[00:00:27] Speaker 05:
Our first case for argument today is 23-2027, centripetal network versus Palo Alto networks.

[00:00:35] Speaker 05:
Mr. Clement, please proceed.

[00:00:42] Speaker 00:
Thank you, Your Honors, and may it please the court, I'm going to endeavor to leave three minutes for rebuttal.

[00:00:46] Speaker 01:
Mr. Clement, before you go.

[00:00:50] Speaker 01:
You are a very experienced practitioner.

[00:00:52] Speaker 01:
The rhetoric in the blue brief was a little bit much for me.

[00:00:56] Speaker 01:
I'm a little disappointed in the tone of this brief.

[00:01:01] Speaker 00:
Well, I'm sorry you had that reaction, Your Honor, but frankly, my client's pretty disappointed by the way they've been treated throughout this.

[00:01:07] Speaker 01:
Yes, but you're a very experienced appellate advocate, and you know we are not a jury.

[00:01:11] Speaker 01:
And we don't appreciate that kind of rhetoric.

[00:01:14] Speaker 01:
Your strength is in your arguments, not that kind of tone and substance.

[00:01:18] Speaker 01:
So I would hope that you appear before us many times and you are an excellent advocate.

[00:01:24] Speaker 01:
I would hope you would not sign on to a brief like this ever again.

[00:01:27] Speaker 00:
Well, I'm not sure I can make that promise, Your Honor, because with all due respect, I think what happened in this case was not appropriate.

[00:01:37] Speaker 00:
before this court in the first Cisco against centripetal case.

[00:01:42] Speaker 00:
At a minimum, when they asked for recusal for the APJs that had a greater interest, at least potentially three times as much, I think they at least deserve respectful consideration.

[00:01:54] Speaker 00:
And I don't think they got that.

[00:01:56] Speaker 00:
But we can disagree about the rhetoric in the brief.

[00:02:00] Speaker 00:
But I don't think we can disagree that there was a double standard applied here that is highly problematic.

[00:02:06] Speaker 05:
I'm going to let you get on with your argument, but I can't leave my colleague hanging out there.

[00:02:10] Speaker 05:
The rhetoric in the brief was something about which we all unanimously agreed in advance.

[00:02:15] Speaker 05:
Judge Hughes just agreed to be the one to make mention of it.

[00:02:19] Speaker 05:
It's not meant to derail your argument.

[00:02:21] Speaker 05:
And it's not going to take away from the strength of your argument.

[00:02:23] Speaker 05:
It's just the time, but please proceed.

[00:02:26] Speaker 00:
I will, and I will try to proceed in measured tones.

[00:02:30] Speaker 00:
But I have to say, as somebody who has seen a lot of government proceedings, I do think the way these proceedings went and the way that my client was treated was highly inappropriate.

[00:02:42] Speaker 00:
Because I do think there is a responsibility that APJs have, that judges have.

[00:02:47] Speaker 00:
Nobody likes to be told that they should recuse.

[00:02:50] Speaker 00:
But I do think there's a responsibility to handle those with respect.

[00:02:55] Speaker 00:
Um, rhetoric aside, I think the substance here is, I mean, this is quite a remarkable situation if you think about what has happened to my client.

[00:03:03] Speaker 00:
They're first told that there is both the appearance and reality of impropriety when a judge that adjudicates their claim holds less than $5,000 in Cisco stocks, actually their wife.

[00:03:16] Speaker 04:
Counsel, do you agree that there is a different statutory obligation on Article 3 judges versus

[00:03:22] Speaker 04:
the rules applicable to APJs in terms of your recusal argument?

[00:03:26] Speaker 00:
I think there is a different statutory regime that applies.

[00:03:29] Speaker 00:
I think ultimately the due process clause applies to both.

[00:03:34] Speaker 00:
And I think that given the unique function of APJs, which is different from most government executive branch employees and is different from ALJs,

[00:03:45] Speaker 00:
I think in those circumstances, I think to simply proceed on the assumption that the same standard that applies to the executive branch employees applies no differently to the APJs who can essentially have the same effect on the patent as the Article III judges.

[00:04:06] Speaker 00:
They can invalidate it.

[00:04:07] Speaker 00:
The effects on a patent holder are absolutely devastating.

[00:04:11] Speaker 00:
And under those circumstances, it seems to me that the same standards, the basic same standards ought to apply even if the regimes are differently.

[00:04:19] Speaker 00:
And of course, the remarkable thing here is the PTO now agrees with us.

[00:04:23] Speaker 05:
They have now for every other case.

[00:04:26] Speaker 05:
So the regulation clearly permits what happened in this case.

[00:04:31] Speaker 05:
There's just no question about that, correct?

[00:04:34] Speaker 00:
I mean, I think as amended, the better reading of it seems to be that it allows what happened here.

[00:04:39] Speaker 05:
Yes.

[00:04:40] Speaker 05:
So the regulation permits what happened.

[00:04:42] Speaker 05:
So are you challenging the regulation sort of like in an applied way or sort of as a across the board.

[00:04:50] Speaker 05:
This should be rendered unconstitutional for violating due process.

[00:04:55] Speaker 05:
What is your

[00:04:56] Speaker 05:
precise the precise nature of your challenge since the regulation does read on this case.

[00:05:02] Speaker 05:
How is it precisely I should understand the contour of your argument.

[00:05:07] Speaker 00:
So I think there's kind of three aspects to the argument you should understand.

[00:05:10] Speaker 00:
First, there's an as applied due process challenge to the regs as applied to this case in these circumstances.

[00:05:17] Speaker 00:
Second, our challenge here was not limited just to the stock ownership, but the whole way that this case was handled, including the reaction to the recusal motions.

[00:05:26] Speaker 00:
including the decision to allow the joiner of Cisco and only after that was allowed to recuse.

[00:05:33] Speaker 00:
And then there's also, you know, what you might think of as almost like a class of one type aspect to this, which is once the last shoe drops and the PTO makes clear that because of, among other things, appearance of impropriety problems, this is never going to happen to another litigant.

[00:05:51] Speaker 05:
So can I understand that your argument is very narrow

[00:05:56] Speaker 05:
in that it is in the facts of this case, given all of the exact proceedings that took place, you think there was a due process violation here.

[00:06:05] Speaker 05:
Not that you are challenging the idea of a de minimis exception for federal employees or even, wait, a de minimis exception

[00:06:14] Speaker 05:
for federal employees who are charged with general adjudicative tasks, right?

[00:06:19] Speaker 05:
Because, of course, adjudication is rendered throughout the government, right?

[00:06:23] Speaker 05:
MSPB, EPA, I mean, there's so many adjudicative boards within Article 1, you know, that it seems like it would be a tough challenge for us to have to parse based on job description, for example.

[00:06:41] Speaker 05:
Do you follow what I'm saying?

[00:06:43] Speaker 05:
So I'm just trying to understand how broad your argument is.

[00:06:45] Speaker 05:
How far do you need me to go, you know, for you to prevail?

[00:06:50] Speaker 00:
I don't need you to go further than this case and, you know, the circumstances where the litigant has already run into a stock ownership problem in the Article III courts and is now facing essentially an effort to invalidate the same patent.

[00:07:04] Speaker 00:
I mean, you could decide it that narrowly.

[00:07:06] Speaker 00:
I think in fairness, the principle that we're applying should apply to all of the APJs.

[00:07:14] Speaker 00:
I don't think there's going to be any real consequence for whether you decided it's to my client or you decided it's to all APJs, because going forward... Well then, what about all the AJs?

[00:07:24] Speaker 05:
Social Security Administration, I mean come on, you know how many AJs there are in the federal government?

[00:07:29] Speaker 00:
There are quite a few and I don't think I would really go further than the APJs.

[00:07:33] Speaker 00:
Why?

[00:07:34] Speaker 05:
Because there's more money at stake or because it's your client or why?

[00:07:36] Speaker 05:
What justification could there possibly be?

