[00:00:00] Speaker 01:
Next argued case is number 20, 1441, Mobility Works, LLC, against Unified Patents, LLC.

[00:00:09] Speaker 01:
Mr. Randall.

[00:00:11] Speaker 05:
May it please the court.

[00:00:14] Speaker 05:
The PCAP's final written decision with respect to claims 1, 2, 4, and 5 of the 417 patent should be reversed on constitutional due process grounds and on the merits.

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As Justice Marshall wrote 41 years ago in Marshall v. Jericho, the due process clause entitles a person to an impartial and disinterested tribunal in both civil and criminal cases.

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This requirement of neutrality in adjudicative proceedings safeguards the two central concerns of procedural due process.

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The prevention of unjustified or mistaken deprivation and the promotion of participation and dialogue by

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affected individuals in the decision-making process.

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The neutrality requirement helps to guarantee that life, liberty, or property will not be taken on the basis of an erroneous or distorted conception of the facts or the law.

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At the same time, it preserves both the appearance and reality of fairness generating the feeling so important to a popular government that justice has been done.

[00:01:27] Speaker 05:
Two sentences later,

[00:01:29] Speaker 05:
the court continued.

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The requirement of neutrality has been jealously guarded by this court.

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In Toomey v. Ohio, the court reversed convictions rendered by the mayor of a town when the mayor's salary was paid in part by fees and costs levied by him acting in a judicial capacity.

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The court stated that the due process clause would not permit any procedure which would offer a possible temptation to the average man

[00:02:00] Speaker 05:
as a judge to forget the burden of proof required to convict the defendant or might lead him not to hold the balance nice, clear, and true between the state and the accused.

[00:02:12] Speaker 06:
Mr. Randall, this is Judge Dyke.

[00:02:15] Speaker 06:
I have a question about, as I understand it, you have two theories here as to why there's a due process violation.

[00:02:21] Speaker 06:
And one of these is that APJs have an incentive to initiate

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IPR proceedings because it would potentially increase their bonus by giving them more decisional points or whatever the right phrase is.

[00:02:43] Speaker 06:
And the government on page 39 of its brief says, well, there is no such incentive because there are plenty of cases in the ex-party area where they can earn decisional points.

[00:02:59] Speaker 06:
And I don't see that in your reply brief that you responded to that.

[00:03:05] Speaker 06:
Is it not the case that if the APJs want to earn additional decisional points, they don't have to do that by initiating IPRs.

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They can do it simply by addressing ex-party appeals.

[00:03:23] Speaker 05:
Thank you, Your Honor.

[00:03:26] Speaker 05:
There is nothing in the record to support

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the director's statement.

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What is in record indicates that certain judges are only, ABJs are only responsible for ex-party appeals and certain judges are only responsible for AIA proceedings and inter-parties review appeals.

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There's nothing to indicate what the total number of point count or decisional unit counts are.

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In fact, I believe the TTAB hired something like 260 judges since the beginning of the AIA proceedings.

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To get just a fully satisfactory rating, that would require something like over 20,000 total decisional units.

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for that body of APJs that were hired to handle AIA proceedings.

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There's nothing in the record to indicate that if you took away 10, 20, 30% of those cases or more, that there would be sufficient decisional units within the PCAB to support and continue

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the APJs that sell short.

[00:04:50] Speaker 06:
I'm not quite understanding what you're saying.

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The statistics issued annually by the PTO indicate that there is a substantial backlog of ex-party cases, correct?

[00:05:05] Speaker 05:
There is a substantial backlog of ex-party cases.

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But for ex-party cases, you also only get one decisional unit per case.

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Whereas for other cases, you get a much higher decisional unit count.

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For example, in the old inter-parties re-exam, there would be four decisional units given.

[00:05:26] Speaker 06:
Okay.

[00:05:26] Speaker 06:
I understand that point, but just stick with me for a moment.

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So you agree that there is a backlog of ex-party appeals.

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Are you saying that the APJs cannot earn decisional units by adjudicating those cases?

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What I'm saying is that the default is that APJs are divided between the ex-party and the AIA proceedings.

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APJ, my understanding, can ask for cases on the other side.

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That does not mean they will be given those cases.

[00:06:12] Speaker 04:
So what you're saying

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is and I want to make sure I understand the follow up.

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This is Judge Shaw to follow up Judge Dyke's question.

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We have X number of APJs at the board and half of them say only decide inter-parties cases and half of them only decide ex-parte cases and they never cross over.

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Is that correct?

[00:06:39] Speaker 05:
What I'm saying is that if you look at the standard operating procedure for assigning cases by the board at appendix 4351 through appendix 4366, that standard operating procedure identifies a preferred mechanism for assigning cases.

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And in that document, it specifically says that

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at appendix 355, a judge who is assigned to be paneled on a case in other jurisdictions of the board, e.g., a judge assigned to handle re-examination appeals and or AIA proceedings is not automatically paneled on ex-party appeals.

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So they have to actually go and request an ex-party appeal.

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They may or may not be given those.

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not anything to establish that they couldn't earn the decisional unit by requesting the ex parte appeal?

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So currently the record does not indicate one way or another whether judges are getting ex parte cases to what extent judges are getting ex parte cases if their workload in the AIA trial space were to decrease.

[00:08:10] Speaker 05:
But with 200 judges, which my understanding is significantly greater than historic number of judges handling the ex-party cases, all of a sudden we're out of work, the backlog would presumably go down fairly quickly.

[00:08:26] Speaker 06:
OK, but it sounds to me that since you say the record doesn't establish this, that you perhaps haven't made your case, that there's an incentive on the part of APJs

[00:08:40] Speaker 06:
to initiate post-grant proceedings in order to earn decisional units, which is part of your theory.

