[00:00:00] Speaker 03:
The next case is Apple et al.

[00:00:02] Speaker 03:
versus Catherine Vidal, Director of the Patent Office, 2022-1249.

[00:00:10] Speaker 03:
Good morning, Ms.

[00:00:12] Speaker 03:
Carroll.

[00:00:13] Speaker 01:
Good morning, Your Honor, and may it please the Court.

[00:00:16] Speaker 01:
The fintive rule unlawfully restricts access to IPR for precisely the class of petitioners

[00:00:24] Speaker 01:
that Congress understood would have needed it the most.

[00:00:28] Speaker 01:
That is, petitioners that have been accused in litigation of infringing questionable patents.

[00:00:34] Speaker 01:
Now, judicial review is presumptively available to review challenges to allegedly unlawful agency rules.

[00:00:42] Speaker 01:
So although the district court correctly rejected the director's standing arguments, it erred in dismissing this case under Section 314D.

[00:00:52] Speaker 01:
That decision

[00:00:54] Speaker 01:
violates decades of settled precedent holding that a statute that precludes review of a specified agency determination does not bar review of an agency rule that governs those decisions.

[00:01:08] Speaker 01:
And in that respect, this case, I think, is indistinguishable from the Supreme Court's decision in Bowen, which we rely on in our briefs.

[00:01:17] Speaker 02:
That was not a non-enforcement case.

[00:01:20] Speaker 01:
Bowen was a reviewability by statute case.

[00:01:24] Speaker 02:
I think I'd like you to focus more on the committed to agency discretion piece.

[00:01:30] Speaker 02:
I don't want to engage with whether 314D goes beyond its language in some way to make 701A1 applicable to things that are other than the individual determination.

[00:01:44] Speaker 02:
So I guess that, for me at least, I'm very focused on the fact that this is a non-enforcement

[00:01:49] Speaker 02:
decision and Bowen is not that.

[00:01:51] Speaker 01:
No, that's certainly correct.

[00:01:53] Speaker 01:
Bowen, you're right, goes more to the 701A1 issue.

[00:01:57] Speaker 01:
I think the district court's decision clearly contradicts Bowen and the DACA decision as to that point.

[00:02:03] Speaker 01:
As to 701A2, the question whether this is agency action committed to discretion by law, we think we have a very strong case that that provision does not preclude review here for a few reasons.

[00:02:18] Speaker 01:
As this court and the Supreme Court and other courts have explained, that provision applies very narrowly only in the rare circumstances where there is no law to apply.

[00:02:28] Speaker 01:
And I think it's helpful to consider that provision with respect to each of the counts in our complaint and why there's law to apply for each.

[00:02:37] Speaker 02:
I see the argument about kind of, and it's not just

[00:02:41] Speaker 02:
no law to apply.

[00:02:42] Speaker 02:
I think the court has not said it's limited only to that.

[00:02:45] Speaker 02:
There are certain categories, in particular non-enforcement action, which certainly overlap with the no law to apply.

[00:02:52] Speaker 02:
And I do think that there's something to the notion that for your APA 5 UIC 553, notice and comment rulemaking argument, that that is not one of those.

[00:03:07] Speaker 02:
And indeed, in Lincoln against Vigil,

[00:03:09] Speaker 02:
The court reviewed the notice of comment rulemaking claim and the government, in fact, included a footnote in its brief that said, we understand that's not one of the committed to agency discretion by law things because 553 supplies the law to apply.

[00:03:27] Speaker 02:
And that's also not a non-enforcement decision.

[00:03:29] Speaker 02:
But what about your two substantive challenges to a rule, if that's what one wants to call it, and I don't mean anything technical by it, that simply says,

[00:03:39] Speaker 02:
We have discretion, or rather the director says, I have discretion.

[00:03:45] Speaker 02:
I delegated that discretion to the board.

[00:03:48] Speaker 02:
And here are a list of non-exclusive considerations that will guide how you as my delegate will exercise discretion.

[00:03:58] Speaker 02:
What's the case law that you have cited for why that?

[00:04:04] Speaker 02:
Is that kind of enumeration of discretionary considerations

[00:04:08] Speaker 02:
is itself not committed to agency discretion.

[00:04:12] Speaker 01:
So I want to provide the case law and explain why we think it's on our side.

[00:04:15] Speaker 01:
And I also want to address how the rule here operates and why we think it's within that case law, because I think we would characterize it slightly differently than Your Honor just did, maybe taking that last part first sort of as the premise of the application of the cases.

[00:04:33] Speaker 01:
The fintive rule here is not simply

[00:04:38] Speaker 01:
a list of factors that the board must consider.

[00:04:42] Speaker 01:
I think even if that's all it were to be clear, I think our case would be reviewable anyway.

[00:04:47] Speaker 01:
But it goes much farther than that.

[00:04:50] Speaker 01:
It is a list of factors combined with direction to the board about you must consider these factors.

[00:04:57] Speaker 01:
When you find this factor, it weighs this direction.

[00:04:59] Speaker 01:
When you find this factor, it weighs the other direction.

[00:05:02] Speaker 01:
And when the sum total of those factors indicate that

[00:05:07] Speaker 01:
conducting IPR would be quote unquote inefficient in light of the litigation that leads to denial.

[00:05:14] Speaker 01:
So to take an example, I think the board's application of the rule in the supercell institution decision, which we cite

[00:05:22] Speaker 01:
16 to 17 of our opening brief is a really good example.

[00:05:25] Speaker 02:
But the Supreme Court case is about non-enforcement.