[00:07:39] Speaker 05:
Somebody's social security benefits could be their entire livelihood.

[00:07:42] Speaker 05:
The impact on an individual could be more profound even than the impact on your client.

[00:07:48] Speaker 05:
measured in scale.

[00:07:49] Speaker 05:
So why would it not extend to APJs too?

[00:07:52] Speaker 00:
So I think what's different about APJs than other standard sort of ALJs is most other ALJs are doing things where there isn't a direct analog in the Article III courts.

[00:08:06] Speaker 00:
So, you know, and obviously the public rights, private rights helps sort of reinforce that basic division.

[00:08:12] Speaker 00:
And, you know, APJs are in a different situation.

[00:08:15] Speaker 00:
They're not just dealing with sort of benefits and benefits distribution, which is something that's historically been done in the executive branch.

[00:08:22] Speaker 00:
They're basically taking a validly issued patent and they're making it go poof.

[00:08:28] Speaker 00:
And that's something that otherwise happens in the Article III courts, and it just seems given that grave responsibility.

[00:08:35] Speaker 00:
And again, PTO now agrees with me, they ought to be subjected to a higher standard than garden variety executive branch employees and also ALJs, generally speaking.

[00:08:48] Speaker 00:
As important as I think the recusal issue is here, I do want to make sure I have time to talk about the merits, so to speak, as well.

[00:08:54] Speaker 00:
So let me do that.

[00:08:56] Speaker 00:
I think there was a fundamental procedural error here backed by a fundamental substantive error.

[00:09:01] Speaker 00:
The fundamental procedural error here

[00:09:04] Speaker 00:
is that the board injected issues into this case that were just not the issues that were in the original petition.

[00:09:11] Speaker 00:
They're not the issues that the petitioner raised in this case before the board.

[00:09:17] Speaker 00:
The real dispute before the board that the parties joined was not whether the 856 patent operated on unencrypted packets.

[00:09:28] Speaker 00:
The real question was whether the prior art did that.

[00:09:32] Speaker 00:
And that's where the parties joined issue.

[00:09:33] Speaker 00:
And then all of a sudden, what I think is quite clear that the board did is they essentially looked at our patent and particularly the parts of our patent that talked about the technology and the filtering applying to encrypted packets.

[00:09:51] Speaker 00:
And as to that specific thing, they said that, you know,

[00:09:57] Speaker 00:
That was part of an amendment that came through.

[00:10:00] Speaker 00:
We think the amendment was in error.

[00:10:02] Speaker 00:
And we effectively don't even really think we understand how that even happens.

[00:10:08] Speaker 00:
And so what they essentially did is said, there's a part of this patent that's critical.

[00:10:13] Speaker 00:
It's the part of the patent that distinguishes it from the prior art.

[00:10:16] Speaker 00:
And as to that aspect of the patent.

[00:10:18] Speaker 05:
Mr. Clement, are you going out to help me ground myself to your written description argument that the board crossed the line by basically making a written description argument during the IPR?

[00:10:32] Speaker 05:
Is that the argument?

[00:10:33] Speaker 05:
I'm just trying to ground myself in which of the arguments we're on right now.

[00:10:36] Speaker 00:
So, I mean, I am on that argument, but that argument has both a procedural component and a substantive component.

[00:10:42] Speaker 00:
Even if you didn't agree with me on the substantive aspect of that, though I think you should, the procedural aspect of that is itself an APA violation, raises some of the

[00:10:53] Speaker 00:
you know, the same question that this court has recognized in cases like Qualcomm, where the board is injecting issues to Espante, which is inconsistent with basic APA procedure and is particularly problematic after the Supreme Court's SAS decision, which makes clear that the focus has to be on the petition and the petitioner's argument.

[00:11:11] Speaker 04:
So I just want to take you to another area, given the time.

[00:11:14] Speaker 04:
I am potentially sympathetic to the argument that the copying evidence wasn't properly considered.

[00:11:20] Speaker 04:
So let's say, hypothetically,

[00:11:25] Speaker 04:
What sort of relief would you seek if we disagree that reversal is the right answer?

[00:11:31] Speaker 00:
Well, I think under those circumstances, you would vacate the decision, you would remand it, and I think given the recusal issues, you could certainly specify on remand that the new panel should be assigned consistent with the prospective PTO guidance.

[00:11:46] Speaker 00:
And in that sense, by finding a defect with the board's proceedings, you could effectively remedy the recusal issues without having to decide whether it's a due process.

[00:11:57] Speaker 00:
So you could think of that as constitutional avoidance, if you will.

[00:12:01] Speaker 00:
But I think there's a way in which if you- I wasn't expecting that answer.

[00:12:06] Speaker 04:
Let me also ask you a follow-up question, because my understanding is initially you had concerns with two out of three of the APJs.

[00:12:15] Speaker 04:
that were on the, what I'm going to call the institution decision.

[00:12:18] Speaker 04:
Is that accurate?

[00:12:20] Speaker 00:
No, we had a problem with all three, because we thought that all three, we had a principle problem with APJ McEmera, and then we cited to all of the panel members, relying on the Williams case from the Supreme Court, that all three of them essentially should recuse under the circumstances.

[00:12:36] Speaker 05:
Wait, so is it your view that suppose among the three of us it turns out that Judge Hughes found later he needed to recuse himself?

[00:12:46] Speaker 05:
Is it your view that Judge Cunningham and I would also have to recuse just by sort of osmosis being close to him?

[00:12:51] Speaker 05:
What's the reasoning?

[00:12:52] Speaker 00:
I think that is the thrust of the Williams decision.

[00:12:56] Speaker 00:
That's certainly the way that we briefed it to the three judges on the APJ panel.

[00:13:03] Speaker 05:
Are you familiar with any regional courts that apply the rule that way?

[00:13:08] Speaker 05:
Because we've had lots of instances where judges have .

[00:13:12] Speaker 05:
.

[00:13:12] Speaker 05:
.

[00:13:16] Speaker 05:
some sort of conflict has come up.

[00:13:20] Speaker 05:
When it comes to stocks, one of the difficult things is sometimes if you own stock in something, you don't appreciate all the wholly owned subsidiaries that overarching entity might have, and all of a sudden it's brought to your attention that you have stock in something related to this company, and that judge recuses.

[00:13:38] Speaker 05:
We don't have a historical practice of saying the whole panel has to recuse at that point.

[00:13:42] Speaker 05:
So are you saying that the court's process, which I think is ingrained pretty regularly and occurs with some frequency, and I believe is consistent with what I know to happen at the DC Circuit and other places, are you saying that we are all acting in a way that is either illegal, unlawful, unconstitutional?

[00:14:00] Speaker 05:
What are we doing here?

[00:14:02] Speaker 05:
This seems important to me.

[00:14:04] Speaker 00:
I think the Williams case suggests that you might want to reconsider that practice.

[00:14:08] Speaker 00:
Maybe you can draw distinctions between Article III judges and APJs.

[00:14:13] Speaker 00:
In my understanding, they're something like 250 APJs.

[00:14:17] Speaker 00:
It's a little easier to substitute those out than it is to substitute out an entire panel of the court.

[00:14:25] Speaker 00:
The thrust of the Williams decision does seem to suggest

[00:14:29] Speaker 00:
that having just one conflicted judge, there was a justice, does inflict, in fact, the whole process.

[00:14:37] Speaker 00:
I just want to finish on the written description thing and try to save 30 seconds at least for rebuttal.

[00:14:42] Speaker 00:
We'll give you more time.

[00:14:43] Speaker 00:
I appreciate that, Your Honor.

[00:14:45] Speaker 00:
I think on the written description thing, I think this is really critical here because everybody agrees that the board can't do written description as such, can't invalidate on the basis of written description.

[00:14:57] Speaker 00:
But if the board then confronts a patent and it thinks

[00:15:01] Speaker 00:
there is a written description problem with an aspect of the patent that distinguishes it from the prior art.