[00:08:52] Speaker 05:
Well, Your Honor, I would respectively disagree.

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The APJs are given decisional units that handle APJs.

[00:09:01] Speaker 05:
There is an incentive for them to institute those IPRs in order

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get more decisional units when the final written decision comes due.

[00:09:16] Speaker 06:
Would you agree that there's no incentive if they can earn decisional units elsewhere?

[00:09:20] Speaker 05:
There's no indication that there is.

[00:09:31] Speaker 06:
No, no, no, you're not answering my question.

[00:09:33] Speaker 06:
I'm asking you a question.

[00:09:34] Speaker 06:
Is there an incentive

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to initiate if they can earn the decisional units elsewhere?

[00:09:43] Speaker 05:
Yes, because they are, the APJs are judged on whether they hold the variety of criteria.

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And two of them.

[00:09:57] Speaker 06:
No, you're not answering my question.

[00:10:00] Speaker 06:
This is a hypothetical.

[00:10:02] Speaker 06:
If we conclude that APJs can earn decisional units elsewhere,

[00:10:07] Speaker 06:
Then there's no incentive to initiate, correct?

[00:10:14] Speaker 05:
I do not believe that to be the case, Your Honor.

[00:10:18] Speaker 05:
I respectfully disagree.

[00:10:19] Speaker 01:
Well, is the earning of decisional units the same whether the case is decided as an ex parte or an IPR?

[00:10:32] Speaker 05:
The decisional units are not the same.

[00:10:35] Speaker 05:
Decisional units.

[00:10:36] Speaker 05:
for ex-parting are one decisional unit according to PTO documents, whereas, for example, an inter-parties review might be four decisional units, whereas the documents that have been produced by the government do not state what the decisional units are actually awarded by the Patent Office for either the institution decision or the final written decision.

[00:11:06] Speaker 05:
What they say is basically it's subject to an award.

[00:11:14] Speaker 05:
Benjamin's decision.

[00:11:20] Speaker 01:
Please continue that thought.

[00:11:21] Speaker 01:
There was a disconnect somewheres.

[00:11:24] Speaker 05:
So the documents that have been produced, the FOIA documents that have been produced by the DO,

[00:11:36] Speaker 05:
do not indicate the exact number of decision-making units actually awarded for institution decisions or for final written decisions in AIA proceedings.

[00:11:47] Speaker 05:
What they indicate is that management decision-making units are going to award based on complexity of the case.

[00:11:56] Speaker 06:
OK, could I ask you a question, Judge Dyke, again, a question about your other theory

[00:12:01] Speaker 06:
which is that there's an incentive to initiate because it brings more revenue to the agency.

[00:12:09] Speaker 06:
And yet, there's a somewhat similar case from the DC Circuit that suggests that where congressional appropriations determine the agency's revenue that this theory that you're articulating doesn't work.

[00:12:27] Speaker 06:
Aren't we in a situation?

[00:12:29] Speaker 06:
where congressional appropriations determine the revenue of the agency and not the fees directly?

[00:12:38] Speaker 05:
So 35 USC 42 provides all fees paid by the director and all appropriations for defraying the cost of the activities the Patent and Trademark Office will be credited to the Patent and Trademark Office appropriation account in the Treasury of the United States.

[00:12:58] Speaker 05:
And so all fees are credited to the appropriations account for the United States Patent and Trademark Office.

[00:13:10] Speaker 05:
And then those fees according to 35 USC section 42 subsection C1, it says to the extent that the accounts provided in advance of appropriations acts, fees authorized by this title

[00:13:27] Speaker 05:
or any other act to be charged or established by the director shall be collected by and shall be subject be available to the director to carry out the activities of the Path of Trademark Office.

[00:13:40] Speaker 05:
So basically what used to happen is what you're suggesting where there was basically a general appropriations.

[00:13:48] Speaker 05:
The appropriations may not match the fees and the fees went into the general fund.

[00:13:55] Speaker 05:
now the appropriations for the last several years at the Patent Office, as the Director has conceded, match what the revenues are.

[00:14:06] Speaker 06:
There still has to be an appropriation, right?

[00:14:19] Speaker 05:
Well, the appropriation never goes into the general fund.

[00:14:21] Speaker 05:
The appropriations

[00:14:23] Speaker 05:
go into a special account designated for the Patent Office.

[00:14:27] Speaker 06:
So basically... You're not answering my question.

[00:14:31] Speaker 06:
Is it not that there has to be an appropriation even though you contend that the appropriation has recently been in the amount of the fees collected?

[00:14:43] Speaker 05:
There does have to be an appropriation.

[00:14:49] Speaker 01:
It's my general recollection that at least since the beginning of the American Vents Act, the appropriation has matched the income to the office on the fees, on the filing fees and so on.

[00:15:07] Speaker 01:
Is that incorrect?

[00:15:13] Speaker 05:
Hunter, that is correct statement that you made.

[00:15:18] Speaker 05:
Your Honor, briefly, I'd like to make a couple of statements regarding the substantial evidence issue on the triggering issue, if you want to hear on that.

[00:15:30] Speaker 01:
Okay, proceed for another couple of minutes.

[00:15:36] Speaker 05:
So, in this case, obviously, and in all constitutional cases, there is a constitutional avoidance doctrine.

[00:15:46] Speaker 05:
mobility recognizes the importance of citing constitutional issues and is willing to withdraw claim seven and that would, from this appeal, and that would basically allow the court by concluding that claims one, there isn't substantial evidence to support claims one, two, four, and five in the record.

