[00:00:01] Speaker 02:
Our next case is number 2023, 2077, Odyssey Logistics and Technology Corporation versus Vidal.

[00:00:09] Speaker 02:
Mr. Bauer.

[00:00:10] Speaker 03:
May it please the court?

[00:00:12] Speaker 03:
The district court below dismissed the case for lack of subject matter jurisdiction under Rule 12B.

[00:00:24] Speaker 03:
one, and it found it because it lacked subject matter jurisdiction.

[00:00:29] Speaker 03:
It could not proceed to hear the case.

[00:00:34] Speaker 03:
As a consequence, the only issue in this appeal is whether the district courts erred in concluding that it lacked subject matter jurisdiction.

[00:00:46] Speaker 03:
I know that we will probably get into some of the issues regarding forfeiture and race judicata and the procedural status of the case, but I think that the only issue, and it's a threshold issue, is the question of subject matter jurisdiction.

[00:01:06] Speaker 03:
Now, appellant in its blue brief showed

[00:01:11] Speaker 03:
that what is at issue here is an undisputed violation of the Appointments Clause of the Constitution and the appellant use of the remedy, sui generis remedy, specified by the US Supreme Court in Arthrex and by this court in Belloro Global.

[00:01:37] Speaker 03:
That is therefore federal question jurisdiction because it involves a violation of the Constitution and the remedy for it.

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its appellant's contention before we go to these other issues that in and of itself means that the federal court has jurisdiction to hear the case.

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The other issues that were raised and framed by the government as precluding judicial review may in fact preclude

[00:02:18] Speaker 03:
review of the merits of appellant's request for a director review, but they don't mean that there is no subject matter jurisdiction.

[00:02:29] Speaker 02:
So Mr. Bauer, in footnote two of your brief on page 20, you appear to say that if the patent office had closed this case on the computer system, you'd lose.

[00:02:48] Speaker 02:
Is that what you're saying there?

[00:02:51] Speaker 02:
That your whole argument depends on the fact that they didn't close the case on their computer system?

[00:03:04] Speaker 03:
Just a second, Judge, I'm looking at the footnote now.

[00:03:15] Speaker 03:
No, there, I think in that footnote, we are addressing the argument, which I think is a different issue, of whether or not the proceeding was closed and therefore cannot be revisited.

[00:03:32] Speaker 02:
My question is, suppose this case, it had been closed in the computer system, would that mean that you would lose, that you couldn't reopen it under those circumstances?

[00:03:46] Speaker 03:
It would mean that the request for direct review would have to be denied.

[00:03:53] Speaker 03:
But what the district court should do is say we have jurisdiction and then say we cannot hear this case because it's closed.

[00:04:06] Speaker 02:
So if it was closed, it couldn't be reopened based on the Supreme Court's decision, Arthur.

[00:04:12] Speaker 03:
Yeah, I think it's, you know, lack of case or controversy would be the issue there.

[00:04:19] Speaker 03:
I would also raise that the Supreme Court recently addressed the issue of subject matters jurisdiction in reviewing this court's decision in Harrell v. Department of Defense.

[00:04:35] Speaker 03:
where the Supreme Court surprisingly held that the 60-day notice for noticing an appeal was not jurisdictional in nature.

[00:04:45] Speaker 03:
And that issue came down after the briefs were submitted in this case, rather surprisingly result because the 60-day was, in that case, was statutory.

[00:04:59] Speaker 03:
It certainly is something that historically had been viewed as jurisdictional, but the Supreme Court said it was not jurisdictional.

[00:05:07] Speaker 03:
And that case has been followed by other circuits,

[00:05:11] Speaker 02:
But that doesn't help you very much if we say that you're right, that the court had jurisdiction, but that the result it reached was necessarily correct because it could not award the relief that you're requesting.

[00:05:25] Speaker 02:
That doesn't help you very much.

[00:05:27] Speaker 03:
The reason why I persist, Your Honor, is the 12b-6 is foreclosed in the district court because there's already been an answer filed to our complaint, which in the Fourth Circuit precludes a 12b-6 motion, and we had already filed a summary judgment motion.

[00:05:50] Speaker 03:
So I would hope that if we were to get a reversal on the subject matter jurisdiction, the court would hear the other motions that the government has, and then it would provide a opinion on our summary judgment motion all at the same time.

[00:06:10] Speaker 03:
So even though this seems to be a question of 12b1 versus 12b6, it does have some practical import which way that goes.