[00:15:09] Speaker 00:
I think the Samsung decision of this court teaches very clearly that you cannot invalidate the patent for obviousness under those circumstances with a two-step process where you ignore the written description and you ignore the part of the patent

[00:15:26] Speaker 00:
that you think has a written description problem and then say the rest of the patent is obvious.

[00:15:30] Speaker 05:
We have some canons of construction though when it comes to claim construction and one of them is that the person who's construing a patent claim

[00:15:38] Speaker 05:
should construe it in order to preserve its validity, if possible.

[00:15:42] Speaker 05:
If it's subject to multiple possible constructions.

[00:15:46] Speaker 05:
Now, you can't read limitations into save a patent that is otherwise not salvageable.

[00:15:52] Speaker 05:
But if it is subject to multiple possible constructions, you choose the one

[00:15:58] Speaker 05:
that would conform with validity.

[00:16:00] Speaker 05:
Is it possible that's what the board was doing here?

[00:16:03] Speaker 00:
Well, to reach an invalidity determination, I don't think so with all due respect, Your Honor.

[00:16:06] Speaker 00:
I mean, there's more than one way to invalidate a patent.

[00:16:09] Speaker 00:
And to just save it just enough so you can invalidate it on the basis of obviousness, I don't think it's a permissible move.

[00:16:15] Speaker 00:
And I think that is particularly informed by the constraints that are on the board in an IPR proceeding.

[00:16:22] Speaker 00:
There are plenty of other proceedings where the board can consider 112 defects, but they expressly can't do that in an IPR proceeding.

[00:16:31] Speaker 05:
But can't they consider the disclosure, in fact, aren't they, isn't that the primary source for construing patent claims, is the specification?

[00:16:40] Speaker 00:
They can consider the specification, but what they can't do is say, which is what they did here is, OK, I see what happened here.

[00:16:47] Speaker 00:
This language was added as an amendment.

[00:16:50] Speaker 00:
We think the amendment was in error.

[00:16:53] Speaker 00:
And then we also think that this amendment teaches or discloses applying the filtering to encrypted messages.

[00:17:03] Speaker 00:
And we think that that's just not possible.

[00:17:07] Speaker 00:
We don't understand how that would work.

[00:17:08] Speaker 00:
And then the rest of the board's opinion sort of proceeds on the assumption that like those restrictions aren't there.

[00:17:15] Speaker 00:
And I'm sure it's frustrating for the board if they think, OK, I'm looking at this patent and I see the very thing that distinguishes it from prior art and I don't really think that that's enabled or I think there's a written description problem there.

[00:17:28] Speaker 00:
I'm sure it's frustrating for them.

[00:17:30] Speaker 00:
But I also think Samsung is crystal clear

[00:17:33] Speaker 00:
that you can't act on that frustration and you just have to say under those circumstances we can't invalidate these claims on the basis of obviousness or any of the other factors that are available to us under IPR and maybe someday some court is going to look at that and decide that there's a 112 problem.

[00:17:53] Speaker 00:
I mean, to be clear, I don't think there is a 112 problem at all.

[00:17:56] Speaker 00:
But so I want that to be as crystal clear on the record as possible.

[00:18:00] Speaker 00:
But if the board thinks that and they think, well, here's the thing that distinguishes us from prior art and we're going to essentially ignore that.

[00:18:07] Speaker 00:
I don't think that's an available option.

[00:18:09] Speaker 04:
One final question.

[00:18:10] Speaker 04:
Just on the remedy point, going back to your suggestion that you would need to you'd recommend that we have

[00:18:18] Speaker 04:
opinion that says substitute our APJs.

[00:18:20] Speaker 04:
Are you saying that for all three APJs that were on the final written decision, or what are you contending in terms of which ones you think would need to be substituted out per the arguments you've been making to us?

[00:18:32] Speaker 00:
So I think all three would be substituted out.

[00:18:36] Speaker 00:
I think, like I said, if you find any problem with this and vacate it, I think this problem will sort of solve itself because as long as they're applying the new PTO guidance to cases on remand, which I assume they would, then presumably we're going to get a panel.

[00:18:51] Speaker 05:
No, but that's not true because the one judge who wrote the opinion in this case has no stock.

[00:18:56] Speaker 05:
And so even if they're applying the new rules, you could well go right back to him.

[00:19:00] Speaker 00:
Well, I would hope that under all the facts and circumstances here, and I guess then I would rely on my Williams-based argument that there's a basis for recusal for APJ Moore as well.

[00:19:12] Speaker 05:
And you'd just make that argument back to the PTO then?

[00:19:16] Speaker 00:
Again, I would hope maybe I don't have to, but we'll see.

[00:19:21] Speaker 05:
Okay, thank you, counsel.

[00:19:22] Speaker 05:
Let's hear from...

[00:19:23] Speaker 05:
Who do I have first?

[00:19:24] Speaker 05:
Do I have the government, or who do I have coming up first?

[00:19:27] Speaker 02:
I have planned to go first, Your Honor, but if you want to hear from the government, that's fine, too.

[00:19:30] Speaker 05:
That's fine.

[00:19:32] Speaker 05:
Yeah, actually, give me the government first.

[00:19:34] Speaker 05:
Sorry, sit back down.

[00:19:51] Speaker 03:
Good morning, Your Honors, and may it please the court.

[00:19:53] Speaker 03:
Ryan Springer on behalf of the federal government.

[00:19:56] Speaker 03:
I'd just like to take a step back and put the regulations, the ethics regulations, in context here.

[00:20:03] Speaker 03:
This case involves an administrative proceeding that was initiated by Palo Alto Networks to challenge a patent owned by Centripetal Networks.

[00:20:11] Speaker 03:
APJ McNamara participated at an early stage of that proceeding and he held Cisco stock in an amount that's less than the threshold set by directly applicable ethics regulations.

[00:20:24] Speaker 03:
Then after Cisco was joined to the proceeding in a backup role, APJ McNamara promptly withdrew from the case to allow a three-judge panel who undisputedly have no

[00:20:34] Speaker 03:
you know, pecuniary interest or conflict in the matter to consider the evidence and render a final written decision on the merits of Palo Alto's challenge.

[00:20:44] Speaker 03:
And I think that centripetal's argument here that the entire proceeding has to be unwound and start from scratch, misunderstands the ethics rules, and omits key facts that are relevant to the analysis.

[00:20:54] Speaker 04:
Can I just follow up on the line of questioning I was asking opposing counsel in particular there?

[00:20:57] Speaker 04:
Let's say that we think

[00:20:59] Speaker 04:
it needs to be remanded hypothetically to address the copying evidence, for example.

[00:21:04] Speaker 04:
What would happen as a practical matter at the PTO then in terms of the constitution of the panel that would address a remand?

[00:21:14] Speaker 04:
Who would that be?

[00:21:16] Speaker 03:
I think the PTO would need to make that decision if the case went back.

[00:21:20] Speaker 03:
As I think the discussion this morning has highlighted, Judge APJ Moore, there's no suggestion that he has any pecuniary interest in this case or any other conflict in the matter.

[00:21:31] Speaker 03:
He sat with two other judges who also undisputedly have no conflict in the matter, and they reached an independent judgment based on the facts and evidence in the record.

[00:21:40] Speaker 03:
So I think if the case were to go back on some other issue, the PTO should be the one to make the decision of which APJs should sit on this panel.

[00:21:47] Speaker 05:
But none of these- So just to be clear, there isn't a process.

[00:21:51] Speaker 05:
So at the Federal Circuit, we have a whole process if a case comes back again in terms of trying to have the same panelists.

[00:21:57] Speaker 05:
for efficiency purposes, be involved in that case.

[00:22:00] Speaker 05:
Is there, there's not a similar process at the PTO.

[00:22:02] Speaker 05:
Is there, and I mean, I think I know the answer.

[00:22:04] Speaker 05:
I think the director gets to constitute the panels however he or she wishes.

[00:22:07] Speaker 05:
Is that true?

[00:22:08] Speaker 03:
You know, I don't know the specifics.

