No. 20-74
`
`In the
`Supreme Court of the United States
`
`UNITED STATES,
`
`Petitioner,
`
`v.
`
`IMAGE PROCESSING TECHNOLOGIES LLC, et al.,
`
`Respondents.
`
`On PetitiOn fOr a Writ Of CertiOrari tO the United
`StateS COUrt Of aPPealS fOr the federal CirCUit
`
`BRIEF IN OPPOSITION OF RESPONDENT
`BOLORO GLOBAL LIMITED
`
`caRlos vIllaMaR
`the vIllaMaR FIRM, Pllc
`3424 Washington Drive
`Falls Church, Virginia 22041
`(703) 623-4122
`
`MIchael R. casey
`Counsel of Record
`JaMes R. love
`RobeRt taRcu
`oblon, Mcclelland, MaIeR
`& neustadt, llP
`1940 Duke Street
`Alexandria, Virginia 22314
`(703) 413-3000
`mcasey@oblon.com
`Counsel for Respondent Boloro Global Limited
`
`298145
`
`A
`
`(800) 274-3321 • (800) 359-6859
`
`
`
`In the
`Supreme Court of the United States
`
`UNITED STATES,
`
`Petitioner,
`
`v.
`
`IMAGE PROCESSING TECHNOLOGIES LLC, et al.,
`
`Respondents.
`
`On PetitiOn fOr a Writ Of CertiOrari tO the United
`StateS COUrt Of aPPealS fOr the federal CirCUit
`
`BRIEF IN OPPOSITION OF RESPONDENT
`BOLORO GLOBAL LIMITED
`
`caRlos vIllaMaR
`the vIllaMaR FIRM, Pllc
`3424 Washington Drive
`Falls Church, Virginia 22041
`(703) 623-4122
`
`MIchael R. casey
`Counsel of Record
`JaMes R. love
`RobeRt taRcu
`oblon, Mcclelland, MaIeR
`& neustadt, llP
`1940 Duke Street
`Alexandria, Virginia 22314
`(703) 413-3000
`mcasey@oblon.com
`Counsel for Respondent Boloro Global Limited
`
`298145
`
`A
`
`(800) 274-3321 • (800) 359-6859
`
`
`
`i
`
`QUESTIONS PRESENTED
`
`1. Whether, for purposes of the Appointments Clause,
`U.S. Const. Art. II, § 2, Cl. 2, administrative patent judges
`of the U.S. Patent and Trademark Office are principal
`officers who must be appointed by the President with
`the Senate’s advice and consent, or “inferior Officers”
`whose appointment Congress has permissibly vested in
`a department head.
`
`2. Whether the court of appeals erred by adjudicating
`Appointments Clause challenges brought by litigants that
`had not presented such a challenge to the agency.
`
`
`
`ii
`
`CORPORATE DISCLOSURE STATEMENT
`
`Pursuant to this Court’s Rule 29.6, respondent Boloro
`Global Limited (“Boloro”) states that it has no parent
`corporation and that no publicly held company owns 10%
`or more of its stock.
