[00:00:00] Speaker 05:
Third argument to be argued today is docket number 23-1348, unification technologies versus micron technology.

[00:00:10] Speaker 05:
Mr. Rastegar?

[00:00:12] Speaker 02:
Yes, Your Honor.

[00:00:13] Speaker 05:
OK.

[00:00:14] Speaker 05:
Please begin.

[00:00:14] Speaker 02:
May I please support John Rastegar on behalf of the Appellant of Unification Technologies.

[00:00:20] Speaker 02:
Director Vidal's prior authorship and endorsement of the petitions that issue in the IPR created a unique circumstance that deprived UTL of due process.

[00:00:29] Speaker 02:
As the director of the PTO, the director serves as the boss of all the employees there, including the APJs.

[00:00:36] Speaker 02:
She controls the careers of the APJs.

[00:00:38] Speaker 02:
She controls case assignments, performance reviews, and compensation.

[00:00:43] Speaker 02:
How do we know all that?

[00:00:45] Speaker 02:
So from both Arthrox and Mobility Works, Your Honor,

[00:00:48] Speaker 02:
the case law, their details at a high level, the compensation structure, or the APJs.

[00:00:54] Speaker 05:
But as a practical matter, none of those opinions make any comment on whether or not the director of the agency is looking through, I don't know, 250 different administrative patent judge performance reviews and then

[00:01:11] Speaker 05:
making some kind of assessment on what's the proper bonus amount, if any, for those people, as well as thousands of other employees of the agency.

[00:01:22] Speaker 02:
So respectfully, it's not necessary to show that the director personally reviews each of the APJs for this compensation.

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It's sufficient for the director simply to oversee the entire compensation structure, because the director can instruct her subordinates to award compensation based on

[00:01:40] Speaker 02:
aspects like performance, and she can single out individual APJs if they've caught her attention.

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So what about if there was a patent re-examination here?

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Would that also be barred from consideration, because that would necessarily require a PTO employee to undertake that re-exam, and that employee would necessarily be under the control of the director, or at least the director would be reviewing bonuses?

[00:02:06] Speaker 02:
So if I'm understanding the question correctly, Your Honor, you're asking if the director petition for patent re-examination with the same concerns apply?

[00:02:16] Speaker 02:
Yes, Your Honor, I believe they would.

[00:02:17] Speaker 05:
OK.

[00:02:17] Speaker 05:
So then there's really no way for this agency to do any kind of second review of your patent, so long as Director Badal is the director, even if she accuses herself.

[00:02:34] Speaker 02:
Well, as an initial matter, the petitioner here always has the remedy of using district court to challenge the validity of these patents.

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So the petitioner is not being deprived of the right to challenge the patents.

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The fact that this particular avenue might be foreclosed by the fact the director is currently overseeing the employees within the patent office.

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So the answer to my question is yes?

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I think as long as the compensation structure is as it currently is, the answer is yes.

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that the director has control over the discretionary components of APJA compensation.

[00:03:12] Speaker 05:
In particular, those components include... And I guess patent examiner discretionary compensation.

[00:03:19] Speaker 02:
Yes, Your Honor, I'm not sure if the director has control over patent examiner discretionary compensation.

[00:03:24] Speaker 05:
How do we know they have control over the discretionary compensation for APJs then?

[00:03:31] Speaker 02:
So again, in both Arthrox and Mobility Works, the compensation structure was detailed.

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And I believe in Mobility Works, it was detailed that among the factors considered in the discretionary review were decisional units, which are an objective criteria, but then several subjective criteria, including support for PTO leadership,

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quality of work and stakeholder interactions.

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The PTO's intervener brief here doesn't say it, but the PTO's brief and mobility works noted that it's lead APJs that do the performance reviews for APJs.

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So that seems to be something of a roadblock for your position that it's always the director that's

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responsible for this.

[00:04:18] Speaker 02:
Respectfully, all of the APJs at the end of the day are subject to the director's feedback and review.

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Then it would be the same for patent examiners as well.

[00:04:30] Speaker 02:
Again, I'm not particularly familiar with the patent examiner compensation piece.

[00:04:34] Speaker 02:
That's why I said I don't know.

[00:04:36] Speaker 04:
It seems like the logic in your position is that because of Director Vidal's past,

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Your client is absolutely immune from any adverse action at any level by the PTO until she leaves as director.

[00:04:53] Speaker 02:
No, Your Honor.