[00:06:21] Speaker 03:
I do have to mention that in the district court's opinion and in the government's motion to dismiss, they did not distinguish between 12b1 or 12b6.

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They went to the waiver and the forfeiture issues and the allegation that the case was closed and says, you know, you should dismiss this case 12b1 or 12b6, you decide.

[00:06:46] Speaker 03:
And it was a conclusion in search of a rationale.

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And 12b1 lack of subject matter jurisdiction is the wrong rationale.

[00:06:54] Speaker 03:
I mean, it has import because then it would cause the courts to not be able to hear certain cases.

[00:07:01] Speaker 03:
So it is important that the subject matter jurisdiction issue be correct.

[00:07:07] Speaker 01:
Councilor, when I consider your arguments and you raise some good points, it seems to me that even following through to the end of those arguments that you lose, I don't see a clear path here for you.

[00:07:27] Speaker 01:
What do you think is a clear path for you?

[00:07:30] Speaker 03:
Well, I think a path forward is to have the director consider our request for review.

[00:07:37] Speaker 03:
And if that can be done, that is the intention of the director.

[00:07:44] Speaker 03:
When the director implemented the 2019 guidelines, it was the intention of the director to give relief

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to what was at that time viewed as an overly narrow interpretation of Alice versus CLS Bank.

[00:08:00] Speaker 03:
It was the intention of the director to give relief.

[00:08:03] Speaker 03:
to applicants in the patent office who are affected by that overly narrow interpretation.

[00:08:09] Speaker 03:
And so the request for director review simply asked the director to let us argue that point.

[00:08:17] Speaker 03:
It is the appropriate remedy.

[00:08:22] Speaker 03:
Why did the director have to allow that?

[00:08:26] Speaker 03:
The director has discretion, your honor, in treating the request for director review.

[00:08:33] Speaker 03:
It's his.

[00:08:34] Speaker 02:
And they refuse to give you director review here, right?

[00:08:38] Speaker 03:
No, your honor.

[00:08:39] Speaker 03:
What happened here is that the request for director review was refused to be considered as a blanket issue.

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And quite frankly, it was an anonymous email that did that.

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So it was not done by the director or a proper delegate of the director.

[00:09:01] Speaker 03:
They refused to even consider it.

[00:09:04] Speaker 03:
Now there are a series of ex-party appeals in which the director will say it's considered, but it's denied.

[00:09:12] Speaker 03:
But here, the reason for not considering it is that we don't consider requests for direct reviews and ex parte appeals.

[00:09:22] Speaker 03:
Well, that's directly contradicted by Belloro-Globo and the Golden Rule Fasteners case.

[00:09:28] Speaker 03:
It is the appropriate remedy in an ex-party appeal.

[00:09:33] Speaker 03:
Again, you can argue forfeiture and a waiver and the closed case, but it is the appropriate remedy.

[00:09:46] Speaker 01:
Councilor, what is your view as to our own jurisdiction to reconsider or consider a decision by the director that's made at its own discretion not to review?

[00:10:00] Speaker 03:
It's a very differential standard, or it would be a very differential standard of review.

[00:10:06] Speaker 03:
And again, the request for director review does not even ask the director to change his mind on anything.

[00:10:14] Speaker 03:
I mean, there's the PTAB decision here was rendered in 2018.

[00:10:20] Speaker 03:
In 2019, these new guidelines come out.

[00:10:23] Speaker 03:
It's a change in the way the Patent Office operates.

[00:10:26] Speaker 03:
There are hundreds or perhaps even thousands of other patents which have been granted under those guidelines, which the appellant here is being denied.

[00:10:36] Speaker 03:
And there is a timing or procedural issue, but there is certainly not a jurisdictional issue.

[00:10:43] Speaker 04:
I would- Can I follow up on your answer to Judge Reno's last question, which you had said that the standard review to apply to the board's discretion to, I mean, the director's discretion to not consider a grant review.

[00:10:59] Speaker 04:
You said that that was very deferential, but haven't we held an ESIP that there's no article three review of such a decision?

[00:11:11] Speaker 03:
In the ESIP case, that was a different procedural status.

[00:11:16] Speaker 03:
That was a petition for a writ of mandamus filed directly with the Federal Circuit.

[00:11:24] Speaker 03:
And the Federal Circuit said under that statute, it could not be granted.

[00:11:29] Speaker 03:
It was not a subject matter jurisdiction.

[00:11:33] Speaker 03:
In fact, if there's a subject matter jurisdiction problem, the court says we don't have jurisdiction and it doesn't issue an opinion.