[00:16:07] Speaker 05:
The unpatentability of those claims would allow it to avoid the constitutional issues that mobility has raised.

[00:16:14] Speaker 05:
So the claims,

[00:16:16] Speaker 05:
in the case require a ghost mobile node that creates replica IP messages on behalf of the mobile node.

[00:16:23] Speaker 05:
The claim goes on to say that the ghost mobile node handling signaling required to allocate resources and initiate mobility on behalf of the mobile node, the ghost mobile node triggering signals based on the predicted physical location of such mobile node or distance with relation to at least one foreign agent.

[00:16:43] Speaker 05:
So the appellee relies on agents to satisfy this scope goes mobile mode limitation.

[00:16:51] Speaker 05:
But all of the submitted evidence and boards findings make clear that according to the teachings of Lou, the mobile node itself and not image it triggers the signals that allocate resources and initiate mobility on behalf of the mobile node.

[00:17:05] Speaker 05:
Thus, no reasonable mind could conclude Lou's M-Agent is the entity in the Lou communication network that triggers signaling to allocate resources and initiate mobility.

[00:17:18] Speaker 05:
For example, a review of the board's factual findings regarding the 417 patent informed on this issue.

[00:17:24] Speaker 05:
Specifically, the board found that

[00:17:31] Speaker 05:
with respect to the 417 that a ghost mobile node acts on behalf of the mobile node and can be virtual node and need not reside at the same physical location as the mobile node.

[00:17:41] Speaker 05:
The board went on to indicate that the ghost mobile node predicted future state of the mobile node may be based upon, for example, an estimated location, trajectory, or speed of the mobile node.

[00:17:53] Speaker 05:
Based on this predicted future state, the ghost mobile node determines which foreign agent is likely to serve

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as a mobile node next communication link and the signals that that foreign agent accordingly.

[00:18:06] Speaker 05:
This signal can be a registration request to cause an allocation of communication resources the same way as would be performed in mobile node with physically present in the foreign agent's request.

[00:18:19] Speaker 05:
Then when the court or when the board went on to discuss the Lou reference, it basically defined that the mobile terminal sends the MF agent

[00:18:28] Speaker 05:
assignment request to its M Agent 50 with an address of a new location it's traveling to.

[00:18:36] Speaker 05:
The assignment request from this mobile terminal 55, the board found is a request to establish, i.e.

[00:18:45] Speaker 05:
pre-assign an MF Agent 52 with the location the mobile terminal is traveling to so that the necessary services and data are ready for the mobile terminal when it arrives at the new location.

[00:18:57] Speaker 05:
The entity that the appellate points to, the M agent 50, simply registers that request and forwards it to the remote MF agent manager 62 at the new location.

[00:19:10] Speaker 05:
And so this is spelled out at the board's opinion at appendix 1213.

[00:19:16] Speaker 05:
So we respectfully submit that the board's factual findings regarding the MF agent itself and

[00:19:25] Speaker 05:
the phone sending the assignment request, which initiates the entire registration process, is the signal that basically that the phone is what is triggering the signaling that's required by the claim and not the MF agent or the M agent as the appellee argues.

[00:19:49] Speaker 01:
Okay.

[00:19:50] Speaker 01:
Thank you.

[00:19:51] Speaker 01:
We will save you rebuttal time.

[00:19:55] Speaker 01:
Thank you, Mr. Randall.

[00:19:59] Speaker 01:
Let's hear first from the government, Ms.

[00:20:01] Speaker 01:
Caris Fang.

[00:20:04] Speaker 02:
May I please the court?

[00:20:06] Speaker 02:
I'm Dana Caris Fang for the government, and I'd like to address the constitutional issues.

[00:20:10] Speaker 02:
As you know, I'm sharing time with counsel for unified patents.

[00:20:13] Speaker 02:
I'd like to start with the structural due process argument, which is waived because it was not waived before the agency.

[00:20:19] Speaker 01:
Let's just assume it's not waived since you're here, and let's hear the due process argument.

[00:20:25] Speaker 02:
Sure.

[00:20:26] Speaker 02:
So there are three core facts that we all know to be true that are in the record and that are enough for the government to prevail in this case.

[00:20:38] Speaker 02:
APJs don't make more money if they institute.

[00:20:43] Speaker 02:
An institution decision counts just the same as a non-institution decision in the performance reviews.

[00:20:49] Speaker 01:
Let's go straight.

[00:20:50] Speaker 01:
to the bonus question on productivity and not on institute but on productivity which of course flows from institution.

[00:21:01] Speaker 01:
What is the government's response to the fact?

[00:21:05] Speaker 01:
We federal judges, we work very hard.

[00:21:08] Speaker 01:
We don't get a bonus if we decide more cases in a period of time.

[00:21:14] Speaker 01:
How and there is precedent which really is

[00:21:21] Speaker 01:
sort of hard to overcome.

[00:21:22] Speaker 01:
How do you overcome the answer that seems undisputed that the bonus calculation depends on productivity?

[00:21:37] Speaker 02:
So the bonus calculation depends on, it's true, the number of doses that APJ decides in addition to other factors.

[00:21:45] Speaker 02:
But it's not unconstitutional to say that people have to do a certain amount of work to get a bonus.

[00:21:52] Speaker 02:
There is plenty of work in the PTAB for everybody.

[00:21:58] Speaker 01:
But that's not the bonus structure.

[00:22:00] Speaker 01:
The bonus structure, I saw that that's your argument, that they wouldn't run out of work.

