Source: https://www.justice.gov/osg/brief/translogic-tech-inc-v-dudas-opposition
Timestamp: 2019-04-25 08:47:27+00:00

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Whether the decision of the Board of Patent Appeals and Interferences in this case must be vacated on the ground that one of the members of the panel was ap pointed by the Director of the Patent and Trademark Office in violation of the Appointments Clause, when petitioner did not raise its constitutional objection at any time before its petition for rehearing en banc in the court of appeals.
The opinion of the court of appeals (Pet. App. 1a-28a) is reported at 504 F.3d 1249. The decision of the Board of Patent Appeals and Interferences of the United States Patent and Trademark Office (Pet. App. 29a- 112a) is not reported. The decision of the Board on re hearing (Pet. App. 121a-141a) is not reported.
The judgment of the court of appeals was entered on October 12, 2007. A petition for rehearing was denied on January 24, 2008 (Pet. App. 118a-120a). The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1).
1.	The United States Patent and Trademark Office (USPTO) is "responsible for the granting and issuing of patents," subject to the policy direction of the Secretary of Commerce. 35 U.S.C. 2(a)(1). The "powers and du ties" of the USPTO are vested in the "Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office" (Direc tor), who is appointed by the President with the advice and consent of the Senate. 35 U.S.C. 3(a)(1).
When a patent examiner within the USPTO makes an adverse decision on a patent application during original examination or on a patent during reexamination, the disappointed patent applicant or patent owner may take an appeal to the Board of Patent Appeals and Interfer ences (Board), which comprises the Director, the Com missioner for Patents, the Commissioner for Trade marks, and "administrative patent judges." 35 U.S.C. 6(a) and (b); 35 U.S.C. 134(a) and (b) (Supp. V 2005). The members of the Board who are "administrative pat ent judges" are required by statute to "be persons of competent legal knowledge and scientific ability who are appointed by the Director." 35 U.S.C. 6(a). Each appeal must be heard by "at least three members of the Board, who shall be designated by the Director." 35 U.S.C. 6(b). A patent owner may seek judicial review of an ad verse decision of the Board in the United States Court of Appeals for the Federal Circuit. 35 U.S.C. 141 (Supp. V 2005); 35 U.S.C. 306.
2.	In 1992, the USPTO issued a patent to petitioner, a designer of specialized electrical circuits. Seven years later, that patent became the subject of infringement litigation between petitioner and Hitachi, Ltd. Pursuant to a series of five requests filed by petitioner and Hita chi between 1999 and 2002, a patent examiner at the USPTO reexamined the disputed patent and invalidated it on the ground that it would have been obvious at the time of invention. Pet. App. 31a.
Petitioner appealed the examiner's decision to the Board, which affirmed. Pet. App. 29a-112a. A three- member panel of the Board heard the appeal on May 31, 2005, and issued its lengthy opinion on July 14, 2005. Id. at 29a, 30a. Petitioner filed a request for rehearing be fore the same panel of administrative patent judges on September 13, 2005, which was denied with another opinion on October 26, 2005. Id. at 121a-141a.
3.	Petitioner then sought review in the United States Court of Appeals for the Federal Circuit, which affirmed the invalidity of the patent. Pet. App. 1a-28a. The court rejected all three of petitioner's arguments about the validity of its patent under 35 U.S.C. 103(a). The court first rejected petitioner's construction of the term "coupled to receive" in the patent claims, showing no deference to, but nevertheless agreeing with, the Board's construction of the claims. Pet. App. 14a, 16a- 19a. It next considered and rejected two of petitioner's arguments that the invention was not obvious from the prior art. Id. at 19a-28a. In doing so, it relied exten sively on this Court's decision in KSR International Co. v. Teleflex Inc., 127 S. Ct. 1727 (2007), which had not been available to the Board. Pet. App. 19a, 20a-23a, 25a, 27a. Among other things, the court noted that peti tioner's prior-art argument made "the same error cor rected by the Supreme Court in KSR." Id. at 25a.
After the court of appeals had rejected petitioner's arguments on the merits of patentability, petitioner filed a combined petition for panel rehearing and rehearing en banc. In support of panel rehearing, petitioner raised another argument about patentability, contending that the Federal Circuit panel had misread the patent speci fication and that its decision raised new grounds of re jection to which petitioner was entitled to respond. Pet. for Reh'g 2-8. In support of rehearing en banc, peti tioner argued for the first time that the Board's decision should be vacated because one of the administrative pat ent judges who had participated in the case had been appointed by the Director, pursuant to a statutory amendment that took effect in 2000. Id. at 8-15. Peti tioner argued that that method of appointment violates the Appointments Clause, by vesting the appointment of an inferior officer in someone other than "the President alone, * * * the Courts of Law, or * * * the Heads of Departments." Art. II, § 2, Cl. 2.
The court of appeals denied the petition for panel rehearing and rehearing en banc in a summary order that addressed neither argument on the merits. Pet. App. 118a-120a.
