[00:00:02] Speaker 04:
Final case for argument is 21-1708, Hyatt versus PTF.

[00:00:48] Speaker 04:
We're ready, Mr. Grossman, whenever you are.

[00:00:51] Speaker 01:
Thank you, Your Honors, and may it please the court.

[00:00:53] Speaker 01:
I'm Andrew Grossman for the appellant, and I would reserve three minutes for rebuttal.

[00:00:57] Speaker 01:
The uncontroverted evidence before the district court showed the PTO adopted a secret rule to block Gilbert Hyatt from obtaining additional patents and enforced that rule for over a decade.

[00:01:09] Speaker 01:
The evidence further showed that the PTO maintains that rule in the current era of the Hyatt unit.

[00:01:14] Speaker 01:
Just after the Hyatt unit's leader took office in 2013,

[00:01:17] Speaker 01:
He told a former PTO official that the plan was to reject every single one of Hyatt's applications.

[00:01:23] Speaker 01:
The PTO proceeded to kill two of Hyatt's applications by running out all patent term on them in 2016.

[00:01:29] Speaker 01:
And the Hyatt unit's leader also instructed his examiners in 2016 to reject every application on multiple grounds, to run up the rejection count because it tells a story, to ignore relevant materials submitted by Hyatt when making rejections, to penalize Hyatt for things like typographical errors,

[00:01:45] Speaker 01:
and to withhold information from Hyatt that would allow him to avoid forced abandonment of his applications.

[00:01:51] Speaker 01:
And that is just a sampling of the evidence.

[00:01:54] Speaker 01:
The showing of bad faith was light years beyond what the Supreme Court held in Department of Commerce versus New York.

[00:02:01] Speaker 01:
to justify substantial discovery on the government.

[00:02:04] Speaker 04:
The district court here found lack of evidence that the PTO presently has and no patents for high policy.

[00:02:11] Speaker 04:
What was the evidence with respect to the fact that you argued that it pres... I assume your argument was that it presently has that policy.

[00:02:19] Speaker 01:
Yes, Your Honor.

[00:02:19] Speaker 04:
Is that there is uncontroverted evidence that it presently has that policy?

[00:02:23] Speaker 01:
There is uncontroversial evidence, Your Honor, that it did adopt that rule in 1997, and then continued to enforce it for 10 years.

[00:02:31] Speaker 04:
My question is, how does that jive with the issue before the district court, which was when the PTO presently has that policy?

[00:02:38] Speaker 01:
Your Honor, when an agency adopts a rule, if the agency is going to depart from that rule, it has to acknowledge the change in policy that it's making.

[00:02:45] Speaker 01:
When we presented uncontroverted evidence that the PTO had in fact adopted and carried out this rule, the PTO had a burden to show that it had switched policies or to controvert that evidence and show that it did not in fact adopt that rule.

[00:02:58] Speaker 01:
We also introduced evidence, as I described, and evidence in addition to that, that supports that the PTO continues to carry out that rule.

[00:03:06] Speaker 01:
There is, for example, the packet of instructions that I mentioned from the leader of the Hyatt unit to Hyatt unit examiners that demonstrates that the agency continues to apply an incredibly prejudicial regime against Mr. Hyatt in ways that conflict with the agency's... Those instructions are part of the administrative record?

[00:03:26] Speaker 01:
Yes, Your Honor.

[00:03:27] Speaker 03:
And so are you arguing that the district court judges determination that no such rule existed now?

[00:03:35] Speaker 03:
is not supported by the administrative record?

[00:03:38] Speaker 01:
Your Honor, we are arguing three things.

[00:03:40] Speaker 01:
The first is that the court erred in constructing the administrative record by failing to follow the whole record rule.

[00:03:46] Speaker 01:
The second, that the court wrongly essentially blocked all discovery, having found a strong showing of agency bad faith or misconduct.

[00:03:54] Speaker 01:
And third, that even given the record, the court erred procedurally as well as in substance

[00:04:00] Speaker 01:
uh... in determining that there is uh... notice you in in in in grating so it's not a summary that i was i'm not sure how that you're giving us links up to that you i don't really care which of those you address first but can you just address the issues yes sir so i'll start with the record issue the district court jerry matter the administrative record and doing so it violated the fundamental rule that he challenges the action has been a piece of discretion

[00:04:31] Speaker 01:
I think that ultimately it's abuse of discretion.