[00:04:54] Speaker 02:
Why not?

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Only for situations where the director endorsed and authored the arguments that are being presented to the patent office.

[00:05:04] Speaker 05:
So if the director had taken all these exact same positions,

[00:05:12] Speaker 05:
against your client's patent, but they were in a district court filing.

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You're saying, okay, that's not enough because it wasn't actually filed here, this agency.

[00:05:25] Speaker 02:
Correct, Your Honor.

[00:05:25] Speaker 02:
The issue is that the arguments of the director are being presented to

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her employees, and they're being asked to sit and adjudicate fairly their boss's arguments.

[00:05:37] Speaker 01:
So basically, the extension of what my colleagues have been asking is, essentially, a person who practiced before the PTO should never serve as director of the PTO.

[00:05:46] Speaker 02:
No, Your Honor, not at all.

[00:05:48] Speaker 02:
What we are saying is, in a situation where an individual is on a short list, for instance, to be considered for director, they should make a calculated decision to not put their name on a petition.

[00:06:00] Speaker 01:
And even if- But your nominee doesn't necessarily mean you're going to be confirmed, right?

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So you're basically asking her to quit her job, hoping that she'll be confirmed.

[00:06:12] Speaker 01:
Is that kind of what you're saying?

[00:06:14] Speaker 01:
I don't know if I'm misunderstanding your argument.

[00:06:15] Speaker 01:
I'm trying to get it.

[00:06:16] Speaker 02:
Respectfully, Your Honor, that's not what we're saying.

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What we are saying is that everything that Ms.

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Fadal did in private practice could have been done without affixing her name to the petition here.

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There are associates certainly at the firm who work on petitions who don't have their name on the briefings.

[00:06:36] Speaker 01:
Wait, so you're saying it would be OK if she had kind of secretly been working on this stuff, but you have more of a concern because she actually put her name on the briefing and then appropriately recused.

[00:06:48] Speaker 02:
Yes, Your Honor, we have a concern that she put her name on the briefing because, as a result of putting her name on the briefing, it became a matter for the APJs to then have to consider.

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They knew they were considering their boss's arguments.

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If she'd never appeared on the briefing, this wouldn't have been an issue.

[00:07:03] Speaker 01:
Do you also have a concern about the timing of the withdrawal from the IPR proceedings by Director Vidal?

[00:07:08] Speaker 02:
We do.

[00:07:09] Speaker 01:
What's the concern?

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Respectfully, had she withdrawn the moment her nomination was announced, this would have been a much different factual scenario.

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Instead, Director Vidal was lead counsel on the petitions, and then the replies were filed.

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After the replies were filed,

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Director Vidal withdrew from this case.

[00:07:28] Speaker 04:
But the petitions have been filed before her nomination.

[00:07:30] Speaker 04:
Correct, Your Honor.

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And she authored the arguments, and her name was on the brief.

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Why wasn't that enough, from your perspective, to be a disqualification?

[00:07:39] Speaker 02:
So the reason it would be a different factual scenario is that it would have at least signaled

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to the APJs that the director is trying to withdraw herself from this process to avoid any sort of potential for improper input.

[00:07:54] Speaker 04:
Well, if it's possible for her to cure this sort of defect, then I'm unclear on what she failed to do here that you think was necessary to cure the problem.

[00:08:05] Speaker 02:
Because in this instance, the director waited until after the reply was filed to withdraw.

[00:08:11] Speaker 04:
So to go back to what Judge Cunningham said, your position is,

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once you know you're being considered, if you've practiced in the PTO, you know you're being considered for a nomination, you better right now withdraw from everything that you're working on in the PTO.

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Otherwise, you're going to inadvertently immunize a certain number of patentees from ever being subject to an IPR.

[00:08:34] Speaker 02:
I think the prudent course of action would be to not continue to put your name on new filings.

[00:08:43] Speaker 04:
Can I ask you if something that confuses me is, while I understand you would prefer that we reverse what the board did here, you do say, or alternatively, vacate and remand the board's final written decisions.

[00:08:57] Speaker 04:
Who would you have us remand this case to?

[00:09:00] Speaker 02:
So again, the director controls the compensation structure for the APJs.

[00:09:04] Speaker 02:
If the director removes the subjective components that are, you know.

[00:09:08] Speaker 04:
So you want us to vacate, remand, and order her to revise her compensation structure.