[00:05:28] Speaker 02:
Heckler against Cheney is kind of the seminal one or something.

[00:05:33] Speaker 02:
But Lincoln talks about this as well.

[00:05:37] Speaker 02:
Please do not interrupt.

[00:05:38] Speaker 02:
I apologize, Your Honor.

[00:05:41] Speaker 02:
So they say there are obvious choices about how

[00:05:47] Speaker 02:
give priority to what agency resources should be used, and a number of other things that are absolutely traditional non-enforcement considerations at the heart of discretion of non-enforcement.

[00:06:00] Speaker 02:
How does this go beyond that?

[00:06:02] Speaker 01:
So I believe the Supreme Court's decisions in Heckler, in Warehouser, this Court's decision in Ray Vivint, the controlling circuit precedent in the Ninth Circuit, and the Perez-Perez decision, all cited in the brief

[00:06:17] Speaker 01:
make clear a few key propositions that we rely on here.

[00:06:21] Speaker 01:
One is that mere discretion, including non-enforcement discretion, doesn't suffice where the statute being implemented sets clear boundaries, which is our allegation here.

[00:06:35] Speaker 01:
And of course, the merits are not at issue here.

[00:06:38] Speaker 01:
Our claim on the merits is the statute prohibits the director from denying institution

[00:06:45] Speaker 01:
based on the pendency of parallel litigation.

[00:06:49] Speaker 01:
And that provides the metric against which the court evaluates the exercise or articulation of discretion, just as in, for example, in Weyerhaeuser, in Vivint, considering the comparable language in 325D, where this court said even that express grant of discretion did not trigger 701A2.

[00:07:15] Speaker 01:
because there are statutory limits.

[00:07:18] Speaker 01:
And as even Heckler recognizes, even in the non-enforcement context, if there is a statutory constraint, that constraint is enforceable.

[00:07:29] Speaker 01:
And I guess maybe a different way to think of it.

[00:07:32] Speaker 03:
Council on justiciability as opposed to jurisdiction, why isn't there a lack of particularity about whether your clients will

[00:07:45] Speaker 03:
be subject to this fintive rule.

[00:07:48] Speaker 03:
I know you argued that they have in the past, but the future is speculative, isn't it?

[00:07:56] Speaker 01:
In this case, with respect, I think looking to the allegations of the complaint, it's not speculative.

[00:08:02] Speaker 01:
We've alleged, first of all, a clear pattern of past applications of the rule, along with specific allegations that these plaintiffs regularly develop technologies, that they are regularly

[00:08:15] Speaker 01:
subject to infringement claims and litigation, that they routinely file IPR petitions in that context, that the board is obligated by law to apply the rule to petitions filed in that context, that there are pending petitions.

[00:08:30] Speaker 03:
And you can raise that issue when there's a denial.

[00:08:36] Speaker 01:
The board does not entertain those arguments because it understands that it is

[00:08:42] Speaker 01:
obligated by the rule and it cannot deviate from the rule.

[00:08:46] Speaker 01:
And this court has also held that no appeal from a denial is available on this basis.

[00:08:52] Speaker 01:
And so I think this is a critical point that cuts through both the standing argument and the justiciability arguments, which is that if this suit is precluded, the consequence is that there is no avenue available for any rule governing institution of IPR, not on appeal,

[00:09:12] Speaker 01:
not on mandamus, not under the APA.

[00:09:15] Speaker 01:
You could have a new director come in who just makes a naked policy substitution.

[00:09:21] Speaker 01:
I don't know what Congress was thinking in creating IPR.

[00:09:25] Speaker 01:
I just think it's a bad idea.

[00:09:27] Speaker 01:
From now on, the board should deny all IPR petitions unless they're filed within 30 days after service of a complaint.

[00:09:37] Speaker 01:
I think it would be quite clear that such a rule would violate the AIA.

[00:09:42] Speaker 01:
But under the director's position, that rule would be unenforceable.

[00:09:46] Speaker 01:
It reads Section 314D, as well as the standing and other disability principles.

[00:09:54] Speaker 04:
It's your position that a writ of mandamus would not be able to be brought to this court?

[00:10:01] Speaker 04:
And why not?

[00:10:02] Speaker 01:
So this court held in Milan that mandamus would be available to review a denial only in the case of a colorable constitutional claim, and the director has taken that position as well.

[00:10:12] Speaker 01:
So that really does leave the APA as the only available route, which is what the Supreme Court said in Cuoso and Sass and adhered to in Thrive that 314D and the statute in general does not enable the PTO to act outside its statutory authority.

[00:10:32] Speaker 01:
I guess I would look at it this way.

[00:10:34] Speaker 01:
Suppose you had a provision in the AIA that explicitly said, the director may not deny institution based on the pendency of parallel litigation.

[00:10:45] Speaker 01:
I don't want to speak for the government, but I would assume that they would agree that defensive rule would be unlawful if that's what the statute explicitly said, and that courts are available as they presumptively are in the absence of clear and convincing contrary evidence

[00:11:01] Speaker 01:
to enforce the statute against the director's unlawful rule.

[00:11:06] Speaker 02:
So what you just said scans very easily on 701A1.

[00:11:13] Speaker 02:
But 701A2, what you just said, would be clearly inapplicable to that, because that would not be committed to agency discretion.

[00:11:24] Speaker 02:
And there's a body of DC Circuit law, which you did not cite, that talks about the kind of exception to committed agency discretion by law, where the statutory violation is particularly clear.

[00:11:39] Speaker 02:
I don't really see that you're in that ballpark, and you haven't argued that you're in that ballpark.

