[00:00:00] Speaker 04: 2140, Arthrex versus Smith and Nephew. [00:00:36] Speaker 05: May it please the court. [00:00:43] Speaker 05: My name is Anthony Cho. [00:00:44] Speaker 05: I'm here on behalf of Arthrex. [00:00:47] Speaker 05: The invention at issue here involved a technique for conducting surgery without having to tie knots. [00:00:56] Speaker 05: It was originally protected in the 280 application by filing a non-provisional, and then the inventors decided to make improvements upon that original invention [00:01:06] Speaker 05: And they filed and protected that original idea by incorporating that idea in subsequent applications and claiming priority to it. [00:01:16] Speaker 05: The claim term at issue, or the question at issue, is whether there's written description support for each of the claims at issue. [00:01:25] Speaker 05: And if there is the prior art that the nephew contends is prior, it would, in fact, not be prior art. [00:01:35] Speaker 05: Your Honor, I would like to focus the court's attention on the actual claim term that was at issue in this case, and that is an islet that threads. [00:01:45] Speaker 05: That's all that was claimed and nothing more. [00:01:48] Speaker 05: There was no requirement that an islet be free sliding, and there was no requirement that any other advantage be captured by the invention other than an islet that threads. [00:02:00] Speaker 05: And Your Honor, I believe the board in reviewing this case made two [00:02:06] Speaker 06: Are you saying such a claim limitation doesn't encompass a flexible loop? [00:02:13] Speaker 05: Your honor, the claim limitation would encompass a flexible loop. [00:02:15] Speaker 06: Would. [00:02:16] Speaker 05: Yes, it would. [00:02:17] Speaker 05: An eyelet that threads. [00:02:19] Speaker 05: Because a flexible eyelet, like rigid eyelets, both thread suture. [00:02:23] Speaker 05: And that is something that was established in the prior art and something that was established in the specification. [00:02:29] Speaker 06: In fact, the specification... Does it encompass a fixed aperture? [00:02:34] Speaker 05: It would include a rigid eyelet, your honor. [00:02:37] Speaker 05: And if we take a look at, in fact, what's interesting about this case is that Smith and Nephew had to concede for purposes of this claim of anticipation that an islet covers the islet issue, covers both the flexible islet and a rigid islet. [00:02:54] Speaker 05: species of this genus of an islet are in fact disclosed the first species being the 280 application the second species being subsequent applications which by the way also incorporated by reference the flexible islet and so when we start but you have a problem trying to claim priority all the way back to your first applications in the chain right and [00:03:19] Speaker 05: I don't agree, Your Honor. [00:03:21] Speaker 05: I believe that we do. [00:03:21] Speaker 06: Because the first applications, as I understand it, provide a written description support only for one of the embodiments. [00:03:29] Speaker 06: That's correct. [00:03:29] Speaker 06: It's for the flexible loop. [00:03:31] Speaker 05: And that's correct, Your Honor. [00:03:32] Speaker 06: So how could a claim that encompasses something broader than that species have written description support in an application that discloses only a species? [00:03:45] Speaker 05: I look at it this way, Your Honor. [00:03:46] Speaker 05: In fact, I kind of look at Smythe as very instructive on this point. [00:03:51] Speaker 05: If there's an application, for example, that discloses a lead weight as a one-pound weight, and then there's a subsequent application that discloses a pound of feathers as a one-pound weight, and let's just call that section application a CIP because the feathers weren't previously disclosed, we should be able to, as Smith and Amgen instruct, [00:04:15] Speaker 05: claim of one pound weight. [00:04:19] Speaker 05: And that's what we have here, Your Honor. [00:04:21] Speaker 01: We have... In that situation, do you have to have a written description support for both of those embodiments? [00:04:27] Speaker 05: I think Bilstad teaches that all that is needed is one representative example to support that genus, or one example that a person of ordinary skill in the art can immediately visualize and say, [00:04:39] Speaker 05: That's, for example, an eyelet. [00:04:41] Speaker 05: And we have that here. [00:04:42] Speaker 05: We are not talking about something that is a matter, so to speak, of rocket science. [00:04:47] Speaker 05: It is an eyelet that simply threads suture. [00:04:50] Speaker 05: The ordinary dictionary definition is an eyelet that receives suture or which suture is passed or some material is passed. [00:04:58] Speaker 05: And the prior art was clearly undisputed, establishing both flexible eyelets and rigid eyelets. [00:05:04] Speaker 05: as teaching threading of suture and as being interchangeable both for knotty procedures and knotless procedures. [00:05:11] Speaker 05: And so I think that's the challenge here is that every time there is, in fact, a CIP, there's something else always added. [00:05:19] Speaker 05: And there's nothing wrong in the law that permits somebody to go back to claim their original broad subject matter of the first application. [00:05:29] Speaker 05: And that's part of the reason why we leave. [00:05:31] Speaker 05: We have this practice of continuations in part. [00:05:35] Speaker 05: And so from that perspective, because we can establish [00:05:38] Speaker 06: Well, I guess if application number one discloses a spoon, right? [00:05:44] Speaker 06: And then the continuation application discloses, well, you can use a spoon or a fork, right? [00:05:55] Speaker 06: You wouldn't be able to get priority for such a claim, spoon or fork, all the way back to the original application that only disclosed a spoon. [00:06:05] Speaker 06: Is that right? [00:06:06] Speaker 05: Well, it depends on how you claim it. [00:06:07] Speaker 05: And I think that's one of the benefits of being able to draft our claims. [00:06:11] Speaker 04: What if the original application disclosed a spork? [00:06:14] Speaker 05: A spork? [00:06:16] Speaker 05: Well, I think we could, for example, claim a generic claim to utensil, because it was commonly known that spoons and forks are, in fact, utensils. [00:06:23] Speaker 05: And so it may seem odd, but that is, in fact, the whole purpose behind CAPs, that we should be allowed to go back and claim the broader subject matter that was disclosed. [00:06:33] Speaker 05: And I think we can all think of examples where that is in fact the case where we can think of something that was a broad idea, and here the broad idea was an eyelet that threads. [00:06:44] Speaker 05: And then something that embellishes that idea, here in this case it happens to be a rigid eyelet. [00:06:50] Speaker 06: Can we move on to your constitutional challenge to the [00:06:54] Speaker 06: Patent Board? [00:06:55] Speaker 05: Your Honor, I would like to, without, can I just focus on one point that I think was not disclosed by the Board, and I would just be very quickly point out that we made an argument about in race, Mike. [00:07:06] Speaker 05: and Amgen about common function and structure, and that was never considered. [00:07:11] Speaker 05: And the flexible islet disclosing the species or supporting the genes was never considered as written description support. [00:07:20] Speaker 05: With respect to the constitutional argument, Your Honor, I would submit that PTAP judges, because they have the ability to submit final written decisions, have the significant authority that [00:07:36] Speaker 05: the justices in Edmonds mentioned, that pushes the line of the inferior, pushes the judge, judges from inferior officers of the Constitution to principal officers, and that there is no, in fact, review except on the instance that there is a request for reexamination, or I'm sorry, request for rehearing granted. [00:07:59] Speaker 05: Because. [00:08:00] Speaker 04: But even when the rehearing occurs, doesn't that also occur by the same board judges that are not constitutionally appointed, according to you? [00:08:07] Speaker 05: The rehearing does incur, or if it is in fact granted, it would occur by the, sorry, the. [00:08:15] Speaker 04: The same board judges, right? [00:08:17] Speaker 05: The same board judges, correct. [00:08:18] Speaker 04: And they would, your view is they aren't constitutionally appointed and therefore ineligible to decide the question in the first case. [00:08:26] Speaker 04: So having them rehear a case, could that possibly cure the defect? [00:08:30] Speaker 05: Well, Your Honor, I don't believe that would cure the defect, because you have to have at least a principle. [00:08:36] Speaker 05: I mean, Your Honor. [00:08:38] Speaker 05: First of all, I would point out that with respect to if they reheard this matter, I don't know if Your Honor is referring to rehearing this matter generally, but I believe the Supreme Court has mentioned that it would have to be a different panel of judges that would rehear this matter if we were successful on appeal. [00:08:53] Speaker 06: Are you familiar with standard operating procedure number two of the patent board? [00:08:58] Speaker 05: Not that specific one, Your Honor. [00:09:00] Speaker 06: OK, my understanding from the government's green