[00:09:14] Speaker 02:
Ideally, we would like you to reverse, but if you were to remand to PTAB, then I believe that PTAB has a choice, right?

[00:09:24] Speaker 02:
They can either have certain APJs who are not subject to any sort of subjective analysis of their performance.

[00:09:33] Speaker 04:
If they use their current APJs,

[00:09:37] Speaker 04:
under their current compensation structure, then our remand is just inevitably going to lead to you coming back here and saying that whole thing was tainted and we can't affirm it.

[00:09:48] Speaker 05:
Yes, Your Honor.

[00:09:50] Speaker 05:
OK.

[00:09:52] Speaker 05:
So if the director issued, I don't know, some statement today that says, I do not ever look at bonus compensation for APJs.

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But let me be very clear that if this case ever comes back on remand to the board, I am completely walled off from any kind of performance review or bonus decision making for the board panel.

[00:10:23] Speaker 05:
Would that be good enough?

[00:10:26] Speaker 02:
Potentially.

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And the test is not whether or not the director actually biased the process, but whether an average APJ would be

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tempted to consider her role as director and as the author of this petition in analyzing facts and reaching their conclusions.

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If there's a strong enough statement, I believe that that would potentially help cure this issue.

[00:10:53] Speaker 04:
That's one question that merits.

[00:10:57] Speaker 04:
Your position is we don't have any claim construction dispute in front of us.

[00:11:01] Speaker 04:
it's all just, it seems to me, a disagreement with how the board read this Suda reference.

[00:11:07] Speaker 04:
Is that right?

[00:11:09] Speaker 02:
That is true.

[00:11:10] Speaker 02:
What I would say is that our position is the claim terms needed to be afforded their plain and ordinary meaning, which means that the words we... And they were not?

[00:11:21] Speaker 04:
Or they were?

[00:11:22] Speaker 02:
They were not.

[00:11:23] Speaker 04:
So that is a claim construction dispute.

[00:11:27] Speaker 02:
I think it depends on how you characterize that.

[00:11:30] Speaker 02:
I think

[00:11:32] Speaker 02:
The two big issues there that pop up are that we believe the claims of the 658 and 406 patent, which require an indication or message that data has been deleted or erased, have a past tense component to them, and that that carries a meaning that should be respected.

[00:11:52] Speaker 02:
I don't know if that necessarily rises to a true claim construction dispute as much as we just don't feel that that language was appreciated by the board.

[00:12:01] Speaker 02:
Similarly, with respect to the marking module in the 406 patent, it needs to act in response to receiving an indication, or the indication rather.

[00:12:13] Speaker 02:
Again, this goes back to this needs to be the same indication then that the request receiver module received, and there needs to be

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a recognition of that requirement in the claim language.

[00:12:26] Speaker 02:
I see that I'm into my rebuttal time.

[00:12:28] Speaker 05:
OK.

[00:12:29] Speaker 02:
We'll keep your rebuttal time.

[00:12:32] Speaker 05:
Thank you, Your Honor.

[00:12:38] Speaker 05:
OK.

[00:12:38] Speaker 05:
My understanding is Ms.

[00:12:40] Speaker 05:
Coperly for Micron is going to argue first?

[00:12:43] Speaker 05:
Yes, Your Honor.

[00:12:44] Speaker 05:
OK.

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But given the way that the oral argument has gone so far,

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I would imagine that you'll be using much fewer than 12 minutes and giving the government more than three minutes to respond to these due process arguments.

[00:12:59] Speaker 05:
But feel free to also give your two cents on the due process argument as well.

[00:13:05] Speaker 00:
I will, Your Honor.

[00:13:07] Speaker 00:
Obviously, we think there is no, and may it please the court, obviously, we think there is no due process problem here.

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In fact, we think that unification's argument taken to its logical extension

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doesn't solve the due process problem, it actually creates one.

[00:13:22] Speaker 00:
The relief that unification is asking for here is a ruling that would deprive my clients of the right to pursue any relief whatsoever in front of the Patent and Trademark Office just because the counsel they started with happened to later be selected for a presidential appointment.

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Accepting that argument would create tremendous unfairness.

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for my clients.

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And why do that when there's no evidence that unification suffered any unfairness at all?

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As we heard this morning, my colleague here has conceded that there's no evidence in the record

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that shows that the director personally decides the bonuses for APJs.

[00:14:08] Speaker 00:
The record is devoid of that.