`
`
`
`iii
`
`QUESTIONS PRESENTED . . . . . . . . . . . . . . . . . . . . . . i
`
`CORPORATE DISCLOSURE STATEMENT . . . . . . ii
`
`TABLE OF CONTENTS. . . . . . . . . . . . . . . . . . . . . . . . . iii
`
`TABLE OF CITED AUTHORITIES . . . . . . . . . . . . . . iv
`
`STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
`
`I. statutoRy and PRoceduRal backgRound . . . . . .1
`
`II. PRoceedIngs below. . . . . . . . . . . . . . . . . . . . . . . . .1
`
`ARGUMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
`
`I. adMInIstRatIve Patent Judges oF the
`u.s. Patent a nd tR a deM a Rk oFFIce
`a Re unconst I t u tIona lly a PPoIn t ed
`PRIncIPal oFFIceRs . . . . . . . . . . . . . . . . . . . . . . . . .2
`
`
`
`II. e v e n I F a PJ s a R e Fou n d t o b e
`constItutIonal aPPoInted geneRally,
`ResPondent’s Ptab Pa nel decIdIng
`Issues undeR 35 u.s.c. § 101 weRe not . . . . . . .4
`
`
`
`III. the aPPoIntMents clause challenge
` was tIMely RaIsed . . . . . . . . . . . . . . . . . . . . . . . . .5
`
`CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
`
`TABLE OF CONTENTS
`
`Page
`
`
`
`iv
`
`CASES
`
`Arthrex, Inc. v. Smith & Nephew, Inc.,
`941 F.3d 1320 (Fed. Cir. 2019), reh’g denied,
`
`953 F.3d 760 (Fed. Cir. 2020), petitions for
`
`
`cert. pending, Nos. 19-1434 (filed June 25,
`
`2020), 19-1452 (filed June 29, 2020), and
`19-1458 (filed June 30, 2020). . . . . . . . . . . . . . . passim
`
`
`Buckley v. Valeo,
`
`424 U.S. 1 (1976) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
`
`Jones Bros., Inc. v. Sec’y of Labor,
`
`898 F.3d 669 (6th Cir. 2018). . . . . . . . . . . . . . . . . . . . . .6
`
`Thunder Basin Coal Co. v. Reich,
`
`510 U.S. 200 (1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
`
`STATUTES
`
`35 U.S.C. § 101 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4, 5, 7
`
`35 U.S.C. § 318(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
`
`35 U.S.C. § 6(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
`
`35 U.S.C. § 6(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
`
`TABLE OF CITED AUTHORITIES
`
`Page
`
`
`
`v
`
`REGULATIONS
`
`37 C.F.R. § 41.47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
`
`37 C.F.R. § 41.5(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
`
`37 C.F.R. § 41.5(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
`
`37 C.F.R. § 41.50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
`
`37 C.F.R. § 41.50(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
`
`37 C.F.R. § 42.51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
`
`37 C.F.R. § 42.62(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
`
`37 C.F.R. § 42.70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
`
`CONSTITUTIONAL PROVISIONS
`
`U.S. Const. art II, § 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
`
`U.S. Const. art. III, § 1. . . . . . . . . . . . . . . . . . . . . . . . . . . .5
`
`Cited Authorities
`
`Page
`
`
`
`1
`
`STATEMENT
`
`I. StatUtOry and PrOCedUral BaCkgrOUnd
`
`The Appointments Clause of the Constitution requires
`principal officers to be appointed by the President with the
`advice and consent of the Senate. U.S. Const. art II, § 2.
`Congress can nonetheless “vest the Appointment of such
`inferior Officers, as they think proper, in the … Heads of
`Departments.” Id.
`
`As noted in the government’s petition, in “Arthrex,
`Inc. v. Smith & Nephew, Inc., 941 F.3d 1320 (2019) …,
`the Federal Circuit held that the administrative patent
`judges [APJs] who sit on Board panels are principal
`officers who must be, but by statute are not, appointed by
`the President with the advice and consent of the Senate.”
`Pet. at 25. That petition further acknowledges “because
`this Court’s disposition of the government’s petition in
`Arthrex may affect the proper disposition of these cases,
`[the government’s] petition should be held pending the
`disposition of that [Arthrex] petition and any further
`proceedings in this Court.” Id. at 26.
`
`II. PrOCeedingS BelOW
`
`Boloro’s ex parte appeals at the PTAB stem from final
`decisions in three patent applications (U.S. Application Ser.
`No. 14/222,613 (“the ‘613 application”), U.S. Application
`Ser. No. 14/222,615 (“the ‘615 application”), and U.S.
`Application Ser. No. 14/222,616 (“the ‘616 application”))
`in which all claims had been rejected by the Examiner
`under 35 U.S.C. 101. A split panel of the PTAB affirmed
`the rejections of the Examiner under 35 U.S.C. 101 both
`initially and in Decisions on Rehearing.