[00:22:10] Speaker 03:
I believe that is correct.

[00:22:11] Speaker 03:
And here, my understanding is at least, you know, sort of as a matter of course, it would go back to the same panel.

[00:22:17] Speaker 03:
There may need to be a decision here if different APJs should take over.

[00:22:21] Speaker 03:
But again, as I mentioned, there's no reason to think that any of the APJs who rendered the final written decision

[00:22:27] Speaker 03:
have any conflict in this matter and should be recused off of this case.

[00:22:31] Speaker 05:
But at least one APJ who's alleged to have a conflict, at least in appearance of impropriety, if not actual impropriety, participated in the decision to institute this proceeding.

[00:22:42] Speaker 05:
I mean, there is a threshold you have to get over before you even have a proceeding.

[00:22:46] Speaker 05:
And so you have someone, whether he does or does not have an appearance of impropriety, let's put that to the side for now.

[00:22:53] Speaker 05:
because it's argued as an appearance.

[00:22:55] Speaker 05:
Mr. Clement stood here and said, yeah, technically under the rules, that APJ is not in violation of the de minimis rule.

[00:23:02] Speaker 05:
So he acknowledged that, which he had to.

[00:23:06] Speaker 05:
But he's still arguing there's nonetheless an appearance of impropriety, especially given everything.

[00:23:10] Speaker 05:
So you had a judge who was involved in the choice to institute the proceeding who has an appearance of impropriety potentially, if we credit him.

[00:23:20] Speaker 05:
Shouldn't that be unwound?

[00:23:22] Speaker 03:
Your Honor, I don't think that that's the right way to think about this.

[00:23:25] Speaker 03:
The appearance of impropriety question here collapses with the more specific regulation that says that APJs can hold stock up to the amount that's specified in the regulation.

[00:23:36] Speaker 05:
Okay, but suppose I thought there was an appearance of impropriety.

[00:23:38] Speaker 05:
Let's just start with that.

[00:23:39] Speaker 05:
Suppose I thought there was.

[00:23:41] Speaker 05:
What would I do then?

[00:23:43] Speaker 05:
Do I need, if I thought, yeah, there's an appearance of impropriety, should I unwind the entire institution decision?

[00:23:49] Speaker 05:
Because that person with an appearance of impropriety participated in a decision.

[00:23:54] Speaker 03:
Sure.

[00:23:55] Speaker 03:
I mean, again, I don't want to sort of fight the premise here.

[00:23:59] Speaker 03:
I mean, I don't think that the question here is about the appearance of impropriety.

[00:24:02] Speaker 03:
It's whether or not

[00:24:03] Speaker 03:
the de minimis regulations apply, but even assuming that you thought that there was some ethical problem that affected the final written decision, I think it would be... I don't even understand that answer.

[00:24:12] Speaker 05:
The regulations do have an express de minimis, but they also have a separate appearance of impropriety condition.

[00:24:21] Speaker 05:
So clearly, you could have an appearance of impropriety that causes the need for you to recuse yourself, right?

[00:24:27] Speaker 03:
So your honor, I think there's two points that are important here.

[00:24:30] Speaker 03:
So the one is that the regulation that centripetal is pointing to that talks about the appearance of partiality is one that's about personal and business relationships.

[00:24:40] Speaker 03:
It's separate from the regulation that specifically talks about personally held stock.

[00:24:45] Speaker 03:
And that regulation, as well as many of the other regulations that centripetal is pointing to, point back to the security holdings exemption, because that is a circumstance in which the Office of Government Ethics has made the determination that the interest at issue is so remote and so inconsequential that it won't affect the integrity of the proceeding itself.

[00:25:07] Speaker 05:
So are you saying the appearance of impropriety provision does not ever read upon the de minimis provision, that the de minimis provision

[00:25:15] Speaker 05:
You are free and clear under the de minimis provision no matter what.

[00:25:19] Speaker 05:
This regulatory scheme creates a process by which you can never have an appearance of impropriety even as long as you're within that de minimis amount.

[00:25:28] Speaker 03:
Your Honor, if the only basis that is being asserted for recusal is one about stock ownership,

[00:25:35] Speaker 03:
then you look to the stock exemption provision.

[00:25:40] Speaker 03:
If there are other reasons to think that there may be effects outside, then it is possible that the appearance of impropriety section would kick in.

[00:25:47] Speaker 05:
So wait, let me be very clear.

[00:25:50] Speaker 05:
Are you saying the appearance of impropriety section can never read on, can never be affected by someone who is being considered under that de minimis category?

[00:26:04] Speaker 03:
Your Honor, OGE has said that this is what determines whether or not there's an appearance of impropriety.

[00:26:11] Speaker 03:
They have said that if an APJ or another government officer who is covered by these regulations holds $15,000 or less in a party to a particular matter, that that satisfies.

[00:26:22] Speaker 01:
For stock ownership, right?

[00:26:23] Speaker 01:
Just based on the sheer fact of ownership.

[00:26:25] Speaker 01:
If that APJ sends an email to their partner saying, woohoo, I'm on a case that is going to either increase or decrease the value of our Cisco stock, even though that's related to the stock ownership, that would be a separate basis for

[00:26:44] Speaker 05:
impropriety right that's correct your honor if there was some other basis to assert a conflict that might you know that the appearance of impropriety section might kick in where we're just talking about the ownership of stock and you don't think that that could apply here don't worry about your time okay don't worry about the time I'm gonna give you lots of time but you don't think that could apply here where we're talking about a three point two billion dollar judgment in a related district court proceeding that could be affected by

[00:27:13] Speaker 05:
by what is done here.

[00:27:15] Speaker 05:
So, I mean, I don't know what $3.2 billion could do to Cisco stock, but it's got to be something.

[00:27:21] Speaker 05:
And I mean, I don't know how many shares this APJ had.

[00:27:24] Speaker 05:
It's not many.

[00:27:25] Speaker 05:
I know it's not many because he's under that threshold.

[00:27:27] Speaker 05:
But you're talking about a $3.2 billion judgment.

[00:27:30] Speaker 05:
I mean, that's a really big number.

[00:27:31] Speaker 05:
That doesn't matter.

[00:27:33] Speaker 05:
That doesn't affect anything.

[00:27:34] Speaker 03:
So, Your Honor, I would point you to, if you look at the specific securities exemption regulation, and particularly subsection B, which is about non-parties, there's an example that's given in that situation where it talks about an employee who's deciding whether to approve a drug for a particular company that would compete with another company where that employee owns stock.

[00:27:56] Speaker 03:
And what it says is that in that circumstance, the employee can have up to $25,000.

[00:28:00] Speaker 03:
I think that looks very similar to what we have here.

[00:28:03] Speaker 03:
It may be that a decision in this case would have affected a company that when APJ McNamara was making the institution decision, it may have affected a company in which he owned a small amount of stock.

[00:28:15] Speaker 03:
But these regulations are very explicit that they apply.

[00:28:18] Speaker 03:
And they're designed that way.

[00:28:19] Speaker 03:
They're supposed to make it easy for executive employees like APJs to make the decision about whether they can participate in particular matters without having to ask sort of ephemeral questions.

[00:28:30] Speaker 03:
They can look at their stock ownership and see if it's below the threshold that's set by these regulations.

[00:28:36] Speaker 05:
Can I get you now to pivot and address Williams?

[00:28:39] Speaker 05:
Mr. Clement was very careful each time he talked about Williams to say the, quote, thrust of Williams.

[00:28:43] Speaker 05:
I believe the thrust word was used three times.

[00:28:45] Speaker 05:
And I think that there's probably a reason that he's characterizing it that way.

[00:28:49] Speaker 05:
Because it does seem to me, if he's right about Williams, there are a lot of appellate courts in the country that probably have some constitutionally infirmed decisions out there.

[00:28:59] Speaker 05:
Because when one judge recuses themselves, it doesn't necessarily cause the other two judges on that panel to recuse themselves.

