[00:00:00] Speaker 04:
We begin our proceedings this morning.

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I have a motion to offer, so I will turn it over to Judge Newman to recognize me, hopefully.

[00:00:07] Speaker 05:
I recognize the Chief Judge and invite her to make an appropriate motion with respect to Ms.

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Oliver.

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Let me begin by moving the admission of Angela Oliver, who is a member of the Bar and is in good standing with the highest courts of Texas.

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I have knowledge of her credentials and am satisfied

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more than satisfied that she possesses the necessary qualifications.

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Let me just say a few words, if I may.

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Firstly, go Baylor, because Angela is celebrating today, because she's an alumni of Baylor.

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So she's celebrating the victory last night of the women's basketball team.

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And secondly, just let me say that I've said this before, what mixed blessings we have as circuit court judges, because we hire the best and the brightest.

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at least clerks like Angela, far exceed our wildest expectations.

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And then when they prove themselves to be the kind of person we'd love to be with us permanently, they leave.

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So it's bittersweet.

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A little sweeter for me is that Angela, after much lobbying, and her husband have decided, at least for the time being, to remain in Washington.

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So we're really happy about that.

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Angela has been just a superb clerk.

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She came to me from Judge Gilstrak in ED, Texas.

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And before that, she had been a student of one of my former clerks, David Taylor, at SMU.

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So we've got a lot of history and common ground.

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And it's just been a delight to have her in chambers.

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And I'm sure she will be successful in every respect.

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And I welcome her to the bar.

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Judge Newborn.

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Welcome to the bar now.

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We shall vote on the motion.

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Judge Stone, what is your vote?

[00:02:01] Speaker 03:
I fully support the motion.

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And the movement, we assume, supports her own motion.

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And I support the motion.

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So the motion is granted.

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Now, will you approach the bailiff to administer the oath?

[00:02:19] Speaker 02:
Andrew, please raise your right hand.

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Do you solve this for her or?

[00:02:23] Speaker 02:
Congratulations, and thank you for everything.

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Welcome to Dubai.

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First case this morning for argument is 18-1462 Belspar sourcing versus PPG.

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Mr. Baluch?

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Baluch.

[00:02:54] Speaker 00:
Good morning, and may it please the court.

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The USPTO committed a pure legal error that this court reviews de novo.

[00:03:02] Speaker 04:
The USPTO interpreted this court's mandate as forcing... We all know about the case, so let me just get into it before your time expires.

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Is it your view that when the Chief Judge of the Board did what she did, she was

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either one following what she felt she was compelled to do under their regulations, or was she sitting there and really trying to interpret what this court intended?

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I think the former.

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I think on page 10 of the appendix, that judge, Judge Bonilla Wright, states that the Federal Circuit did not remand the proceeding to the board for another decision.

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The agency was not.

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So you think it's the latter.

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I would have thought you had said the latter.

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Like, all she was doing.

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She's not compelled to do anything.

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But she was trying to ascertain what our court intended when we demanded it.

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No?

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Well, yeah.

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Recall that this all happened suespante when Judge Robertson, APJ Robertson issued a couple sentence order saying,

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The board decision is vacated.

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Therefore, the RAND comes back without any Bancorp analysis or other legal analysis.

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Was this done?

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What's the time frame on this?

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Was all of this done after the time had expired?

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Did you file a petition for rehearing in this case?

[00:04:25] Speaker 04:
I can't remember.

[00:04:26] Speaker 00:
Not a petition for rehearing in this.

[00:04:28] Speaker 04:
OK.

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But had the time expired?

[00:04:32] Speaker 04:
Yes.

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Were you filing a petition for rehearing by the time this happened?

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It did.

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The Suez-Fonte order by the board came on June 2017.

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This court's mandate issued on March 2017.

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So yes, all of this, we were surprised in the absence of any remand that Suez-Fonte, the board takes up the case and then reinstitutes the right of appeal notice.

[00:05:05] Speaker 03:
Can I understand what you understand to be the scope of the mandate, I guess?

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Your thought would be that the PTO would look at it.

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They would see that the decision was vacated, but there was no remand.

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So that would be the end of it.

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And then the inter-party's re-examination proceedings would just be concluded as PTO?

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Exactly.

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Yes.

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Which is how all of the DC Circuit cases that have the same formulation that this court's mandate had.

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What do you think is the best case in support of your view?

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Several.

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Well, for different reasons.

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But we have the Bank Corp, Supreme Court case itself that says vacatur.

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Vacatur is what clears the path for future relitigation.

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Rather than a, as PPG seems to believe, that Monsignor requires not only vacating the final agency decision, but also vacating all of the

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non-final agency decisions, plus a remand with instructions to dismiss.

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And Bancorp says vacatur clears the path.

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And Justice Scalia wrote the Bancorp decision.

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When he was a member of the D.C.

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Circuit bench, he authored the radiophone case in which he said that all members of the Court are in agreement that this case is moot and that we must vacate the agency's order pursuant to Munsingware

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in Meckling Barge, the final sentence of radiophone dismisses the petitions for review and vacates the declaratory ruling under review.

[00:06:45] Speaker 04:
Can I ask you two, I guess I have two questions.

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One is, why do we care and why are we here?

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And I'll ask your friend that as well.

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I mean, they've got a covenant not to sue on these patents.