[00:22:07] Speaker 01:
But your briefs, the briefs say,

[00:22:09] Speaker 01:
that doing certain kinds of work earns more points than other kinds of work and that the bonus is measured by these points of productivity.

[00:22:22] Speaker 01:
This is what I find troubling.

[00:22:25] Speaker 01:
How does the government resolve that with the due process precedent which seems to weigh against this position?

[00:22:36] Speaker 02:
Your honor, I think there's a misunderstanding about how these decisional units work.

[00:22:42] Speaker 02:
So it is true that some kinds of work get more decisional units than other kinds of work, but that is because some things take more time than other things.

[00:22:55] Speaker 02:
So the goal with the decisional units is that it should equalize the amount of time a task takes.

[00:23:01] Speaker 01:
If an opinion- But why isn't that covered by the salary?

[00:23:05] Speaker 01:
That's what troubles me.

[00:23:07] Speaker 01:
There's something on top of the ordinary salary for people who are acting as judges, depending on these other factors.

[00:23:21] Speaker 02:
So it's not unconstitutional to have a system in which people who work hard and do good work get bonuses.

[00:23:30] Speaker 01:
We're talking about judging.

[00:23:32] Speaker 01:
We're talking about due process law.

[00:23:35] Speaker 01:
not whether, if you work harder, you get paid more.

[00:23:38] Speaker 01:
Okay, Ms.

[00:23:39] Speaker 01:
Caris Fang, are you here?

[00:23:40] Speaker 02:
Yes, I am.

[00:23:42] Speaker 01:
Okay, let's take up with whatever the sentence we interrupted you in the middle of.

[00:23:48] Speaker 01:
You see what's troubling me.

[00:23:51] Speaker 02:
Yes, so nothing in the institution, nothing in the bonus process depends on the outcome of the institution decision.

[00:24:01] Speaker 02:
If you decide to institute a case, the APJ may or may not get that trial.

[00:24:06] Speaker 02:
But if they decide not to institute or they don't get the trial, they get another case right away.

[00:24:14] Speaker 02:
Judges are awarded decisional units for ex parte cases.

[00:24:18] Speaker 02:
You can see that at Appendix 4043.

[00:24:22] Speaker 02:
And there's plenty of work.

[00:24:25] Speaker 02:
for these judges to get all of the decisional units that they want.

[00:24:28] Speaker 01:
That's really not the question that I'm trying to probe.

[00:24:33] Speaker 01:
Not that these are straightforward, honest APJs trying to do a job, but how you reconcile with the tradition of due process of law when an agency sets up a quasi-judicial structure or Congress sets it up.

[00:24:55] Speaker 01:
to essentially to replace judicial proceedings and in fact to provide an estoppel in judicial proceedings to nonetheless adopt procedures which we know would not be available to the third branch of government.

[00:25:16] Speaker 02:
So perhaps it's helpful here to look at the cases and to look at what the Supreme Court has told us

[00:25:24] Speaker 02:
does raise a problem.

[00:25:25] Speaker 02:
That is the Toomey situation, where we have a decision maker who, when he decides the case, some of the money he gets, some of the money, then when he opposes a fine, goes right into his own pocket.

[00:25:40] Speaker 02:
That's the kind of situation that the Supreme Court has said raises a concern.

[00:25:46] Speaker 02:
Now, here, nothing in terms of the bonus turns at all on the outcome

[00:25:54] Speaker 02:
of the decision.

[00:25:56] Speaker 02:
These bonuses simply reward people who are working hard and doing good work.

[00:26:03] Speaker 01:
But their argument is that the number of cases, not the outcome, but just the number and therefore the decision to grant, to institute.

[00:26:18] Speaker 01:
But let me ask you another question.

[00:26:20] Speaker 01:
that I've been worrying about ever since the AIA was adopted, and that is that the statute says, and continues to say, that institution will be decided by the director, not by the tribunal.

[00:26:37] Speaker 01:
And early in the proceedings, as I understand it, that step was delegated by the director to the tribunal, and ever since then,

[00:26:50] Speaker 01:
We see here from their concerns that that is a distortion of the original plan, which seems to have been that the director, through the standard PTO examining core,

[00:27:07] Speaker 01:
would take the first look at the case for which now review, say, IPR is being requested and decide on some, I think the hearings use the term probable cause, decide whether there's probable cause to take another look.

[00:27:27] Speaker 01:
And the argument of the other side, I think their best argument, at least most forceful, is that

[00:27:36] Speaker 01:
to turn that threshold step which was supposed to protect patentees because of the difference of the burden of proof and a lot of other things which happened on this review.

[00:27:50] Speaker 01:
That this first step is now delegated to the same tribunal that's supposed to objectively decide the merits and that there is some sort of inherent

[00:28:05] Speaker 01:
bias at least towards granting the institution requests.

[00:28:12] Speaker 01:
And we all know that these are burdensome, extremely expensive proceedings that are for whatever reason imposed on patentees.

[00:28:25] Speaker 01:
And so that's a long return to

[00:28:30] Speaker 01:
my initial question, which is how does the office justify that they have delegated the initial threshold institution step to the final decision maker?

[00:28:45] Speaker 02:
So, Your Honor, this court rejected in Ethicon the argument that there is a problem with having the APJ decide both stages.

[00:28:54] Speaker 02:
And this court said this is just like a judge.

[00:28:57] Speaker 02:
deciding both the preliminary injunction stage and the final merit stage.

[00:29:03] Speaker 02:
There are also a lot of incentives in this process to issue good decisions, right?

[00:29:09] Speaker 02:
Poor quality decisions are going to mean worse performance reviews.