[00:11:40] Speaker 03:
In fact, the court issued an opinion and says this is just plain wrong because it's not appropriate to do a petition for writ of mandamus in the direct appeal.

[00:11:50] Speaker 03:
Here, Appellant followed the procedure set forth in ESIP.

[00:11:55] Speaker 03:
It filed a separate complaint in the Eastern District of Virginia complaining about the single decision of this blanket email, anonymous email, refusing to consider the request for a direct review.

[00:12:09] Speaker 03:
And what happens, and the only thing that's in the record,

[00:12:13] Speaker 03:
is this two sentences by an anonymous email.

[00:12:18] Speaker 03:
I mean, that also strikes at against the very essence of the Arthrex decision that there has to be some accountability.

[00:12:26] Speaker 03:
And the director has much discretion and latitude how she applies that authority, but she has to have that authority.

[00:12:36] Speaker 02:
Now, prior to this... But cases have to come to a conclusion sometime, and if this was a closed case, you lose, right?

[00:12:47] Speaker 03:
Well, I would agree that if it was a closed case, that if there was a notice of abandonment,

[00:12:54] Speaker 03:
issued in the case, then we would be without hope in the case.

[00:13:01] Speaker 03:
We do, you know, under the facts and particularly under the record, there is nothing to indicate that the case is closed.

[00:13:12] Speaker 03:
Well, we decided the case.

[00:13:15] Speaker 02:
We affirmed the board's decision of unpatentability.

[00:13:20] Speaker 02:
And why does it matter whether it was entered as a closed matter in the agency's computer system or not?

[00:13:30] Speaker 03:
Well, the Federal Circuit's opinion merely affirmed PTAB's decision that it correctly applied

[00:13:40] Speaker 03:
the guidelines and its analysis under Section 101.

[00:13:48] Speaker 03:
The statute says that the case should proceed according to the outcome of the cases.

[00:13:54] Speaker 03:
That simply because there is one PTAP decision and one Federal Circuit decision does not mean that the case is necessarily closed.

[00:14:03] Speaker 03:
Unfortunately,

[00:14:04] Speaker 03:
There are cases in which it goes to the PTAB board two, three or more times.

[00:14:09] Speaker 03:
And there are cases that go to the federal circuit more than one time.

[00:14:14] Speaker 02:
And here there is a change in the... Not after we make a determination that the claim is unpatentable.

[00:14:24] Speaker 03:
Well, it is dependent on two things, which were the issues raised in the request for director review.

[00:14:31] Speaker 03:
One, the director changed the guidelines for doing this to everyone's benefit.

[00:14:36] Speaker 03:
In fact, those 2019 guidelines were applied by the PTAB in a decision rendered just weeks after the guidelines

[00:14:48] Speaker 03:
in which the 2019 guidelines weren't even briefed.

[00:14:52] Speaker 03:
The director was trying to correct what it thought was a too narrow interpretation of the Alice case.

[00:15:05] Speaker 03:
The other thing that comes up here is there are issues.

[00:15:10] Speaker 03:
So this is really a change in the process.

[00:15:13] Speaker 03:
And now there's new guidelines.

[00:15:20] Speaker 03:
It's only equitable that the appellant gets the benefit of those 2019 guidelines that hundreds of other applicants... Can I ask you, the guidelines aren't binding on the board, right?

[00:15:33] Speaker 04:
The board is following federal survey law, right?

[00:15:37] Speaker 03:
I believe not.

[00:15:41] Speaker 04:
Do you think the MPEP is binding on the board and those guidelines?

[00:15:46] Speaker 03:
Not the MPEP, but the director did take the position, and I believe still does take the position, that the PTAP should follow its guidelines on subject matter eligibility to the extent that there is any kind of variance

[00:16:03] Speaker 03:
between those guidelines and the Federal Circuit jurisprudence.

[00:16:07] Speaker 03:
My point is only that the director should decide whether or not we get the benefit of those guidelines.

[00:16:14] Speaker 03:
If they didn't ex-Party Smith after their already briefing under the previous guidelines, we should get the benefit of that.

[00:16:22] Speaker 03:
The other issue, of course, that comes up is there was some concern about the process that was used in that earlier PTAP decision that could not have been reached

[00:16:39] Speaker 03:
by the federal circuit because the federal circuit review is constrained to the written record.

[00:16:45] Speaker 03:
There are issues which came to light with respect to interference in the judge's decision-making by the director's office or other parts of the patent office.

[00:16:59] Speaker 03:
And that is also raised in the request for direct review

[00:17:03] Speaker 03:
because there's no other way to reach that issue.