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And when you asked about the record evidence and the basis for finding compensation, the only citations were

[00:14:19] Speaker 00:
to Mobility Works.

[00:14:20] Speaker 05:
The director sets the pay for the APJs, right?

[00:14:23] Speaker 00:
The director sets the rate of pay for the APJs.

[00:14:26] Speaker 00:
There is a bonus procedure.

[00:14:29] Speaker 00:
According to Mobility Works, the bonuses are decided in a performance review that may include things like quality, productivity, and advancing the mission of the PTO and its leadership.

[00:14:46] Speaker 00:
But that is not.

[00:14:46] Speaker 01:
But they're not tied to outcomes, right?

[00:14:48] Speaker 00:
It's not tied to outcome.

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And it's certainly not tied to fidelity to a position that the director took before she was the director while she was in private practice on behalf of a client.

[00:15:02] Speaker 00:
It is extremely far-fetched to say.

[00:15:05] Speaker 05:
I guess the question, though, is maybe you can't unrim the bell once the APJs are fully aware that the director has, in fact, filed something

[00:15:16] Speaker 05:
to the board taking a very, very specific position in this proceeding, then at a minimum, it creates an awkward situation for an APJ to potentially knowingly and publicly take a position that's contrary to the current directive.

[00:15:36] Speaker 00:
So Your Honor, my colleague a moment ago said repeatedly that she put her name on papers filed in this IPR.

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while she was a candidate.

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She did not.

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The petitions in this case were filed before Director Vidal was nominated.

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In fact, the petitions, the IPRs, were instituted before Director Vidal was nominated.

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Once she was nominated, the only thing she put her name on in this case was a motion to withdraw.

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She did not put her name.

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on the reply briefs that were submitted before her confirmation hearing.

[00:16:12] Speaker 05:
She had not withdrawn yet.

[00:16:13] Speaker 00:
She had not withdrawn yet, but she did not sign any papers or any arguments once she was nominated.

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And that was a very significant part of the argument I just heard.

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The argument seems to be that people in the world might think that administrative patent judges might fear that if they

[00:16:34] Speaker 00:
rejected an argument that was being asserted by one of Director Vidal's former clients, that she would take it personally, would personally involve herself in their compensation, and would punish them through the bonus.

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That is the very definition of speculation.

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It is extremely remote, far more remote even than the argument about institution bias that this court rejected in Mobility Works.

[00:17:01] Speaker 00:
And where would that argument end?

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I mean, there's no logical reason.

[00:17:05] Speaker 01:
Because there was at least an argument made by opposing counsel in terms of a concern about the timing.

[00:17:10] Speaker 01:
I know you're addressing that in some parts.

[00:17:11] Speaker 01:
But what do you contend is the appropriate time by which she would have needed to withdraw?

[00:17:18] Speaker 00:
It takes a long time to go through a nomination hearing, as I'm sure all of you are painfully aware.

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And I don't think there's certainly nothing in any rules, in any case law, in any precedent that requires

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a candidate to immediately drop their practice completely as soon as they are nominated.

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So there's simply no requirement, no expectation that I've ever heard of that that is what is required.

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She did withdraw before her hearing.

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She certainly withdrew.

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before she took office, and she recused before the moment at which she would have been required to be involved in any sort of decision in any director review petition.

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So there was no delay here.

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She acted prudently and quickly, and there's simply no rule or requirement or anything that I've ever seen that would require her to act differently than that.

[00:18:16] Speaker 04:
And we don't, I don't think, have any evidence

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that she could have been or was involved in any compensation decisions in that time before she recused herself.

[00:18:25] Speaker 00:
I think that's correct, Your Honor.

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And also, and I think this is important, it would be inappropriate for the director to take it personally

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if one of the deciders in an IPR rejected an argument she liked.

[00:18:44] Speaker 00:
And what would be the limit of that?

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Why wouldn't the same argument apply if she made an argument in litigation on behalf of a different client, or if she made a speech, or if she wrote an article?

[00:18:56] Speaker 00:
And the argument we're hearing today would essentially.

[00:18:58] Speaker 05:
I guess the subject is not so much hers.

[00:19:01] Speaker 05:
It's the APJs that were on this panel.

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And what's their perception?

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What's their likelihood of feeling some kind of pressure to be biased?

[00:19:12] Speaker 00:
There has been no evidence presented here to suggest that an APJ would have an expectation that they would be punished by the director

[00:19:25] Speaker 00:
for ruling in a particular way on a particular IPR.