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Have these patents been

[00:07:02] Speaker 00:
Asserted by you against other defendants in other venues these two patents in these reexaminations have not been asserted by us against anyone and they enjoy covenant not to sue we believe that their continued participation and eager eagerness to see these patents get cancelled points to a

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what I think is their end game, which is some kind of issue preclusive effect that would apply.

[00:07:30] Speaker 00:
So you've got other patents.

[00:07:31] Speaker 04:
The argument would be that there are a lot of other patents out there that you own and that they're similar.

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So is that your incentive here that even if you're never going to use the patents here that have for now been validated, you think that might have some

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collateral effect on your assertion of other patents, either against your friend here or against other people?

[00:07:56] Speaker 00:
We believe these two patents have value because we can assert them against other parties, not against PPG, but against other parties.

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But we strongly believe that even if these two patents are canceled in the re-examination, there would not be an issue preclusive effect against the five other patents.

[00:08:17] Speaker 04:
So that all suggests that this isn't really that important.

[00:08:23] Speaker 00:
For us, it's important because we don't want our two patents to be cancelled.

[00:08:27] Speaker 04:
But you don't perceive that the cancellation of these patents would necessarily have a reclusive effect on further litigation on similar patents?

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Or is that your worry?

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I mean, you're allowed to worry.

[00:08:40] Speaker 00:
We are worried.

[00:08:41] Speaker 00:
We're on pins and needles.

[00:08:45] Speaker 00:
The publication of a certificate canceling claims will have preclusive effect on those patents and prevent us from getting any reissue claims, et cetera.

[00:08:57] Speaker 00:
Let me ask you one other question.

[00:08:58] Speaker 03:
You also have to worry about the legal function.

[00:09:00] Speaker 03:
You have to fight some other battle related to your patents having this cancellation, right?

[00:09:06] Speaker 03:
I mean, even if you were to prevail,

[00:09:09] Speaker 03:
in some sort of argument that your re-cancellation of your claims here doesn't impact the validity of your claims in other patents, you still might have a legal battle on that.

[00:09:18] Speaker 03:
Is that correct?

[00:09:19] Speaker 00:
I think so, yes.

[00:09:24] Speaker 03:
I just want to know, is that one of your concerns, just to allay any of those potential issues with respect to other related patents?

[00:09:34] Speaker 00:
Well, we don't think there are, as we

[00:09:36] Speaker 00:
We cite the restatement seconds of judgments to say that there is not going to be issue preclusion against those other patents, but we think these two patents can still be asserted against parties other than PPG.

[00:09:51] Speaker 05:
But aren't we over complicating the issue?

[00:09:55] Speaker 05:
I just wonder why it should be relevant in this case, whether or not there are

[00:10:03] Speaker 05:
that haven't come into the case.

[00:10:06] Speaker 05:
Isn't it simply, it seems to me, a straightforward question of when we issue a decision and say vacated, what that means.

[00:10:15] Speaker 05:
That's something that for which there are decades of precedent as to what it means.

[00:10:24] Speaker 05:
Exactly.

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And in looking back retrospectively, it was a non-precedential opinion.

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But perhaps it was incomplete.

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in not saying, therefore, the underlying decision of the board is also vacated.

[00:10:43] Speaker 05:
But that has all sorts of powerful implications if we take that position in this case that haven't, I think, ever been explored.

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And that, in fact, I have long felt was a gap in the American VINCE Act.

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I think they just ran out of steam after

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10 years of trying to enact that statute and left these undecided areas.

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But now here we are.

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So our decision will, in fact, I think, have implications.

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If we say the board's opinion, we say we've already held it's vacated.

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Therefore, the underlying examiner's decision is also vacated.

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will have all sorts of fallout implications that aren't really explored here.

[00:11:38] Speaker 05:
Is this something you think we need to figure out?

[00:11:41] Speaker 00:
I don't think so.

[00:11:42] Speaker 00:
I think, Your Honor, you're correct that it's a simple issue, and it comes down to two sentences really at appendix page 12 that is the board's reasoning, that because the board's decision is vacated, the status of the claims in this inter-party's re-examination

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proceeding is the status of the claims prior to the board's decision.

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Accordingly, claims 1 through 112 stand rejected as set forth in the right of appeal notice.

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This is a misapplication of the vacatur doctrine.

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They are replacing the vacated board decision that was favorable to patentability with the new decision of the examiner unfavorable to patentability, and they believing that they are simply executing this court's mandate.

[00:12:25] Speaker 04:
Can we, who's got what authority to do what?

[00:12:28] Speaker 04:
We've got a board opinion here before us.

[00:12:32] Speaker 04:
So we have authority to tell the board.

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What is it we're supposed to tell the board?

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You board go back and tell the patent office that they have to do this.

[00:12:42] Speaker 04:
Who's got authority to do what here?

[00:12:45] Speaker 00:
What we are seeking is a reversal of the board's denial of our Rule 41.3 petitions.

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Our Rule 41.3 petition sought from the Chief Judge to vacate and terminate the proceeding and to undo the APT.

[00:13:04] Speaker 03:
What proceeding?

[00:13:04] Speaker 03:
Vacate and terminate what?

[00:13:06] Speaker 00:
The re-examinations.

[00:13:08] Speaker 03:
Do they have the authority to do that?

[00:13:11] Speaker 00:
Yes, they do.

[00:13:12] Speaker 00:
The board?

[00:13:13] Speaker 00:
Which of them?