[00:29:13] Speaker 01:
You have a statute, you have a statute which is contrary to the way it's being implemented.

[00:29:21] Speaker 01:
You have a statute which says that the director will see to the

[00:29:27] Speaker 01:
initial institution stage, not the tribunal.

[00:29:31] Speaker 01:
And you're telling us, well, it's okay for the tribunal to do it because they're honest people.

[00:29:36] Speaker 01:
That's not my question.

[00:29:38] Speaker 01:
My question is the departure from the statute where, as according to the record of the eight years of chewing this over that went on in the legislative process, that this was an important aspect of the enactment

[00:30:01] Speaker 01:
So please answer the question if you can.

[00:30:06] Speaker 02:
Yes, Your Honor.

[00:30:07] Speaker 02:
So nothing in the statute bars the director from delegating these institution decisions, but this case isn't about the director's authority to delegate.

[00:30:17] Speaker 02:
We haven't briefed that question.

[00:30:20] Speaker 01:
This question is about due process.

[00:30:23] Speaker 01:
And they make a very strong argument that they're not getting due process because of the incentives

[00:30:30] Speaker 01:
of the board, constituted board, to grant institution petitions.

[00:30:39] Speaker 06:
This is Judge Wright.

[00:30:40] Speaker 06:
Could I bring you back to that question?

[00:30:42] Speaker 06:
There are two contentions here that I'd like you to address in that respect.

[00:30:48] Speaker 06:
One is they say that the number of decisional units that you get in ex parte is less than the decisional units that you would get

[00:30:59] Speaker 06:
for an IPR final written decision.

[00:31:03] Speaker 06:
Is there anything in the record about that?

[00:31:07] Speaker 02:
I do not.

[00:31:09] Speaker 06:
It includes the additional material that's been submitted.

[00:31:16] Speaker 02:
Yes, Your Honor.

[00:31:19] Speaker 02:
That is in the supporting document to the performance reviews.

[00:31:24] Speaker 02:
I'm not sure that that is,

[00:31:25] Speaker 02:
in the documents that Mobility Works requested judicial notice.

[00:31:31] Speaker 02:
But the key here is you do get less credit typically for an ex parte appeal, but that is because the ex parte appeal is less work.

[00:31:41] Speaker 02:
And the goal is to reward not every decision the same, but every amount of work the same.

[00:31:48] Speaker 06:
So it's a... What's the difference?

[00:31:52] Speaker 02:
Yeah, sure.

[00:31:54] Speaker 02:
an IPR is issued after there's a full trial and then in writing... No, no, no.

[00:32:00] Speaker 06:
In terms of the number... What's the difference in terms of number of units?

[00:32:05] Speaker 02:
I'm sorry, Your Honor.

[00:32:06] Speaker 02:
I don't have that information in front of me if... I think it's in the record that you provided us.

[00:32:12] Speaker 01:
This is the difference.

[00:32:13] Speaker 01:
One unit for...

[00:32:16] Speaker 01:
for the re-examination as against for a decision on an IPR that's somewhere in the record, I think.

[00:32:30] Speaker 02:
That may very well be correct.

[00:32:33] Speaker 02:
That matches my memory of it.

[00:32:36] Speaker 02:
Of course, to the extent that what we're talking about are facts,

[00:32:40] Speaker 02:
That does bring us back to the importance of building that factual record before the agency, which didn't happen here.

[00:32:47] Speaker 02:
But the point is that these decisional units are assigned to reward equal amounts of work equally.

[00:32:56] Speaker 02:
So an ex parte appeal is much less work than an IPR where the judge holds a trial and then writes usually a lengthy decision dealing with all of the evidence in the trial.

[00:33:07] Speaker 02:
And that's why those cases

[00:33:09] Speaker 02:
earn more decisional units.

[00:33:13] Speaker 02:
But we are just not in a situation where there is any judge on the PPAD who can't get enough work to... Okay.

[00:33:22] Speaker 06:
Let me ask you to address that.

[00:33:24] Speaker 06:
The contention seems to be that APJs assigned to post-grant proceedings somehow can't get

[00:33:37] Speaker 06:
ex parte appeals if they run out of work.

[00:33:40] Speaker 06:
Is that the case?

[00:33:43] Speaker 02:
No, that's incorrect.

[00:33:44] Speaker 02:
You'll see that in page five of the standard operating procedures.

[00:33:50] Speaker 02:
It says, to request ex parte appeals to be added to his or her docket, a judge who is assigned to be paneled on cases and other jurisdictions of the board should contact the designee to request a certain number of ex parte appeals.

[00:34:07] Speaker 02:
up to the designated maximum workload.

[00:34:09] Speaker 02:
So that's simply incorrect.

[00:34:12] Speaker 02:
You can always get ex parte appeals if you would like them.

[00:34:16] Speaker 02:
APJs also do other kinds of work for which they get credit, such as rulemaking and outreach.

[00:34:23] Speaker 02:
So an APJ always has ample opportunity to get the necessary number of decisional units.

[00:34:34] Speaker 02:
And it's also

[00:34:36] Speaker 02:
I think there's sort of a misunderstanding here that these trials are less work.

[00:34:42] Speaker 02:
It is a lot of work to have a trial and to write an opinion that addresses all of the evidence in the trial.

[00:34:51] Speaker 01:
Explain to us why this requires

[00:34:57] Speaker 01:
the bonus.

[00:34:58] Speaker 01:
Here we have people operating at the maximum of the executive service and are paid a salary and they make a large point and particularly they're amicus with statistical support for the incentive to proceed to

[00:35:24] Speaker 01:
perhaps close cases in favor of institution.