brief here that [00:09:06] Speaker 06: that standard operating procedure contemplates the director, Sue Esponte, convening a panel to potentially rehear any board decision for the purposes of perhaps making precedential either an affirmance or a reversal or something else. [00:09:34] Speaker 06: And so therefore, at least right now, there's something inside the agency that contemplates the director making a move on a patent board decision. [00:09:46] Speaker 05: Your Honor, I'm familiar with that rule. [00:09:48] Speaker 05: I'm sorry, I didn't know the number. [00:09:49] Speaker 05: But yes, the director [00:09:56] Speaker 05: Ken certainly, well, he can't on his, I'm sorry, let me rephrase. [00:09:59] Speaker 05: I don't believe the director can, on his own, institute rehearing. [00:10:03] Speaker 05: There must be a petition that's filed according to the rules for rehearing. [00:10:09] Speaker 05: And because of that, and because that panel that would have to be to rehear the matter would still consist of three judges, as well as other members of the PTAB, [00:10:22] Speaker 05: who are not constitutionally appointed. [00:10:24] Speaker 05: It is a fine-written decision. [00:10:27] Speaker 01: Even if the director was to inject herself into the fray as a panel member in order to review a decision, does a director retain its same authority as director, or does a director at that point become just another mere panel member that's bound by the law? [00:10:48] Speaker 05: Your Honor, I believe he just becomes another member of the panel. [00:10:51] Speaker 05: And from that perspective, I think that it can be said that the decision that is written, and by the way, that interjection only comes by intervention on appeal. [00:11:02] Speaker 05: And so for that reason, I would also add that it supports the contention that these PTAP judges are, in fact, principal officers. [00:11:09] Speaker 01: Does the statute ever speak about the PTAP director or the director [00:11:15] Speaker 01: reversing the panel decision based on either political or policy reasons and not the law. [00:11:25] Speaker 05: I'm sorry, Your Honor, say that again. [00:11:26] Speaker 01: Does the statute speak to the authority of the director to review a panel decision on the basis of policy, the agency's policy objectives as opposed to just [00:11:43] Speaker 01: the law? [00:11:45] Speaker 05: I'm not aware of anything that requires the judge or the director to be able to make a decision in that regard. [00:11:55] Speaker 05: My recollection is that the APA, in some regards, constrains the director because there must be some sense of independence and that there must be some sense of a fair hearing and that it can't be politically determined, which is something that I think [00:12:13] Speaker 05: Limits the power of the the director mr. Mr.. Cho you're willing to your rebuttal time would you like to save the remainder? [00:12:22] Speaker 04: Yes, sir Let's hear from mr.. Is it Steenberg? [00:12:33] Speaker 00: I'm good and It's good morning. [00:12:35] Speaker 00: Your honor. [00:12:38] Speaker 00: My name is Charlie steenberg on behalf of Smith and F here in our three care [00:12:41] Speaker 00: As Mr. Cho noted, the central issue here is whatever description support, which is an intensely factual issue. [00:12:50] Speaker 00: Here, the board made a series of well-supported findings concerning whether [00:12:55] Speaker 00: The applications file over a 10-year period from 2003 to 2013 supported a generic first member that everyone agrees is construed in the 2014 application could be either a flexible loop or a rigid implant. [00:13:12] Speaker 00: However, as the board noted, the applications for a 10-year period between 2003 and 2013 [00:13:20] Speaker 00: expressly warned against the flexible loop and noted that it could cause bone damage and abrade tissue. [00:13:27] Speaker 00: Instead, the present invention is described over a 10-year period was for a device that allowed for the free sliding of suture, which, as Arthur X notes, for instance, in page 6 of its reply, the flexible loop cannot possibly achieve. [00:13:47] Speaker 00: the applications included in the 707 application filed in 2003 on which the board focused. [00:13:54] Speaker 00: described several different embodiments of suture anchors that allow for the free-siding of suture. [00:14:02] Speaker 01: What's your argument that there can never be an incorporation by reference in situations where you have a disparagement of the claims or aspects of the written description? [00:14:14] Speaker 00: Your Honor, is the board found, and we agree, there was an incorporation by reference here in the background section. [00:14:23] Speaker 00: That, however, is just the threshold question. [00:14:28] Speaker 00: It leads to the follow-up factual question of what is the import of that incorporation by reference, and how would a person with a skill in the art understand that incorporation by reference. [00:14:37] Speaker 00: In that sense, the case is very similar to Tronzo. [00:14:42] Speaker 00: And as cases like Tronzo and Aniscape and Bamberg, which applied Tronzo, [00:14:50] Speaker 00: Note, you can have situations in which a material in the background is described negatively, that is, for purposes of providing context for the invention. [00:15:00] Speaker 00: Furthermore, as Aniscape particularly notes, the issue here is not one of disclaimer. [00:15:07] Speaker 00: That is, you can have situations where the properly construed justification leads on broader claims, but the disclosure does not support those broader claims. [00:15:18] Speaker 00: Aniscape is a case in point. [00:15:20] Speaker 00: properly construed, as this court found, the controller could encompass devices that were not capable of six degrees of freedom. [00:15:28] Speaker 00: However, the problem for the patent owner in that case was that their alleged priority document taught the importance of six degrees of freedom and thus did not support [00:15:40] Speaker 00: the The the claim is Interpreted in this case was a board limited to the scope of what was incorporated by reference The board considered the incorporation by reference that is the entirety of the application If you looked at pages 28 through 30 of the board's decision it the board noted that the [00:16:10] Speaker 00: that what Arthrox is arguing about incorporation by reference looked at it in a vacuum, in essence, without taking account of the 707 applications. [00:16:28] Speaker 00: the 707 disclosures as a whole to the point that even while the 707 application and the other three applications file over a 10-year period, note that alternative embodiments beyond the three specifically described [00:16:45] Speaker 00: in the application, allow for the free sliding of suture, even alternative embodiments needed to allow for the free sliding of suture, which again is precisely what the flexible loop cannot accomplish. [00:16:58] Speaker 01: Can you get to the Appointments Clause argument? [00:17:00] Speaker 00: Certainly. [00:17:02] Speaker 00: The, you know, as an initial matter, this argument was never raised before this court, and unlike, for instance, the retroactivity issue in Peters, [00:17:16] Speaker 00: Where that, you know, candidly was a pure question of law in which, you know, input from the board would not have impacted this court's decision. [00:17:27] Speaker 00: Here, the relevant question is the extent of supervision by the director of the board. [00:17:32] Speaker 00: And on that issue, I submit the input from the board at the [00:17:37] Speaker 00: at the stage of the IPR itself. [00:17:39] Speaker 01: Does a director supervise the board if the director steps in as a panel member? [00:17:46] Speaker 01: Isn't the director bound to the same responsibilities and the same parameters as a regular panel member? [00:17:52] Speaker 01: I mean, the director does not become a super panelist, right? [00:17:57] Speaker 00: To my understanding, it's not as if the director is a member of the panel. [00:18:02] Speaker 00: It could magically supersede. [00:18:04] Speaker 01: So if the director is bound by the same law as a regular panel member, then how can you say that the director is supervising the panels? [00:18:11] Speaker 00: Several things, Your Honor. [00:18:13] Speaker 00: For one, the director, in talking about applying the relevant law, the director has a key role in establishing particular board decisions as precedential. [00:18:26] Speaker 00: The director has a key role in setting forth policy for the board. [00:18:32] Speaker 00: The director, furthermore, has responsibility for appointing panel members. [00:18:37] Speaker 00: And as the Supreme Court found at Edmond, I believe, and has also been held elsewhere, the ability to control panel assignments is a key aspect of control. [00:18:52] Speaker 00: And by contrast, I'll note that out of the two cases that Arthrex cites that found an appointments clause violation, one is the railroad case, which is so factually distinguishable that Arthrex doesn't even mention it in its reply. [00:19:05] Speaker 00: The other is the intercollegiate case in which the relevant board consisted of three members that always sat on bunk without any input from the librarian or Congress as to panel assignments. [00:19:22] Speaker 00: I also note, going back to the issue of waiver, that Arthrex is