the head of the Commerce Department general delegation authority.

[01:26:10] Speaker 03:
It doesn't apply.

[01:26:11] Speaker 03:
And my argument is that

[01:26:13] Speaker 03:
The reasonable implication of this clause is that general delegation of authority.

[01:26:17] Speaker 07:
OK, well, I don't think it's reasonable to read out to whom the clause applies, which is what you're asking me to do.

[01:26:23] Speaker 07:
So assume you lose on that argument.

[01:26:26] Speaker 07:
What is your other argument with regard to 3347 and why it causes the FVRA to have a broader applicability?

[01:26:35] Speaker 07:
Because you put a lot of weight on 3347B.

[01:26:38] Speaker 07:
And I think the clear text and the plain language of 3347B does not apply to authority delegated to the head of the PTO.

[01:26:47] Speaker 07:
So since that's the case, what else can you tell me about 3347 that you want me to keep in mind when thinking about how the FVRA operates?

[01:26:56] Speaker 03:
I would still say there's a broader question about whether a general delegation provision to whoever grant is an appropriate substitute for the appointment mechanisms established.

[01:27:08] Speaker 03:
I think 3347A says that the statutory appointment mechanisms are exclusive.

[01:27:12] Speaker 03:
And so I think 3347B is a clarification of that principle in the context of a general delegation statute.

[01:27:18] Speaker 03:
But 3347A still stands by itself.

[01:27:22] Speaker 03:
And when you have an agency, whether it's an agency or a sub-agency like the PTO, that comes up with a succession plan that delegates

[01:27:30] Speaker 03:
every function of the agency head to somebody else and it kicks in only when there's a vacancy in the office.

[01:27:36] Speaker 03:
By any standard, that is simply a substitute for the acting appointment mechanisms of the statute.

[01:27:42] Speaker 02:
Do you agree that the scope of 3348 applies only to exclusive non-delegable functions?

[01:27:49] Speaker 03:
No, we think that's qualified by the

[01:27:52] Speaker 03:
point that's clear both from the statute and also just from the context and the history of the statute that a general delegation provision cannot be relied upon.

[01:27:59] Speaker 02:
But I'm talking about 3348.

[01:28:01] Speaker 02:
3348 specifically defines function or duty as being a non-delegable exclusive function.

[01:28:08] Speaker 02:
Do you agree with that?

[01:28:11] Speaker 03:
I think there's two arguments we have, Your Honor.

[01:28:13] Speaker 03:
One is that, do you mean the statute is a whole?

[01:28:15] Speaker 03:
That needs to be understood.

[01:28:16] Speaker 02:
I'm just reading the definition of function or duty in 3348.

[01:28:20] Speaker 02:
I mean, you can't seriously argue the actual import of the plain words of just that definition.

[01:28:30] Speaker 03:
No, I think the plain words of that definition is that when Congress vests a function in two or three different officers, it's a non-exclusive function.

[01:28:38] Speaker 03:
I don't think that provision clearly says one way or the other whether it covers a situation where Congress vests authority in one officer, but that officer happens to have general delegation authority.

[01:28:48] Speaker 03:
On that, I just think it's empty.

[01:28:50] Speaker 03:
And I think it needs to be construed consistent with the background of the statute, which is that populists did not want agencies using general delegation authority to evade the statutory appointment mechanisms.

[01:29:01] Speaker 03:
But even if you think 3348 is clear, that just tees up the conflict.

[01:29:05] Speaker 03:
And so you need to resolve the conflict between 3347 A and B and 3348.

[01:29:11] Speaker 03:
And we think when you view the statute against this background, Congress did not want agencies

[01:29:16] Speaker 03:
relying on general delegation authority to make up their own succession plans, and so 3347 has to be viewed as an exception or a carve out to the language in 3340.

[01:29:27] Speaker 03:
I think those are two different routes to get there, but that is how we would harmonize those two statutes.

[01:29:31] Speaker 03:
And again, to be clear, on the government's contrary view,

[01:29:35] Speaker 03:
this statute was just totally ineffective to accomplish anything.

[01:29:39] Speaker 03:
It doesn't constrain the PTO's actions at all, and it constrains the actions of other agencies hardly at all, in all but excruciatingly narrow circumstances.

[01:29:48] Speaker 03:
And the government embraces that.

[01:29:50] Speaker 03:
They don't walk away from that.

[01:29:51] Speaker 07:
Is there any way to hold the way you're arguing right now on this FERA, the Federal Vacancy Reform Act, statute, is there any way to hold the way you want

[01:30:04] Speaker 07:
without being directly in conflict and thereby creating a circuit split between ourselves and the DC Circuit.

[01:30:12] Speaker 03:
There is no circuit conflict in any event, Your Honor.

[01:30:14] Speaker 03:
To stand up California, the district court, I think, provides some support to the government.

[01:30:18] Speaker 03:
But the Court of Appeals explicitly said it was not addressing the FDRI claim because it hadn't been raised on appeal.

[01:30:24] Speaker 03:
That's mentioned and put note in the DC Circuit's opinion.