[00:35:30] Speaker 01:
And they certainly do raise the question of having a different, of having the same entity make the institution decision as do the adjudication.

[00:35:43] Speaker 01:
And you're saying that you're not prepared to respond to that?

[00:35:48] Speaker 02:
I'm saying this court has already in Ethicon addressed the question of whether there's some kind of due process problem by having the APJs make the initial decision.

[00:36:00] Speaker 02:
You have nothing else to say beyond what was in Ethicon?

[00:36:05] Speaker 02:
So I may not be understanding the question.

[00:36:08] Speaker 01:
I'm trying to understand the difference.

[00:36:12] Speaker 01:
I think that there is a significant due process concern, particularly

[00:36:18] Speaker 01:
when it's in direct contravention of the act of Congress in which the decision whether to take on a case, again, the decision of probable cause is and the final decision maker are the same when they were set up by statute to be different.

[00:36:41] Speaker 01:
That's my problem.

[00:36:42] Speaker 01:
That's my question.

[00:36:47] Speaker 02:
Nothing in the statute prevents the director from delegating this.

[00:36:52] Speaker 01:
But they're saying due process prevents the director.

[00:36:56] Speaker 01:
Of course, the director personally isn't going to read these petitions.

[00:37:01] Speaker 01:
We understand that.

[00:37:03] Speaker 01:
There's an enormous core of experienced examiners.

[00:37:08] Speaker 01:
And it was contemplated that the examiners, I suppose more likely than not, certainly in the same art unit, so an examiner with a technological background, perhaps the examiner who examined it in the first place, would take a look and see if there's a question, a significant question, enough to pull this patent which is issued out of circulation essentially and put it through this

[00:37:37] Speaker 01:
judicial process in the hands of experts.

[00:37:42] Speaker 01:
And this is where the delegating that operation to the same entity that conducts the trial and makes the final decision

[00:37:56] Speaker 01:
was explicitly avoided in the American Events Act.

[00:38:02] Speaker 01:
And this is where I'm having trouble understanding how due process was as well served by the way it is handled now as the way it was intended to be set up.

[00:38:22] Speaker 02:
So Ethicon tells us there's no due process problem.

[00:38:26] Speaker 02:
There are also, through the performance review process, somebody who is issuing poor quality decisions is going to get worse performance reviews.

[00:38:34] Speaker 02:
I didn't ask about performance.

[00:38:36] Speaker 01:
I'm really trying to understand what I find to be the most troublesome issue and one with due process implications and is pressed particularly, again, by the amicus with statistical data.

[00:38:55] Speaker 02:
So I would like to address that statistical data.

[00:38:59] Speaker 02:
It comes from an amicus brief asserting that patent holders are more likely to win cases that are instituted in October than in September.

[00:39:10] Speaker 02:
It's important to understand what that brief does not say.

[00:39:14] Speaker 02:
It does not say that more cases are instituted in one month or another.

[00:39:19] Speaker 02:
That's not true.

[00:39:21] Speaker 02:
Okay, so you don't want to answer my question?

[00:39:25] Speaker 02:
So, I have several answers to your question, Your Honor.

[00:39:31] Speaker 02:
I do think that it is important to note that that statistical evidence does not show a problem.

[00:39:37] Speaker 06:
Is the question that Judge Newman has asked you about raised in this case by the patent holder?

[00:39:45] Speaker 02:
No, Your Honor.

[00:39:46] Speaker 02:
It is not raised in this case and we haven't briefed the Director's authority to delegate here.

[00:39:52] Speaker 02:
If the court would like to call for a supplemental brief on that, we can, but it has not been raised.

[00:39:57] Speaker 02:
I do believe that the due process problem is foreclosed.

[00:40:00] Speaker 02:
The due process argument, there is no due process problem, is foreclosed by this court's decision in Ethicon saying that the same APJ can decide both stages, just like a federal judge can decide both the preliminary injunction phase and the final merits decision.

[00:40:19] Speaker 02:
And then, you know, the fact here really belie an argument that there is some kind of pressure on APJs to institute.

[00:40:29] Speaker 02:
The PCAP has put out a lot of policy.

[00:40:31] Speaker 06:
Let me ask you another question.

[00:40:34] Speaker 06:
My impression, and I'm not sure whether this is in the briefs here, is that throughout the federal government that administrative judges can earn performance bonuses by,

[00:40:46] Speaker 06:
the amount of work that they do.

[00:40:49] Speaker 06:
Am I correct about that or is that not correct?

[00:40:54] Speaker 02:
I do believe that it is correct.

[00:40:56] Speaker 02:
Many federal employees can get bonuses for doing more work and the APJ performance review process is very similar to the performance review processes of other

[00:41:08] Speaker 02:
federal employees.

[00:41:12] Speaker 06:
Wait, wait.

[00:41:12] Speaker 06:
I wasn't asking about other federal employees.

[00:41:14] Speaker 06:
I was asking you about other administrative judges in other parts of the government.

[00:41:19] Speaker 06:
Do we know whether they get performance bonuses which depend on productivity?

[00:41:27] Speaker 02:
I do not know the precise bonus structure for other APJs, I mean for other ALJs.

[00:41:38] Speaker 02:
But if you look at what has actually been happening with institutions, there's policy guidance, a lot of which, some serves to increase institutions, but a lot of that policy guidance, like the census factors, actually leads to fewer institutions.

[00:41:53] Speaker 02:
And we're in a situation where petitions are going up and institutions are going down.

[00:41:59] Speaker 02:
So we don't see a system.

[00:42:01] Speaker 02:
The facts just do not support.