[00:13:14] Speaker 00:
Yes, we think so.

[00:13:15] Speaker 00:
We think so.

[00:13:15] Speaker 00:
We think the inter-party re-exam, and I see I'm into my rebuttal.

[00:13:21] Speaker 00:
The inter-party re-examination is an integrated proceeding, which there's an examiner phase and the board phase, and that's all treated as the re-examination.

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And the board speaks for the agency as a whole as to that proceeding.

[00:13:39] Speaker 03:
So we have plenary authority and de novo review to interpret our own mandate and see what we meant.

[00:13:47] Speaker 03:
Yes.

[00:13:47] Speaker 03:
And so you would have us say what was vacature, we didn't intend the examiner's rejection would stand or something to that effect.

[00:13:57] Speaker 03:
Yes.

[00:13:58] Speaker 03:
And then the board figures out what the proper procedure would be or do we go further?

[00:14:03] Speaker 03:
You're asking for more than that.

[00:14:04] Speaker 03:
You're asking for us to tell the board to tell the PTO what to do.

[00:14:12] Speaker 00:
The board is part of the PTO, so it's not the board telling the PTO.

[00:14:15] Speaker 04:
Well, the examining court.

[00:14:18] Speaker 00:
Right.

[00:14:19] Speaker 04:
Which operates under the direction of the director, right?

[00:14:22] Speaker 00:
Yes.

[00:14:24] Speaker 00:
But it could be either way.

[00:14:27] Speaker 00:
Somebody at the agency ought to shut this down or just leave.

[00:14:32] Speaker 00:
They should have just done nothing.

[00:14:34] Speaker 00:
They could have entered this court's mandate and decision into the record and just not touched it.

[00:14:42] Speaker 00:
Indeed, when we look at the DC Circuit cases that apply the same formulation of the mandate as this court, we don't see any further agency proceedings in those cases.

[00:14:53] Speaker 04:
But don't you think the agency has to do something, even if they were to do what you think they should have done?

[00:14:57] Speaker 04:
Yes.

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There's something hanging out there where there is an agency action.

[00:15:01] Speaker 04:
I don't know enough about the rules here that if the examiner issues is it called a man or whatever, that

[00:15:09] Speaker 04:
If it's never reviewed or whatever, if it's automatically effectuated, if there's nothing saying to stop it.

[00:15:16] Speaker 04:
I don't know what the answer is.

[00:15:17] Speaker 00:
And so our petition sought an order from the board saying that ordering the reexamination to be terminated.

[00:15:25] Speaker 04:
So you think that even under our decision as you read it, it would have still, the board would have still had to do something.

[00:15:33] Speaker 00:
That would have been the better course for the agency to do.

[00:15:35] Speaker 00:
Yes.

[00:15:36] Speaker 00:
Under MPEP 2694,

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It explains the ways that a re-examination can be ended.

[00:15:43] Speaker 00:
The most normal one is the publication of a re-examination certificate on the merits.

[00:15:50] Speaker 00:
But they clearly say that you can vacate the re-examination proceeding or terminate the re-examination proceeding.

[00:15:56] Speaker 00:
And in these instances, no re-examination certificate is issued.

[00:16:01] Speaker 04:
Who's the we?

[00:16:02] Speaker 04:
Who's the you in that sentence?

[00:16:04] Speaker 04:
You can vacate?

[00:16:06] Speaker 00:
The agency is vacating.

[00:16:09] Speaker 00:
Truly, we're approaching the agency as this integrated body.

[00:16:16] Speaker 00:
And while it is true that you receive the board decision and you review the board decision, the Walling case says that you render a disposition of the entire case.

[00:16:28] Speaker 00:
And that includes eliminating the entire agency proceedings of any preclusive effect.

[00:16:35] Speaker 03:
Which case were you referring to?

[00:16:40] Speaker 00:
the Supreme Court's walling decision.

[00:16:42] Speaker 03:
That gives us authority to terminate the entire re-examination proceeding?

[00:16:48] Speaker 00:
Yes.

[00:16:49] Speaker 00:
Yes, we do.

[00:16:50] Speaker 00:
It is a disposition of the whole case.

[00:16:53] Speaker 03:
You agree, don't you, that this is a little bit of a rare circumstance because it's not going to happen in an IPR, for example, where there is no examiner action left-hand hanging.

[00:17:04] Speaker 03:
There's only the board's decision, right?

[00:17:06] Speaker 00:
I could see the vacature of the

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final written decision being interpreted incorrectly, as the agency did here, to say, oh, well, the Federal Circuit did not also vacate the institution decision.

[00:17:21] Speaker 00:
So the institution decision stands, and we can go forward.

[00:17:24] Speaker 00:
That's a bit more absurd.

[00:17:26] Speaker 04:
Any case where we've ever done that?

[00:17:28] Speaker 04:
I mean, there are two ways we could go here.

[00:17:29] Speaker 04:
We could have just been silent, or we can say they misconstrued us.

[00:17:34] Speaker 04:
But to avoid this in hindsight,

[00:17:38] Speaker 04:
What would we have had to say that we're vacating the board's decision and order the Patent Office to wipe out the re-exam?

[00:17:50] Speaker 00:
We think the mandate was written perfectly consistently with radiophone and the other DC circuit cases.

[00:18:00] Speaker 00:
We are not seeking modification of the mandate by inserting the reinstatement of the right of appeal notice, as the agency and PPG have done.