[00:11:44] Speaker 02:
You're making an argument that the statutory structure, the statutory policy, the practicalities make this a really bad fit for this regime.

[00:11:54] Speaker 01:
So, Your Honor, we haven't made that argument here because it goes more to the merits, but we did make that argument in our summary judgment briefing below.

[00:12:01] Speaker 01:
I seem I'm about to cross into my rebuttal time, but if I could provide an answer to the

[00:12:06] Speaker 01:
to the question, we do think that this is effectively that same situation for a few reasons in the text structure and context and purposes of the statute.

[00:12:17] Speaker 01:
We have, first of all, section 315B that sets the one-year period implicitly acknowledging and permitting IPR petitions in the wake of an infringement assertion in court, provided they're timely.

[00:12:32] Speaker 01:
We have the sort of traffic control measures

[00:12:35] Speaker 01:
in 315A, which explicitly dictate the circumstances in which the pendency of an infringement claim in litigation does or does not preclude IPR from going forward.

[00:12:51] Speaker 01:
We have other provisions related to parallel proceedings before the office, as opposed to litigation, where Congress expressly conferred discretion on the director to handle parallel proceedings

[00:13:05] Speaker 01:
in his or her discretion.

[00:13:07] Speaker 01:
Those provisions would be totally superfluous if the statute allowed something like the Fenton rule.

[00:13:14] Speaker 01:
So we have all of those provisions together in light of the purpose of IPR in the first place, which is to make a more efficient streamlined procedure for challenging questionable patents available precisely when those patents have been asserted in litigation.

[00:13:34] Speaker 01:
So we think very much, again, this is a merits question.

[00:13:36] Speaker 01:
And for jurisdictional justiciability purposes, of course, the court takes the merits as they come.

[00:13:44] Speaker 01:
But on the merits, we think there's a very strong case that, in fact, this rule does exceed the guardrails around the director's discretion in exactly the way that was true in the cases that Your Honor is referring to.

[00:13:58] Speaker 01:
And granted, the director disagrees with our reading of the statute.

[00:14:03] Speaker 01:
And if the complaint is reinstated as it should be, the district court will have to resolve that dispute about statutory interpretation.

[00:14:14] Speaker 01:
Does the statute prohibit this rule or doesn't it?

[00:14:17] Speaker 01:
But that's exactly why there is law to apply here.

[00:14:21] Speaker 01:
And there is a metric against which to measure the director's exercise of discretion here.

[00:14:27] Speaker 01:
This is not a case like this court's decision in Allman Brothers, for instance,

[00:14:32] Speaker 01:
which was another 701A2 case where the issue was that the US trade representative could accept certain trade benefits that the secretary deemed satisfactory.

[00:14:45] Speaker 01:
The court has no way to decide whether something should or shouldn't be satisfactory to an agency.

[00:14:51] Speaker 01:
But a court certainly has the ability to interpret a statute, decide whether a rule violates the statute, decide whether

[00:15:01] Speaker 01:
the agency engaged in reasoned decision-making as required by the APA.

[00:15:05] Speaker 01:
And of course, as I think Your Honor mentioned earlier, the notice and comment claim wouldn't be subject to the 701A2 objection at all, because agencies have no discretion not to follow those required procedures.

[00:15:19] Speaker 03:
Unless the court has.

[00:15:20] Speaker 03:
As you notice, your time has expired.

[00:15:22] Speaker 03:
But we'll give you back your rebuttal time.

[00:15:24] Speaker 01:
Thank you.

[00:15:24] Speaker 03:
I appreciate that.

[00:15:26] Speaker 03:
Mr. Shaw.

[00:15:27] Speaker 00:
May it please the court?

[00:15:28] Speaker 00:
Waley Shaw for Director Vidal.

[00:15:31] Speaker 00:
As the Supreme Court and this court have held, Congress gave the director unreviewable discretion to deny institution of IPR.

[00:15:39] Speaker 00:
The politically accountable director could exercise that discretion herself without any explanation based on considerations she holds only in her head.

[00:15:49] Speaker 00:
And we would not be here today if she had done that.

[00:15:52] Speaker 00:
However, the director has delegated that authority to the board and the previous director in an act of transparency and good governance

[00:16:00] Speaker 00:
gave his subordinates written instructions about things they should think about when exercising his discretion.

[00:16:06] Speaker 00:
That is, defensive factors.

[00:16:08] Speaker 00:
Now, the plaintiffs have already come to this court multiple times making the same arguments that they are making now.

[00:16:16] Speaker 04:
But this court has to- Mr. Schall, can I interrupt you?

[00:16:18] Speaker 04:
I really would like to have your response to Ms.

[00:16:22] Speaker 04:
Carroll's hypothetical about what if there was a statute that said you cannot

[00:16:30] Speaker 04:
choose to not institute because of the existence of parallel district court litigation, and then the PTO had the finted factors anyway, so that it was a clear statutory violation.

[00:16:44] Speaker 04:
Would there be judicial review and how so?

[00:16:46] Speaker 00:
Well, I think that if it were true that there was some clear statutory command governing the director's discretion to deny institution,

[00:16:57] Speaker 00:
then the case law would look completely different.

[00:17:00] Speaker 00:
For example, this court's decision in Milan would not have held that mandamus is not available except for color-gold constitutional claims because there are essentially no statutory limits on the director's discretionary denial authority.

[00:17:16] Speaker 00:
This court and the Supreme Court have both said that

[00:17:19] Speaker 00:
the director can deny review for basically any reason.