[00:19:29] Speaker 00:
There's simply no evidence in the record to suggest that.

[00:19:32] Speaker 00:
It's pure speculation.

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And it's certainly not the kind of evidence that one would expect for the kind of request we're hearing today, which is essentially to disqualify the entire patent and trademark office from addressing any issue on which the director personally took a position, whether herself

[00:19:53] Speaker 00:
or on behalf of a client while in private practice.

[00:19:56] Speaker 05:
Is there anything you want to say briefly on the merits based on what you heard this morning?

[00:20:01] Speaker 00:
There is, Your Honor.

[00:20:02] Speaker 00:
There is no claim construction issue being presented here.

[00:20:05] Speaker 00:
If you look at the opening brief, you'll see that in every, if you just look at the table of contents, the heading of every section is student disclosure.

[00:20:14] Speaker 05:
Well, we have to figure out what is in response to receiving the indication, right?

[00:20:20] Speaker 00:
Your Honor.

[00:20:22] Speaker 00:
There's a footnote in which the footnote six of the board's decision explains that this idea that there had to be something that happened directly in response to the initial indication was something that was argued for the first time at oral argument below, and no evidence was presented to support it, and the court did not consider it.

[00:20:45] Speaker 00:
Moreover, there was another basis for the board's ruling.

[00:20:48] Speaker 00:
And the board concluded that Suda discloses things happening in response to an indication.

[00:20:56] Speaker 00:
The whole point of what Suda was describing was data is the user of the host chooses something for deletion, let's say a picture in a digital camera.

[00:21:11] Speaker 00:
And the host computer does two things at the same time.

[00:21:15] Speaker 00:
It sends an indication.

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that information has been deleted.

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And it also removes things from the host computer's file system.

[00:21:24] Speaker 00:
And then once the indication goes to the SSD, things happen in response, including that the information on the non-volatile storage is marked as something that could be erased or recycled or deleted in whatever fashion the algorithm concludes.

[00:21:44] Speaker 00:
There was a very extensive factual findings made here, Your Honor.

[00:21:47] Speaker 00:
And one thing I have not seen either in the briefing or even an oral argument here is any suggestion as to why the evidence presented to the board was insufficient to support the conclusions that the board raised.

[00:22:03] Speaker 00:
The decision about what a prior art reference discloses is the epitome

[00:22:10] Speaker 00:
of a discretionary decision that this court reviews for substantial evidence.

[00:22:15] Speaker 00:
It is a factual issue.

[00:22:17] Speaker 00:
And there have been no claim construction issues.

[00:22:21] Speaker 00:
If you review the briefs, you will not see a single reference to a statement the board erred in its claim construction.

[00:22:29] Speaker 00:
That is not part of the arguments that have been presented to this court.

[00:22:33] Speaker 00:
And the same is true for the motivation to modify, Your Honor.

[00:22:36] Speaker 00:
The board concluded that there was no motivation to modify required here.

[00:22:40] Speaker 00:
And as a result, it did not need to consider that issue.

[00:22:45] Speaker 00:
No modification was required.

[00:22:47] Speaker 05:
OK, thank you.

[00:22:47] Speaker 05:
Let's hear from the PTO.

[00:23:02] Speaker 03:
Good morning.

[00:23:02] Speaker 03:
May it please the court?

[00:23:03] Speaker 03:
Rob McManus for the government.

[00:23:07] Speaker 03:
Let's start with the timing of the withdrawal and the recuse.

[00:23:11] Speaker 03:
As this court's questions recognize, there is no conflict here until Kathy Vidal is actually confirmed as the director.

[00:23:18] Speaker 03:
That is the nature of the argument from appellant as to why these APJs may be concerned about reaching a particular outcome.

[00:23:24] Speaker 03:
They want to make their boss happy.

[00:23:26] Speaker 03:
She's not the boss until she's confirmed.

[00:23:28] Speaker 03:
She's confirmed on April 5, 2022.

[00:23:31] Speaker 03:
By that point, she has withdrawn from the district court litigation, and she has withdrawn her representation in the IPR.

[00:23:37] Speaker 03:
She has also, since the point of her nomination in the fall of 21,

[00:23:40] Speaker 03:
never filed a paper in the IPR.

[00:23:43] Speaker 03:
So we have no indication that she has participated after her nomination, which arguably does not even create a conflict per Judge Cunningham's questions.

