EX PARTE PATENT APPEALS AT THE PTAB: PER CURIAM ORDERS PRACTICE * Harold C. Wegner ** I. OVERVIEW 2

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1 EX PARTE PATENT APPEALS AT THE PTAB: PER CURIAM ORDERS PRACTICE * Harold C. Wegner ** I. OVERVIEW 2 II. OBJECTIVES OF EX PARTE APPEAL DECISION-MAKING 4 A. The Primary Goals for Most Decisions 4 B. Opinions Expressing Policy Viewpoints for Changes in the Law 5 III. SOLUTIONS TO INCREASE PTAB EFFICIENCY 6 A. Simplified Per Curiam Affirmances as a Default Policy 6 B. Pre-Screening Cases for Per Curiam Disposition 6 C. A Strict Rule to Follow the Default Policy 7 D. Phony scholarship should be Discouraged 7 IV. JUDICIAL ACCEPTANCE OF NONPRECEDENTIAL ORDERS 8 V. SCRUTINY OF NONPRECEDENTIAL OPINIONS 9 VI. CONCLUSION 10 * This paper is part of an ongoing study into the large percentage of patent applications which are refiled either as RCE or Section 120 continuing applications. This paper explores the long delays in the appellate process which contributes to such refilings. This paper represents the personal views of the author and does not necessarily reflect the views of any colleague, organization or client thereof. This draft: November 6, ** Partner, Foley & Lardner LLP.

2 I. OVERVIEW Ten years ago Professors Lemley and Moore published their landmark article on continuation abuse, pointing to problems created by patent applicants. Mark A. Lemley & Kimberly A. Moore, Ending Abuse of Patent Continuations, 84 B.U.L. Rev. 63 (2004). Today, the abuse continues, but with much of the blame being on the shoulders of an examining corps that is rewarded for coercion of continuing applications: Given the long delay in ex parte appeals within the Patent Office, a segment of the examining corps has the in terrorem threat that the applicant must file a continuation or RCE to gain his claims or face waiting in the appellate que for a lengthy period during which the value of the patent right may evaporate. This paper explores a way to end the backlog and reopen an ex parte appeal as a viable option to filing a continuing or RCE application. On the one hand, the Patent Trial and Appeal Board in the most immediate past has done a simply excellent job of dealing with post-grant proceedings under the Leahy Smith America Invents Act. Lost in the shuffle is the continued challenge to end the unacceptable backlog of more than twenty-five thousand (25,000) pending ex parte appeals 1, a backlog inherited from the prior leadership of the Board. 1 See Fiscal Year 2014, Patent Trial & Appeal Board Receipts and Dispositions by Technology Centers, Ex parte Appeals, FY2014 Monthly Dispositions September 2014 (showing a total of 25,506 pending ex parte appeals.) USPTO website, last visited Nov. 6,

3 This paper commences with a consideration of the objectives of ex parte appellate decisions and opinions and the impact of prolonged delays in reaching decisions. See II, Objectives of Ex parte Appeal Decision-Making. The first key reform that must take place to end the backlog is to eliminate formal opinions for many ex parte appeals. A sizable number of appeals involves a situation where either the applicant-appellant or the Examiner is clearly off base and there is no point of law to be made. The answer is to substantially eliminate lengthy opinions for such cases with a mechanism close to but not identical to Federal Circuit Rule 36. See III, Solutions to Increase PTAB Efficiency. If the PTAB adopts simple nonprecedential opinions and orders it would be in good company with its reviewing court. The Federal Circuit in its own practice has embraced nonprecedential decisions, even to the point of an ad hoc expansion of Rule 36 beyond its literal scope. See IV, Judicial Acceptance of Nonprecedential Orders. The argument that nonprecedential decisions will avoid appellate scrutiny does not have basis in practice, as seen from the attention that has been given to nonprecedential opinions at the Federal Circuit, both by the en banc Court itself as well as the Supreme Court. See V, Scrutiny of Nonprecedential Opinions. 3