[00:17:23] Speaker 00:
In my land, this court said that the Supreme Court had determined in cuozo that the institution decision is committed to agency discretion by law.

[00:17:34] Speaker 00:
So I think this court's precedent and the Supreme Court's precedent indicate that it is not the case that there are any clear statutory limitations on the director's denial authority, which

[00:17:47] Speaker 00:
just goes to show how inappropriate it is for the plaintiffs to come back to this court, again, making the same arguments that they have in previous cases that have been rejected, but now doing so by a more circuitous route.

[00:18:03] Speaker 00:
So they recognize.

[00:18:06] Speaker 02:
I'm not sure that that's really a fair characterization.

[00:18:09] Speaker 02:
I mean, maybe in the district court, to the extent that the plaintiffs were arguing there are

[00:18:16] Speaker 02:
statutory constraints, maybe of a less than express and directly applicable sort, but nevertheless enough statutory constraints that that isn't, you may be right that that's inconsistent on the merits with the assertion, with the premises of a number of our decisions of the Supreme Court's, Arthur X. Enquozzo about discretion.

[00:18:40] Speaker 02:
But in this court, all they're asking for is an opportunity to argue about that.

[00:18:45] Speaker 00:
Right.

[00:18:47] Speaker 00:
So let's start with the district court example, or let's start with the final ring.

[00:18:53] Speaker 02:
Just because we don't have any case that involves an attack on a director or otherwise PTO authoritative generic pronouncement about how to go about making the yay or nay institution decision.

[00:19:10] Speaker 02:
All of our cases are about individual

[00:19:13] Speaker 02:
determinations right uh... in terms of and i think you're going to cases interpreting the preclusion review with respect respect interpartisan we have any cases uh... that involved attacks on generic uh... director or otherwise authoritative pronouncements about the standards that will apply to the year and a institution uh... i i i certainly not aware of any in the i p r context and i think there's a good reason for that because

[00:19:42] Speaker 00:
The director's decision to deny institution is akin to the enforcement discretion that was discussed in Heckler.

[00:19:51] Speaker 00:
And those decisions are made as a matter of discretion, are traditionally unreviewable, and are based on factors that are up to the politically accountable decision makers.

[00:20:01] Speaker 02:
Is it your position that whenever an individual case-specific determination is committed to agency discretion,

[00:20:11] Speaker 02:
that an agency's pronouncements about how that discretion will be exercised in the future are thereby also committed to the agency's discretion?

[00:20:20] Speaker 00:
I certainly don't think that it's possible to draw any sort of bright line rule.

[00:20:24] Speaker 00:
But I think in this case, if you look at the design of the statutory scheme, the purposes of insulating the denial decision, the institution decision from judicial review, this court's precedence

[00:20:38] Speaker 00:
and the Supreme Court's precedents discussing the unreviewability of those determinations, I think it's clear that it would be.

[00:20:47] Speaker 02:
So the answer you're giving right now, I think, would require you to say what about Judge Stoll's example of a very clear statutory constraint on the exercise of that description.

[00:21:06] Speaker 00:
Well, I think that would be a very different decision.

[00:21:09] Speaker 00:
So for example, if that were the case, I would imagine that in my land, this court would not have said that there is no mandamus review for statutory claims, only for colorable constitutional claims.

[00:21:23] Speaker 00:
And perhaps the Supreme Court would not have said that the denial decision is committed to agency discretion by law.

[00:21:30] Speaker 00:
But that is, in fact, what the courts have said.

[00:21:34] Speaker 00:
So I guess it's hard to sort of generalize about this or hard to sort of discuss this hypothetical because it would mean that the entire case law, all the case law and understandings of the statute would be different.

[00:21:48] Speaker 04:
So let's set that case law aside and say it doesn't exist and this is the first case before us.

[00:21:52] Speaker 04:
What would be your answer?

[00:21:55] Speaker 00:
Yeah, it's hard to say.

[00:21:58] Speaker 00:
I suppose if there were an absolutely clear statutory command and the director were clearly violating it, then maybe the mandamus review would be something that this court might consider.

[00:22:08] Speaker 00:
And it would depend on how clear the statutory command would be and all of the sort of discretionary decisions that go into the grant of mandamus review.

[00:22:20] Speaker 00:
So I think that would present a very different situation.

[00:22:24] Speaker 02:
Can I ask why is the 553 claim not reviewable?

[00:22:34] Speaker 02:
I mean, 701A1, 701A2, both.

[00:22:38] Speaker 00:
I think it's clearly incompatible with the statutory scheme because again, this is a scheme that allocates unreviewable discretion to the director, allows her, she could be making... Why is this different from Lincoln?

[00:22:51] Speaker 02:
And in, in Lincoln, the Indian health service had said, we have under a lump sum appropriation, unreviewable discretion about how to spend it.

[00:23:01] Speaker 02:
And the Supreme court said first, yes, you're, you're quite right about that.

[00:23:06] Speaker 02:
Substantively unreviewable discretion.

[00:23:08] Speaker 02:
Cause the nature of a lump sum appropriation is we're not constraining how you spend it.

[00:23:12] Speaker 02:
But then the Supreme court went on to decide.

[00:23:15] Speaker 02:
On the merits, the question of whether the exercise of that discretion to cancel a particular program and reallocate funds was in fact subject to review for whether it needed to be done by notice and comment rulemaking.

[00:23:29] Speaker 02:
And in a footnote in your brief in that case, you said quite right, there is of course law to apply to that decision, namely the process for going about making the decision, the law being

[00:23:43] Speaker 02:
It's specifically 553 and its standards.