[00:04:33] Speaker 01:
I think in this instance it goes down to de novo because the court, in two respects, one, the court paid lip service to the whole record rule and then in the very next breath excluded things from the record regarding the precise rule that is the subject of Mr. Hyatt's challenge here.

[00:04:49] Speaker 01:
That simply was a disregard of the whole record rule and that was legal error by the district court.

[00:04:55] Speaker 01:
Likewise,

[00:04:56] Speaker 03:
Why is it legal error?

[00:04:57] Speaker 03:
I thought his rationale was, what I'm reviewing is whether this rule exists now.

[00:05:02] Speaker 03:
I'm going to exclude documents or possible testimony that pertain to time frames not relevant to this current rule or this current alleged rule.

[00:05:15] Speaker 03:
Why is that an abuse of discretion?

[00:05:18] Speaker 01:
When an agency action is challenged, Your Honor, that review has to be conducted upon the whole record.

[00:05:23] Speaker 01:
And so it's important what action was being challenged

[00:05:25] Speaker 01:
We alleged and presented evidence that this rule was adopted in 1997 and was carried forward in various forms to the present.

[00:05:32] Speaker 01:
That made the whole record a record that began in 1997 or perhaps even before then.

[00:05:37] Speaker 01:
And so the court's gerrymandering of the record to rule out all of that evidence before even considering it was a... Gerrymandering?

[00:05:45] Speaker 04:
What does that mean?

[00:05:46] Speaker 04:
How is that applicable to what you're talking about here?

[00:05:50] Speaker 01:
The court's exclusion of that evidence from the administrative record.

[00:05:54] Speaker 03:
What is the point of him deciding whether that rule existed way back in 2013?

[00:06:01] Speaker 03:
What your relief is asking for now, let's just assume I agree with you, disagree with you about the Bowen issue, because it'll clean up this conversation.

[00:06:11] Speaker 03:
If we get rid of the rest of that complaint, you can reach that if you want to.

[00:06:14] Speaker 03:
But if what you're trying to do is say, have the district court order Hyatt to revoke its no patents for Hyatt rule,

[00:06:22] Speaker 03:
If their defense is, we do not currently have such a rule, then why is anything that happened in 2013 or before relevant to what's happening now?

[00:06:34] Speaker 01:
Well, Your Honor, when an agency adopts and applies an unlawful rule, the law recognizes that that rule may have impacts, that as part of the standard Bacchatoran remand process, the agency must effect a complete rescission of the rule as well as of its effects.

[00:06:52] Speaker 01:
That's something that would potentially give Hayat a variety of relief regarding the agency's exercise of discretion, particularly with respect to applications that are still before the agency.

[00:07:03] Speaker 01:
In other words, ones that have not yet proceeded to judge and review in court.

[00:07:06] Speaker 03:
I don't understand that.

[00:07:07] Speaker 03:
If there is no rule in place for them to revoke, what makes the difference if there was one in 213 with regards to currently ongoing patent applications?

[00:07:19] Speaker 01:
Well, Your Honor, I think the court can't simply assume that there is not a rule in place.

[00:07:23] Speaker 01:
That is what the PTO has contended.

[00:07:26] Speaker 03:
But that's what the district court was trying to decide.

[00:07:28] Speaker 03:
Is there a rule in place now?

[00:07:31] Speaker 03:
And he decided that.

[00:07:32] Speaker 03:
He decided that issue.

[00:07:34] Speaker 01:
The court decided that issue by excluding evidence.

[00:07:36] Speaker 01:
Now, even if you disagree with me on the record issue, in other words, drawing the temporal limit, the court excluded from the administrative record numerous materials concerning the current era of the Hyatt unit.

[00:07:47] Speaker 01:
And I would start with the declaration of Jessica Harrison.

[00:07:50] Speaker 01:
in which she testified, sworn under oath, that the current head, the current leader of the Hyatt unit, described in 2013 that he intended, he planned to reject every single one of Mr. Hyatt's applications.