uncommonly unworthy of being a court of the benefit of this court looking past the issue of waiver when it itself has repeatedly filed IPRs, including several IPRs that literally were decided or addressed by the exact same panel we have in this case. [00:19:47] Speaker 04: How do you get around Freytag? [00:19:50] Speaker 04: Didn't Freytag deal with the exact same waiver issue? [00:19:57] Speaker 00: Freytag noted that, first of all, this is a matter of discretion. [00:20:02] Speaker 04: So just to be clear, so we have the authority to choose as a matter of discretion whether to find the issue waived or not. [00:20:09] Speaker 00: Absolutely, Your Honor. [00:20:11] Speaker 00: My point simply is that in Freytag, I believe the exact language of this in court was that Freytag's challenge was neither frivolous or disingenuous. [00:20:21] Speaker 00: Here, by contrast, we submit that Arthrex, having repeatedly benefited from the IPR system, including IPRs in which, again, they literally have the same- I don't understand. [00:20:31] Speaker 04: There's a system that exists, and if they want to challenge [00:20:37] Speaker 04: Patent rights, are you saying that they shouldn't do it if they believe there's an unconstitutional appointments clause? [00:20:44] Speaker 04: Or if they're the challenger, they have some obligation to, as part of their challenge, bring an unconstitutional appointments clause question? [00:20:51] Speaker 00: In this instance, if Arthrex wanted to raise and preserve this issue, then yes, we assume that they should have raised it at the board stage. [00:20:59] Speaker 04: And we would have had the benefit of- No, that's a different answer. [00:21:03] Speaker 04: You're suggesting to me, [00:21:05] Speaker 04: that the fact that they themselves filed other IPRs should prevent them from now in this IPR challenging the Appointments Clause. [00:21:14] Speaker 04: And I'm saying that I don't understand that argument. [00:21:17] Speaker 00: I apologize, Your Honor. [00:21:18] Speaker 00: In a scenario in which Arthrex had raised this issue at the board stage, then I agree. [00:21:23] Speaker 00: The fact that they separately had filed IPRs of their own would not have been a bar to the board addressing the Appointments Clause issue. [00:21:33] Speaker 00: and this court in turn addressing the issue. [00:21:36] Speaker 01: Does the board have authority to rule under some constitutionality? [00:21:44] Speaker 00: In certain cases, as applied, Your Honor, yes. [00:21:52] Speaker 04: This is not an as applied challenge. [00:21:55] Speaker 04: I understand they're briefed to be not an as applied challenge, but rather a facial challenge. [00:22:00] Speaker 04: Does the board have the authority to rule on a facial challenge to their own proper appointment under the Constitution? [00:22:11] Speaker 00: I would defer to the government, Your Honor, but I'm not aware of specific authority to that effect. [00:22:15] Speaker 00: However, as I was saying earlier, had Arthex faced this challenge below, we would have the benefit of a more complete record as to the specific nature of the Directive of Supervision [00:22:30] Speaker 00: I'm further finishing my response to your question earlier, and I realize that... You've exhausted all of your time, and you're now using the government's time. [00:22:37] Speaker 04: Would you like to continue? [00:22:38] Speaker 00: No, Your Honor. [00:22:44] Speaker 04: Okay. [00:22:45] Speaker 04: I just wasn't sure if you were aware of it. [00:22:46] Speaker 04: I didn't know if you knew they set the clock to 15 versus 10. [00:22:49] Speaker ?: Okay. [00:22:53] Speaker 02: May it please the court, Melissa Patterson, for the government. [00:22:56] Speaker 02: The government intervened on two issues, including the constitutional issue the court discussed this morning. [00:23:02] Speaker 02: As an additional matter, both of those issues were forfeited by Arthrex for failure to waive for the board. [00:23:07] Speaker 02: You agree that we have the discretion to address those issues? [00:23:10] Speaker 02: Absolutely, Your Honor. [00:23:11] Speaker 02: As noted in both Frytag and in DBC, courts certainly have the power to overlook a forfeiture of this kind. [00:23:19] Speaker 02: But as this court also explained it. [00:23:21] Speaker 04: Funny, I haven't seen any of those cases referred to as a forfeiture. [00:23:23] Speaker 04: It's usually a waiver. [00:23:24] Speaker 04: A forfeiture sounds much more serious. [00:23:27] Speaker 02: You know, I think there's a Supreme Court case explaining that forfeiture technically applies to when you're just silent about it, whereas waivers, when you affirmatively say... Well, in Freytag, they were silent all the way until the Supreme Court, right? [00:23:38] Speaker 04: Indeed, Your Honor. [00:23:39] Speaker 04: And yet they didn't refer to it as a forfeiture there, did they? [00:23:41] Speaker 02: I think they actually may have your honor. [00:23:44] Speaker 02: But we're using them more or less interchangeably here, because it is as if Arthrex came in and said, we think these judges are very, very constitutionally appointed, which I think would fall into the classic waiver box. [00:23:56] Speaker 02: Our point here is that in DVC and in Freytag, the courts looked to whether or not it was an appropriate use of the discretion. [00:24:04] Speaker 04: Well, in DVC, first off, we're not bound by DVC, right? [00:24:06] Speaker 04: Every panel can exercise its discretion, correct? [00:24:09] Speaker 02: You are bound by DBC insofar as it's binding precedent of this court that says that only in exceptional cases should the court overlook a forfeiture. [00:24:18] Speaker 04: Well, did DBC's facts parallel these facts? [00:24:21] Speaker 02: In many ways, it did. [00:24:22] Speaker 02: It was also an appointments class challenge. [00:24:24] Speaker 04: But in that case, didn't they rely on the remedy? [00:24:27] Speaker 04: The fact that Congress, one of the reasons they chose not to exercise their discretion was because Congress had already remedied the situation. [00:24:34] Speaker 04: The Secretary had already started implementing that remedy. [00:24:37] Speaker 04: So it drastically limited the impact. [00:24:39] Speaker 04: That's one of the reasons, but there were others, Your Honor. [00:24:41] Speaker 04: But doesn't that make it a case that is really significantly different from this one? [00:24:46] Speaker 04: Because if there really is, in fact, a constitutional problem here, [00:24:50] Speaker 04: It is ongoing, and every case being decided will be infected by it. [00:24:54] Speaker 04: So wouldn't that, unlike DBC, where it had been resolved, wouldn't that make a pretty big difference in terms of the exceptional importance of whether or not we should deem this waived? [00:25:04] Speaker 02: That's one of the considerations in DBC, but it's not the only one. [00:25:08] Speaker 02: And of course, DBC also talked about the problem with incentivizing sandbagging. [00:25:12] Speaker 02: But so did Freytag. [00:25:15] Speaker 04: Freytag had the same set of facts. [00:25:17] Speaker 04: The only difference between, say, Freytag and DBC, as far as I can tell, is that in DBC, a remedy had already been provided by Congress and been implemented by the Secretary. [00:25:28] Speaker 04: I don't see any significant difference. [00:25:30] Speaker 04: What am I missing? [00:25:30] Speaker 04: Is there a difference between Freytag and DBC? [00:25:34] Speaker 02: Well, in DBC, of course, this court interpreted Freytag and said that the appropriate analysis... In a situation where a remedy has already been provided and already been implemented, we choose not to exercise our discretion. [00:25:46] Speaker 02: Again, that's one of the factors in DBC, but it's not the only one. [00:25:48] Speaker 02: And if the concern is that this court is not going to get a crack at this issue because nobody has preserved it, [00:25:54] Speaker 02: This court need not worry because in case 18, 1831, the Polaris case that has already been scheduled for argument on November 4th, Polaris did preserve this issue. [00:26:04] Speaker 02: It did raise it before the board. [00:26:06] Speaker 06: I'm sorry, can we move along? [00:26:08] Speaker 06: Because I'm interested in hearing an answer to Judge Raina's earlier question about whether the board in this case or really any other case, would it have the authority to review this Appointments Clause challenge and then potentially decide for itself [00:26:27] Speaker 06: We have to, we conclude that we've all been unconstitutionally appointed. [00:26:34] Speaker 06: And so therefore, this is an unconstitutional statute. [00:26:38] Speaker 04: And in fact, an unconstitutional decision at that point. [00:26:40] Speaker 04: Go ahead. [00:26:40] Speaker 02: Right. [00:26:41] Speaker 02: Well, not quite, Your Honor. [00:26:43] Speaker 02: Suppose, the top line answer is yes. [00:26:45] Speaker 02: The board does have the authority to address constitutional issues. [00:26:48] Speaker 02: And if you look at the Supreme Court's decision in Elgin, [00:26:51] Speaker 02: There, even if the agency can't actually do anything about it, the agency can offer shed light on threshold issues about how the statute works. [00:27:02] Speaker 02: Here, there's a debate in the briefs about such things as which removal statute applies to these