[00:23:46] Speaker 02:
You probably won that issue, but that's a merits victory.

[00:23:50] Speaker 00:
I think the answer is that a claim that notice and comment rulemaking is required to determine what the director may consider

[00:24:01] Speaker 00:
in exercising her unreviewable discretion to deny institution of IPR is fundamentally incompatible with the statutory scheme.

[00:24:09] Speaker 00:
I mean, just imagine what would happen if the director were exercising that authority herself, which she does

[00:24:15] Speaker 00:
sometimes do through director review decisions.

[00:24:19] Speaker 00:
I mean, would she be required, if she has some considerations that she thinks about in her head and she intends to consistently apply across cases, would she be required to then solicit notice and comment?

[00:24:34] Speaker 00:
I mean, this type of claim.

[00:24:36] Speaker 02:
What's distinctive here is that the issuance, this precedential opinion,

[00:24:43] Speaker 02:
binds her 250 delegates in their exercise of the delegated authority.

[00:24:49] Speaker 02:
So this is not just in an individual decision-maker set.

[00:24:53] Speaker 02:
It's a binding proclamation.

[00:24:57] Speaker 02:
I'm just trying to avoid APA words here.

[00:25:00] Speaker 02:
that governs her delegate's exercise of authority.

[00:25:06] Speaker 00:
And she is plainly permitted to instruct her subordinates as to how to exercise her discretion.

[00:25:13] Speaker 00:
She can issue a memo.

[00:25:15] Speaker 00:
She can designate a presidential decision.

[00:25:18] Speaker 00:
She has the authority to review institutional decisions herself.

[00:25:24] Speaker 00:
And so she has a range of methods by which she can exercise her management authority over the board.

[00:25:30] Speaker 00:
the board's exercise of her discretion.

[00:25:34] Speaker 00:
And so the idea that her choice among these methods could be dictated, particularly when she could have exercised the discretion herself, I think is just incompatible with the statutory scheme.

[00:25:44] Speaker 04:
I would just... So can I, just to make sure I understand, you're saying her discretion is so vast that even the procedure under which she should be making the exercise in that discretion is outside of a court review.

[00:25:59] Speaker 04:
Is that what you're saying?

[00:26:01] Speaker 00:
I think it is clear in the statutory scheme that the director has the ability to deny institution for any constitutionally permissible reason.

[00:26:12] Speaker 00:
And I think efforts by the courts to dictate to the director what factors she may or may not consider in exercising.

[00:26:21] Speaker 00:
Let's talk about procedure.

[00:26:22] Speaker 04:
Let's set aside the factors.

[00:26:24] Speaker 04:
You're talking about merits now.

[00:26:25] Speaker 04:
I'm going back to Judge Toronto's questions about the procedure.

[00:26:29] Speaker 04:
and notice and comment rulemaking.

[00:26:30] Speaker 04:
So I'm trying to understand.

[00:26:31] Speaker 04:
I thought I was repeating back to you what I understood you to be saying.

[00:26:35] Speaker 04:
So could you focus just on the notice and comment rulemaking?

[00:26:39] Speaker 00:
I think that is correct, that it would intrude on the director's ability to exercise the unreviewable discretion granted to her by statute that Congress intended for her to be able to have.

[00:26:53] Speaker 04:
Even for her to be able to determine not just what the factors are, but unfettered abilities on how she's going to determine it.

[00:27:02] Speaker 00:
Perhaps there's some, I don't know if there's some way of procedural way of exercising her authority that would be so outside the bounds of constitutional permissibility that there would be a claim there.

[00:27:13] Speaker 00:
But certainly this type of claim that she has to set out her factors by notice and comment rulemaking is not consistent with the statute.

[00:27:22] Speaker 00:
I also want to sort of turn to the idea that the factors are binding or that dictate results in particular cases.

[00:27:33] Speaker 00:
And I think that is maybe do very different things.

[00:27:36] Speaker 02:
In fact, they are obviously very different things.

[00:27:38] Speaker 00:
Yeah, I think that's right.

[00:27:39] Speaker 02:
Is binding to consider the factors with some arrows attached to the factors.

[00:27:45] Speaker 00:
I think that's exactly right.

[00:27:49] Speaker 00:
Furthermore, the idea that plaintiffs can be sure of how

[00:27:52] Speaker 00:
these factors are going to be applied is entirely speculative.

[00:27:56] Speaker 00:
I would just point out that on pages three and four of their reply brief plaintiffs cite, I think, five pending IPR petitions, or that were pending at the time the reply brief was written.

[00:28:08] Speaker 00:
Now, I looked into some of those, or I looked into the ones that are cited.

[00:28:12] Speaker 00:
Are they outstanding now?

[00:28:14] Speaker 00:
Yes, but I think this also speaks to a broader question of the speculative nature of

[00:28:23] Speaker 00:
plaintiff's efforts to indicate how, you're right, I think this answer mostly goes to standing.

[00:28:33] Speaker 00:
Out of those decisions, every single one has already, an institution decision has been made in each one of those cases.

[00:28:39] Speaker 00:
And in none of those cases did the board rely on the fint of factors.

[00:28:45] Speaker 00:
There was always some other basis for the decision.

[00:28:49] Speaker 00:
And so the idea that the fintive factors are certainly going to cause harm to them is, I think, again, entirely speculative and not sufficient to support standing.