[00:08:02] Speaker 01:
This was after he had been on the job for a period of a couple months.

[00:08:06] Speaker 03:
Pardon?

[00:08:07] Speaker 01:
That's in 2013.

[00:08:08] Speaker 01:
That is in 2013.

[00:08:10] Speaker 01:
But I think what makes that important is that's where the court drew the line.

[00:08:13] Speaker 01:
And so the court held that the current era was the Hyatt unit era.

[00:08:19] Speaker 01:
And it disregarded evidence that it said was stale because it related to 2012 and earlier.

[00:08:25] Speaker 01:
So even if you go with the court on that line, we think it's wrong, but even if you go with the court on that, the court's evidentiary decisions in constructing the record still didn't make sense.

[00:08:34] Speaker 01:
Ms.

[00:08:35] Speaker 01:
Harrison also testified that in 2018, Mr. Morse described... What's the basis for the exclusion of that declaration?

[00:08:42] Speaker 01:
He said that Ms.

[00:08:44] Speaker 01:
Harrison, what was the court's basis?

[00:08:46] Speaker 01:
The court said that Ms.

[00:08:47] Speaker 01:
Harrison, like some of the other witnesses, had left the PTO by 2012.

[00:08:52] Speaker 01:
And that's true, but her evidence that she testified to post-states that day.

[00:08:57] Speaker 01:
And so that was not considered... Wait, so again, abuse of discretion, right?

[00:09:04] Speaker 03:
Why is it an abuse of discretion for him to decline to consider a declaration from somebody that left the PTO in 2012 when the relevant question is a current timeframe?

[00:09:17] Speaker 03:
I don't know how far back you want to go to define a current timeframe, but it can't be 2012.

[00:09:23] Speaker 01:
you know i'm sticking with what the court drew for the for the purpose of this argument so twenty twelve and earlier is out under under that line the reason she left before that she left before then but she had possibly be an abuse of discretion to exclude somebody who wasn't presently employed your honor i would ask i i think it goes and if you can let me as described the contents of the declaration attest to uh... p t o conduct planning and activities in the current height unit era

[00:09:53] Speaker 01:
She was friends with the leader of the Hyatt Unit.

[00:09:55] Speaker 01:
She met the Hyatt Unit's leader for lunch after she left the PTO in 2013 when he had just taken over the job and he was describing to her his plans for the Hyatt Unit.

[00:10:08] Speaker 03:
I don't understand how that's an abuse of discretion to throw out knowledge she gained through lunches and her friendship when she's not officially employed by the PTO.

[00:10:17] Speaker 01:
Because it speaks to decisions that the PTO made that are absent from the record because the PTO has excluded them from the record.

[00:10:23] Speaker 01:
That's the whole purpose of going beyond the record when there's a strong showing of the- OK, let's assume that I don't think that's an abuse of discretion.

[00:10:31] Speaker 03:
What else do you have?

[00:10:33] Speaker 03:
He did allow you an evidentiary hearing because of the bad faith nature of these allegations.

[00:10:39] Speaker 03:
He did allow you to supplement the record.

[00:10:43] Speaker 01:
Your Honor- You just want more and then he allowed.

[00:10:46] Speaker 01:
Your Honor, we were allowed almost nothing.

[00:10:48] Speaker 01:
I would encourage the court to simply look at the transcript of the afternoon-long depositions that were conducted.

[00:10:56] Speaker 01:
We were not able to address, to carry out practically any line of questioning, and all the court drew from it was simply that the PTOs, the current head of the high unit, and two other officials deny that they're familiar with any rule to deny patents to Hyatt.

[00:11:09] Speaker 01:
We had

[00:11:10] Speaker 01:
different areas of circumstantial evidence that we wanted to go over with witnesses were unable to do that we had no documentary discovery which is sort of which is what you would expect review this is record review you get the record there was your honor there was no record in this case

[00:11:26] Speaker 01:
The agency did not, in and of itself, assemble a record for a no patents for Hyatt rule.

[00:11:32] Speaker 03:
The agency denied that it currently... How can they assemble a record if there is no record for this rule?