[00:29:06] Speaker 05:
We, as a matter of process, usually substitute in a different judge just for the recusal person.

[00:29:11] Speaker 05:
So can you help me understand his Williams argument?

[00:29:15] Speaker 03:
Sure.

[00:29:15] Speaker 03:
I don't read Williams to say that if there's someone on a panel who has a conflict, automatically all the other judges, that conflict is attributed to them.

[00:29:24] Speaker 03:
I mean, for one thing, the case of Williams is very different than this case.

[00:29:30] Speaker 03:
In Williams, it was a situation where the justice on the Supreme Court had early participated in the exact same case.

[00:29:37] Speaker 03:
That person had, you know, that justice had previously authorized the death penalty against the litigant that was then before the state Supreme Court.

[00:29:46] Speaker 03:
And the Supreme Court said that the justice, because of his earlier participation in the case, might be psychologically wedded to his decision to, you know, grant relief or not grant relief.

[00:29:56] Speaker 03:
And in the discussion of remedy, what the Supreme Court noted was that it is true that the other justices on the panel may have been exposed to this justice, but that it was okay for it to go back to the other justices to render an independent decision looking at the facts themselves.

[00:30:12] Speaker 03:
And here, we have no asserted conflict.

[00:30:16] Speaker 03:
you know, by itself, either a financial stake or another basis for conflict of the three APJs.

[00:30:22] Speaker 05:
What about the fact that the director of the PTO has now stepped in and said, you know what, we're just not going to have any more board judges who own any stock at all.

[00:30:33] Speaker 05:
I mean, that sort of helps, doesn't it?

[00:30:37] Speaker 05:
The claim here that

[00:30:39] Speaker 05:
There is potentially an appearance of impropriety with adjudicators holding stock in a case in which they're participating as an adjudicator.

[00:30:47] Speaker 03:
You know, I don't think it helps the claim here because the claim here is about what the ethics regulations do or don't say.

[00:30:53] Speaker 03:
And the PTO guidance, which is a paneling procedure, was very explicit that it was going beyond what is required by the ethics regulations and not calling into question anything that happened before that was an application of the specific, you know, particularly the securities regulations that we have at issue here.

[00:31:12] Speaker 04:
Can you just briefly address what I saw was a jurisdictional argument raised in terms of what we could do with respect to the institution decision as opposed to what we might do with respect to the final written decision?

[00:31:24] Speaker 03:
So Your Honor, we haven't taken a specific position on that.

[00:31:27] Speaker 03:
We haven't been authorized to take a position on that.

[00:31:31] Speaker 03:
We haven't disputed that if the court thought

[00:31:33] Speaker 03:
that there was some ethical problem that affected the final written decision.

[00:31:37] Speaker 03:
This court could vacate the final written decision.

[00:31:40] Speaker 03:
But we haven't taken a position on what about if the court would need to go beyond that or could just do that and send it back to the PTO to make a decision about how to proceed.

[00:31:49] Speaker 05:
Can I just ask another question, which is sometimes we are asked to send things back to a different panel.

[00:31:59] Speaker 05:
And not always because there is a letter of the law in propriety, but sometimes it's just an appearance of impropriety.

[00:32:08] Speaker 05:
Certainly the decision in this case, to the extent that we commented on the appellant's brief, the decision in this case also reads quite strongly as written.

[00:32:25] Speaker 05:
Is it prudent that maybe three new sets of eyes, if this case goes back, should be assigned to it?

[00:32:31] Speaker 05:
And ought we to do that?

[00:32:33] Speaker 05:
Or just in the interest of prudence?

[00:32:35] Speaker 05:
Or ought the director to do that?

[00:32:38] Speaker 05:
I mean, is your argument going to be to me that we should leave that in the capable hands of the director?

[00:32:43] Speaker 03:
Your Honor, I think that this court should leave that in the hands of the agency to make that decision.

[00:32:48] Speaker 03:
I mean, I don't see that centripetal is specifically asked for that relief.

[00:32:52] Speaker 03:
And again, I mean, I think the important point here is that there's no suggestion.

[00:32:57] Speaker 05:
I kind of think he asked for that relief.

[00:32:58] Speaker 05:
I mean, maybe I'm wrong.

[00:32:59] Speaker 05:
Maybe the blue brief didn't technically ask for it, but it felt like he asked for that relief here.

[00:33:03] Speaker 05:
But maybe I'm mistaken.

[00:33:06] Speaker 05:
So if he did ask for that relief, what's your response?

[00:33:09] Speaker 03:
I still think it would be appropriate to allow the agency to make that decision in the first instance and decide whether or not there's any reason to move this to a different set of judges, particularly when all of the judges that sat on this panel are not even asserted to have their own conflict of interest.

[00:33:27] Speaker 03:
I wonder if there are any other questions.

[00:33:30] Speaker 03:
Thank you.

[00:33:38] Speaker 02:
May I proceed, Your Honor?

[00:33:40] Speaker 02:
Yep.

[00:33:40] Speaker 02:
Good morning.

[00:33:41] Speaker 02:
May it please the court, Mark Fleming on behalf of the Appellees, and thank you very much to NC Central for its hospitality this morning.

[00:33:48] Speaker 02:
I would start, and I recognize I'm the only one on this side of the V who will talk about the patent merits, so I want to make sure I'll get to that.

[00:33:54] Speaker 02:
On the recusal issue, I think it's worth underscoring there is an alternative ground and basis for the board's decision here.

[00:34:00] Speaker 02:
And so in order to reverse the board's decision on the recusal issue, this court would have to find that it was an abuse of discretion.

[00:34:07] Speaker 02:
for the board to find that centripetal failed to timely raise this issue.

[00:34:11] Speaker 02:
And the facts here are important.

[00:34:13] Speaker 02:
On November 9th, 2022, centripetal told the Supreme Court of the United States that it knew about APJ McNamara's stock holding and it said, quote, federal regulations permit

[00:34:24] Speaker 02:
government employees to participate in matters in which they possess a financial interest."

[00:34:30] Speaker 02:
That's within the de minimis exception that we've been talking about.

[00:34:33] Speaker 02:
Centripetal to this day, not in its briefing to the board, not in its briefing to this court, and not in Mr. Clement's advocacy this morning, has not explained why it waited from November 9th to December 30th, the Friday before the New Year's holiday and four business days before the board faced a statutory deadline

[00:34:52] Speaker 02:
to bring this issue to the board without seeking authorization and without meeting and conferring with Palo Alto networks.

[00:34:58] Speaker 05:
Well, I think that's actually a fair characterization.

[00:35:01] Speaker 05:
I think that in their reply brief after you raised this argument, a great brief pages 10 through 12, they did in fact explain that.

[00:35:08] Speaker 05:
They explained that they had to seek

[00:35:10] Speaker 05:
back copies of, I think, securities information about the judges and they didn't have, in a timely fashion, all of the necessary information they had.

[00:35:22] Speaker 05:
At least that's what they say on Gray Briefs, page 10 to 12.

[00:35:24] Speaker 05:
So to the extent that you said they didn't respond to it, I think that's inaccurate.

[00:35:27] Speaker 05:
Whether you don't like their response is a different question, but don't say they didn't respond to it because they did.

[00:35:31] Speaker 02:
Chief Judge Moore, they did not say that to the board, and certainly it's not a basis for finding of abusive discretion on the part of the board to rely on something that comes up for the first time in the reply brief on appeal.

[00:35:42] Speaker 02:
But even taking those statements on their face, which I'm happy to do, they represent that they had what they were looking for by November 16th.

[00:35:48] Speaker 02:
That still leaves six weeks between November 16th and December 30th.

[00:35:52] Speaker 05:
Just out of curiosity, when you say they didn't make this argument to the board, was the board presented with

[00:35:57] Speaker 05:
this timeliness argument?

[00:35:58] Speaker 02:
Absolutely.

[00:35:59] Speaker 02:
And they relied on it in their decision.