judges, which is a key factor. [00:27:09] Speaker 06: I understand that the board [00:27:11] Speaker 06: you know, with all of this experience and insights on how the board operates and what it does and doesn't do, maybe the board could offer something on that. [00:27:19] Speaker 06: But would the board even have the authority, if it were to conclude that the statute, that they were unconstitutionally appointed, [00:27:27] Speaker 06: They wouldn't have the authority to issue such a decision, would they? [00:27:30] Speaker 02: Well, I think it would, Your Honor. [00:27:31] Speaker 02: It would come at the institution stage, which, of course, is done on the director's authority alone. [00:27:36] Speaker 02: And the director, let's just suppose a counterfactual world in which there actually weren't appointments caused problem, which there is not. [00:27:42] Speaker 02: But if the director got a petition, [00:27:45] Speaker 02: said, oh my goodness, there's an appointments clause challenge here. [00:27:48] Speaker 02: Actually, there's a real latent defect in section six here. [00:27:52] Speaker 02: He could decline institution on the basis of a conclusion that there was a statutory defects. [00:27:58] Speaker 02: Recall the inner party's review is never mandatory. [00:28:00] Speaker 02: The director, as the Supreme Court explained in Quozo, has unfettered discretion to decline to institute. [00:28:06] Speaker 06: So then the challenge would have to be raised in a preliminary patent on a response before an institution. [00:28:13] Speaker 06: not after the institution. [00:28:15] Speaker 02: Is that right? [00:28:17] Speaker 02: I certainly think that would be an opportunity for the patent owner to raise it. [00:28:20] Speaker 06: It wouldn't be a preserved issue if you only raised it after the institution. [00:28:26] Speaker 02: As a practical matter, Your Honor, of course, the director can reverse an institution decision, can essentially un-institute. [00:28:33] Speaker 02: So even if the patent owner provided it in a response once institution had occurred, there's still a mechanism for the director to address the issue and call off [00:28:43] Speaker 02: the inner party's review. [00:28:44] Speaker 02: So I don't think that there's any practical problem with litigants raising this issue before the board and giving the board a chance. [00:28:52] Speaker 02: And as DBC said, all you have to do is give them a chance. [00:28:55] Speaker 02: Even if the board's not going to actually weigh in on the issue, you do need to give the agency a chance to explain that the statutory scheme [00:29:03] Speaker 02: That could obviate some of the constitutional issues. [00:29:05] Speaker 04: Aren't you getting that chance right now? [00:29:06] Speaker 04: I mean, one of the significant powers that you argued on the merits the director has that should be important in this consideration is the ability to intervene and to put forth his views. [00:29:18] Speaker 04: Aren't you having the opportunity now to put forth those views? [00:29:22] Speaker 02: We are, Your Honor. [00:29:23] Speaker 02: And we're happy to address some of the merits. [00:29:24] Speaker 02: But of course, as this Court and the Supreme Court has explained, the appropriate time to raise those challenges is before the agency. [00:29:31] Speaker 04: Can we get beyond? [00:29:32] Speaker 04: I'm trying to move you beyond waiver. [00:29:33] Speaker 02: Absolutely, Your Honor. [00:29:34] Speaker 02: Can you please get beyond waiver and get to the merits? [00:29:36] Speaker 02: Let's address some of the merits questions. [00:29:38] Speaker 02: So one thing that hasn't been discussed this morning is the director's authority to issue binding policy directives that bind everybody, all the other judges, all the employees at the PTO. [00:29:48] Speaker 02: And that can come at any time. [00:29:50] Speaker 02: It can come before the PTAB engages with the decision and applies the law, or it could come after an initial panel decision comes down. [00:29:59] Speaker 02: So there are sort of three different buckets of control that the Supreme Court has looked to in principal officer challenges. [00:30:06] Speaker 02: Recall that we're trying to figure out whether or not these judges are [00:30:11] Speaker 02: quote, at some level, supervised and directed by a Senate-confirmed, presidentially appointed officer. [00:30:18] Speaker 02: And here, there are two different PAS officers, both the secretary of commerce and the director of the PTO, who supervise and control the judges. [00:30:28] Speaker 02: So there's these sort of three different ways in which that happens that are relevant under the Supreme Court's admin analysis. [00:30:34] Speaker 02: First is regulatory, second is removability, and third is to the actual substance of the decisions. [00:30:41] Speaker 02: How can you review? [00:30:42] Speaker 02: How can you engage with the substance? [00:30:44] Speaker 03: Regulatory, removability, and reviewability, the three Rs. [00:30:47] Speaker 03: Go ahead. [00:30:48] Speaker 02: Exactly, Your Honor. [00:30:49] Speaker 02: So certainly, I don't think there's any dispute here that the director has the regulatory authority here. [00:30:54] Speaker 02: He can set out both under 2B and under 316. [00:30:59] Speaker 02: The director is the one who gets to construe the statute and promulgate regulation. [00:31:02] Speaker 04: Well, he doesn't have substantive. [00:31:04] Speaker 04: rulemaking authority? [00:31:05] Speaker 02: Under 316, the Supreme Court explained in Quozo that the rule there, even if considered, it was the broadest reasonable interpretation rule, even if considered a substantive rule under this court's 2B line of cases, that it was still a proper exercise of the authority. [00:31:21] Speaker 02: So we're not solely relying on the, we're not just talking 2B authority in our party's [00:31:25] Speaker 02: We're talking 316 rulemaking authority. [00:31:27] Speaker 06: When the director issues examination guidelines for its examiners, Section 101, Section 112, Section 103, is the board members, are they bound by those examination guidelines? [00:31:42] Speaker 02: Yes, Your Honor. [00:31:43] Speaker 02: And I think, in fact, the director's recent 101 guidance released in January 2019 applies to all employees. [00:31:49] Speaker 06: Does it say that in the guidance document that [00:31:53] Speaker 06: APJs are bound by these examination guidelines? [00:31:56] Speaker 02: I'd have to go back and check, but I assure you that the director and the agency expects all of the employees, including the APJs, to follow, in this example, the 101 guidance the director sets out. [00:32:08] Speaker 02: The director is in charge of this office. [00:32:10] Speaker 02: He has uncontested authority to issue that type of guidance. [00:32:13] Speaker 06: He does, but what I don't know for sure is to what degree [00:32:20] Speaker 06: Do members of the board believe that they are bound by such examination guidelines? [00:32:24] Speaker 06: Those examination guidelines are clearly set out for examiners, just as the manual patent examining procedure is set out for examiners. [00:32:34] Speaker 06: But I don't think the board is necessarily bound by the MPEP. [00:32:39] Speaker 02: Well, I think it's uncontested. [00:32:41] Speaker 02: I think that that guidance actually does apply to everyone. [00:32:44] Speaker 02: But even if it didn't, I don't think anyone is here saying that the director couldn't make it. [00:32:49] Speaker 02: So the director could issue the same sort of policy guidance and label it, attention APJs, this means you. [00:32:56] Speaker 02: And at that point, the APJs are required to follow this binding policy guidance. [00:33:02] Speaker 02: So in terms of the R, the substance box of the decision, [00:33:06] Speaker 02: The director doesn't have to wait until the panel spits out a decision embracing a view of the law he doesn't like. [00:33:12] Speaker 02: He can actually get out ahead of it. [00:33:14] Speaker 02: In a lot of ways, this is more significant. [00:33:17] Speaker 06: I mean, I understand that if the director somehow helps engineer a presidential board decision, then the board is bound by such a presidential decision. [00:33:27] Speaker 06: But I'm trying to figure out about everything else that's not a presidential decision. [00:33:31] Speaker 06: Suppose if there was a board presidential decision that said, [00:33:35] Speaker 06: all members of the board are bound by the MPEP, then the board would be locked in. [00:33:40] Speaker 06: But right now, there's nothing in the MPEP itself that says that board judges are bound by the contents of the MPEP. [00:33:47] Speaker 06: It specifically says examiners are, but it doesn't say anything about board judges. [00:33:52] Speaker 02: Your Honor, the director, absolutely. [00:33:54] Speaker 02: Anything he could do by deeming a board decision presidential, which, look, he doesn't have to engineer it. [00:34:00] Speaker 02: The director has the sole authority. [00:34:01] Speaker 06: I mean, I'm just thinking about some board decisions I'm aware of where [00:34:05] Speaker 06: Or maybe there aren't, you know, board members who have said things like, well, those guidance documents are just guidelines. [00:34:15] Speaker 06: They're not really things that they're bound by. [00:34:19] Speaker 06: And so I'm just