[00:11:37] Speaker 03:
That's their position.

[00:11:39] Speaker 03:
Are you claiming that they have withheld documents or they have hidden documents?

[00:11:43] Speaker 03:
Did you make a non-filth allegation that the district court could have ruled on to that effect?

[00:11:50] Speaker 01:
Your Honor, I would encourage you to look at the New York versus Department of Commerce decision by the district court, because I think it lays out how this works.

[00:11:56] Speaker 01:
And the Supreme Court generally affirmed the approach the court there took.

[00:11:59] Speaker 01:
When a party makes a strong showing of agency bad faith, the court can no longer rely on the agency's representations regarding the record.

[00:12:07] Speaker 01:
The record is no longer trustworthy.

[00:12:09] Speaker 01:
Because there is that bad showing, and there is a presumption that if the agency is engaged in bad faith, it is not putting evidence of that into the record.

[00:12:17] Speaker 01:
Here the agency in and of itself produced no record.

[00:12:19] Speaker 01:
It denied that it had this rule, even though it didn't controvert the evidence dating back to 1997.

[00:12:25] Speaker 03:
And in those circumstances, you supplement the record, right?

[00:12:29] Speaker 01:
Well, except the court, first of all, refused to supplement the record with the very evidence that it held justified that it created the strong showing of bad faith that is these witnesses' declarations.

[00:12:39] Speaker 03:
Let me just back up on this.

[00:12:41] Speaker 03:
Even if he allowed that evidence in, why is it relevant to whether there is a current

[00:12:48] Speaker 03:
rule in place?

[00:12:50] Speaker 01:
That's a revocation argument.

[00:13:04] Speaker 01:
That's what the law is, FCC versus Fox, as well as Regents versus University of California.

[00:13:08] Speaker 03:
This is where I don't understand what that gets you.

[00:13:11] Speaker 03:
And second, your Honor, if they improperly revoke the no patents for Hyatt rule, what do you care if it was properly or improperly revoked as long as it was revoked?

[00:13:23] Speaker 03:
That's what you're asking the district court for.

[00:13:25] Speaker 01:
Your honor, if the agency came into court and provided a fulsome record demonstrating that it had revoked the rule, this would be a very different case, and we wouldn't be making this sort of argument.

[00:13:34] Speaker 01:
And this would be, as I said, an entirely different appeal.

[00:13:37] Speaker 01:
That is not what happened because the district court did not require the PTO to do that.

[00:13:41] Speaker 01:
Instead, the district court relied upon PTO's officials denying that they have such a rule and rested a hand on that, notwithstanding that it had found that Hyatt made the required strong showing of bad faith that weren't discovery.

[00:13:53] Speaker 01:
If there was going to be discovery in an APA case based on that sort of strong showing, the discovery has to complete the record.

[00:14:00] Speaker 01:
That's the language that's used in the Supreme Court decisions.

[00:14:03] Speaker 01:
And in this instance, there was no attempt made to complete the record.

[00:14:06] Speaker 01:
We asked for discovery.

[00:14:09] Speaker 03:
A little baffled you say there's no attempt.

[00:14:11] Speaker 03:
You disagree with the district court's way of doing it, but he allowed you a live evidentiary hearing where he himself could hear the credibility of the witnesses.

[00:14:23] Speaker 03:
Now, if you want to discuss the scope of that, that's one thing, but to say that the record wasn't supplemented is just wrong.

[00:14:32] Speaker 03:
It was supplemented with these testimonies.

[00:14:34] Speaker 03:
You were given what?

[00:14:35] Speaker 03:
Either five depositions or three with a rule whatever.

[00:14:41] Speaker 01:
ultimately right we were limited to three the pts thirty b six witness was unprepared and so that was not a fruitless deficit that was not a fruitful deposition at all uh... and the two that and the two that we were under the people that you take one was for a narrow purpose and the way the lead one the leader of the high unit as you your honor i'm sure saw from the uh... deposition transcript that deposition was effectively limited to the district court asking for separate times whether or not he whether or not he was aware of a no patents for high

[00:15:10] Speaker 01:
That was what happened at the culmination of every single line of questioning that we undertook, except for those lines of questioning where we were simply blocked.