`
`
`
`2
`
`Respondent filed a motion to vacate and remand in this
`consolidated case in light of the Arthrex decision, and the
`Federal Circuit granted the motion based on its earlier
`Arthrex precedent.
`
`ARGUMENT
`
`I. adminiStrative Patent JUdgeS Of the U.S. Patent
`and trademark OffiCe are UnCOnStitUtiOnally
`aPPOinted PrinCiPal OffiCerS
`
`As in Arthrex, the Board’s final decisions below
`were rendered when “the current structure of the Board
`violate[d] the Appointments Clause.” 941 F.3d at 1335.
`The APJs who presided over the hearings in the ex parte
`appeals and issued the final decisions in those applications
`were “principal officers” under the Appointments Clause,
`yet were neither appointed by the President nor confirmed
`by the Senate. Indeed, the Federal Circuit noted that the
`“Director acknowledges that, under the reasoning … in
`Arthrex, … the administrative patent judges (APJs) were
`not constitutionally appointed at the time the Board’s final
`decision on appeal was issued.” App. 83a.
`
`Citing Arthrex, the Federal Circuit held “the
`appropriate remedy for such a constitutional violation
`was to vacate the Board’s decision and to remand for the
`purpose of reassigning the matter to a different panel of
`APJs for a new hearing and decision.” Id. The Federal
`Circuit did just that. App. 84a.
`
`While the Board in Arthrex was presiding over an
`inter partes review, the Court’s analysis in that case,
`that the APJs who presided over the proceeding were
`
`
`
`3
`
`“principal officers” under the Appointments Clause, also
`holds true in these ex parte appeals, and the government
`has waived any argument to the contrary. In determining
`that the APJs in Arthrex were “principal officers,” the
`Federal Circuit found that a determinative factor was the
`exercise of “significant authority pursuant to the laws of
`the United States.” Id. at 1327-1328 (quoting Buckley v.
`Valeo, 424 U.S. 1, 125–26 (1976)). As part of that analysis,
`the Court held:
`
`The APJs exercise significant discretion when
`carrying out their function of deciding inter
`partes reviews. They oversee discovery, 37
`C.F.R. § 42.51, apply the Federal Rules of
`Evidence, 37 C.F.R. § 42.62(a), and hear oral
`arguments, 37 C.F.R. § 42.70. And at the close
`of review proceedings, the APJs issue final
`written decisions containing fact findings and
`legal conclusions, and ultimately deciding the
`patentability of the claims at issue. See 35
`U.S.C. § 318(a).
`
`Id. at 1328.
`
`APJs in ex parte appeals carry out similar functions
`when they hear oral arguments under 37 C.F.R. § 41.47 and,
`at the close of the appeal proceedings, issue final written
`decisions containing fact findings and legal conclusions.
`See 37 C.F.R. § 41.50. Although not specifically addressed
`in Arthrex, in ex parte appeals, the PTAB also has the
`power: (1) to disqualify counsel (37 C.F.R. § 41.5(b)); (2) to
`admit people pro hac vice (37 C.F.R. § 41.5(a) “authorize
`a person other than a registered practitioner to appear
`as counsel in a specific proceeding”); and (3) to “order
`
`
`
`4
`
`appellant to additionally brief any matter that the Board
`considers to be of assistance in reaching a reasoned
`decision on the pending appeal” (37 C.F.R. § 41.50(d)).
`The PTAB then ultimately decides the patentability of
`the claims at issue by “review[ing] adverse decisions of
`examiners upon applications for patents.” 35 U.S.C. § 6(b)
`(1). Furthermore, after a decision, under 35 U.S.C. § 6(c),
`“[o]nly the Patent Trial and Appeal Board may grant
`rehearings.”
`
`Thus, the then-appointed Administrative Patent
`Judges of the PTAB were unconstitutionally appointed
`principal officers.