trying to understand what is the relationship between the board and these various guidance documents that I. [00:34:28] Speaker 02: Any guidance that the director explains should bind APJs. [00:34:32] Speaker 02: And my understanding is that he's already done that with things like the 101 guidance. [00:34:36] Speaker 02: APJs are required to apply. [00:34:39] Speaker 02: And if an APJ, in fact, said something like, guidance schmeidens, here's what I think the law means, that would indeed be an errant board member. [00:34:46] Speaker 02: And at that point, the two different forms of removal authority [00:34:51] Speaker 02: which the Supreme Court and Edmund explained are an extremely powerful tool of control, might well come into play. [00:34:57] Speaker 02: APJs do not have the authority to naysay the director's binding guidance. [00:35:02] Speaker 02: So we have a very robust substantive control. [00:35:08] Speaker 04: You're still on regulatory, but then I thought you were launching into removability, which is the two forms of removal authority. [00:35:14] Speaker 04: What are the two forms of removal authority? [00:35:15] Speaker 02: The two forms of removal authority are, first, the director's unfettered authority to designate panel members. [00:35:22] Speaker 04: So let me ask you that. [00:35:23] Speaker 04: The statute actually unquestionably gives him unfettered authority to designate who sits on what panel. [00:35:29] Speaker 04: What it doesn't give him is the authority to de-designate. [00:35:32] Speaker 04: And so I'm a little confused because removal is something that is discussed in many, many, many statutes. [00:35:38] Speaker 04: Removal from judicial administration, removal from your job altogether with or without cause. [00:35:44] Speaker 04: Where does the statute give the director the ability to de-designate panel members as opposed to designate? [00:35:51] Speaker 02: Removal authority follows appointment authority, Your Honor. [00:35:54] Speaker 02: And many statutes are silent on the question of removal. [00:35:57] Speaker 02: And dating back to the Supreme Court's, I think it was 1923, Myers decision, when Congress is silent about removing somebody for a role, you should look to who has the appointing power. [00:36:07] Speaker 02: So we think Section 6, which gives, as you said, I think it's uncontested that the director has the unfettered authority to appoint, but also gives him the authority, if he thinks the judge is [00:36:18] Speaker 02: is errant, to use Judge Chen's word, that he could change the panel. [00:36:23] Speaker 04: And you're not concerned with, say, Justice Ginsburg's comments and oral arguments that that would amount to a due process problem, or Judge Dyke's opinion that followed that same line of concern, that that sort of panel stacking, that messing around like that would create a due process problem, you don't have a concern about that? [00:36:43] Speaker 02: You know, if somebody thought that their due process rights had been violated by a particular use of the director's authority, they could certainly bring that challenge. [00:36:50] Speaker 02: But recall what we're sort of getting attacked from both sides. [00:36:53] Speaker 02: You know, we have Arthrex here saying, you don't have enough control. [00:36:56] Speaker 02: The director doesn't have. [00:36:57] Speaker 04: But you're trying to tell me that the director has the control to de-designate any time he doesn't like. [00:37:02] Speaker 04: In your brief, you even said mid-case. [00:37:05] Speaker 04: Mid-case, he could pull an APJ off of an IPR that he's midway through deciding, if the director so chooses. [00:37:13] Speaker 04: And I'm saying, I don't see where that is in the statute. [00:37:16] Speaker 04: And your response to me was, well, you should just assume it's there, because they have the power to appoint. [00:37:20] Speaker 04: And since it's silent, they therefore have the power to remove. [00:37:22] Speaker 04: And I'm saying, well, what if that power to remove mid-case that you're suggesting would amount to a due process violation? [00:37:29] Speaker 04: Should I still assume the director has that authority if it would create due process concerns? [00:37:35] Speaker 02: I think the top line answer is yes, Your Honor, if I could just explain why. [00:37:38] Speaker 02: You can always imagine circumstances in which an agency might abuse or misuse its power. [00:37:45] Speaker 02: So if the director were to say something like, I'm going to change the cases so one of the petitioner's buddies is on the panel, maybe that particular use of the authority would [00:37:55] Speaker 02: would create a due process problem. [00:37:57] Speaker 02: But recall that we read statutes in order to obviate constitutional concerns, not to read them in. [00:38:04] Speaker 02: And we have folks here today saying, this director does not have enough control over the office. [00:38:10] Speaker 02: And what we're saying is you should read Section 6 in the way that removal and appointment power [00:38:16] Speaker 02: traditionally is read, even without constitutional concerns, to mean that the director has control over who hears particular cases. [00:38:24] Speaker 04: So I think that you even said in your brief that it could go so far as the director deciding to never appoint a particular APJ to any case. [00:38:31] Speaker 04: Is that right? [00:38:32] Speaker 04: That's right, Your Honor. [00:38:33] Speaker 04: Really? [00:38:34] Speaker 04: So why would he be hired? [00:38:35] Speaker 04: I mean, would there be a concern there about fraud, waste, and abuse since [00:38:38] Speaker 04: The obligations and job descriptions of an APJ are laid out clearly in the statutes and the regs. [00:38:44] Speaker 04: And if you take all of them away and we're continuing to pay them, what happens then? [00:38:48] Speaker 04: That seems a little suspicious or concerning. [00:38:50] Speaker 02: At that point, the Secretary of Commerce, who has the ability to remove APJs from government service entirely, might well decide to initiate that type of termination. [00:38:58] Speaker 04: But the director has the- And that termination would have to be in the interest of the efficiency of service. [00:39:02] Speaker 04: And so it would be there, according to you, because the director has decided [00:39:05] Speaker 04: that they're not going to appoint them. [00:39:07] Speaker 04: I'm not going to appoint you to any cases. [00:39:09] Speaker 04: Therefore, your service is inefficient. [00:39:12] Speaker 02: I think that's a possibility, Your Honor. [00:39:14] Speaker 02: I think the challenge here is that the director- It doesn't sound just a tiny bit circular to you? [00:39:18] Speaker 02: No, Your Honor. [00:39:19] Speaker 02: I think that that is two different forms of removal authority contemplated by the statute working in tandem. [00:39:24] Speaker 04: These are signs of control between the president and these APJs, which is- Does removal for the efficiency of service have embedded within it a notion of misconduct? [00:39:36] Speaker 04: I we're getting a little far beyond the briefs and I know we're not because you you told me that this is the removal authority So I've got to figure out I say I adopt the statutory section that you say governs removal 7513 it says removal in if it for cause in the efficiency of service right Yes, one potential for what many of the cases that you've cited to me talk about is more of an unfettered removal removal without cause [00:40:06] Speaker 02: Well, of course, this court's decision in Messiah's talks about a much higher removal standard. [00:40:10] Speaker 04: Yes, but there you had reviewability, which we don't have here. [00:40:12] Speaker 04: So don't even try to go there yet. [00:40:14] Speaker 04: We're going to stick with this first. [00:40:15] Speaker 04: So I understand that I agree with you. [00:40:17] Speaker 04: Messiah's has probably an even more difficult removal [00:40:24] Speaker 04: process inherent in it, but it totally has direct reviewability. [00:40:30] Speaker 04: So it has one, your three buckets. [00:40:32] Speaker 04: It's got two of your three buckets completely and one of your three buckets less so. [00:40:36] Speaker 04: My concern is you got one bucket completely, supervision, and the other two buckets, eh, not so much. [00:40:42] Speaker 04: So that's where I am. [00:40:43] Speaker 04: I'm afraid you're one third full, my friend. [00:40:45] Speaker 04: And so that's why I want you to focus on that notion, because you can't point to Messiah and say there was less there, because it's all a balancing act. [00:40:54] Speaker 04: Couple of things, Your Honor. [00:40:55] Speaker 02: Let's return to the buckets. [00:40:56] Speaker 02: I think we all agree the regulatory authority is within the director, and that that's a relevant form of control. [00:41:01] Speaker 04: When you say we all agree, I'll say you assert it. [00:41:03] Speaker 04: Go ahead. [00:41:04] Speaker 02: No one has contested here in this room. [00:41:07] Speaker 04: Whether or not it is sufficient to meet the standards set out in Edmund is a different question. [00:41:13] Speaker 02: Well, and of course, we're advocating a mosaic approach. [00:41:16] Speaker 02: Edmund itself said there's no sort of exclusive criterion. [00:41:19] Speaker 02: We sort of look at the landscape as a whole to see, do