[01:30:27] Speaker 03:
But there is a second ground, Your Honor.

[01:30:29] Speaker 03:
Wait.

[01:30:30] Speaker 07:
Hold on.

[01:30:31] Speaker 07:
I mean, I'm looking at the stand up for California case.

[01:30:34] Speaker 07:
You know, on page 622, it goes on to talk about exclusive versus non-exclusive functions and duties, and what is delegatable and what is not.

[01:30:45] Speaker 07:
So.

[01:30:49] Speaker 03:
Right.

[01:30:49] Speaker 03:
Let me put that to you, Your Honor, on page 622.

[01:30:52] Speaker 03:
It says the palace have not raised their FBRA plates on appeal.

[01:30:55] Speaker 03:
So I don't think there's a direct conflict.

[01:30:57] Speaker 03:
What do you think?

[01:30:57] Speaker 07:
Oh, I see.

[01:30:58] Speaker 07:
So we'd be conflicting with what you believe is a bunch of dicta.

[01:31:02] Speaker 03:
uh... it's not it's it's comments in the context of a different type of challenges but i feel it was not a debt vr a claim anymore it was just a challenge to whether those functions were in fact debatable and so i i

[01:31:14] Speaker 03:
You know, one can make an argument out of this that this should support indirectly their FDRD argument, but I don't think it's the square holding that we're asking you to disagree with, which of course is not a binding decision in any event.

[01:31:26] Speaker 07:
I understand that you don't think we're bound by the DC Circuit, thank you for that.

[01:31:30] Speaker 07:
I also understand that you don't think that it's even a holding per se, but the position you're asking us to take is very much at odds with the position May articulated in that, or the

[01:31:41] Speaker 07:
their understanding as articulated by them, in that opinion?

[01:31:46] Speaker 03:
Well, the DC Circuit did not look into the background of the statute at all.

[01:31:50] Speaker 03:
It didn't mention 3347E at all.

[01:31:53] Speaker 03:
And it didn't grapple with the fact that their interpretation would just render the statute totally ineffective.

[01:31:58] Speaker 03:
But I should transition, because if your honors want to decide this case on the narrowest ground, we do have our second argument.

[01:32:04] Speaker 03:
We agree with the government that it has narrower implications, because it would only implicate the directors

[01:32:11] Speaker 03:
review authority over IPRs.

[01:32:13] Speaker 03:
And that's the point that even if you think Section 3348 treats general delegation functions as non-exclusive, the fact remains that this particular function is exclusive, because under the clear mandate of the Supreme Court's decision, the director is the only officer at the agency that can single-handedly review a board decision.

[01:32:34] Speaker 03:
They claim that the Supreme Court's decision just stands for the point that

[01:32:38] Speaker 03:
The director has to have the power to review decisions, but the court was really clear on this.

[01:32:42] Speaker 03:
I'm looking at page 1987 of the Arthrex decision, and the court explains why Section 60 cannot constitutionally be enforced to the extent that its requirements prevent the director from reviewing final decisions.

[01:32:54] Speaker 03:
But then the court says, very explicitly, Section 60 otherwise remains operative as to the other members of the key task.

[01:33:02] Speaker 03:
The court, that was not a throwaway line.

[01:33:04] Speaker 03:
The court made a very conscious decision that it was getting rid of Section 60's restraints only with respect to the director, and it was leaving them in place with respect to everyone else at the agency.

[01:33:17] Speaker 03:
And that's part of the court's mandate.

[01:33:19] Speaker 03:
The government can't avoid that just by claiming that the general thrust of the opinion was that the director should have greater review.

[01:33:26] Speaker 03:
The court gave as much as it thought the Constitution

[01:33:30] Speaker 03:
hearing that section sixty because section sixty otherwise remains in effect with respect to everyone else in the agency the director cannot delegate his single-handed review authority to any other individual at the agency.

[01:33:45] Speaker 07:
Okay Mr. Cry thank you very much we understand your argument.

[01:33:53] Speaker 07:
We'll give Mr. Cho one minute.

[01:33:57] Speaker 01:
Your Honor, very quickly with regards to the merits, the Court has focused on the background section and noticed that there is some discussion about the risk of a loss and additional steps.

[01:34:09] Speaker 01:
I would also note that that same background describes the sutra loop as still an improvement.

[01:34:16] Speaker 01:
And that did not constitute disclaimer, which I don't believe there's any authority in the case law that suggests that you can erase

[01:34:25] Speaker 01:
express written description support by statements such as this.

[01:34:29] Speaker 01:
So I would submit very plainly that this is not that case.

[01:34:33] Speaker 01:
But drawing attention to the invention and issue, it is a suture eyelet, or an eyelet that threads suture.

[01:34:41] Speaker 01:
We did not, if there was disclaimer, give that up.

[01:34:45] Speaker 01:
And for that reason, I believe, Your Honor, we should have this case, at least the written specification, considered by the board.

[01:34:53] Speaker 07:
Thank you, Your Honor.

[01:34:54] Speaker 07:
I thank all counsel, this case is taken under submission.