`
`II. even if aPJS are fOUnd tO Be COnStitUtiOnal
`aPPOinted generally, reSPOndent’S PtaB Panel
`deCiding iSSUeS Under 35 U.S.C. § 101 Were nOt
`
`The government’s petition acknowledges “because
`this Court’s disposition of the government’s petition in
`Arthrex may affect the proper disposition of these cases,
`[the government’s] petition should be held pending the
`disposition of that [Arthrex] petition and any further
`proceedings in this Court.” Pet. at 26. Respondent
`agrees that the government’s petition initially should
`be held pending the disposition of Arthrex because the
`Appointments Clause challenge will likely be settled by
`Arthrex.
`
`However, in the context of these appeals in particular,
`the APJs also exercised significant authority by virtue of
`what they were being asked to render judgment on. The
`only issue before them on rehearing was whether to ignore
`the actual statutory language of 35 U.S.C. § 101 as written
`
`
`
`5
`
`by Congress and to instead substitute their own judgment
`for Congress’ by deciding whether to affirm the rejection
`of the claims under 35 U.S.C. § 101 as being directed to
`judicially-excepted subject matter. That is, without being
`appointed like federal judges under U.S. Const. art. III,
`§ 1, they were being asked to act like Article III judges
`in determining the applicability of a judicial exception.
`
`The extent of that independent authority, without
`oversight by the Director, is brought into focus by the
`fact that the panel members themselves disagreed as to
`whether the judicial exception applied. That is, at least
`one of the panel members must, by definition, have been
`contradicting the decision of what the Director would
`have done because there was a 2-1 split among the panel.
`
`III. the aPPOintmentS ClaUSe Challenge WaS timely
`raiSed
`
`Respondent raised its Appointments Clause challenge
`as part of a motion to vacate and remand before filing its
`opening brief. As in Arthrex, Appellant timely raised its
`Appointments Clause challenge “before the first body
`capable of providing it with the relief”— the Court of
`Appeals for the Federal Circuit.
`
`Moreover, raising an Appointments Clause challenge
`before the Board would have been futile. The Federal
`Circuit in Arthrex expressly addressed the issue when
`it held:
`
`the Board was not capable of providing any
`meaningful relief to this type of Constitutional
`challenge and it would therefore have been
`
`
`
`6
`
`futile for [the Appellant] to have made the
`challenge there. “An administrative agency
`may not invalidate the statute from which it
`derives its existence and that it is charged with
`implementing.”
`
`Id. at 1339 (citing Jones Bros., Inc. v. Sec’y of Labor, 898
`F.3d 669, 673 (6th Cir. 2018)).
`
`Indeed, the PTAB does not even have jurisdiction
`to hear such challenges. See Thunder Basin Coal
`Co. v. Reich, 510 U.S. 200, 215 (1994) (“[a]judication
`of the constitutionality of congressional enactments
`has generally been thought beyond the jurisdiction of
`administrative agencies”).
`
`
`
`7
`
`CONCLUSION
`
`The government’s petition should be held pending
`the disposition of Arthrex. Should the Court find that
`the Arthrex panel was unconstitutionally appointed,
`the Court should deny this petition as well. Even if this
`Court finds that the Arthrex panel was constitutionally
`appointed, it should nonetheless find that the panel in the
`appeals at-issue here was unconstitutionally appointed
`by virtue of the grounds of rejection that the APJs were
`asked to review -- a judicially-created exception under 35
`U.S.C. § 101 requiring them to act as Article III judges.
`Furthermore, the Federal Circuit properly adjudicated
`Respondent’s Appointments Clause challenge because
`raising the issue before the PTO would have been futile.
`
`Respectfully submitted,
`
`caRlos vIllaMaR
`the vIllaMaR FIRM, Pllc
`3424 Washington Drive
`Falls Church, Virginia 22041
`(703) 623-4122
`
`MIchael R. casey
`Counsel of Record
`JaMes R. love
`RobeRt taRcu
`oblon, Mcclelland, MaIeR
`& neustadt, llP
`1940 Duke Street
`Alexandria, Virginia 22314
`(703) 413-3000
`mcasey@oblon.com
`
`Counsel for Respondent Boloro Global Limited
`
`
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