[00:28:59] Speaker 00:
And I think that goes broadly, that goes to sort of a more general problem with the plaintiff's case, which is that it's absolutely clear that they cannot, on review of a final written, they cannot attack a decision applying the fintive factors in a particular case.

[00:29:17] Speaker 00:
And so what

[00:29:19] Speaker 00:
At least in that case, it would be clear for standing purposes whether the fictive factors will be applied and what the potential effects of the decision are.

[00:29:29] Speaker 00:
But they can't do that because Congress has made the judgment that that review is not allowed.

[00:29:34] Speaker 00:
Now what they want to do is shift to an earlier point in the process when it's still very unclear whether the factors will be applied to them or not.

[00:29:45] Speaker 00:
And that's where they run up against the standing problem.

[00:29:48] Speaker 00:
So by trying to shift away from attacking individual decisions and relying on their injuries from particular denials of IPR and trying to attack the scheme as a whole, they are changing their problem from a preclusionary review problem to a standing problem.

[00:30:09] Speaker 00:
You know, we contend that the statutory preclusion of review governs both types of claims.

[00:30:18] Speaker 00:
But according to them, even if you accept their preclusion of review argument, they still face the standing argument up front.

[00:30:24] Speaker 00:
And that's something that they can't get around because

[00:30:27] Speaker 00:
Congress has precluded them.

[00:30:29] Speaker 02:
Maybe you can help me understand this a little bit more precisely.

[00:30:32] Speaker 02:
At least coming in the way I was thinking about this, just focus on Apple.

[00:30:37] Speaker 02:
It's not clear to me.

[00:30:38] Speaker 02:
This is true of all five plaintiffs, but Apple has been a defendant, patent infringement defendant, in a vast number of suits.

[00:30:48] Speaker 02:
continuing as far as we know, has been an IPR petitioner in a vast number of matters.

[00:30:58] Speaker 02:
Why is it unduly speculative that

[00:31:06] Speaker 02:
particularly maybe, or maybe this is irrelevant, maybe this is unnecessary, but particularly in light of at least there being some numbers of fintive based denials of institution that Apple would be adversely affected, even though sitting here today, it cannot, almost by definition, identify the particular instance.

[00:31:29] Speaker 02:
Why is that not enough for standing?

[00:31:32] Speaker 00:
Yeah, so first, I have at least two responses that I'd like to get out.

[00:31:36] Speaker 00:
The first is just that the probability is not as high as they say, especially since the Finti factors are, while the Finti factors themselves remain the same, the director has, in the exercise of her politically accountable discretion, clarified the application of the Finti factors in particular cases.

[00:31:55] Speaker 00:
So for example, now a compelling showing of

[00:31:57] Speaker 00:
compelling showing of likelihood of success on the merits allows you to get around the Finti factors.

[00:32:05] Speaker 02:
That is, that they would not... So is this moot as to the challenge to the Finti factor?

[00:32:09] Speaker 00:
We're not contending that it's moot, but I'm just saying that the application of the factors may depend on, for example, interim guidance that's been issued by the director, on director review decisions that sort of clarify how the factors should be applied.

[00:32:25] Speaker 02:
But there has not yet been an announcement about the idea floated last spring or summer about conducting a rulemaking.

[00:32:34] Speaker 00:
Is that right?

[00:32:34] Speaker 00:
The rulemaking, the director has requested comments, has not yet issued.

[00:32:39] Speaker 02:
Requested comments about whether to propose a rule?

[00:32:41] Speaker 00:
Right.

[00:32:42] Speaker 00:
There has not been a notice to propose rulemaking.

[00:32:44] Speaker 00:
That's correct.

[00:32:46] Speaker 00:
But the director has issued interim guidance about how definitive factors should be applied.

[00:32:52] Speaker 00:
They include, for example,

[00:32:55] Speaker 00:
the role I indicated about a compelling showing of likelihood of success on the merits.

[00:33:02] Speaker 00:
And the final point is just that the idea that you can say just, you know, I expect, you know, because I have so many, so much litigation going on, I expect to be injured.

[00:33:17] Speaker 00:
You know, there's a high probability I will be injured in some case.

[00:33:20] Speaker 00:
That is not the kind of showing that the Supreme Court has said.

[00:33:23] Speaker 00:
is sufficient.

[00:33:24] Speaker 00:
In the Summers case, the plaintiff organization made this very kind of argument.

[00:33:29] Speaker 00:
There was a regulation governing logging in national forests and the plaintiff organization said, I have so many men, you know, I have thousands and thousands of members.

[00:33:39] Speaker 00:
They live all over the country.

[00:33:41] Speaker 00:
They visit national forests all the time.

[00:33:43] Speaker 00:
So they are certain to be, they are statistically certain to be

[00:33:47] Speaker 00:
impacted by this regulation.

[00:33:49] Speaker 00:
What the Supreme Court said is that is not enough.

[00:33:52] Speaker 00:
There may be a statistical probability that some harm will occur, but you need to be specific.

[00:33:58] Speaker 00:
You need to say which plaintiff visiting which forest at what time.

[00:34:03] Speaker 02:
I don't remember the court's decision, but that at least had the organizational aspect, so it would be fair to say that it was speculative

[00:34:12] Speaker 02:
as to any individual member of the organization.

[00:34:17] Speaker 02:
Is that right?

[00:34:17] Speaker 02:
And here, we don't have that issue.

[00:34:19] Speaker 02:
We have, just focusing on Apple, a single company that's been sued in hundreds.

[00:34:25] Speaker 00:
To be sure, right.

[00:34:26] Speaker 00:
We have a limited number of plaintiffs, but they still need to be.