[00:15:16] Speaker 01:
And we were blocked, by the way, on questioning regarding current height unit activities where, despite being designated in part as a 30B6 organizational witness, the height units leader just professed that he had no personal knowledge, and therefore the district court forced us onto a different topic.

[00:15:33] Speaker 01:
This was effectively good for nothing.

[00:15:35] Speaker 01:
It was futile in terms of,

[00:15:37] Speaker 01:
being adequate to demonstrate the existence or nonexistence of a current no patents for Hyatt rule.

[00:15:42] Speaker 01:
I noted also that the district court excluded from the administrative record

[00:15:47] Speaker 01:
uh... other high unit era internal communications the district court did this in a single sentence stating that they were all subject to the to the deliberative process privilege the pg never claimed that any of these materials were deliberative at all or privilege it produced in the mister hiding previous litigation without making any privilege claim and on the substance none of them were privileged let me just get back to it you're saying evidentiary hearing held to supplement the record

[00:16:14] Speaker 03:
Was insufficient for him to address the agency's decision-making that you're challenging.

[00:16:20] Speaker 01:
Yes, your honor.

[00:16:21] Speaker 03:
OK, and whether he has compiled a sufficient record to review the agency's decision making is an abuse of discretion standard for us.

[00:16:31] Speaker 01:
It is an abuse of discretion to the extent that the court views it as incorporating the district court's view that this is all subject to a mandamus standard, which appears to be the basis for the court's line drawing in terms of the evidence.

[00:16:43] Speaker 01:
That, again, would be subject to de novo because that's obviously legal error.

[00:16:47] Speaker 04:
I think we're close.

[00:16:49] Speaker 04:
You're well into your rebuttal.

[00:16:51] Speaker 04:
You want to save it?

[00:16:53] Speaker 01:
Yes, I'll reserve the remainder of my time.

[00:16:54] Speaker 01:
Thank you, Your Honor.

[00:17:08] Speaker 02:
Good morning.

[00:17:08] Speaker 02:
May it please the Court, Peter Sahlert on behalf of the USPTO and the Director, appearing in my capacity as a Special Assistant United States Attorney.

[00:17:18] Speaker 02:
Sir Hyde has raised essentially four different issues before this court in the briefing.

[00:17:24] Speaker 02:
Let's start with the way that the record was constructed.

[00:17:29] Speaker 02:
As the court has already noted, that is subject to review for an abuse of discretion.

[00:17:33] Speaker 02:
This is a highly unusual case.

[00:17:36] Speaker 03:
Let me just ask you this.

[00:17:40] Speaker 03:
Didn't the district court just let in all these declarations from these former employees to the extent they were testifying about their time at the agency?

[00:17:52] Speaker 02:
Your Honor, I think that the problem with this is an unusual case.

[00:17:56] Speaker 02:
And as Your Honor is well aware, having dealt with prior litigations involving the same appellant

[00:18:03] Speaker 02:
But the patent applications that you issue are rather complex and sprawling and date back very far in time.

[00:18:10] Speaker 02:
And I think that the district.

[00:18:11] Speaker 03:
OK, sorry.

[00:18:13] Speaker 02:
I will finish very quickly.

[00:18:15] Speaker 02:
I think the district court wanted to draw a reasonable line for managing this case without reaching back to the entire history and saying, look, as your honor said, and as USPTO said in their briefing on this issue, this is about prospective relief.

[00:18:29] Speaker 02:
Do we have this ruling in place now?

[00:18:31] Speaker 02:
that should be set aside because it's illegal.

[00:18:34] Speaker 02:
And so you can only reach so far back in time and claim it's relevant to what's going on now.

[00:18:39] Speaker 03:
I guess my practical interest in this was if he just let this in and said, well, whatever may have happened in the past, the record as it stands now with the testimony of these still leads me to the conclusion that there's no rule in place.

[00:18:54] Speaker 03:
This other evidence isn't relevant.

[00:18:57] Speaker 03:
we'd still be reviewing that current decision for substantial evidence on the administrative record and we wouldn't be quarreling about whether these declarations should be in and out.