[00:23:51] Speaker 03:
She's still, I don't mean this pejoratively, she's just a Winston Strong litigator at that point.

[00:23:56] Speaker 03:
She is an attorney.

[00:23:58] Speaker 03:
She is, as you all know well, the nomination's process may not bear fruit.

[00:24:03] Speaker 03:
And it's certainly the timing of which is unknown even to the nominee.

[00:24:07] Speaker 03:
So under those kinds of facts,

[00:24:09] Speaker 03:
It would be an extreme remedy to grant appellant's request to issue a ruling that the PTO could not entertain any review of this patent in this IPR or as Judge Chen recognized in re-exam.

[00:24:24] Speaker 03:
It also has profound effects for whether the degree to which the PTO can examine applications from entities for which the director has a conflict.

[00:24:35] Speaker 03:
counsel for this court to reject the invitation by a parent to craft the remedy.

[00:24:41] Speaker 03:
We also know.

[00:24:41] Speaker 05:
The argument is, from the other side, that the director holds the strings when it comes to bonus compensation decisions.

[00:24:49] Speaker 05:
And so therefore, it's really bad.

[00:24:53] Speaker 05:
Regardless of the timing of refusals and withdrawals and things like that, ultimately, it still boils down to the fact that in reality, she holds the strings to these APJ's bonus compensation decisions.

[00:25:05] Speaker 05:
And that is the trigger that could likely induce an average APJ to try to do something to make their boss happy as opposed to unhappy.

[00:25:20] Speaker 03:
Well, as Your Honor pointed out, the bonus structure that this court endorsed in Mobility Works is not rising to a due process violation, even accepted on face value.

[00:25:31] Speaker 03:
That there might be some relationship between a particular decision and the bonus recognizes that those bonuses are administered by board management.

[00:25:40] Speaker 03:
The structure that is outlined in the standard operating procedures for the board on how these bonuses, which are discretionary, are administered, does not contemplate any involvement from the director.

[00:25:51] Speaker 03:
Could the director get involved?

[00:25:53] Speaker 03:
I mean, ostensibly nothing forecloses the director from doing so, but there's no reason to think in this particular instance that she would do something that she normally does not do and insert herself into the particular bonus compensation for these particular three APJs.

[00:26:09] Speaker 03:
And that issue aside, we're still back sort of at square one with the issue that was addressed in Mobility Works.

[00:26:15] Speaker 03:
There it was about institution decisions, and here we're talking about final written decisions.

[00:26:19] Speaker 03:
But the argument is the same, that APJs care about a particular outcome.

[00:26:24] Speaker 03:
And that particular outcome drives their bonus incentive.

[00:26:27] Speaker 03:
Well, this court rejected that in Mobility Works, and it's equally applicable here.

[00:26:31] Speaker 03:
There is no correlation between the particular outcome of the decision and the APJ's particular bonus, and particularly when you consider in the context that each one of these decisions is what they call a decisional unit.

[00:26:43] Speaker 03:
The APJ's bonuses require 84 decisional units.

[00:26:46] Speaker 03:
So the idea that one would stand out amongst the other 83 or however many they have acquired is tenuous at best.

[00:26:53] Speaker 03:
And the Van Harkin decision, which this court cited to in Mobility Works, puts a fine point on sort of the real basic argument that's at play here, which is I want to make my boss happy.

[00:27:04] Speaker 03:
And so I might do something that I think is going to make them happy.

[00:27:07] Speaker 03:
That Van Harkin decision from the Seventh Circuit rejected that premise as highly tenuous, the idea being

[00:27:14] Speaker 03:
There the argument went, this particular individual would find violations in order to make their boss happy, lest their boss fired them.

[00:27:23] Speaker 03:
Now here, APJs are not at-will employees, so Director Vidal does not have direct ability to terminate an APJ based on a particular outcome of a decision.

[00:27:32] Speaker 03:
But the theory that Appellant advances here is roughly the same.

[00:27:36] Speaker 03:
They will do something to make their boss happy in an effort to curry their favor.

[00:27:40] Speaker 03:
It flies

[00:27:41] Speaker 03:
It does not fly for the same reason that the court in Van Harkin recognized.

[00:27:46] Speaker 03:
And that's important, because in order to take a step back, we have a case in which the director recognized the conflict and recused herself.