[00:18:08] Speaker 00:
But perhaps, to dispel any doubt, perhaps it would have been more clear if the mandate had said, and we remand with instructions to dismiss the reexaminations.

[00:18:23] Speaker 05:
That would have- There's no question that this court would have had the power to do that.

[00:18:29] Speaker 05:
other than thinking this went without saying, because there was no remand.

[00:18:36] Speaker 00:
And the IOP states that the court will remand only when there is something more for the trial court or agency to do.

[00:18:45] Speaker 00:
There was no remand, therefore it follows that there was nothing more that this court thought.

[00:18:49] Speaker 04:
But you're saying by necessity, there was something more to do at the agency, because somebody had to do something with this outstanding

[00:18:58] Speaker 04:
Examiners?

[00:19:00] Speaker 00:
No, the examiner's decision stood reversed by the PTAB in the prior appeal.

[00:19:06] Speaker 00:
Yeah, but isn't it normal?

[00:19:07] Speaker 04:
We have that a lot.

[00:19:08] Speaker 04:
And if the reversing decision is wiped out, then the other, the underlying decision that it reversed resurrects itself normally in our types of cases, right?

[00:19:19] Speaker 00:
I don't think so, because the vacatur in the IOP state

[00:19:25] Speaker 00:
that the court will vacate all or part of a judgment, order, or agency decision when it is being eliminated but not replaced with a contrary judgment or order of this court.

[00:19:36] Speaker 00:
So to bring back the right of appeal notice, rejections would be replacing the vacated board decision with a contrary judgment.

[00:19:45] Speaker 04:
OK.

[00:19:45] Speaker 04:
It's not your fault.

[00:19:46] Speaker 04:
It's ours.

[00:19:47] Speaker 04:
But we've far exceeded all of your time.

[00:19:49] Speaker 04:
So will we store something that will be on the other side?

[00:19:52] Speaker 04:
Thank you very much.

[00:19:59] Speaker 03:
I'm very interested in knowing why you're here, why you continue to have an interest.

[00:20:05] Speaker 01:
Your honor, you may recall from the earlier appeal that even after the covenant was provided by Valspar, we argued that this court retained jurisdiction, and we urged the court to go ahead and decide that appeal.

[00:20:23] Speaker 01:
And we did that, and we quoted to the court

[00:20:27] Speaker 01:
numerous instances in which Valspar, in this parallel litigation that involves continuations of the same patents that are involved here, was arguing to the district court that the board's decision supports the validity of their claims.

[00:20:45] Speaker 04:
No, I think we understand why you would have not, if they were going to moot out this appeal, why you would have wanted to

[00:20:53] Speaker 04:
get rid of the board decision.

[00:20:55] Speaker 04:
I guess I understand that.

[00:20:57] Speaker 04:
The question is what's your stake in getting rid of the examiner's decision and why do you think that's consistent with what this court did when it was reviewing the circumstances it had before it?

[00:21:09] Speaker 01:
Because our concern is that as we have argued in the earlier case, the Supreme Court in the Cardinal Chemical case recognized that even vacated decisions

[00:21:23] Speaker 01:
can have an impact on later cases.

[00:21:27] Speaker 01:
That's what we saw happening here.

[00:21:29] Speaker 04:
So your interest was, and if you're going to wipe it out, wipe it all out.

[00:21:32] Speaker 01:
Exactly.

[00:21:32] Speaker 04:
That doesn't answer.

[00:21:33] Speaker 04:
I don't think it's to what Judge Stowell's point is.

[00:21:36] Speaker 04:
You didn't want this bad board decision coming to haunt you in other cases.

[00:21:41] Speaker 04:
Fair enough.

[00:21:42] Speaker 04:
But why are we here fighting over whether or not the re-exam should have issued?

[00:21:50] Speaker 01:
We think that we obviously felt that the board's decision was wrong.

[00:21:54] Speaker 01:
It's been vacated.

[00:21:56] Speaker 01:
We think we're entitled to the Patent Office's decision saying that these claims are canceled to prevent any future effect that they will have in other litigation.

[00:22:08] Speaker 03:
Now, to the extent that you're arguing that the examiner's decision should stand, because why?

[00:22:16] Speaker 03:
I mean, you've got a covenant not to sue.

[00:22:17] Speaker 03:
So what is your rationale?

[00:22:20] Speaker 03:
You want to be able to rely on it with respect to other patents?

[00:22:24] Speaker 01:
We want to be able to use it to rebut any argument that we hear from the other side that somehow this vacated board decision still has some persuasive value.

[00:22:35] Speaker 01:
And we think the Patent Office did the right thing here.

[00:22:38] Speaker 01:
We think the Patent Office followed this court's mandate precisely.

[00:22:42] Speaker 01:
And we haven't seen any argument that there was any ambiguity about this agreement.

[00:22:47] Speaker 05:
Well, the mandate said it was vacated.

[00:22:49] Speaker 05:
It didn't say either restore, reinstate, preserve, or cancel.

[00:22:55] Speaker 01:
You know, I'd like to get into that, Your Honor, because I think this is really the key to the whole case.

[00:23:02] Speaker 01:
And if I may, what we see in the briefing is that Bausbar primarily relies on the Munsingware case, the Supreme Court case, and that line of cases, including the Alvarez versus Smith case,

[00:23:18] Speaker 01:
and the Mecklenbarge case which applied it to agency actions.