these folks report directly? [00:41:23] Speaker 02: Are they controlled only by the president, or are they controlled by somebody else? [00:41:27] Speaker 02: So we've got the regulatory bucket. [00:41:28] Speaker 02: We've got the removability bucket, and we have two different. [00:41:32] Speaker 04: So even if the question is, are they controlled by the president or are they controlled by someone else? [00:41:35] Speaker 04: I don't think in Edmonds or in any other case, when they were deciding whether they're principal officers, the Supreme Court said, well, let's see what exercises the president has for these people. [00:41:44] Speaker 02: I'm not sure that's right, Your Honor. [00:41:45] Speaker 02: The question in Edmund was to decide whether you're inferior, we decide whether or not you have a superior. [00:41:55] Speaker 02: And if that superior is only the president, you're a principal officer. [00:41:58] Speaker 02: But if that superior is another presidentially appointed Senate-confirmed officer, then you're an inferior officer. [00:42:04] Speaker 02: So returning to our buckets, even if you thought that the efficiency of the service standard under 7513. [00:42:11] Speaker 04: Can you answer my question about whether or not it implicates misconduct? [00:42:14] Speaker 04: I do think it can implicate misconduct. [00:42:17] Speaker 04: So I'm trying to get you to answer the question. [00:42:19] Speaker 04: But the relevant form of misconduct. [00:42:20] Speaker 04: Yes, is your answer yes, it implicates misconduct, or no, it does not? [00:42:23] Speaker 04: Yes, it can implicate misconduct. [00:42:25] Speaker 02: And one form of misconduct would be insubordination. [00:42:28] Speaker 02: So returning to the example we discussed earlier, if an APJ disregarded the binding policy directions of the director in issuing a decision, then I think that would be a fair grounds for removal under 7513 as a form of insubordination. [00:42:44] Speaker 06: But that's not in the performance plan for the board judges that they have to follow all guidance documents by the director. [00:42:52] Speaker 02: I don't know if that's written down their performance plans, but I think it certainly could be if the director was having a problem with employee and subordination within the PTO. [00:43:01] Speaker 02: That would certainly be one of the options. [00:43:03] Speaker 04: OK, but it does implicate some form of misconduct. [00:43:06] Speaker 04: So you agree it's different than without cause? [00:43:09] Speaker 02: I do agree. [00:43:09] Speaker 02: Yeah. [00:43:10] Speaker 02: That there is a gap. [00:43:11] Speaker 02: On that basis, it is. [00:43:13] Speaker 02: But that is not true of the director's authority to functionally remove judges from judicial service. [00:43:20] Speaker 02: And recall that in Edmund, that was the relevant removal power. [00:43:23] Speaker 02: Nobody thought the JAG there could remove them from service entirely. [00:43:28] Speaker 02: which is the 7513 call we've been having. [00:43:32] Speaker 02: Edmund says to remove them from judicial service. [00:43:34] Speaker 04: Oh, no. [00:43:35] Speaker 04: I understand your point. [00:43:37] Speaker 04: The other problem you have is, again, I'll [00:43:39] Speaker 02: Likewise look at this as the mosaic that you want me to is in Edmond there was review ability as well So we are so far over but I really want to hear your thoughts on review ability Yeah, and so the review ability mechanism here we think looks a little different than Edmond but we the review ability is all about the substance and of course in Edmond there wasn't sort of unfettered ability to change facts you could only it was I think deferential standard of review on the back end here we think the review ability comes from [00:44:07] Speaker 02: both at the front and the back end. [00:44:08] Speaker 02: This is the ex ante ability to issue binding policy guidance. [00:44:13] Speaker 04: And then if you think that a panel... But how does that have anything to do with reviewing a decision in an individual case? [00:44:17] Speaker 02: Because a review of a decision is about whether or not the substance of the decision was right. [00:44:21] Speaker 02: Did the decision maker get this right or did they get it wrong? [00:44:23] Speaker 04: OK, and so when they get it wrong, when it has not followed the director's policy, does the director have the ability to say, ha, that I'm not letting it issue? [00:44:32] Speaker 02: The director has the ability to convene the rehearing panel to vote on rehearing. [00:44:37] Speaker 04: No, he doesn't. [00:44:38] Speaker 04: He has the ability to ask to have a panel decide whether to rehear a case. [00:44:43] Speaker 02: He has the ability. [00:44:44] Speaker 02: I think there's a little bit of nuance there, Your Honor. [00:44:46] Speaker 02: I agree that he does not have the authority to grant rehearing. [00:44:50] Speaker 02: But he does have the authority to ask three people to think about rehearing, including himself, to decide whether or not rehearing. [00:44:57] Speaker 02: But recall that in the interim between the issuance of what he thinks is a bad panel decision and the convening of a here it's the standing presidential opinion panel, the director, if he thought that the original panel had missed the vote on the law, he could issue a binding policy direction that then would guide [00:45:16] Speaker 02: both the decision to grant rehearing and the substance of that decision on rehearing. [00:45:20] Speaker 02: So even though the review mechanism, I agree, it's not quite the same as an admin, we think it's still a real and practical way for the director to exert control. [00:45:29] Speaker 04: It's an interesting argument. [00:45:30] Speaker 04: It's unfortunate you didn't make it in your brief, this argument about how he could, in the meantime issue, I'm sure you thought that up in your mooting, which is great. [00:45:38] Speaker 04: but this argument that he could make this interim policy direction, like between when the decision issues and when the rehearing panel is thinking about it, he could, boom, here's my policy directive, now you have to follow it, rehearing panel, and then they don't, so then what happens? [00:45:53] Speaker 04: Because he's only one member of the rehearing panel. [00:45:55] Speaker 04: So the other two judges say, uh-uh, not doing it. [00:45:58] Speaker 02: Well, those judges would be just as errant as the original judges that we were discussing earlier. [00:46:03] Speaker 02: And I don't think that we should. [00:46:04] Speaker 04: Not really, because what if they just don't grant rehearing? [00:46:07] Speaker 04: Then he never knows why, right? [00:46:08] Speaker 04: They don't have to write an opinion explaining why they're not granting rehearing. [00:46:11] Speaker 04: So they don't have to subject themselves to the misconduct of insubordination by openly indicating they're not following his policy guidance. [00:46:18] Speaker 04: They can just, I vote no on rehearing. [00:46:21] Speaker 02: The in terms of the ability to control the substance it's not perfect, but it wasn't perfect in Edmund either Recall that the reviewers there had to defer to the factual findings and look at okay Is there any other review powers other than the one that you just articulated? [00:46:35] Speaker 02: And you just want to make sure I understand your argument altogether And I want to make sure that we have in terms of the mosaic of all the control mechanisms [00:46:41] Speaker 02: We've got the authority to issue binding regulations. [00:46:44] Speaker 02: We've got the ability to remove them from judicial service. [00:46:46] Speaker 02: We also have the secretary's ability to remove them from government service entirely. [00:46:52] Speaker 02: We've got the ability for him to designate any decision as presidential or to de-designate a decision as presidential. [00:46:58] Speaker 04: I don't understand what you think that gets you. [00:47:00] Speaker 04: Which bucket do you think that falls into, just so I know where to put it? [00:47:03] Speaker 02: I think that falls into the substantive review bucket, Your Honor. [00:47:05] Speaker 04: The fact that he can designate an opinion as presidential means he can review individual opinions? [00:47:10] Speaker 02: I don't think that there is a neat breakdown between the type of review you're talking about [00:47:15] Speaker 02: and the ability to dictate the substance of decisions. [00:47:17] Speaker 02: Really? [00:47:18] Speaker 04: Because the Supreme Court did. [00:47:19] Speaker 04: I mean, they said review was whether or not you are the final decision maker on a given case. [00:47:25] Speaker 02: I think looking at the DC Circuit's analysis in Intercollegiate might help here. [00:47:28] Speaker 04: There? [00:47:29] Speaker 04: Me too. [00:47:29] Speaker 04: OK, so if this case is exactly like Intercollegiate, what do I sever? [00:47:33] Speaker 04: It is not. [00:47:33] Speaker 04: Stop. [00:47:33] Speaker 04: What do I sever? [00:47:35] Speaker 02: Well, we do have various options as fallback arguments in terms of what the court could sever. [00:47:41] Speaker 02: First, the court could read Section 3 to not provide any removal protections for APJs. [00:47:48] Speaker 04: So I would scratch out the words officers and. [00:47:51] Speaker 02: I don't even think you need