[00:42:04] Speaker 02:
that this is a system that encourages unnecessary institutions.

[00:42:09] Speaker 02:
And that performance review process, you know, one factors productivity, the other three relate to performance.

[00:42:16] Speaker 02:
If APJs were instituting cases unnecessarily, they would be getting worse performance reviews, and it would not be a way to get to the highest bonus.

[00:42:29] Speaker 02:
Another thing about this system with the decisional units

[00:42:32] Speaker 02:
is that that system was designed because PTAB was trying to clear a backlog.

[00:42:39] Speaker 02:
And if there were not a lot of work that PTAB was trying to get through, there didn't used to be a threshold for the top levels of decisional units for bonuses.

[00:42:51] Speaker 02:
You can see that at J3622 and by comparing 3631 through to 3891, which was the old

[00:43:02] Speaker 02:
the old performance review, which did not have numerical thresholds for the top numbers.

[00:43:08] Speaker 02:
And if we were, again, in a world where PTAP was not trying to clear through a big backlog, there's no basis for thinking that PTAP wouldn't revise its bonus factors to continue to reward the people who were working hard and doing good work.

[00:43:30] Speaker 02:
There's just no constitutional problem with a policy that says you have to do a certain amount of work to get a bonus.

[00:43:40] Speaker 01:
If there are no further questions.

[00:43:44] Speaker 01:
Any more questions for Ms.

[00:43:45] Speaker 01:
Kerisvang?

[00:43:47] Speaker 00:
No.

[00:43:48] Speaker 00:
No.

[00:43:48] Speaker 01:
Okay, you're not.

[00:43:49] Speaker 01:
All right.

[00:43:50] Speaker 01:
Mr. Mudd.

[00:43:52] Speaker 01:
Yeah, Billy.

[00:43:54] Speaker 03:
May it please the court, Jason Mudd for Unified Patents.

[00:43:58] Speaker 03:
I would like to address the triggering limitation of the 417 patent, which is the only argument on the merits of the board's unpatentability determination that was raised by the appellant mobility works.

[00:44:12] Speaker 03:
First, I note this limitation only applies to claims one, two, four, and five of the board's determination.

[00:44:20] Speaker 03:
Mobility does not challenge the merits as to claim seven.

[00:44:24] Speaker 03:
That determination should be affirmed.

[00:44:27] Speaker 03:
The court should find that Mobility's argument on the triggering limitation is waived.

[00:44:31] Speaker 03:
As Mobility admits on page 59 of its opening brief, Mobility did not present arguments relative to this limitation before the board.

[00:44:40] Speaker 03:
Third, even if the court were to entertain this new argument, the board correctly found this limitation was satisfied by the Lew reference and that finding is supported by substantial evidence.

[00:44:53] Speaker 03:
The board correctly found that Lew's M agent

[00:44:55] Speaker 03:
which it found to be the ghost mobile mode, that Lou's M-Agent handles pre-assignment signaling on behalf of the mobile device to prearrange services and initiate mobility on behalf of the mobile device.

[00:45:08] Speaker 03:
The board also correctly found that the M-Agent does so based on a predicted physical location of the mobile device.

[00:45:16] Speaker 03:
This is what Lou refers to as PMM or predictive mobility management.

[00:45:21] Speaker 03:
These findings are in the board's final written decision at pages 30 to 31 of the appendix.

[00:45:28] Speaker 03:
Lose M agent acts as a proxy for the mobile terminal, as the board found.

[00:45:33] Speaker 03:
The M agent sends a preassignment request on behalf of the mobile terminal to the foreign network.

[00:45:39] Speaker 03:
And in that manner, the M agent triggers signals on behalf of the mobile terminal.

[00:45:45] Speaker 03:
The M agent triggers those signals based on a predicted physical location provided to it by the mobile terminal.

[00:45:52] Speaker 03:
Now, mobility may be correct that the predicted location is determined by the mobile device itself rather than the M agent.

[00:46:01] Speaker 03:
But nothing in the claim language requires that the ghost mobile node must itself determine the predicted location.

[00:46:08] Speaker 03:
Instead, the signaling need only be based on a predicted location of the device regardless of how that predicted location is determined.

[00:46:18] Speaker 03:
So in lieu, the mobile terminal may be what predicts its future location and provides that location to the M agent.

[00:46:25] Speaker 03:
But it is the M agent that actually registers the pre-assignment request and sends that request to the foreign network, specifically to an MF agent manager in the foreign network.

[00:46:37] Speaker 03:
Now importantly, the mobile terminal has not yet traveled to or registered with the foreign network at its predicted future location.

[00:46:46] Speaker 03:
So the mobile terminal cannot yet itself signal the foreign network.

[00:46:51] Speaker 03:
The M agent has to act as a proxy for the mobile terminal.

[00:46:55] Speaker 03:
So the M agent is what actually triggers the signaling because the M agent communicates on the network on behalf of the mobile terminal before it reaches its destination.

[00:47:06] Speaker 03:
Now mobility dismisses this point as a red herring in footnote 10 on page 27 of its required brief.

[00:47:13] Speaker 03:
But it's most certainly not a red herring.

[00:47:16] Speaker 03:
It is the whole reason that the M agents must trigger the actual signaling to the foreign network, because the M agent is the entity that's already in communication with the foreign network and is able to handle pre-assignment signaling.

[00:47:32] Speaker 03:
The mobile terminal has not yet been assigned to a router in the foreign network, so it cannot communicate with the foreign network on its own behalf yet.