[00:36:02] Speaker 02:
By whom?

[00:36:02] Speaker 05:
Who presented the title?

[00:36:03] Speaker 02:
Palo Alto Networks.

[00:36:04] Speaker 02:
In opposing the recusal motion, pointed out and attached as an exhibit the pages of the cert reply.

[00:36:10] Speaker 02:
It's on page 6692 of the appendix.

[00:36:13] Speaker 05:
And they didn't respond to that in the proceedings before the board?

[00:36:17] Speaker 02:
To my knowledge, I don't know what the response was other than to say we needed time to get all the relevant disclosures.

[00:36:22] Speaker 02:
Which, of course, they had by November 9th.

[00:36:24] Speaker 05:
That is a response, and they assert to us it was not until November 16th the Department of Commerce responded and sent Tribunal's request for additional disclosures and warned, I'm quoting from page 10 to 12, I mean, if that is the same thing they argued to the Board, it seems like they did argue this to the Board.

[00:36:40] Speaker 02:
They did not argue November 16th to the Board.

[00:36:43] Speaker 02:
I mean, I invite Mr. Clement to contradict me, but that is not something the board had ever heard.

[00:36:47] Speaker 02:
It came up the first time.

[00:36:47] Speaker 05:
Well, since you're the only person that is going to actually talk about the patent issues, and we've had an awful lot of discussion about this, why don't you move to that?

[00:36:54] Speaker 02:
As far as I understand it, the written description argument depends on two assumptions, neither of which is correct.

[00:37:00] Speaker 02:
The first is that the board somehow found that the claims were limited to applying the filtering rules directly to encrypted packets.

[00:37:08] Speaker 02:
And the second is that the board somehow found that those claims were unsupported by written description.

[00:37:12] Speaker 02:
Neither of those is right.

[00:37:13] Speaker 02:
The board didn't reach a written description finding, it told you.

[00:37:16] Speaker 02:
It didn't reach a written description finding in footnote seven.

[00:37:18] Speaker 02:
And the board expressly says that the patent does cover filtering encrypted packets by correlating them with unencrypted packets and Centripetal does not deny this.

[00:37:28] Speaker 02:
They say on page 49 of their blue brief that their claims are that broad and they do not require the rules to analyze the encrypted payload portion of the encrypted packets.

[00:37:37] Speaker 02:
They said the same thing to the board in their patent owner response.

[00:37:41] Speaker 02:
on page 4631 of the appendix.

[00:37:44] Speaker 02:
So the question before the board was, does the Buruganahalli prior art reference disclose the claim limitation in all its breadth, or at least in some of its breadth, which is covering filtering encrypted packets by correlating them with unencrypted data in the handshake packets.

[00:38:00] Speaker 02:
And there's plainly substantial evidence.

[00:38:02] Speaker 02:
What do we do?

[00:38:03] Speaker 05:
Let's turn to the issue that Judge Cunningham asked a lot of questions about, which is if the board did not properly consider the evidence of copying in the context of its obviousness analysis, what ought we to do with this case?

[00:38:18] Speaker 02:
I want to answer that.

[00:38:21] Speaker 02:
Well, I think the answer to the question as presented is if this court concludes that the board did not correctly consider something and that it would make a difference, the outcome of the case, then obviously the court's practice is to vacate and remit.

[00:38:34] Speaker 02:
However, I would like to address the premise of the question.

[00:38:37] Speaker 02:
which is the notion that the board did not address the argument that centripetal made with respect to copying, which it most certainly did.

[00:38:44] Speaker 02:
And I think in that regard, it's important to look at the argument that centripetal actually made, which is on pages 4680 and 4681 of the appendix.

[00:38:52] Speaker 02:
This is the end of their patent owner response.

[00:38:54] Speaker 02:
pages 67 to 70, and it's very clear from this argument, and I invite the court, thank you for turning to it, that what Simtripital was arguing was that the board should defer to the finding of the district court in the Cisco case.

[00:39:11] Speaker 05:
And there is a 4680.

[00:39:13] Speaker 05:
4680.

[00:39:15] Speaker 05:
Okay, no, they said it, they talked about the district court case and then they gave all the specific exhibits and the specific page numbers.

[00:39:22] Speaker 05:
And it does not amount to that much, actually.

[00:39:24] Speaker 05:
They didn't point to that many specific things.

[00:39:26] Speaker 05:
They sure as heck could have pointed to more, but they didn't.

[00:39:29] Speaker 05:
They only pointed to a few things.

[00:39:31] Speaker 05:
So I don't think that the characterization the board made about how it would have to go searching through 3,000 pages or more of evidence is at all accurate.

[00:39:38] Speaker 05:
They pointed at this very page to specific pages of the record, specific testimony that supported their claim of copying.

[00:39:47] Speaker 05:
The board didn't have to go on some hunting and pecking and fishing expedition.

[00:39:50] Speaker 05:
Fair enough, the board could have said, in these few pages you pointed to, I don't see a sufficient case.

[00:39:56] Speaker 05:
But that was one of the things that bothered me about the board's opinion.

[00:40:00] Speaker 05:
They just very flippantly, quite frankly,

[00:40:03] Speaker 05:
said, I'm not going to go fishing for this evidence.

[00:40:06] Speaker 05:
They didn't have to.

[00:40:07] Speaker 05:
The evidence is articulated right here in the brief that was filed, the particular pages of evidence.

[00:40:14] Speaker 02:
I think what the board was saying, if I may, is if you look at the sentence immediately preceding that string site, it says, petitioner ignores that the court in the Cisco litigation also found

[00:40:26] Speaker 02:
compelling evidence of copying and that the evidence of copying was public.

[00:40:30] Speaker 05:
And that the evidence of copying was public at the time it filed the petition.

[00:40:33] Speaker 05:
Exactly, right?

[00:40:34] Speaker 05:
There's an and.

[00:40:36] Speaker 05:
They're not just relying on the court finding.

[00:40:38] Speaker 05:
They're saying and, and here is all that evidence.

[00:40:40] Speaker 05:
And then there's a bunch of C4 examples.

[00:40:43] Speaker 05:
Now, fair enough.

[00:40:44] Speaker 05:
If the board wanted to say, I know you said CEG, but these are the only ones I'm going to look at, I'm not going to go hunting and pecking through the rest of the record because this thing is too big and you had to put me on notice.

[00:40:55] Speaker 05:
But it had to at least address these, these specific pieces of evidence.

[00:40:59] Speaker 02:
So the centripetal did not put the entire record before the board.

[00:41:04] Speaker 02:
It didn't put any of the documents that supposedly reflected copying before the board.

[00:41:08] Speaker 02:
None of the trial exhibits were before the board.

[00:41:10] Speaker 02:
You're right, Your Honor.

[00:41:11] Speaker 02:
These particular handful of pages of trial transcript were filed with the board.

[00:41:16] Speaker 05:
The rest of the record on which the judge... They didn't have to... the board judges don't have to look at the rest of the record then, but they have to look at these pages.

[00:41:24] Speaker 05:
These specific pages were called out as presenting evidence of copying and they were given to the board.

[00:41:30] Speaker 02:
I think it is fair for the board to decide.

[00:41:32] Speaker 02:
I don't.

[00:41:33] Speaker 02:
Well, then if the court has made that determination, then I'm not going to quibble with it.

[00:41:38] Speaker 02:
Certainly, it is within the court's power to remand for further consideration.

[00:41:42] Speaker 02:
I think it would be a futile exercise, frankly.

[00:41:44] Speaker 02:
And I think the centripetal will presumably just appeal again.

[00:41:47] Speaker 02:
It would be a waste of the board's time and a waste of this court's time.

[00:41:50] Speaker 02:
But the court obviously has the authority to do it.

[00:41:52] Speaker 02:
I'm not going to say that you don't.

[00:41:54] Speaker 01:
I guess I don't think.

[00:41:56] Speaker 01:
Is that because you think the evidence of copying is insufficient to overcome the obviousness determination here?