officers and. [00:47:53] Speaker 02: There are many officers of different varieties. [00:47:56] Speaker 02: I think that you would just. [00:47:56] Speaker 04: What do you mean? [00:47:57] Speaker 04: What are the other officers? [00:47:58] Speaker 04: I made a list. [00:47:59] Speaker 04: There aren't, actually. [00:48:00] Speaker 04: I don't know, Your Honor. [00:48:00] Speaker 04: There's TTAB judges, PTAB judges, and the two commissioners. [00:48:02] Speaker 04: There are no other officers that I'm aware of or even alleged to have ever been officers. [00:48:06] Speaker 02: We think the way to do the least violence to the statute but get to the end that you are articulating is to simply read section three to not extend to any officer whose appointment mechanism is set out by specifically in the statute. [00:48:21] Speaker 02: So that would be APJs. [00:48:23] Speaker 04: So here's my problem with that. [00:48:25] Speaker 04: What I'm struggling with. [00:48:26] Speaker 04: is in all of the severability cases I've read, it's literally a matter of excising language. [00:48:31] Speaker 04: It's not a matter of rewriting your own language. [00:48:33] Speaker 04: And I'm a little worried that what you're asking me to do is an exercise in writing the statute as opposed to just cutting out a tiny, tiny little unconstitutional part to make the rest constitutional. [00:48:43] Speaker 02: So I mean- We do have a scratch-out option, Your Honor, but before we get to it, I- Well, why can't this scratch-out option just be officers and? [00:48:50] Speaker 02: I'm just not sure what collateral effects that would have. [00:48:53] Speaker 02: That's not specifically what we prefer. [00:48:55] Speaker 04: But it would cure the unconstitutional. [00:48:56] Speaker 02: I do agree. [00:48:56] Speaker 04: You agree it would cure the unconstitutional. [00:48:58] Speaker 04: If there is an unconstitutional defect, it would cure it here. [00:49:00] Speaker 02: If there were an unconstitutional defect, and if this court thought that that resided in the whatever fetters exist on the removal authority, then yes, it would cure it. [00:49:10] Speaker 02: If the court wanted to re-identify another saving scratch out, as you call it, mechanism, which is to red line the at least. [00:49:17] Speaker 04: Well, do you honestly think, before you identify the other one, that I could write into the statute something as part of separability? [00:49:25] Speaker 04: Because you said read section three as somehow not including the PTAB judges. [00:49:32] Speaker 04: How do I say officers parentheses except PTAB judges in section three? [00:49:37] Speaker 02: Your Honor, of course, as the Supreme Court made clear in the NFIB decision, just because something is not the most natural reading of the statute does not mean that it's not a possible reading of a statute to obviate constitutional concern. [00:49:50] Speaker 02: We certainly think it would be a fair reading, not a rewriting, [00:49:55] Speaker 02: of Section 3 to say that the cross-reference to Title 5 governing federal employees, which is the only way that the Section 7513 comes in here, only applies to that personnel within the PTO whose appointment is not specifically provided for by statute. [00:50:11] Speaker 02: So that would include the APJs whose, of course, their appointment is specifically provided by Section 6. [00:50:16] Speaker 02: We think that does the least violence to the statutory text. [00:50:19] Speaker 02: We think that's a fair reading of the statute. [00:50:20] Speaker 04: But all the other officers that I just articulated, which I think are the only officers of the PTO, are separately provided by statute. [00:50:26] Speaker 04: TTAB judges are separately brought up by statute, and both commissioners are. [00:50:29] Speaker 04: So are you a little concerned that if I do what you're asking, I've now affected the Title V rights of exactly the same bucket of people? [00:50:36] Speaker 02: I'm just not sure, Your Honor. [00:50:37] Speaker 02: The reason that I'm resisting your officers and scratch out is that we have not surveyed to see if there's anybody else who's not specifically provided for by statute who might qualify as an inferior officer or otherwise be considered an officer within the agency. [00:50:50] Speaker 04: But you do recognize that if I make the change the constructive [00:50:53] Speaker 02: Change that you're suggesting I have also affected t-tab judges and the two commissioners right because they are all appointed by statute So yes, well the commissioners I believe have removal provisions specifically written into the statute, so I don't think we need to be concerned Okay with them, but the you know I do think it's a fair rate Maybe not the most natural way which is why we have not adopted that reading so I know you told me to sever something in section 3 and didn't tell me what to sever in your brief [00:51:19] Speaker 04: You suggested that severing could solve the problem, but you never gave me the express way I was going to sever something. [00:51:25] Speaker 02: I think our only express severance argument was in section six with at least three members. [00:51:32] Speaker 02: If this court thought that the requirement that three members, three APJs, which can include, of course, the director, deputy director, have to vote on a final written decision, over hearing or otherwise, [00:51:44] Speaker 02: We think that it would be a possible severability argument for the court to eliminate the at least three member requirement. [00:51:51] Speaker 02: We do not think that the entire statute would need to come down because of any defect this court found in the appointments clause. [00:51:58] Speaker 06: So what would be the consequence of that if the court were to delete at least three members from section six? [00:52:11] Speaker 06: Then how would the board operate in a way that you think avoids an appointments clause problem? [00:52:18] Speaker 02: I think at that point, there would be no statutory minimum on the number of APJs who have to issue a decision at that point. [00:52:24] Speaker 06: So then what happens? [00:52:25] Speaker 06: Does the director, as an APJ, issue every single final decision? [00:52:30] Speaker 02: Not necessarily, Your Honor. [00:52:32] Speaker 02: But he could issue decisions alone at that point. [00:52:34] Speaker 02: Recall that the statute vests all of the powers and duties of the office in the director himself. [00:52:40] Speaker 06: So then the director issued board decisions in that scenario would be appropriate under the Constitution. [00:52:47] Speaker 06: Anybody else doing it it wouldn't be constitutional. [00:52:51] Speaker 04: No, not at all your honor Of course that at that point the director would be assigning anywhere between one and three APJs to issue decisions So then you're gonna have all decisions not just you're gonna have every appeal every derivation proceeding every post grant review and every inter parte proceeding decided could be decided by a single panel member of the board any random one and [00:53:14] Speaker 04: Anyone that the director... And you think that does less violence to this process than just saying officers and aren't included in Title V? [00:53:24] Speaker 02: Your Honor, we don't think any violence... That is profound. [00:53:27] Speaker 04: The impact that you're suggesting there. [00:53:28] Speaker 04: Every one of those proceedings would go from having three adjudicators to having one. [00:53:33] Speaker 04: Do you know how many board decisions we get with dissents? [00:53:36] Speaker 04: And do you know how useful that is to the proper vetting of these processes? [00:53:40] Speaker 04: You're taking IPRs out of district courts and having board judges hear them who aren't Article III appointed people, and now you want to say only one judge can get rid of all those patent rights? [00:53:52] Speaker 04: Couple of things. [00:53:53] Speaker 02: One, the director, of course, would still be able to appoint three judge panels. [00:53:56] Speaker 02: If he wanted. [00:53:57] Speaker 02: If he wanted, yes, just as he can now appoint larger panels than three. [00:54:00] Speaker 04: And you don't think that, wait, you think Congress [00:54:04] Speaker 04: So I'm supposed to define Congress's intent in all this and preserve it to the greatest extent possible when thinking through severability. [00:54:12] Speaker 04: You think Congress would care more about possible officers that you can't name because you're not sure because you haven't made a list and that I can't think of, their Title V rights being impacted versus you think Congress intended for all of these different proceedings to be able to be held with a single judge. [00:54:31] Speaker 02: Your Honor, it depends on what the court thinks the constitutional defect is. [00:54:35] Speaker 02: I'm sort of shadowboxing here, because if the court thinks the problem is that there is not enough removal power, then the remedy would be to do something to Section 3. [00:54:45] Speaker 04: But the problem isn't any of those. [00:54:46] Speaker 04: The problem is collectively. [00:54:48] Speaker 04: It is a mosaic. [00:54:49] Speaker 04: Every case, the Messiahs, Edmonds, all of them, it's balancing the three, right? [00:54:54] Speaker 04: So if I take some out of this bucket, there's got to be more over here to make up for it. [00:54:57] Speaker 