[00:19:09] Speaker 03:
I guess you would just argue that none of that's an abusive discretion.

[00:19:12] Speaker 02:
It's not an abusive discretion to say that that's too far removed in time to be probative of the question before the court.

[00:19:19] Speaker 02:
And I think that Your Honor's right that the result would be the same, but also it

[00:19:23] Speaker 02:
It would have involved additional complexities in creating the record because they are declarations, not depositions that were subject to cross-examination.

[00:19:32] Speaker 02:
And so it would open up numerous additional substantive issues that the court was not forced to address because they just simply determined it was too far removed to be relevant, even if taken as true as of the time that they were made.

[00:19:45] Speaker 04:
The suggestion that there was the so-called policy

[00:19:50] Speaker 04:
It does influence how you view that.

[00:19:52] Speaker 04:
If the PTO had never had any policy and had no witnesses to say this is what we did, it would be a different case than the case of having a so-called prior policy.

[00:20:04] Speaker 04:
So it has some relevance to this analysis, right?

[00:20:08] Speaker 02:
It could, Your Honor, if Mr. Hyatt had tied that past activity through a more constant stream through time, like if it was tied to current

[00:20:19] Speaker 02:
happenings in the case.

[00:20:21] Speaker 02:
But four of the declarations are from the early 2000s, and only two of them go up to even 2012.

[00:20:29] Speaker 02:
So most of them are even farther removed.

[00:20:31] Speaker 02:
And then there's a big jump, right?

[00:20:33] Speaker 02:
There's this gap, and you get to the present time

[00:20:37] Speaker 02:
And we see all that's happening in the cases that is part of the administrative record, the sampling of documents that the USPTO put in involving the prosecution of Mr. Hyatt's applications, that the district court reviewed, that the district court found that to be the most probative evidence because it's objective.

[00:20:56] Speaker 02:
It is circumstantial, but he reviewed it with care, not to the level it would be subject to review for its actual legal correctness in a 141 or 145 proceeding.

[00:21:06] Speaker 02:
But he reviewed it and found that the USPTO was applying legitimate rejections, that it was grappling with the issues, that it was providing reasoned bases, and that these documents were long and substantive.

[00:21:18] Speaker 02:
There are 50, 7,500 page documents each time.

[00:21:23] Speaker 00:
If the court had permitted Mr. Hyatt to supplement the records to the extent that they wanted to, the best wish

[00:21:34] Speaker 00:
that they had to supplement the record.

[00:21:36] Speaker 00:
How much material are we talking about?

[00:21:39] Speaker 02:
Well, part of the problem, Your Honor, as we pointed out in the red brief, is we have no idea.

[00:21:43] Speaker 04:
I thought the district court said, didn't he refer to 1.7 million pages?

[00:21:48] Speaker 04:
I don't know what that was, too.

[00:21:49] Speaker 02:
Yes, so in a related litigation with Mr. Hyatt, the section 145 actions from the district of BC.

[00:22:01] Speaker 04:
I'm sorry to interrupt your answer.

[00:22:03] Speaker 02:
I can give a very quick round off to that answer.

[00:22:06] Speaker 02:
There was extensive discovery there that relative to the latches rejection and much of that discovery that Mr. Hyatt obtained in that proceeding was the basis for filing this complaint.

[00:22:19] Speaker 02:
And so filing all of his file histories happened in that litigation.

[00:22:24] Speaker 02:
And it was, you know, over it was millions of pages.

[00:22:28] Speaker 02:
So, uh, and that's so that, and that was as of,

[00:22:33] Speaker 02:
2017, I believe, and so there would be all the intervening events.

[00:22:38] Speaker 02:
I think that the key issue is that the district court was entitled to rely on the live testimony, where he looked at Mr. Morse in the eye.

[00:22:47] Speaker 02:
And he himself, on five separate times during the evidentiary hearing, looked him in the eye and asked him, is there such a policy?

[00:22:55] Speaker 02:
And Mr. Morse said, no.

[00:22:56] Speaker 02:
And he's entitled to credit that.

[00:22:58] Speaker 02:
He asked the question.

[00:22:59] Speaker 02:
He looked at him in the eye and made that.