[00:42:02] Speaker 02:
Absolutely, Your Honor.

[00:42:03] Speaker 02:
I mean, the board said that the Burugana-Hawley reference is essentially anticipatory.

[00:42:07] Speaker 02:
The only reason there was a second reference offered is because Burugana-Hawley doesn't expressly recite the proxy system by name.

[00:42:14] Speaker 02:
Here on appeal, centrifugal doesn't deny that Burugana-Hawley does disclose routing to a proxy system.

[00:42:20] Speaker 02:
So we're talking about an anticipatory reference, essentially.

[00:42:23] Speaker 02:
And the board essentially said that even strong secondary considerations would not be sufficient to overcome a very strong case of obviousness.

[00:42:32] Speaker 05:
Where did they say that?

[00:43:02] Speaker 02:
On page 50 of the appendix, the final paragraph, for the reasons described above, we find that Burgan Ahali presents a strong case of obviousness and, in fact, is essentially anticipatory, skipping down to the penultimate sentence.

[00:43:16] Speaker 02:
Thus, even if patent owner's objective evidence was strong, we would find it insufficient to establish non-obviousness.

[00:43:21] Speaker 02:
We also find, however, that the evidence offered would be insufficient to overcome even a weak case of obviousness.

[00:43:27] Speaker 02:
So I think that makes very clear what the board would say on remand.

[00:43:29] Speaker 02:
Perhaps they could have said it more clearly.

[00:43:32] Speaker 02:
This court reviews judgments and not opinions.

[00:43:34] Speaker 02:
Again, I think it would be a futile exercise to remand on this record and force the board to go through it again.

[00:43:38] Speaker 02:
The court obviously can't read.

[00:43:39] Speaker 05:
Actually, this court doesn't read.

[00:43:40] Speaker 05:
You're completely wrong.

[00:43:41] Speaker 05:
We do not review judgments, not opinions, in agency cases.

[00:43:44] Speaker 05:
We are bound by chennery.

[00:43:45] Speaker 05:
We have to actually review opinions and rationales provided by the board.

[00:43:48] Speaker 02:
All Chenery means is that you cannot affirm on a ground not relied on by the board.

[00:43:53] Speaker 02:
But this is not a ground not relied on by the board.

[00:43:55] Speaker 02:
The board considered the copying evidence and determined that it would not overcome the very strong case of obvious that was shown.

[00:44:01] Speaker 02:
It's not a Chenery violation to affirm on that basis simply because the board opinion was not written the way perhaps I would have written it or the way your honor would have written it.

[00:44:11] Speaker 02:
But again, I'm not here to say that you can't remand it if you think that's appropriate.

[00:44:15] Speaker 02:
You certainly can.

[00:44:15] Speaker 04:
But I think it's a little stronger

[00:44:18] Speaker 04:
consider the copying evidence I'm just looking at from its page 54 and looking at that I mean what the board says here is particularly succinct is the word I'll use and when you see what it's saying here it's hard for me to read these few sentences to say that the board did

[00:44:39] Speaker 04:
adequately considered the copying evidence.

[00:44:42] Speaker 02:
Judge Cunningham, all I can say is I think it matched the succinctness of the argument that centripetal itself made, which I directed the court to on 4680.

[00:44:48] Speaker 02:
I mean, after all, we're only talking about an unelaborated string site to a handful of transcript pages where the board had not been offered a more fulsome version of the record from which copying could be concluded and where the arguments- The problem with that is you're talking about, you characterize it as just a string site with a bunch of the,

[00:45:07] Speaker 05:
You have a district court judge that concluded there was copying here.

[00:45:10] Speaker 05:
Now, they're not bound by that, but it is persuasive.

[00:45:13] Speaker 05:
It's persuasive evidence.

[00:45:14] Speaker 05:
You have a fact finder that concluded that the copying here, and it was significant.

[00:45:20] Speaker 05:
And so, well, it turns out that fact finder had all kinds of infirmities.

[00:45:23] Speaker 05:
I grant you that, but it doesn't make it any less true that another adjudicator who looked at all this reached a strong conclusion about it.

[00:45:34] Speaker 02:
In a different context, the context of willfulness, so issues like nexus and then the obviousness requirements, and it wasn't comparing it against the very strong prima facie case of obviousness that had already been found using the Burugana-Hawley prior arc.

[00:45:48] Speaker 02:
So it's a very different context.

[00:45:50] Speaker 02:
Your Honor is right, nothing in the prior vacated opinion in any way bound the board.

[00:45:55] Speaker 02:
And the argument that was made was simply, and this is, you know, the string side is there, but the string side is there in order to show why the district court reached the decision it did.

[00:46:04] Speaker 05:
What do I do with the following?

[00:46:06] Speaker 05:
I really don't like the board's opinion where it comes awfully close to doing something with regard to written description.

[00:46:14] Speaker 05:
Yes, it has a footnote that says, despite all the rhetoric in my opinion, I'm not actually deciding this case on the basis of written description.

[00:46:21] Speaker 05:
Boy, there's a lot in there that feels like it does not belong there and is not appropriate for the board to do.

[00:46:27] Speaker 05:
What do I do with that?

[00:46:29] Speaker 05:
I mean, I kind of think in light of all this, this probably ought not to go back to the same judges if it goes back.

[00:46:35] Speaker 05:
But because I really think they came very close on that written description thing to doing something that seems really not appropriate.

[00:46:42] Speaker 02:
So Chief Judge Moore, I think I can explain what the board was doing, but I want to answer the question the way you've asked it.

[00:46:49] Speaker 02:
There isn't a written description validation.

[00:46:52] Speaker 02:
It's an obviousness and validation.

[00:46:54] Speaker 02:
They're clear about that.

[00:46:55] Speaker 02:
If the court finds some infirmity with the obviousness analysis, then obviously remanding is appropriate.

[00:47:02] Speaker 02:
If the obviousness analysis is correct, then I think the thing to do is to write an opinion that says precisely what your honor just said and say we remind the board that 112 considerations are not appropriate when doing a 103 analysis.

[00:47:15] Speaker 02:
We determine that the 103 analysis here satisfies substantial evidence review and it's being affirmed on that basis, but we urge the board to be, to stay in its lane.

[00:47:24] Speaker 05:
Well, we review obviousness de novo not for substantial evidence, but

[00:47:27] Speaker 02:
Please come true, but the underlying findings, whether we're gonna Holly as prior art discloses the claimed invention is a finding of fact which would be reviewed for substantial evidence.

[00:47:38] Speaker 02:
Certainly the underlying conclusion once you've made the findings as to whether there's a prima facie case of obviousness, whether there are secondary considerations.

[00:47:46] Speaker 02:
The weighing of all that together is reviewed de novo, but they haven't made an argument as to that.

[00:47:50] Speaker 02:
All of their arguments as to whether Burunga-Nahale discloses the claimed invention are substantial evidence findings, except for this effort to gin up a fictional written description finding, which simply doesn't exist.

[00:48:01] Speaker 02:
What I think the board was doing here,

[00:48:03] Speaker 02:
was reacting to Centripital's effort to read the claims more narrowly than they are actually recited.

[00:48:10] Speaker 02:
Centripital was coming into the board and saying, no, no, no, these are narrow claims because they require applying the filtering criteria to encrypted packets.

[00:48:20] Speaker 02:
Nothing in the claim says that.

[00:48:21] Speaker 02:
Nothing in the spec actually says that.

[00:48:23] Speaker 02:
And that's what we had argued from the very beginning, which is that the claims read on not just applying rules to encrypted packets, but applying rules to unencrypted packets in the initial handshake message and in court.

[00:48:38] Speaker 02:
I'm sorry, Your Honor.

[00:48:39] Speaker 04:
If we decide to remand and send it back, do you have any objection to new APJs

[00:48:46] Speaker 04:
reviewing the record and dealing with anything that we say needs to be done on remand.

[00:48:50] Speaker 02:
We don't object to that, Your Honor.