04: So the problem can be solved, I think, [00:55:01] Speaker 04: by helping to fill any of the buckets if there's a defect. [00:55:05] Speaker 04: Can't it? [00:55:06] Speaker 04: I mean, can't there be a total absence of reviewability, as there was in some cases, and still have it be constitutional? [00:55:13] Speaker 04: Because the other two buckets are totally full. [00:55:15] Speaker 04: Or can't it be that there's an absence of removability, but the other two buckets are totally full? [00:55:22] Speaker 04: It doesn't matter, does it, which bucket has a deficit? [00:55:25] Speaker 04: Because there's no doubt that this is an unfettered removal authority. [00:55:29] Speaker 04: And there's also no doubt that this is pretty low on the reviewability scale. [00:55:32] Speaker 04: So it kind of doesn't matter which one gets filled more, maybe, to push it over the edge for constitutional purposes, since it is a balancing act. [00:55:39] Speaker 04: Do you agree with what I'm saying? [00:55:41] Speaker 02: I do agree with the sort of the weighing and the mosaic approach. [00:55:45] Speaker 02: But I just want to note that I disagree with one of the premises about the unfettered removal authority. [00:55:50] Speaker 02: And that is because there is no fetter. [00:55:52] Speaker 02: on the director's ability to assign or reassign panel members. [00:55:57] Speaker 02: And that is precisely the type of removal from judicial service that the Supreme Court deemed a very powerful tool for. [00:56:03] Speaker 04: Suppose that I don't agree with your interpretation, since all of the other cases talk about for cause or not for cause, and Evans even cites them in those cases. [00:56:12] Speaker 04: And so suppose I don't totally agree with your notion that it's just removal from a given case or something like that. [00:56:19] Speaker 04: From judicial service. [00:56:22] Speaker 04: So you think the better course of action is to change all three member panels to allowing the director to make them one member panels across all of these different types of proceedings? [00:56:35] Speaker 02: I don't actually think that we have set out a preferred saving mechanism. [00:56:39] Speaker 02: We have identified various options available. [00:56:42] Speaker 04: You don't think that would do significant violence to the entire scheme, not just IPRs, because this is the statutory section that applies to all the different proceedings? [00:56:50] Speaker 02: But I don't think that we have identified a preferred route. [00:56:54] Speaker 02: Of course, our preferred route is that you uphold the constitutionality of the judges. [00:56:58] Speaker 06: I guess, for me, I understand that if this case is similar to intercollegiate, and intercollegiate severed the constraints on removal power, and then likewise in free enterprise, the Supreme Court severed out the constraints on removal power there, then there's [00:57:21] Speaker 06: a track record for doing something like that here with Section 3, the current constraint on removal power of ABJs. [00:57:30] Speaker 06: But the other theory you have, which is to remove the three-member requirement for any board decision, it's not clear to me yet how that increases the board's supervisory power as a principal officer over a set of inferior officers. [00:57:50] Speaker 02: I think it's because at that point the director could reserve to himself any decision on either rehearing or as an initial matter. [00:57:57] Speaker 02: So if the director thought that there was a problem, he alone could fix it. [00:58:00] Speaker 02: The problem that Arthrex has said exists in the scheme is that the director alone can't do it because it's one of three. [00:58:07] Speaker 02: So if you got rid of the three requirement, we think [00:58:10] Speaker 02: Not that the director would have to in any particular case, not that he couldn't still assign three judge panels, but he could as a matter of raw statutory power. [00:58:17] Speaker 06: Right now, the statute says rehearings are granted only by the board. [00:58:23] Speaker 02: That's right, Your Honor. [00:58:24] Speaker 06: So I guess it depends on what hat the director is wearing at that point in time. [00:58:31] Speaker 06: I mean, the director is the director for director purposes. [00:58:34] Speaker 06: But when the director stands in the shoes [00:58:39] Speaker 06: Being a board member then. [00:58:41] Speaker 06: then he's a board member, and then he's an APJ at that point. [00:58:45] Speaker 06: And then he's satisfying the statutory requirement of granting a rehearing, even if he could by himself serve as the quote unquote board. [00:58:57] Speaker 02: Well, Your Honor, I think at that point, if it got rid of the three member requirement, it would be very much the same as any other agency where there's a single head. [00:59:04] Speaker 02: So the commissioner of social security certainly isn't in there making individual social security decisions. [00:59:10] Speaker 02: By statute, he could. [00:59:13] Speaker 02: And so therefore, the political accountability, which is what the appointments clause is concerned about, resides with the Commissioner of Social Security. [00:59:21] Speaker 02: Similarly here, again, we think that it is very clear who's accountable for the decisions of the PTO. [00:59:29] Speaker 02: We think it is the director and the secretary of commerce. [00:59:32] Speaker 04: But if there were a problem that this court found in the political accountability... Unlike the Social Security context, the alternative isn't district court litigation. [00:59:40] Speaker 04: I mean, your problem is, to some extent, you have argued you, the government, so strongly about what the PTO is and how equivalent these are to district court proceedings, you know, IPRs. [00:59:53] Speaker 04: You argued that so vociferously throughout [00:59:56] Speaker 04: the process leading up to oil states and SAS. [00:59:59] Speaker 04: I mean, your briefs are replete with the analogies and the strength of that and how the board is so significant and that this is very similar to all the protections and all of the events that would occur in a district court proceeding. [01:00:15] Speaker 04: But now you're saying we should and that Congress might have intended or would be content with the idea of the director doing [01:00:23] Speaker 04: all of it all by himself or single-handedly or designated a single-handed minion to do it. [01:00:28] Speaker 04: I mean it's just that does not it's very hard for me to imagine that that is consistent with [01:00:33] Speaker 04: the scheme that Congress intended in light of all the PTO's arguments, especially over the years. [01:00:38] Speaker 02: I think the importance of the inter-parties review proceeding actually cuts the other way, Your Honor, rather than jettisoning the entire inter-parties review mechanism. [01:00:45] Speaker 04: Oh, so you're saying if the whole thing has to go, for God's sakes, this is a better alternative. [01:00:49] Speaker 04: Congress didn't want the whole thing to go. [01:00:51] Speaker 04: But that's why I'm still sort of perplexed by your argument. [01:00:55] Speaker 04: not lovingly embracing the elimination of officers and. [01:00:59] Speaker 02: I think we get to the same place, Your Honor. [01:01:02] Speaker 02: That's just not a prediction. [01:01:03] Speaker 04: No, we don't. [01:01:04] Speaker 04: We don't dramatically change the entire scheme if we take out officers and. [01:01:08] Speaker 04: We just deprive a few unknown people of a few protections. [01:01:12] Speaker 04: But wait, let me just point out, if the thing's unconstitutional, they don't actually have those protections anyway, because they were not rightfully appointed. [01:01:19] Speaker 04: So whatever protections Title V affords them, if these are unconstitutional appointments, they actually have no Title V protection. [01:01:25] Speaker 02: I think that's right, Your Honor. [01:01:26] Speaker 02: The reason that I am not lovingly embracing, as you say, this alternative is that we did not float it in our brief. [01:01:32] Speaker 02: The very particular way of getting that brief. [01:01:33] Speaker 02: What? [01:01:33] Speaker 04: You can't take ownership of it so you won't go in? [01:01:36] Speaker 04: Yeah, I think that. [01:01:38] Speaker 02: Yeah? [01:01:38] Speaker 02: OK. [01:01:38] Speaker 02: Yes, from the podium, I am not going to get out ahead of the Solicitor General and embrace the savings construction that we ourselves have not proposed. [01:01:45] Speaker 02: If this Court would like, we could certainly follow up with a 28-J letter regarding this Court's proposal. [01:01:51] Speaker 02: But no, I'm uncomfortable and I'm unwilling to. [01:01:56] Speaker 02: lovingly embrace an alternative the government itself has not vetted and proposed. [01:02:01] Speaker 02: I see I'm out of time, Your Honor. [01:02:02] Speaker 02: If there are no further questions, we appreciate your help. [01:02:08] Speaker 02: Thank you very much, Your Honor. [01:02:15] Speaker 05: Your Honor, I have nothing to add to this lively debate. [01:02:19] Speaker 05: That's a great idea, Mr. Chau. [01:02:21] Speaker 05: If there are any questions, I'm here for them. [01:02:22] Speaker 04: Thank you very much. [01:02:23] Speaker 04: Thank you. [01:02:23] Speaker 04: All right. [01:02:24] Speaker 04: Case is taken under submission.