[00:34:29] Speaker 00:
So even beyond showing which member, they need to say, well, what forest are you planning to visit?

[00:34:34] Speaker 00:
When are you planning to visit?

[00:34:37] Speaker 02:
There's only one forest.

[00:34:39] Speaker 02:
It's the PTO.

[00:34:40] Speaker 00:
No, but the analogy here, I think, is that plaintiffs need to be able to show which IPR petitions are likely to have the... Well, first, they need to meet the statutory minimum criteria for institution.

[00:34:53] Speaker 00:
Then it has to be likely that the fintive factors will be applied to them.

[00:34:57] Speaker 00:
It has to be likely that the fintive factors will actually be dispositive of institution.

[00:35:01] Speaker 00:
And that was the point that I was speaking to earlier.

[00:35:05] Speaker 00:
with regard to the five cases cited in the reply brief in which none of those cases had the fintive factors applied to them in a dispositive way.

[00:35:13] Speaker 04:
There's a part of Summers that I just want to ask you about.

[00:35:19] Speaker 04:
There is at least one particular member

[00:35:23] Speaker 04:
of the organization, Matt or Rosian I think it is, who said that they had repeatedly visited a particular place, PTO, that they had imminent plans to do so again and that they had interests in viewing the flora and fauna of the area and those would be harmed.

[00:35:41] Speaker 04:
if the project went forward.

[00:35:43] Speaker 04:
And in that case, the government conceded that that was sufficient to establish Article III standing.

[00:35:48] Speaker 04:
So your characterization of the case troubles me, because at least for somebody who to me sounds a little bit like some of the parties here,

[00:35:56] Speaker 00:
uh... that was conceded by the government and not considered that the court didn't consider that any further than what i've just said so first i i i i i think i was referring to sort of the second part of summer so if you look down from that portion of opinion you'll see the discussion i was talking about but with regard to the particular plaintiff i think that plaintiff made a uh... made a standing showing that the plaintiffs in this case have not made he said you know yes i am the plaintiff i am planning to visit this specific force which is in fact

[00:36:26] Speaker 00:
subject has a logging or timber project planned for it that is specifically covered by the regulation.

[00:36:34] Speaker 00:
So it was absolutely clear.

[00:36:35] Speaker 04:
Your view is that that is more concrete.

[00:36:37] Speaker 00:
Yes, absolutely.

[00:36:38] Speaker 04:
Then I expect I'll be filing petitions and I expect that they will be done based on the fintive factors, based on my experience in the past.

[00:36:46] Speaker 00:
Right, just a general experience.

[00:36:48] Speaker 00:
I have lots of petitions.

[00:36:53] Speaker 00:
Based on the sheer number of petitions, I am sure, as a statistical matter, that I am going to be injured.

[00:36:59] Speaker 00:
I think that is the kind of showing that is not sufficient under Summers to establish standing.

[00:37:04] Speaker 03:
Thank you, counsel.

[00:37:05] Speaker 03:
I think we have your argument.

[00:37:07] Speaker 03:
Ms.

[00:37:07] Speaker 03:
Carroll, you may have five minutes for both.

[00:37:10] Speaker 01:
Thank you, Your Honor.

[00:37:12] Speaker 01:
I'd like to try to make I think three points and answer any additional questions as well.

[00:37:18] Speaker 01:
The first thing I want to underscore is that we are not challenging a determination whether to institute an IPR.

[00:37:26] Speaker 01:
We are challenging an agency rule governing that decision that we allege on the merits does violate a clear command of the statute.

[00:37:36] Speaker 01:
I believe Mr. Shaw conceded that if it were sufficiently clear that that would be a reviewable contention and the question whether or not that's in fact what this statute means is a question to be determined by the district court on the merits.

[00:37:50] Speaker 01:
It does not preclude reviewability.

[00:37:53] Speaker 01:
Judge Toronto, you asked if there are any cases out there, whether I think in the 701A1 or the 701A2 context, that say if specific decisions, whether it's a non-enforcement decision or some other specific decision is unreviewable, has a court ever said that makes a general rule unreviewable?

[00:38:14] Speaker 01:
And the answer to that, I'm pretty sure, is no.

[00:38:16] Speaker 01:
The director hasn't cited any such cases, and I'm not aware of any.

[00:38:20] Speaker 01:
And I think the reason for that is because

[00:38:23] Speaker 01:
Taking that approach would work a sea change in the presumption of reviewability, which is a cornerstone of the idea that agencies are creatures of statutes.

[00:38:32] Speaker 01:
And when an agency has a broad channel of discretion, when that discretion has guardrails around it that Congress has imposed, we expect that the agency will comply with those limits and that courts are available when those limits provide a judicially manageable standard

[00:38:52] Speaker 01:
against which to measure the exercise of discretion, which is true here plainly with respect to the notice and comment claim, but with respect to the other claims as well.

[00:39:02] Speaker 01:
Mr. Shaw also relied, I think, a good deal on the general statutory structure and purpose here and the whole idea that Congress wanted this to be a hands-off, the director just gets to decide this with no limit on discretion whatsoever.

[00:39:18] Speaker 01:
And I think it's important in that regard to bear in mind

[00:39:21] Speaker 01:
what Congress would have expected about how the director would make rules as opposed to decide individual institution cases.

[00:39:30] Speaker 01:
And I think the additional views of the panel and Facebook against Windy City are very helpful in this regard.

[00:39:36] Speaker 01:
Congress expressly authorized the director to make rules governing institution and IPR and specifically how IPR would relate to other proceedings.