[00:48:51] Speaker 02:
I would assume that would be up to the director through her statutory authority to determine which APJs will sit on the case.

[00:49:00] Speaker 02:
But ultimately, this court has the authority to do that.

[00:49:04] Speaker 05:
Okay, thank you, counsel.

[00:49:06] Speaker 05:
Mr. Clement, we'll allow them to go way over, so we'll give you some latitude for short.

[00:49:15] Speaker 00:
Thank you, your honors.

[00:49:16] Speaker 00:
I think I'll just need a couple of minutes for a couple of points in rebuttal.

[00:49:19] Speaker 00:
First of all, just on the recusal issue, I do think it is worth recognizing that the PTO has now decided that this cannot happen to any other litigant.

[00:49:30] Speaker 00:
And so I don't know that you can really convert this to a class of one case, but I think in considering the appearance to any objective observer,

[00:49:37] Speaker 00:
to what has happened to my client in this case.

[00:49:40] Speaker 05:
The fact that my client... You have to address first the government's argument that the appearance issue, the appearance provision in the regulations does not actually apply to the de minimis, that there's already been a determination effective in the de minimis that anyone who holds stock under this amount does not create an appearance and propriety.

[00:49:57] Speaker 00:
If that's the right reading of the regulations, then the regulations are unconstitutional as applied here, and I think would be unconstitutional in other cases as well, with all due respect.

[00:50:09] Speaker 00:
Because appearance of impropriety is not just a regulatory standard.

[00:50:13] Speaker 00:
I mean, the due process clause gives a litigant the entitlement to an adjudicator who has the reality and the appearance of impartiality.

[00:50:23] Speaker 05:
Yes, but the appearance, there's been an effectively made decision that the appearance of impropriety is not implicated by this de minimis amount of simply a stock holding.

[00:50:35] Speaker 05:
That doesn't mean that there couldn't be other things like Judge Hughes gave this example of an email where, yay, I'm on a Cisco case, whatever.

[00:50:41] Speaker 05:
There could be other factors that could impact.

[00:50:45] Speaker 05:
But if the only factor being alleged is $1,000 of stock or something, that the regulation expressly covers that.

[00:50:52] Speaker 00:
With all due respect, they don't think the executive branch gets the last word on that.

[00:50:56] Speaker 00:
For them to just say, what if they said under these same regs that the threshold is $250,000?

[00:51:02] Speaker 01:
Then you make a constitutional attack on the regulation itself, not as applied.

[00:51:11] Speaker 00:
No, with all due respect, I don't think so.

[00:51:16] Speaker 00:
Because that would apply to anything under $250,000.

[00:51:18] Speaker 00:
And it actually would probably be constitutional as applied to plenty of individuals.

[00:51:23] Speaker 00:
But it wouldn't be constitutional as applied to larger holdings.

[00:51:27] Speaker 00:
And obviously, Congress has made a much different judgment in 455.

[00:51:32] Speaker 00:
And even though 455 is not directly applicable, I think for this court, making a judgment about appearance of impropriety

[00:51:40] Speaker 00:
I think should take into account another coordinate branch of government that has a very different view of what, you know, less than $5,000 of stock does.

[00:51:50] Speaker 00:
And of course, this court in the prior decision in Cisco against St.

[00:51:54] Speaker 00:
Tripital specifically said that with respect to Judge Morgan's holdings or his wife's holdings, to be more precise,

[00:52:00] Speaker 05:
Yeah, but what I'm worried about here is, I mean, the federal judiciary has 1,000 judges across the country.

[00:52:06] Speaker 05:
In terms of adjudicators within the Article 1 branch, you're talking about tens of thousands of individuals.

[00:52:13] Speaker 05:
So I just am worried.

[00:52:15] Speaker 05:
that the government very consciously, they expressly say so in the regulation, we don't want there to be questions in people's mind based on job duties about whether they fall within this de minimis amount or not, so we are carefully curating this to apply to all government employees.

[00:52:33] Speaker 00:
Right, and the PTO has already made a judgment.

[00:52:36] Speaker 00:
that that really isn't fair to apply to APJs because of the specific role that they take.

[00:52:43] Speaker 00:
So going forward, this is never going to happen.

[00:52:45] Speaker 05:
Wait a minute, did the director make a decision that's not fair or did she make a decision that this has presented such a headache?

[00:52:51] Speaker 05:
We have enough APJs, let's just avoid the headache in the future and not deal with this.

[00:52:55] Speaker 00:
So two things, Your Honor.

[00:52:57] Speaker 00:
First of all, she made the judgment, I think, based on this very case.

[00:53:00] Speaker 00:
Oh, I have no doubt about that.

[00:53:02] Speaker 00:
Well, and then the idea that there wouldn't be a remedy in this very case is concrete.

[00:53:07] Speaker 05:
But she told you there's no remedy in this case, actually.

[00:53:09] Speaker 05:
Her decision was

[00:53:11] Speaker 05:
In the future, you know what, to avoid people making such a fuss about this, we're going to just say we won't do this anymore.

[00:53:18] Speaker 05:
But it is not wrong, and it has absolutely no impact on existing cases.

[00:53:23] Speaker 05:
She was really clear about that.

[00:53:25] Speaker 00:
Well, with respect, she wasn't clear about all of that.

[00:53:27] Speaker 00:
She didn't say,

[00:53:28] Speaker 00:
This has no, there's nothing wrong here.

[00:53:31] Speaker 00:
I just want to avoid the head.

[00:53:32] Speaker 00:
Actually, she did.

[00:53:33] Speaker 00:
No, she said there are legitimate concerns that are raised in these cases.

[00:53:38] Speaker 00:
I mean, we can look at it, but she does not say.

[00:53:40] Speaker 05:
If she said there's nothing, if she didn't say, if she did not conclude that this has no, why would she say this has no impact on existing or past cases?

[00:53:48] Speaker 05:
Why would she say that?

[00:53:49] Speaker 05:
Why would she have that?

[00:53:51] Speaker 05:
If she actually, if you're telling me that in her

[00:53:54] Speaker 05:
executive order, whatever it's called, director's order, that she decided, yeah, this is wrong.

[00:54:00] Speaker 05:
This is wrong.

[00:54:01] Speaker 05:
What's wrong in light of this case?

[00:54:02] Speaker 05:
Why wouldn't she have done something about this case?

[00:54:05] Speaker 00:
So with respect, I think that she didn't do something about this case because my client was singled out for unfavorable treatment, which explains why we're making this claim.

[00:54:16] Speaker 00:
I think it explains and frankly justifies the rhetoric in the brief, but we obviously disagree about that.

[00:54:21] Speaker 00:
But I think my client is singled out and treated horribly unfairly in this case and makes it a class of one case.

[00:54:28] Speaker 00:
I know that, and I'm supposed to be a zealous advocate for my clients.

[00:54:33] Speaker 00:
And if the rules of this court don't allow that, I think that's frankly a problem.

[00:54:37] Speaker 04:
Now, moving to- Counsel, I think you can be a zealous advocate without using extended rhetoric.

[00:54:43] Speaker 04:
I don't think that those two things have to rise and fall together by any means.

[00:54:46] Speaker 00:
Well, you'll have to tell me what rhetoric really offended you, because I think this brief was an excellent brief and consistent with the briefs that I filed in every regional circuit in the Supreme Court of the United States.

[00:54:57] Speaker 00:
I don't know.

[00:54:57] Speaker 05:
I've seen quite a few of your briefs.

[00:54:58] Speaker 05:
I've never seen one written like this.

[00:54:59] Speaker 05:
So there you have it.

[00:55:00] Speaker 00:
But anyway, I think- Well, in not every case does my client get treated this shabbily by the federal government.

[00:55:06] Speaker 05:
I don't think that this is being fruitful any longer.

[00:55:07] Speaker 05:
Do you have anything further?

[00:55:08] Speaker 05:
Thank you, counsel.

[00:55:09] Speaker 05:
This case is taken under submission.