[00:23:26] Speaker 01:
In each of those cases the Supreme Court after finding that the case had become moot vacated the underlying decision and remanded to the lower tribunal with instructions to dismiss and that was the established practice that was

[00:23:49] Speaker 01:
announced first in the Munsingware case.

[00:23:53] Speaker 01:
And when, you know, Valspar argues in its brief that Munsingware says this clears the way for future litigation or it doesn't prejudice the parties.

[00:24:03] Speaker 01:
But if you read Munsingware carefully, what Munsingware says is that established procedure of vacating coupled with a remand with instructions to dismiss is what clears the way for future litigation.

[00:24:16] Speaker 05:
Yes, if we are ignoring all of the

[00:24:19] Speaker 05:
cases which don't go that far, which they vacated.

[00:24:23] Speaker 01:
Yes.

[00:24:24] Speaker 01:
All of those.

[00:24:24] Speaker 05:
And the consequences of the vacature.

[00:24:29] Speaker 01:
Your Honor, the radio phone case and the DC circuit cases that Mr. Baluch has referred to were cases in which there was only one lower decision.

[00:24:45] Speaker 01:
So all the court had to do in that case, once it found there was a lack of jurisdiction, was to dismiss that underlying decision.

[00:24:54] Speaker 01:
None of them were like this case, where the underlying decision- I don't think that's a fair statement.

[00:24:59] Speaker 01:
I'm sorry?

[00:25:00] Speaker 05:
I don't think that's a fair statement.

[00:25:02] Speaker 05:
I think part of the situation is that one can find precedent for any of these procedures.

[00:25:08] Speaker 05:
And what's necessary is to decide, in a particular case,

[00:25:14] Speaker 05:
where you have an administrative agency that makes a decision, and then you have an administrative board that reviews that decision, and then a federal court that reviews the administrative board.

[00:25:28] Speaker 05:
And meanwhile, you have all sorts of interactions and covenants not to sue, and I don't know what else, which affect the relationship between the parties, what in fact is the appropriate posture

[00:25:44] Speaker 05:
in terms of what happens along the line.

[00:25:48] Speaker 05:
We know, for example, that unlike most cases here, the decision under the American Vents Act, the estoppel applies only between the parties.

[00:26:02] Speaker 05:
At the same time, we have a situation where the office is authorized to issue a certificate canceling claims.

[00:26:11] Speaker 05:
This then goes beyond

[00:26:13] Speaker 05:
the relationship between the parties.

[00:26:16] Speaker 05:
There are all sorts of unresolved conflicts that we are getting into in trying to discern the legislative intent and to interpret the statute in accordance with the legislative purpose and be interested in your guidance on these complexities which are raised here because in the

[00:26:42] Speaker 05:
In the decision, all that happened was that it was vacated.

[00:26:46] Speaker 05:
You're saying that automatically retains what has happened below.

[00:26:52] Speaker 01:
Well, what was vacated here was a decision favorable to Valspar that was itself an appellate decision.

[00:27:05] Speaker 01:
there was that appellate decision reversed an underlying patent office decision, which, as the patent vice chief judge pointed out, was a final rejection of the patent office, which became.

[00:27:21] Speaker 05:
Suppose the examiner had gone the other way and sustained the patent.

[00:27:26] Speaker 05:
Are we now saying that that too now becomes graven in stone?

[00:27:34] Speaker 05:
works in estoppel not only between these parties, but everyone else?

[00:27:41] Speaker 05:
Or only when it's invalidated?

[00:27:43] Speaker 01:
The walling case, excuse me, the Bancorp case, stands for the proposition that a party cannot unilaterally take action to deprive a court of jurisdiction, and in doing so, erase a judgment that was adverse to it.

[00:28:04] Speaker 01:
What they're doing is they're trying to erase the decision that was the final rejection of the Patent Office, which became the only decision of the Patent Office once the board's decision was vacated.

[00:28:15] Speaker 03:
What is your authority for the position that Bancorp also goes further to say, and they also get punished, they're also going to have any decision below that was not favorable to them remain because they mooted the opportunity for an appeal?

[00:28:31] Speaker 01:
The court in Bancorp

[00:28:34] Speaker 01:
said that when a party unilaterally... I understand what he said.

[00:28:39] Speaker 03:
It talks about clearing the path for new litigation.

[00:28:45] Speaker 03:
You think it also supports the idea that the examiner's rejection should stand.

[00:28:50] Speaker 01:
Well, I don't see that the Patent Office had a choice here, to be honest with you, Your Honor.

[00:28:54] Speaker 03:
Well, can I back up for a minute?

[00:28:55] Speaker 03:
I just want to ask you, do we have de novo power to interpret our own mandate?

[00:29:02] Speaker 01:
The court has de novo power to interpret its own mandate.

[00:29:07] Speaker 01:
I do not believe the court has the power at this point to alter that mandate by including in it what in form and effect would be a new remand to the board with instructions to dismiss the reexaminations.

[00:29:24] Speaker 03:
If that was going to be done... Just for a minute, I want to ask you another question.

[00:29:28] Speaker 03:
Now, if we are of the view, just hypothetically, if we're of the view that our remand, because it actually just was a vacature and no remand, that it was not intended for the examiner's rejection to stand, then what else has to be done here?

[00:29:46] Speaker 03:
What law do you have, if that's how we interpret our mandate, is the natural consequence then that the re-examination is terminated?