[00:39:49] Speaker 01:
That's in section

[00:39:50] Speaker 01:
316A4.

[00:39:52] Speaker 01:
Congress said you can make those rules, and the way that you will make those rules is by prescribing regulations.

[00:39:59] Speaker 01:
Congress also said when you make a specific determination in an individual case whether to institute an individual IPR, that institution decision is unreviewable.

[00:40:10] Speaker 01:
But there is no reason to think that in doing that, Congress would have ever thought that that would make general rules unreviewable because Congress would never have thought that the director would make rules by this mechanism in the first place.

[00:40:26] Speaker 01:
As the members explained in Facebook versus Windy City, the PTO, neither the director nor the board have authority to make rules

[00:40:35] Speaker 01:
Through adjudications.

[00:40:36] Speaker 02:
Can I just ask you, I don't have it in front of me, but does the 316 provision about rulemaking, or is it your view that it does, apply even when the matter would be within an exception to 553?

[00:40:52] Speaker 01:
So I believe those are perhaps separate questions.

[00:40:56] Speaker 01:
I think of 316 as a grant of authority to promulgate regulations.

[00:41:02] Speaker 01:
And I think of sections 553

[00:41:05] Speaker 01:
as a rule about how those regulations must be made.

[00:41:09] Speaker 01:
And of course, the applicability of 553 turns on what particular type of rule it is, of course.

[00:41:17] Speaker 01:
And so you could imagine, I mean, Mr. Shaw talked about all sorts of other ways the director might have exercised discretion or decided how discretion should be exercised.

[00:41:28] Speaker 02:
I guess I'm curious about, so in the

[00:41:31] Speaker 02:
uh, rulemaking part of, uh, Lincoln against civil.

[00:41:36] Speaker 02:
The government wins that by, on the basis of the exception to 553B-A, and Lincoln quotes Chrysler Corp as an exception for statements issued by an agency to advise the public prospectively of the manner in which the agency proposes to exercise a discretionary power.

[00:41:56] Speaker 02:
Um, those words have a certain resonance for what's going on here.

[00:41:59] Speaker 01:
So respectfully, we would disagree with that.

[00:42:02] Speaker 01:
And this, again, goes to the merits of our complaint rather than reviewability up front.

[00:42:07] Speaker 01:
But as to the merits and as to that point, what we've argued in the district court is that this is a substantive rule that is subject to notice and comment requirements under the APA.

[00:42:18] Speaker 01:
Because not only is it binding on the board, but it has legal and practical consequences for regulated parties as well.

[00:42:29] Speaker 01:
direction to the board about how to proceed.

[00:42:32] Speaker 01:
It's direction to the board about how to proceed that has legal consequences for parties, and it's the same legal consequences that give our clients standing to bring this complaint.

[00:42:47] Speaker 01:
Most standing arguments are generally in the form of, these are the wrong plaintiffs or

[00:42:54] Speaker 01:
not yet, or something along those lines.

[00:42:56] Speaker 01:
The standing argument here, I think, is sort of another version of the idea that the discretion the director has here is so completely unreviewable that no court could step in, even if an exercise of that discretion embodied in a rule binding on the board contradicted a clear statutory command.

[00:43:15] Speaker 01:
I don't think that's correct.

[00:43:17] Speaker 01:
And I think that if this court were to endorse that theory, it would go quite at odds

[00:43:23] Speaker 01:
with any decision of the Supreme Court, prior decisions of this court or the other regional circuits.

[00:43:28] Speaker 01:
I mean, going back to Bowen, the Supreme Court traces the presumption of reviewability back to Marbury versus Madison.

[00:43:35] Speaker 01:
This is not a technical innovation of the APA.

[00:43:39] Speaker 01:
This is a fundamental principle that agencies are expected to follow the law.

[00:43:44] Speaker 01:
And when they are alleged not to, and when the court has a manageable standard against which to judge

[00:43:52] Speaker 01:
whether the agency has violated the law, that's a reviewable complaint.

[00:43:57] Speaker 01:
We may or may not win at the end of the day.

[00:43:59] Speaker 01:
I think we have very good arguments that we will win as to all three of the claims, given the irrationality of the rule and given the fact that it cuts off access

[00:44:10] Speaker 01:
to IPR in exactly the situation where Congress understood that it would be most necessary and most useful.

[00:44:17] Speaker 01:
But those are merits questions.

[00:44:19] Speaker 01:
As to whether this is reviewable, this is a bread and butter APA case challenging an allegedly unlawful agency rule.

[00:44:27] Speaker 01:
And these plaintiffs have not only, I think we're not relying on a statistical probability that the rule is going to be applied to us.

[00:44:37] Speaker 01:
I think of this case as closer to

[00:44:39] Speaker 01:
the DC Circuit's recent decision in Jibril, which was the terrorist watch list case that's discussed in the briefs, where plaintiffs had a demonstrated past pattern of engaging in certain travel.

[00:44:52] Speaker 01:
They plausibly alleged an intention to engage in that travel again.

[00:44:57] Speaker 01:
And the court said that was enough.

[00:44:59] Speaker 01:
Mr. Shaw said, we can't show for certain that any specific petition would be denied.

[00:45:04] Speaker 01:
We're not required to show that.

[00:45:06] Speaker 03:
The standard here is substantial likelihood.

[00:45:09] Speaker 03:
I think we have your argument.

[00:45:09] Speaker 03:
Thank you so much.

[00:45:10] Speaker 03:
And we'll take the case under submission.

[00:45:12] Speaker 03:
Thank you.