[00:47:41] Speaker 03:
Instead, the mobile terminal cannot trigger the signaling

[00:47:45] Speaker 03:
Instead, the M agent does so on the mobile terminal's behalf.

[00:47:50] Speaker 03:
Thus, the board's finding that lose M agent triggers signaling on behalf of the mobile node based on a predicted location is supported by substantial evidence and should be affirmed.

[00:48:02] Speaker 03:
If there are no questions on that limitation, I'll briefly touch on two of the additional constitutional questions that have been raised.

[00:48:10] Speaker 03:
The first was a question as to under ARTHRICS.

[00:48:13] Speaker 03:
For the first time on appeal, mobility raised an issue that under Arthrex, the board's institution decision is unconstitutional.

[00:48:26] Speaker 03:
First, that argument was waived, but second, in any event, under both Arthrex itself and this court's decision in the Caterpillar case, that argument is foreclosed by precedent.

[00:48:38] Speaker 03:
There is no issue with the institution decision.

[00:48:41] Speaker 03:
the final written decision was entered after the Arthrex case.

[00:48:46] Speaker 03:
And then the other issue raised was the Fifth Amendment takings argument for the first time on appeal mobility argues that a pre-AI patent subjecting it to an IPR proceeding is an unconstitutional taking.

[00:49:00] Speaker 03:
First, that argument was waived.

[00:49:02] Speaker 03:
Second, in any event, that argument too has already been rejected by this court's precedence.

[00:49:07] Speaker 03:
specifically in the Celgene versus Peter case, the court held that... Okay.

[00:49:16] Speaker 01:
You can finish the sentence.

[00:49:18] Speaker 03:
Okay.

[00:49:18] Speaker 03:
Thank you, Your Honor.

[00:49:19] Speaker 03:
This court held that IPR proceedings under the AIA do not sufficiently differ from reexaminations so as to constitute a Fifth Amendment taking.

[00:49:29] Speaker 01:
Okay.

[00:49:29] Speaker 01:
Any questions for Mr. Mudd?

[00:49:33] Speaker 04:
No.

[00:49:34] Speaker 01:
All right, Mr. Randall, you have your rebuttal time.

[00:49:46] Speaker 01:
Are you there?

[00:49:47] Speaker 01:
Are you muted?

[00:49:51] Speaker 05:
Can you hear me, Your Honor?

[00:49:52] Speaker 01:
I hear you now.

[00:49:54] Speaker 05:
Thank you.

[00:49:55] Speaker 05:
So mobility did raise the issue of whether or not the decision makers that decide the institution decision

[00:50:04] Speaker 05:
should be different than the decision makers that hear the trial phase and the final hearing, and raise the constitutional issue with respect to that.

[00:50:16] Speaker 05:
We recognize that Ethicon is contrary to that position, but we also would... Did you raise that in your opening brief?

[00:50:27] Speaker 05:
We did raise that in our opening brief, Your Honor.

[00:50:30] Speaker 06:
But what we would also say is that... Can you tell me where you raised it in the opening breath?

[00:50:37] Speaker 05:
Yes, give me one second.

[00:50:42] Speaker 05:
So the issue was...

[00:50:50] Speaker 05:
Number two, whether the director's delegation of his responsibility to make final unreviewable institution decisions to the same APJs who make the final written decisions violates the Administrative Procedures Act and or the Due Process Clause of the Constitution.

[00:51:03] Speaker 05:
That's on page four of our opening brief.

[00:51:08] Speaker 01:
Okay, proceed with our argument.

[00:51:12] Speaker 05:
So what Mobility would say, Your Honors, is that

[00:51:18] Speaker 05:
Ethicon was not decided at a time when it had the information available to that mobility is now uncovered through the U.S.

[00:51:29] Speaker 05:
Inventor's FOIA request, which indicate a high degree of temptation to institute to satisfy not only the APJ's own personal interests in making sure the APJ has sufficient decisional units available to him,

[00:51:48] Speaker 05:
but also to satisfy the PTAB's budgetary constraints.

[00:51:53] Speaker 05:
The director at APX 4335 through APX 4338, the director issued his final rules setting and adjusting patent fees through the fiscal year 2020 and beyond.

[00:52:15] Speaker 05:
And if you look at that spreadsheet,

[00:52:18] Speaker 05:
basically at columns K and N and rows 296, 297, and 298, the director basically budgets institution rates at 66%.

[00:52:37] Speaker 05:
And so the management of the PTAB, including the vice chairs that decided the institution decision in this case,

[00:52:47] Speaker 05:
understand that they have to, in order to meet budget, to hit a 66% institution rate.

[00:52:55] Speaker 05:
And that also runs through for years on the next page at APX 4336 for the years 2022 through 2024.

[00:53:05] Speaker 05:
So the director is consistently budgeting an institution rate of 66%.

[00:53:11] Speaker 05:
And that is what the APJs are trying to hit.

[00:53:15] Speaker 05:
And you see that in the numbers.

[00:53:17] Speaker 05:
And we know that institution leads to potentially a pre-bias issue that Judge Newman raised in Ethicon, and that judges that have already decided the issues are less likely to reconsider their decisions.

[00:53:43] Speaker 01:
OK, please finish the thought.

[00:53:48] Speaker 05:
That's all I have, Your Honor.

[00:53:51] Speaker 01:
Okay.

[00:53:52] Speaker 01:
Any questions for Mr. Randall?

[00:53:54] Speaker 05:
No.

[00:53:55] Speaker 05:
No.

[00:53:56] Speaker 01:
All right.

[00:53:57] Speaker 01:
In that case, our thanks to all counsel.

[00:53:59] Speaker 01:
The case is taken under submission.