[00:17:08] Speaker 03:
There's no other way to get review of that if that's wrong.

[00:17:12] Speaker 03:
And that came up in the Supreme Court's review and oral argument in Arthrex.

[00:17:18] Speaker 03:
What about these cases in which we found out that there was participation during the decision-making process?

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Now, to her credit, the director has stopped that practice.

[00:17:33] Speaker 03:
But this is the only way that a party can get some internal review of those processes.

[00:17:42] Speaker 03:
Otherwise, you're leaving all of those people who may have suffered those events without any remedy, which is what

[00:17:55] Speaker 03:
The Supreme Court said had to happen.

[00:17:57] Speaker 03:
There had to be a remedy.

[00:17:58] Speaker 03:
And the director gets to decide if and what there will be any remedy.

[00:18:05] Speaker 03:
I'm sorry.

[00:18:07] Speaker 03:
I don't know how much time I have left.

[00:18:12] Speaker 03:
But I'm going to continue.

[00:18:14] Speaker 03:
We'll give you two minutes, Robach.

[00:18:16] Speaker 03:
Thank you very much.

[00:18:17] Speaker 03:
So on the question.

[00:18:21] Speaker 02:
I don't know.

[00:18:22] Speaker 02:
Sheila, how much time is here?

[00:18:24] Speaker 02:
We don't have a clock in front of us.

[00:18:27] Speaker 04:
He's over by three minutes.

[00:18:32] Speaker 04:
Just for a technical matter, sorry.

[00:18:35] Speaker 04:
The clock for me is up in the right-hand corner on the screen.

[00:18:40] Speaker 04:
See it in red there?

[00:18:40] Speaker 04:
Try scrolling over.

[00:18:44] Speaker 02:
I have it now.

[00:18:45] Speaker 02:
Thank you, Your Honor.

[00:18:47] Speaker 02:
You're out of time, so we'll give you two minutes for a bottle.

[00:18:52] Speaker 02:
Okay.

[00:18:53] Speaker 02:
We'll hear now from the PTO, Ms.

[00:18:57] Speaker 02:
Barmore.

[00:18:59] Speaker 00:
Good morning.

[00:18:59] Speaker 00:
May it please the court?

[00:19:00] Speaker 00:
I am Cynthia Barmore, here for the federal government.

[00:19:04] Speaker 00:
From the discussion this morning, it seems to me like this panel has a pretty good handle on the relevant facts.

[00:19:10] Speaker 00:
And just to highlight a couple, the PTAB's 2018 decision has already been affirmed by this court on direct review in 2020.

[00:19:18] Speaker 00:
At no point during those proceedings did Odyssey raise the Appointments Clause challenge it raises now.

[00:19:24] Speaker 00:
We are, I'm happy to answer any questions this court may have, but we are also comfortable to rely on arguments in our brief.

[00:19:31] Speaker 02:
I do have one question is, there's no discussion in your.

[00:19:35] Speaker 02:
brief of Rule 60B, which is the power rule of civil procedure that deals with the reopening of district court judgments.

[00:19:44] Speaker 02:
And there is case law under that that you can't

[00:19:49] Speaker 02:
reopened based on a closed case based on new law.

[00:19:58] Speaker 02:
It would seem as though that same policy that you find under the 3060B6 cases should apply to agency proceedings as well.

[00:20:08] Speaker 02:
Have you looked into that at all?

[00:20:10] Speaker 00:
So we did not dive into this potential difference between factual developments and legal developments because here we thought it was so clear that

[00:20:18] Speaker 00:
you really don't have either that could satisfy a change circumstances exception to reopening.

[00:20:22] Speaker 00:
And so, because we thought that this court, this case was so clearly in the line of ESIP, we didn't want to propose a perpetual limit like that here.

[00:20:31] Speaker 00:
But your honor may be right that there may be other reasons that this is unreviewable.

[00:20:37] Speaker 02:
Well, I guess what I was asking is why shouldn't we look to 60B6 for guidance in determining when an agency proceeding can be reopened?

[00:20:48] Speaker 00:
Well, I don't want to say that this court shouldn't look to that type of an alias situation.

[00:20:53] Speaker 00:
I don't think it's necessary here to look into a district court reopening context just because the case law under the Supreme Court's decision in ICC versus BLE, this court's decision at Magnola Metallurgy, which traced that decision as well as subsequent Supreme Court decisions affirming that this type of agency decision not to reopen an agency proceeding is committed to agency discretion.