4 II. OBJECTIVES OF EX PARTE APPEAL DECISION-MAKING A. The Primary Goals for Most Decisions To understand the challenge and how to tackle this problem, one must step back to see what it is that the public deserves from the appellate process. There are two primary goals for 99 % of the cases. (Indeed, far more than 99 % of all ex parte opinions today are designated as nonprecedential by the Board itself.) First, the panel must render the correct holding as to the specific facts of the case: Who should win the appeal? Second, speed in reaching the decision is vital: Justice delayed is justice denied. The latter objective has particular relevance in the ongoing scandal of a forty-six (46) percent RCE and refile rate. A significant portion of examiners are able to demand that an applicant refile a case that should be deemed allowable or insist on granting only claims that are unduly narrow: The applicant, faced with a multi-year appellate process, is thus forced to agree to the examiner s demand, which results in either a refile of the entire case or a grant of narrow claims with a refile for broader coverage. Of course, if there were count reform that denied count credit for refiles, this problem would disappear overnight. 4

5 B. Opinions Expressing Policy Viewpoints for Changes in the Law What about a reasoned opinion that would be helpful for the patent community at large? This is not an objective of the patent system for the 99- plus % of ex parte opinions which the Board itself designates as nonprecedential; thus,, the PTAB itself denies precedential status to almost all opinions. The PTAB should not have quasi-judicial excursions into policy. This may perhaps be best put into focus by the limited role that its reviewing court itself has in excursions into judicial legislation. Even in the case of the Federal Circuit, the Supreme Court has been critical of Federal Circuit excursions into policy-driven expansion of the law: [T]he Federal Circuit thought it was bringing this statute up to date and even said [it was]... making an extension of the statute to keep up to date with the technology. That is not for courts to do." Hon. Kathleen M. O'Malley, An Expanded "Slim Volume" on the Limited Role of Courts in Shaping Patent Policy, 22 Fed. Cir. B.J. 91, 96 ( )(quoting Breyer, J., oral argument in Microsoft Corp. v. AT&T Corp., 550 U.S. 437 (2007)(footnotes omitted). 5

6 III. SOLUTIONS TO INCREASE PTAB EFFICIENCY A four part solution is proposed: A. Simplified Per Curiam Affirmances as a Default Policy The PTAB should immediately implement a default policy that a decision should be issued in an ex parte appeal per curiam; The reasons for the opinion in a usual situation should be a simple one sentence adoption of a specific reason for affirmance in the Examiner s Answer or a specific reason for the reversal in the Appeal Brief or the Reply Brief. In either case, the opinion should refer to the specific point in the referenced document, identifying the document by paper number for ease of access in the electronic file wrapper on the Patent Office website. (What about the public right to access to the decisions of the PTAB? Since the opinion is nonprecedential access for the point of legal issues is not of primary importance. And, given the reference to the electronic file wrapper in the decision, access is relatively simple in any event.) B. Pre-Screening Cases for Per Curiam Disposition Legal staff provided to the members of the Board should focus on screening cases before they reach the panel for the specific purpose of triage, to identify cases that are ripe for per curiam disposition. A simple memorandum should be provided explaining why a particular case deserves per curiam affirmance or reversal. 6

7 In this way, the work of the PTAB would be shortened even more for the majority of its docket. C. A Strict Rule to Follow the Default Policy To deviate from the default and thus issue a full blown opinion, the panel must provide the Chairman with a Memorandum explaining why the decision should be precedential, agreed upon by the panel. D. Phony scholarship should be Discouraged There is a significant segment of the Board that electronically cuts and pastes paragraphs with case law from earlier, nonprecedential opinions, without citation of the earlier opinion. What value does such judicial plagiarism have? If a particular, earlier case is on all fours and does have excellent reasoning, then it should be acceptable to indicate that this case has facts similar to Ex parte This-n-That which has reasoning explaining the decision in this case. 2 Cut and past opinion writing is dangerous because all too often the facts of the earlier case are not the same and leave a later, copied opinion open to appellate review. This is not a new phenomenon but has a history dating back more than fifty years: For some time in the early 1960 s the APLA Chemical Practice Committee searched for an appropriate vehicle to challenge a key point of 2 This is not relying upon Ex parte This-n-That as precedent but only explaining that the same reasoning is used. It is far better to cite the earlier case than to simply repeat the same reasoning without citation. 7