[00:29:58] Speaker 01:
Your Honor, I'm not sure.

[00:30:01] Speaker 01:
I'm a little troubled with the idea that we should be delving in to what the subjective intent of the panel was at the time it issued that order.

[00:30:10] Speaker 03:
Well, we get to interpret our own.

[00:30:12] Speaker 01:
Well, there was a time.

[00:30:14] Speaker 03:
So you think we can interpret our own mandate?

[00:30:17] Speaker 01:
You can certainly interpret it, but can you change it?

[00:30:20] Speaker 01:
That's really the question.

[00:30:21] Speaker 03:
Well, that depends on you have a different view of what you thought the mandate said.

[00:30:26] Speaker 03:
And the appellant has a certain view.

[00:30:28] Speaker 03:
And you have a different view, right?

[00:30:31] Speaker 01:
I don't think there's any dispute about what the mandate said.

[00:30:34] Speaker 01:
And no one has pointed to any ambiguity in the mandate.

[00:30:38] Speaker 01:
The patent office certainly didn't see any ambiguity in it.

[00:30:42] Speaker 01:
And when I read the court's former opinion... Is this what you asked for?

[00:30:46] Speaker 03:
Did you ask this court?

[00:30:47] Speaker 03:
I believe that you were the party that asked the court to vacate the decision of the board.

[00:30:53] Speaker 03:
Is that correct?

[00:30:54] Speaker 01:
Yes.

[00:30:55] Speaker 03:
Well, let me... Did you ask us to vacate the decision of the board?

[00:30:58] Speaker 03:
Yes or no?

[00:30:59] Speaker 01:
I said yes.

[00:31:00] Speaker 01:
OK.

[00:31:01] Speaker 01:
But may I explain?

[00:31:02] Speaker 03:
I just want to ask one more question.

[00:31:03] Speaker 03:
Did you ask us to vacate the decision of the examiner?

[00:31:06] Speaker 03:
Was this your intent when you asked us to vacate the decision of the board?

[00:31:11] Speaker 01:
Here's what we presented to the court, Your Honor.

[00:31:14] Speaker 01:
We submitted, and this is docket entry 41 in the prior appeal.

[00:31:18] Speaker 01:
We submitted a request that the court continue

[00:31:26] Speaker 01:
keep the case and decide it even after this covenant.

[00:31:29] Speaker 01:
And in support of that, we pointed out numerous occasions where Valspar was using the board's decision as a weapon in the parallel district court litigation.

[00:31:40] Speaker 01:
So that was our primary request.

[00:31:44] Speaker 01:
We ended that by saying the relief least favorable to us is that this court has the authority

[00:31:55] Speaker 01:
to follow the Munsingware established practice of vacating the board's decision and remanding with instructions to dismiss the reexaminations.

[00:32:06] Speaker 01:
We presented that squarely to the court.

[00:32:09] Speaker 01:
The court didn't do it.

[00:32:11] Speaker 01:
They didn't ask for it.

[00:32:13] Speaker 01:
And now here we are, a year after, if they had a problem with the court's mandate, they should have filed a request for rehearing.

[00:32:21] Speaker 01:
They should have asked you to reform it.

[00:32:23] Speaker 01:
They didn't do that.

[00:32:25] Speaker 01:
They come in a year later now and want you to change your mandate.

[00:32:28] Speaker 01:
I don't see how anyone can say the Patent Office did not follow the mandate this court issued.

[00:32:36] Speaker 01:
And when I read the court's opinion in the prior of Keel, it relies on Bancorp.

[00:32:44] Speaker 01:
And Bancorp said, you cannot, by unilateral action,

[00:32:50] Speaker 01:
erase the effect of an adverse decision.

[00:32:52] Speaker 01:
That's what's being done here.

[00:32:54] Speaker 01:
They want to erase what was the final rejection of the Patent Office.

[00:32:59] Speaker 01:
And the court cited Bancorp and the Homburg case as authority for what it said its order was most consonant with justice.

[00:33:16] Speaker 01:
And that order was to vacate

[00:33:18] Speaker 01:
the board's decision and not do anything else.

[00:33:21] Speaker 01:
No remand, no instructions to dismiss the reexamination.

[00:33:25] Speaker 01:
Now, where do we find that in the court's opinion?

[00:33:29] Speaker 01:
We find that in the same paragraph that begins with the court's observation that Valsfar is the one responsible for removing this court's jurisdiction.

[00:33:42] Speaker 01:
And that comes right out of Bancorp.

[00:33:44] Speaker 01:
When I read the court's decision, and I think when the Patent Office read the court's decision, it said this is exactly the result the court intended.

[00:33:54] Speaker 01:
Now, whether there was a subjective intent behind that, I don't have any way of knowing.

[00:34:00] Speaker 01:
But what I do know is what the court's order says, and it does not remand.

[00:34:06] Speaker 01:
It does not say dismiss the reexaminations.

[00:34:08] Speaker 01:
It says we're vacating the board's decision.

[00:34:11] Speaker 05:
This is quite a different

[00:34:13] Speaker 05:
situation and that's what makes it perhaps interesting because with the covenant not to sue it's no longer a matter of who wins or loses it's a matter of depriving the federal system of appellate jurisdiction so that we now are put back in a situation of an agency decision which the statute says is appealable but

[00:34:43] Speaker 05:
because it's no longer a case of controversy, can't be appealed.