[00:21:15] Speaker 00:
That would be Lincoln versus Vigil, the Year Home versus Shalala case.

[00:21:19] Speaker 00:
In all of those cases where you don't have changed circumstances or new facts presented, it's very clear that that type of decision is committed to agency discretion.

[00:21:27] Speaker 02:
And so this court doesn't really need to look to a district court analogy because- Really, the agency would have discretion to open the years old case where we'd affirm the judgment of unpatentability.

[00:21:38] Speaker 02:
I'm not sure that that's true.

[00:21:40] Speaker 00:
So your honor, just to clarify, I'm sorry if I misspoke there.

[00:21:43] Speaker 00:
We don't see anything that the agency could have done here in reopening.

[00:21:47] Speaker 00:
We don't think that there's any aspect of this decision that it could revisit that would be consistent with this court's mandate affirming the decision in 2020.

[00:21:56] Speaker 00:
And of course, everything that the PTO does has to be consistent with this court's mandates.

[00:22:01] Speaker 00:
And so we're not aware of anything in this case that the PTO actually could have revisited.

[00:22:06] Speaker 00:
But just to highlight the general legal principle

[00:22:10] Speaker 00:
We don't really think it matters whether the case was closed or whether this was just a motion to reconsider.

[00:22:16] Speaker 00:
I just want to highlight that the doctrine here applies both to decisions not to reopen and decisions not to reconsider final agency decisions.

[00:22:25] Speaker 00:
And there's no argument that the 2018 agency decision wasn't a final decision.

[00:22:30] Speaker 00:
And it was certainly affirmed by this court on direct review.

[00:22:32] Speaker 00:
And so whether it was a motion to reopen or just to reconsider, it would be equally unreviewable.

[00:22:41] Speaker 00:
Thank you, your honor.

[00:22:43] Speaker 02:
Okay.

[00:22:43] Speaker 02:
Unless there are any questions.

[00:22:45] Speaker 02:
Nope.

[00:22:47] Speaker 02:
I think we're finished.

[00:22:47] Speaker 02:
Mr. Barry have two minutes.

[00:22:49] Speaker 03:
Okay.

[00:22:50] Speaker 03:
Your honor, I had actually reserved five minutes for rebuttal.

[00:22:53] Speaker 02:
I don't know.

[00:22:54] Speaker 02:
But you ran over your time.

[00:22:55] Speaker 02:
You've only got two minutes.

[00:22:57] Speaker 03:
All right.

[00:22:58] Speaker 03:
Then just quickly then, there is a difference between reopening a case that's been decided and filing a request for a direct review to cure a violation of the Appointments Clause of the Constitution.

[00:23:16] Speaker 03:
When we talk about closed cases, it's very odd that we say, okay, there was a constitutional violation here, but we're going to let it stand because there's been a decision.

[00:23:29] Speaker 03:
I mean, you're saying that we can't fix that violation, which is a constitutional violation and not merely some other change.

[00:23:39] Speaker 03:
And I think it's not appropriate to look at this as reopening the case so much as a remedy.

[00:23:46] Speaker 03:
I also have to point out that this is, again, we submit it's not a closed case.

[00:23:54] Speaker 03:
The appellant actually filed a petition for expedited consideration, which was granted.

[00:24:01] Speaker 03:
If the case is closed, why are petitions being considered and granted?

[00:24:05] Speaker 03:
And the government cited rule 197 and that's the rule that indicates the effect of federal circuit decisions on its proceedings.

[00:24:15] Speaker 03:
But in our reply brief, we pointed out rule 198 and the process set forth in the MPEP as to what happens after there's been a PTAB decision and a federal circuit decision.

[00:24:29] Speaker 03:
As I said before, as the court knows, that is not necessarily the end of the case.

[00:24:36] Speaker 03:
And rule 198 says that the director can make and take other action.

[00:24:43] Speaker 03:
This sometimes happens.

[00:24:44] Speaker 03:
And indeed, usually it happens because the patent office wants to make

[00:24:50] Speaker 03:
something different where it hasn't been affirmed.

[00:24:53] Speaker 03:
But here, the case, of course, is that we're asking for review under the current guidelines for patent subject matter eligibility.

[00:25:03] Speaker 02:
I think, Mr. Bauer, we're out of time.

[00:25:06] Speaker 02:
Thank you, Mr. Bauer.

[00:25:08] Speaker 02:
Thank both counsel.

[00:25:09] Speaker 02:
The case is submitted and that concludes our session for this morning.

[00:25:14] Speaker 03:
Thank you.