8 chemical practice. The perfect vehicle was found that turned out to be a plagiarized opinion, Ex parte Papesch, rev d, In re Papesch, 315 F.2d 381 (CCPA 1963)(Rich, J.)). IV. JUDICIAL ACCEPTANCE OF NONPRECEDENTIAL ORDERS Insofar as a PTAB decision explains the reason for its decision even in a single sentence adopting all or part of an Appeal Brief or Examiner s Answer, there is nothing to preclude a brief per curiam order or opinion as a way to dispose of an appeal. The argument is made in some quarters that the Federal Circuit would not look kindly on a per curiam practice at the PTAB that affirmed or reversed simply by referring to the reasons of the appellant or Examiner. If anything, the trend at the Federal Circuit itself has been an expansive view of per curiam dispositions with little or no reasoning. Under the rules of the Federal Circuit it is, of course, well recognized that the Court can dispose of any appeal resulting in an affirmance without any opinion of any kind. This is through the mechanism of Federal Circuit Rule 36 where an affirmance can be announced by the Clerk of the Court in a simple Order that merely identifies the panel and the counsel. There is no explicit provision in Rule 36 that in any way authorizes a decision by Order issued by the Clerk of the Court in any situation other than a straight affirmance without any reasoning. Yet, the Court itself has issued at least one recent decision by the Clerk of the Court with reasons given in a brief statement, per curiam, as in Optimum Power Solutions LLC v. Hewlett-Packard 8

9 Co., 547 Fed. Appx. 997 (Fed. Cir. 2013)(per curiam)(dyk, Wallach, Taranto, JJ.)(Order). Alternatively, a one paragraph, authored nonprecedential opinion has been used to dispose of a case. See JuxtaComm-Texas Software, LLC v. TIBCO Software, Inc., 532 Fed. Appx. 911 (Fed. Cir. 2013)(Linn, J.). Given that the Court has itself given expansive scope to nonprecedential procedures, and particularly given the backlog of cases at the PTAB, the Court would surely not discourage a PTAB practice that adopts Rule 36-like procedures. V. SCRUTINY OF NONPRECEDENTIAL OPINIONS The argument is made that per curiam dispositions would effectively deprive the applicant of appellate review at the Federal Circuit. The history of nonprecedential opinions at the Federal Circuit itself shows that such status does not deny further review. Recently, a panel issued a nonprecedential opinion in Lighting Ballast Control LLC v. Philips Elecs. N. Am. Corp., 498 Fed. Appx. 986 (Fed. Cir. 2013), yet this did not deter the en banc Court from entertaining review, 744 F.3d 1272 (Fed. Cir. 2014)(en banc)(newman, J.). Nonprecedential status did not deny review by the Supreme Court in Teleflex, Inc. v. KSR Int'l Co., 119 Fed. Appx. 282 (Fed. Cir. 2005), rev d sub nom KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398 (2007); see also Holmes Group, Inc. v. Vornado Air Circulation Sys., 13 Fed. Appx. 961 (Fed. Cir. 2001), rev d, 535 U.S. 826 (2002). 9

10 VI. CONCLUSION The choice is between prompt decisions that reach the correct holding which is needed by both applicants and the public versus detailed opinions explaining to the parties that only amplify the reasons for affirmance or reversal. With 25,000 plus backlog of pending appeals the choice should be simple. 10