[00:23:01] Speaker 02:
And that, in conjunction,

[00:23:03] Speaker 02:
With the objective evidence, we put in the USPTO file two sets of listings of all of the actions being taken in Mr. Hyatt's applications, one over a six-week period, one over a roughly six-month period.

[00:23:21] Speaker 02:
So there's that whole listing of all those actions.

[00:23:24] Speaker 02:
Because they're so massive, we only filed the actual copies of a subset of that.

[00:23:29] Speaker 02:
The district court looked at all that and found it's not a smoke screen.

[00:23:33] Speaker 02:
The USPTO is just not making things up to reject Mr. Hyatt's claims.

[00:23:38] Speaker 02:
The USPTO is doing what it said it is doing.

[00:23:42] Speaker 02:
It is trying to bring his patent applications through the examination process and provide final decisions on the merits, including final decisions by the examiner.

[00:23:52] Speaker 02:
And now there are many cases percolating through the board, and there are now multiple Section 145 actions pending in the United States District Court for the Eastern District of Virginia.

[00:24:13] Speaker 02:
Mr. Hyatt's counsel is focused primarily on the evidentiary record.

[00:24:19] Speaker 02:
So I don't want to go too much beyond that, but I do want to talk about this supposed lack of notice.

[00:24:25] Speaker 02:
I think that in our brief, the USPTO has walked through very carefully the procedure that Judge Ellis followed here.

[00:24:32] Speaker 02:
It was reasoned.

[00:24:33] Speaker 02:
There were orders at each step telling what was going to happen next.

[00:24:38] Speaker 02:
We're going to decide what evidence you get.

[00:24:41] Speaker 02:
you know, what discovery can be taken.

[00:24:44] Speaker 02:
Now we're going to decide, I have this remaining count that hasn't been dismissed.

[00:24:48] Speaker 02:
Now we're going to decide, because this is an APA case, what the record is for decision.

[00:24:53] Speaker 02:
And you get to put in briefing on that.

[00:24:55] Speaker 02:
And we're going to include the hearing that we had, and you get to tell me what else should go in there.

[00:24:59] Speaker 02:
And then he ruled on that.

[00:25:00] Speaker 02:
He said, now that we have the record that I told you was decide this case, now we're going to have a hearing on the merits.

[00:25:07] Speaker 02:
So I can decide this thing, whether there's evidence or not.

[00:25:10] Speaker 02:
And both parties had ample opportunity to argue orally before the court and point to all the evidence in the record in support of their case.

[00:25:20] Speaker 02:
And then what Judge Ellis did was

[00:25:22] Speaker 02:
Take all of that under consideration and write a decision on the record.

[00:25:27] Speaker 02:
Not summary judgment, but a decision on the record, where he's allowed to weigh credibility determinations.

[00:25:34] Speaker 02:
For example, the testimony of Mr. Morse, where he himself asked these questions.

[00:25:39] Speaker 02:
And that confirm what the objective evidence shows.

[00:25:42] Speaker 02:
The amount of work, the serious work that the USPTO is doing to grapple with Mr. Hyatt's applications.

[00:25:52] Speaker 04:
Anything further?

[00:25:53] Speaker 02:
If Your Honor said nothing further, I have no other.

[00:25:56] Speaker 02:
Thank you.

[00:25:56] Speaker 02:
Thank you very much.

[00:25:59] Speaker 04:
Will we start two minutes of rebuttal?

[00:26:01] Speaker 04:
Mr. Grossman.

[00:26:03] Speaker 01:
Thank you, Your Honor.

[00:26:04] Speaker 01:
I appreciate that.

[00:26:05] Speaker 01:
Several quick points.

[00:26:07] Speaker 01:
First, Mr. Hyatt came to court with evidence that the PTO carried off over a decade what is a blatantly unlawful activity and kept it secret.

[00:26:15] Speaker 01:
I mean, this is the kind of evidence that a district court will probably never see in an entire lifetime of service on the bench.

[00:26:22] Speaker 01:
And it warranted more than Mr. Hyatt received here in terms of looking into the seriousness of this claims and the PTO's current activities.

[00:26:31] Speaker 01:
With respect to the supplementation of the record, we did request that the entire file histories be added.