[00:34:48] Speaker 05:
And to think through what the appropriate consequence is, I do think is right and before us, but I think we cannot oversimplify the influences on this result.

[00:35:04] Speaker 01:
Well, I understand your point, Your Honor.

[00:35:08] Speaker 01:
But we're guided by Supreme Court precedent here that's pretty clear.

[00:35:13] Speaker 01:
And everybody knew what it was.

[00:35:15] Speaker 01:
The court knew what it was.

[00:35:16] Speaker 01:
Bausbar knew what it was.

[00:35:17] Speaker 01:
If they wanted a remand with instructions to dismiss, they should have asked for it.

[00:35:22] Speaker 01:
If that's what the court intended, that's what the court should have ordered.

[00:35:26] Speaker 01:
The Bancorp case has a very, I think, important holding.

[00:35:31] Speaker 01:
It says, when the appellate decision is vacated, the case stands no differently than it would have if jurisdiction were lacking because the losing party failed to appeal at all.

[00:35:42] Speaker 05:
But they were entitled to think that since there was a covenant not to sue, it no longer mattered as between these parties, whether the claims were valid or not.

[00:35:55] Speaker 05:
It was over.

[00:35:56] Speaker 05:
There was no longer a dispute between you.

[00:35:59] Speaker 05:
So to pursue an inconsequential issue, whether in their briefing to this court or even now seems

[00:36:12] Speaker 05:
certainly distinctive from the precedent you've been drawing our attention to.

[00:36:16] Speaker 01:
There was no longer a controversy in this Court, because this is an Article 3 Court that requires a case of controversy.

[00:36:26] Speaker 01:
The Patent Office, the re-exam in the Patent Office was not mooted.

[00:36:31] Speaker 01:
And that, the D.C.

[00:36:33] Speaker 01:
Circuit case that Mr. Ballou cites, the radiophone case, held that explicitly.

[00:36:40] Speaker 01:
and this court and consumer watchdog recognize the different jurisdictional requirements in this court and the patent office.

[00:36:48] Speaker 05:
I mean, presumably this court... The parties don't care.

[00:36:51] Speaker 05:
The office doesn't care.

[00:36:53] Speaker 05:
This court doesn't care.

[00:36:55] Speaker 05:
The board doesn't care.

[00:36:57] Speaker 05:
But you're telling us that nonetheless this examiner's action needs to be revived or sustained, in which case we haven't gotten to.

[00:37:07] Speaker 05:
their position that if it is, then they should have the right to appeal it, which they would routinely have had, but for all of this intervening mess.

[00:37:18] Speaker 01:
If they hadn't decided as a tactical matter to deprive this court of jurisdiction, then we would have a decision of this court on whether the board was right or wrong.

[00:37:29] Speaker 01:
They chose a different path.

[00:37:31] Speaker 01:
They should suffer the consequences of that choice.

[00:37:34] Speaker 01:
And the Bancorp case says,

[00:37:36] Speaker 01:
When you choose that path, you can't erase an adverse decision.

[00:37:41] Speaker 03:
Mr. Figg, I see on page JA-4152 where you asked for the vacatur in reliance on the Gain Court.

[00:37:52] Speaker 03:
I don't see, though, anywhere where you explain any of this.

[00:37:55] Speaker 03:
And you instead just ask for vacatur.

[00:37:58] Speaker 01:
As I say, Your Honor, we certainly acknowledged that the Court had that authority.

[00:38:03] Speaker 01:
And I think it's said even more explicitly

[00:38:06] Speaker 01:
in Doctrine 41, which was our request, our motion for leave to file a reply letter when they submitted the covenant.

[00:38:16] Speaker 01:
That, for some reason, didn't make it into the Joint Appendix, but is part of this court's appeal record.

[00:38:21] Speaker 01:
We said it very explicitly, that Munsingware lays out.

[00:38:27] Speaker 01:
I don't see how Munsingware could have been any clearer, as well as the cases that relied on it.

[00:38:33] Speaker 03:
You asked us to vacate.

[00:38:36] Speaker 03:
the board's decision, right?

[00:38:38] Speaker 03:
And so we did so that you could have the fairness that you asked for, a clean slate, right?

[00:38:45] Speaker 03:
So you're saying in your reply you explained further that we needed to do more or the examiner's decision would stand?

[00:38:51] Speaker 01:
No, that was not the issue.

[00:38:52] Speaker 01:
That was not the issue.

[00:38:54] Speaker 01:
Our main point was we really wanted the case decided.

[00:39:02] Speaker 01:
And they pulled the rug out from under us with their covenant.

[00:39:06] Speaker 01:
We acknowledged the last sentence of Dock of Entry 41 is, Valspar will not be prejudiced by vacature of the board's decision and remand with instructions to vacate the decision of the central examination unit.

[00:39:22] Speaker 01:
That was sort of, no matter what else you do, you should at least do that.

[00:39:28] Speaker 01:
That was our least favorable relief we were asking for.

[00:39:31] Speaker 01:
We put squarely in front of the court,

[00:39:35] Speaker 01:
exactly the procedure that is required under the Munsingware line of cases.

[00:39:41] Speaker 01:
The court did not do that.

[00:39:44] Speaker 01:
They didn't ask the court to do it, and the court didn't do it.

[00:39:49] Speaker 01:
What's the Patent Office supposed to do?