[00:27:54] Speaker 03:
That is the appropriate remedy.

[00:27:56] Speaker 03:
What they want, what appellant wants to do, is essentially impute

[00:28:00] Speaker 03:
that conflict to every APJ on the patent trial board.

[00:28:04] Speaker 03:
In order to do that, there has to be some basis for these APJs to have a conflict, which turns on their financial theory, which was rejected in Mobility Works and which is consistent with cases like Van Horken.

[00:28:15] Speaker 03:
It's also worth pointing out, to the extent that there's some concern that there would be some impartial evaluation of the merits, these same three APJs wrote the decision on institution well before Kathy Biddle was even nominated.

[00:28:30] Speaker 03:
why that does not foreclose a change of their mind in the final written decision.

[00:28:34] Speaker 03:
It does, at least, atmospherically demonstrate that they impartially evaluated the arguments, at least, ab initio, and found them to have merit.

[00:28:42] Speaker 04:
Can I just ask you to quickly address, you're accused in the gray brief of making a misleading statement, particularly about whether Ms.

[00:28:49] Speaker 04:
Vidal remained lead counsel as opposed to backup counsel.

[00:28:54] Speaker 04:
Were you misleading?

[00:28:55] Speaker 04:
And if not, why not?

[00:28:56] Speaker 04:
No, the gray brief argued.

[00:28:59] Speaker 03:
Oh, I'm sorry.

[00:29:00] Speaker 03:
Sorry.

[00:29:01] Speaker 03:
No, in the great brief, we were simply pointing out that when the reply brief was filed, Kathy Vidal did not sign it.

[00:29:08] Speaker 03:
She was still lead counsel technically.

[00:29:11] Speaker 03:
She had not formally withdrawn her representation.

[00:29:13] Speaker 03:
That's in January of 2022.

[00:29:15] Speaker 03:
She withdraws in February of 2022.

[00:29:18] Speaker 03:
Although, I hasten to point out, her Judiciary Committee nominations hearing was the day before on January 13.

[00:29:25] Speaker 03:
For the conversation, for example, that Judge Cunningham had with my friend,

[00:29:30] Speaker 03:
You still have to balance your private practice interests with the possibility that your nomination might not be approved.

[00:29:34] Speaker 03:
I don't think it's actually the nominations here.

[00:29:35] Speaker 03:
I think it was when she was voted out of committee.

[00:29:37] Speaker 03:
I'm sorry.

[00:29:37] Speaker 04:
I think we make the same point.

[00:29:39] Speaker 03:
Correct.

[00:29:40] Speaker 03:
It would be, honestly, under board procedures, I don't think she could have withdrawn before that reply brief was filed, because you have to seek authorization.

[00:29:47] Speaker 03:
So the one-day gap there would have foreclosed it.

[00:29:50] Speaker 03:
But she ultimately did withdraw in February of 2022 before the final written decision here was offered.

[00:29:55] Speaker 03:
I'll offer one more point, Your Honor.

[00:29:57] Speaker 03:
And the board relied on this as well.

[00:29:59] Speaker 03:
And I apologize, because I see it more in my time.

[00:30:01] Speaker 03:
In appendix page 5384, the board pointed out that interim procedures in the PTO clarify that the director does not have any involvement in any final written decision of an IPR, that the director's involvement does not become implicated, at least until there's the potential for director review.

[00:30:16] Speaker 03:
And by that point, she had recused herself.

[00:30:21] Speaker 05:
OK, thank you very much.

[00:30:22] Speaker 05:
Thank you.

[00:30:26] Speaker 05:
Let's give Mr. Rustic our full five minutes.

[00:30:33] Speaker 02:
Thank you, Your Honor.

[00:30:34] Speaker 02:
As an initial matter, I want to clarify a couple of statements that were just made.

[00:30:38] Speaker 02:
UTL is not seeking to bar Micron from all proceedings in the PTO.

[00:30:42] Speaker 02:
The issue is this particular proceeding where Director Vidal authored the opinions.

[00:30:47] Speaker 02:
That's the only issue we have.

[00:30:49] Speaker 02:
We don't have an issue with Micron filing a re-examination.

[00:30:52] Speaker 01:
You just said authored the opinions.

[00:30:54] Speaker 01:
I think you misspoke.

[00:30:56] Speaker 02:
that authored the petitions.

[00:30:59] Speaker 02:
I apologize.

[00:31:00] Speaker 02:
Thank you.