[00:26:38] Speaker 01:
We also proposed as an alternative a limited subset of very specific evidence that we identified in a table.

[00:26:44] Speaker 01:
that is in the appendix at page 1484 to 1513 that identifies specific documents, many of which touch upon the Hyatt Unit.

[00:26:57] Speaker 01:
In other words, the same era that the court was focused on and limited the record to, and yet nonetheless excluded all of this evidence without any explanation whatsoever.

[00:27:05] Speaker 00:
Did the district court actually rule on each one of your objections to the diminution of the record?

[00:27:14] Speaker 01:
Your honor, the court asked for pleadings to propose material.

[00:27:17] Speaker 01:
We did that, and the court rejected what we had proposed.

[00:27:20] Speaker 00:
So yes.

[00:27:20] Speaker 00:
It just sounded to me, and you tell me if I was wrong, but it sounded to me you got a fair shot.

[00:27:25] Speaker 00:
You were allowed to argue and point to the court, these are the documents that we want.

[00:27:31] Speaker 00:
This is why we think they're probative and the court rule.

[00:27:34] Speaker 00:
Is that?

[00:27:36] Speaker 01:
Your honor, the court did not examine any of the documents, at least not in any way.

[00:27:40] Speaker 00:
That's what's on the record.

[00:27:41] Speaker 00:
That's not what I asked, counsel.

[00:27:42] Speaker 00:
I asked, you got a chance to argue which documents you thought should be in, and you got a chance to base your legal grounds, and the court heard that and made a ruling.

[00:27:54] Speaker 01:
I don't think that's right, Your Honor.

[00:27:56] Speaker 01:
For example, the court excluded wholesale possibly all of these documents based on the deliberative process privilege.

[00:28:03] Speaker 01:
And that's not something we were ever able to argue on a document by document basis where we have the opportunity to demonstrate that, no, actually none of these were privileged at all.

[00:28:11] Speaker 01:
So I'm afraid I could not agree with that.

[00:28:15] Speaker 01:
In terms of notice, my friend said that there was notice.

[00:28:18] Speaker 01:
I will simply note that the PTO's brief does not identify a single case whatsoever where a court found clear notice in circumstances like this.

[00:28:26] Speaker 01:
What the district court never did was say, I'm going to enter judgment.

[00:28:30] Speaker 01:
I'm going to enter summary judgment.

[00:28:31] Speaker 01:
or anything like that.

[00:28:32] Speaker 01:
If the court had done that, we would have pointed out the correct legal standard.

[00:28:37] Speaker 01:
We would have filed a rule.

[00:28:38] Speaker 03:
What do you think a hearing on the merits means?

[00:28:41] Speaker 01:
The court had said again and again and again that it was going to consider our request for further discovery.

[00:28:47] Speaker 01:
There would be opportunity to argue on that.

[00:28:50] Speaker 01:
We assumed in the context that what the court intended was to have a hearing regarding how the case was going to proceed.

[00:28:56] Speaker 01:
I think if you look at the prior hearings that were in this case, the district court was a little bit

[00:29:01] Speaker 01:
I would say erratic in that the hearings tended to cover a wide variety of topics, more or less whatever was on the court's mind that morning.

[00:29:09] Speaker 01:
And we expected just about the same in that particular hearing.

[00:29:13] Speaker 01:
We were surprised when the court entered Sue Espante summary judgment, particularly because even at that last hearing on the merits, the court said nothing about- You mean judgment on the administrative record?

[00:29:23] Speaker 01:
The court said it was a Sue Espante summary judgment, Your Honor.

[00:29:26] Speaker 03:
It says summary judgment on the administrative record.

[00:29:30] Speaker 01:
It was a sui sponte judgment, Your Honor.

[00:29:32] Speaker 01:
And since the court provided no indication that it was doing that, even at the hearing, if the court has no further questions, we would ask that the judgment be reversed.

[00:29:40] Speaker 01:
Thank you.

[00:29:41] Speaker 04:
We thank both sides.

[00:29:42] Speaker 04:
The case is submitted.

[00:29:43] Speaker 04:
That concludes our proceeding for this morning.