[00:39:51] Speaker 01:
Read a requirement into the board's mandate that the court didn't put in its mandate?

[00:39:58] Speaker 01:
I mean, the court didn't tell the Patent Office to dismiss the reexaminations.

[00:40:03] Speaker 01:
The Patent Office had not lost jurisdiction over the reexaminations.

[00:40:08] Speaker 01:
The Patent Office's procedures say when all appeals are over, then we remand the case to the Commissioner for the Ministerial Act of issuing a reexamination certificate that is consistent with the appellate outcome.

[00:40:28] Speaker 04:
Thank you, Your Honor.

[00:40:40] Speaker 00:
While we're on that Joint Appendix, page 4152, where PPG tells this Court what should be done in light of the covenant not to sue, first sentence of the first full paragraph concludes with the PTAB's decision must be vacated.

[00:40:57] Speaker 00:
They don't mention anything else remand or vacating the RAN.

[00:41:01] Speaker 00:
And in that paragraph, quote, the Munsingware

[00:41:06] Speaker 00:
principle that the rights of all parties are preserved.

[00:41:09] Speaker 00:
None is prejudiced by a decision.

[00:41:12] Speaker 00:
And then it ends with a citation to the Sands versus NLRB case of the DC Circuit.

[00:41:18] Speaker 00:
Based on my research, this is the most recent decision of the DC Circuit that applies the Meckling-Barge principle in administrative cases.

[00:41:28] Speaker 00:
And in that case, you had the National Labor Relations Board sitting atop an ALJ.

[00:41:34] Speaker 00:
The ALJ

[00:41:35] Speaker 00:
issued a decision dismissing Ms.

[00:41:37] Speaker 00:
Sands' unfair labor practices case.

[00:41:41] Speaker 00:
That was appealed to the NLRB.

[00:41:44] Speaker 00:
The NLRB board affirmed.

[00:41:47] Speaker 00:
And then on appeal to the D.C.

[00:41:49] Speaker 00:
Circuit, the D.C.

[00:41:50] Speaker 00:
Circuit, including on that panel was Judge Kavanaugh, dismissed the appeal and vacated the board's order.

[00:41:58] Speaker 00:
Only the board's order was mentioned and no remand.

[00:42:01] Speaker 00:
And just so there is no doubt that there would be no preclusive effect,

[00:42:05] Speaker 00:
of the ALJ's order, Sands v. NLRB at page 786 says that they were doing this procedure to further the traditional doctrine, purpose of the doctrine, quote, clearing the path for future relitigation of the issues.

[00:42:22] Speaker 00:
So it would be, it's impossible to square that rationale of the D.C.

[00:42:27] Speaker 00:
Circuit with the idea that just vacating the board NLRB decision

[00:42:34] Speaker 00:
does not affect then the ALJ decision.

[00:42:38] Speaker 00:
There's other cases that we cite, like Beethoven.com versus the Librarian of Congress, DC Circuit case that only vacates the Librarian's decision.

[00:42:49] Speaker 00:
The Librarian sits atop the CARP, the Copyright Arbitration Royalty Panel, which had come to a different decision with respect to the copyright royalty effective dates.

[00:43:02] Speaker 00:
Likewise, the DC circuit.

[00:43:04] Speaker 04:
So your view is that in silence, with respect to anything at the patent office, means that it should also be making.

[00:43:11] Speaker 04:
That's your view.

[00:43:12] Speaker 04:
That's how you read ours.

[00:43:13] Speaker 04:
That's why you didn't file a petition for review.

[00:43:15] Speaker 04:
Yes.

[00:43:16] Speaker 04:
So we would have to affirmatively, if the court wanted to do something different, let's assume in this case we decided, well, we ought to reaffirm the examiner's opinion.

[00:43:28] Speaker 04:
We would have to explicitly say that, in our opinion.

[00:43:33] Speaker 00:
Yes, I think that would be a reversal because you are replacing the vacated board decision that was favorable to patentability with a contrary judgment of this court or of the agency.

[00:43:47] Speaker 00:
A simple reversal would have done the trick.

[00:43:49] Speaker 03:
Would you say that in a procedural circumstance like this, if you expected the examiner's rejection to stand, that the court would have been more explicit about it?

[00:44:01] Speaker 00:
Yes, absolutely.

[00:44:03] Speaker 00:
And just to make a final point that PPG will have its day in court in an Article III court on the five asserted patents, but they've chosen not to challenge those five patents at the Patent Office.

[00:44:20] Speaker 00:
So, you know, they will have their day in court and are having their day in court in the Western District

[00:44:25] Speaker 00:
Pennsylvania on those five patents, and we'll be able to appeal.

[00:44:28] Speaker 04:
I was going to ask you about the status of that.

[00:44:30] Speaker 04:
Your brief said that you went into mediation at the end of 2018.

[00:44:33] Speaker 04:
What is the status?

[00:44:34] Speaker 00:
The case continues on those five patents.

[00:44:38] Speaker 00:
Discovery is closed.

[00:44:39] Speaker 04:
I assume that mediation was not successful.

[00:44:41] Speaker 00:
Correct.

[00:44:42] Speaker 00:
Discovery is closed.

[00:44:43] Speaker 00:
Summary judgment is being briefed.

[00:44:47] Speaker 04:
Thank you.

[00:44:47] Speaker 04:
We thank both sides.