[00:31:04] Speaker 02:
Second of all, this is not an issue of the APJs being inclined to agree with the arguments of Director Vidal's former clients.

[00:31:14] Speaker 02:
The issue is, again, that these were Director Vidal's arguments.

[00:31:19] Speaker 02:
We've repeatedly heard the tests trying to be brought back to

[00:31:24] Speaker 02:
Well, there's no evidence that Director Vidal had any involvement in this.

[00:31:28] Speaker 02:
There's no evidence that Director Vidal had any sort of communications regarding the final written decisions or any indications about that.

[00:31:36] Speaker 02:
That's respectfully not the test.

[00:31:38] Speaker 02:
The test is whether the average APJ might be concerned by Director Vidal's prior positions and might be inclined to agree with them.

[00:31:48] Speaker 02:
And it's not a test of certainty.

[00:31:51] Speaker 02:
We heard reference to the Van Harkin case.

[00:31:55] Speaker 02:
I think if the court needs to understand why the Van Harkin case is not particularly insightful, it simply needs to look at the Aetna case that was cited in the briefing.

[00:32:06] Speaker 02:
Aetna was an Alabama state court case where an insured individual sued Aetna, claiming the failure to promptly pay various insurance claims.

[00:32:17] Speaker 02:
The plaintiff won the lowest court and went all the way up to the Alabama Supreme Court for 154.

[00:32:23] Speaker 02:
After that verdict was affirmed, Aetna filed an appeal to the US Supreme Court, arguing that because the chief judge of the Alabama Supreme Court had filed a separate action against a different insurer, Blue Cross Blue Shield, that involved related issues of law but not any common issues of fact,

[00:32:44] Speaker 02:
All the state employees, including all the judges, were disqualified because they had a potential bias.

[00:32:50] Speaker 02:
The Supreme Court ruled that the chief judge in the Alabama court did have a bias.

[00:32:55] Speaker 02:
Now, the chief judge in the Alabama court did not stand to make any money from the Edna case, and he was not suing any of the individuals involved in the Edna case.

[00:33:05] Speaker 02:
Nevertheless, because there were common issues of law, the Supreme Court said,

[00:33:09] Speaker 02:
Well, there was a potential that that judge might be inclined to make certain rulings of the law that would favor his Blue Cross Blue Shield class action.

[00:33:18] Speaker 02:
Now, with respect to the other eight justices, the Supreme Court said there was no bias.

[00:33:23] Speaker 02:
There was no conflict.

[00:33:24] Speaker 02:
And the reason for that, among those stated reasons, one of them was expressed.

[00:33:28] Speaker 02:
It was there was no evidence in the record that those justices had any idea that they were members of this class action.

[00:33:35] Speaker 02:
That's not the case here.

[00:33:37] Speaker 02:
Here, the director absolutely was known to be the author of the petitions.

[00:33:43] Speaker 02:
And as a result, that necessarily would cause some level of concern that the discretionary aspects of bonus might be subject to negative review if they went against her.

[00:33:57] Speaker 02:
We've also heard citation to Mobility Works as blessing the compensation structure.

[00:34:01] Speaker 02:
That's not what Mobility Works did.

[00:34:03] Speaker 02:
Mobility Works addressed a very specific issue, whether the increased number of decisional units awarded for a final written decision would improperly incentivize an APJ.

[00:34:16] Speaker 02:
This court found that because there was no increased decisional units for a final written decision that invalidated claims or a final written decision that upheld all claims, there was not an improper bias.

[00:34:28] Speaker 02:
That was not a resounding endorsement of the compensation structure as a whole.

[00:34:33] Speaker 02:
It was a very specific issue that was being addressed.

[00:34:42] Speaker 02:
Again, we heard multiple comments about there's no evidence in the record that it would be inappropriate for an APJ to disagree or an APJ to be concerned that they would be punished if they disagreed with Director Vidal.

[00:34:56] Speaker 02:
I would respectfully remind the court that the test is not whether there is evidence that that was an explicit threat or something that happened.

[00:35:03] Speaker 02:
The test is simply whether or not there was a risk and whether or not there would be a temptation based on that risk that an average man might perceive.

[00:35:15] Speaker 02:
Thank you, Your Honors.

[00:35:16] Speaker 05:
OK.

[00:35:16] Speaker 02:
Thank you.

[00:35:18] Speaker 05:
Case is submitted.