The petition for a writ of certiorari should be de nied. Petitioner does not challenge any issue that was actually decided by the court of appeals or the adminis trative agency. Moreover, petitioner did not raise its Appointments Clause challenge before the Board or timely raise it before the court of appeals, and peti tioner's argument regarding the applicability of the de- facto-officer doctrine is presented for the first time in its petition for a writ of certiorari. Because the court of appeals did not address either of the questions pre sented, and because the underlying issue may soon be obviated by the enactment of legislation that would change the method for appointing administrative patent judges that petitioner challenges, review by this Court is not warranted.
1.	Petitioner was unsuccessful in defending the va lidity of its patent before the patent examiner, before the Board of Patent Appeals and Interferences (both on initial appeal and on request for rehearing), and before the Federal Circuit (both on initial appeal and on peti tion for panel rehearing). Rather than re-urge any of its arguments about patentability, petitioner now chal lenges (Pet. 5-12) the constitutionality of the appoint ment of one of the members of the Board that unani mously rejected its patentability arguments in July and October 2005. Petitioner, however, waived its Appoint ments Clause challenge by failing to raise it at any stage before its petition for rehearing en banc in the court of appeals. As a direct result of that waiver, the issue was never considered by the agency or the court of appeals, and this Court should refrain from deciding the question as a matter of first impression.
a.	It is, of course, this Court's general practice not to consider arguments that have not been previously addressed, because it is "a court of final review and not first view." Adarand Constructors, Inc. v. Mineta, 534 U.S. 103, 110 (2001) (per curiam) (quoting Matsushita Elec. Indus. Co. v. Epstein, 516 U.S. 367, 399 (1996) (Ginsburg, J., concurring in part and dissenting in part)); see also, e.g., United States v. United Foods, Inc., 533 U.S. 405, 417 (2001) (refusing to "allow a petitioner to assert new substantive arguments attacking * * * the judgment when those arguments were not pressed in the court whose opinion we are reviewing, or at least passed upon by it"); Glover v. United States, 531 U.S. 198, 205 (2001) ("In the ordinary course we do not decide questions neither raised nor resolved below."). Requir ing an issue to be raised or decided in the court below serves important purposes. It promotes judicial econ omy by ensuring that potentially dispositive issues can be resolved at the earliest possible stage of litigation, and it discourages "the practice of 'sandbagging'" or allowing, "for strategic reasons," the lower court to "pursue a certain course, and later-if the outcome is unfavorable-claiming that the course followed was re versible error." Freytag v. Commissioner, 501 U.S. 868, 895 (1991) (Scalia, J., concurring in part and concurring in the judgment); see also Wainwright v. Sykes, 433 U.S. 72, 89-90 (1977).
Both of those purposes would be served by denying review in this case. Petitioner never raised its constitu tional challenge while its case was pending before the Board-neither when it learned of the identity of the Board members who would be deciding its case in May 2005 (Pet. App. 30a), nor when it filed a request for re hearing before the Board in September 2005 (id. at 122a). Petitioner also failed to raise the issue in its opening or reply brief or at oral argument before the Federal Circuit. Allowing the long history of this case to be voided on the basis of a challenge to the Board's com position that was first raised more than 28 months after petitioner knew which administrative patent judges would decide its appeal would waste judicial resources and promote sandbagging in future cases. Because the question was neither timely pressed nor passed upon be low, the Court should follow its customary practice and refuse to decide the question in the first instance.
b.	Petitioner contends that its failure to raise its constitutional challenge before the Board should be ex cused because an administrative agency cannot "enter tain a claim that the statute which created it was in some respect unconstitutional." Pet. 18 (quoting Robertson v. FEC, 45 F.3d 486, 489 (D.C. Cir. 1995)). Yet that does not accurately describe the nature of the challenge here. Petitioner does not contest the creation of the Board (or of the USPTO), but merely the appointment of some of the Board's members, each of whom serves on any par ticular case only upon designation by agency officials.
Moreover, petitioner has not even tried to show that this is a case in which no "relief" would have been "avail able" from the agency. Pet. 18 (quoting Reiter v. Coo per, 507 U.S. 258, 269 (1993)). Under 35 U.S.C. 6(b), a patent appeal within the USPTO is heard "by at least three members of the Board, who shall be designated by the Director." The Director has delegated the authority to designate panel members for individual cases to the Chief Administrative Patent Judge, who is also autho rized to redelegate that authority to the Vice Chief Ad ministrative Patent Judge. See Manual of Patent Ex amining Procedure § 1002.02(f) at 1000-9 (8th ed., revi sion 6, Sept. 2007) <http://www.uspto.gov/web/offices/ pac/mpep/mpep_e8r5_1000.pdf>. Furthermore, accord ing to the Board's standard operating procedures, which "create internal norms for the administration" of the Board, the Chief Judge or Vice Chief Judge "will ap prove a revised designation" of the judges on a panel "[w]hen satisfied that there is good reason to change the panel already designated." Board of Patent Appeals and Interferences, Standard Operating Procedure 1 (Revi sion 12): Assignment of Judges to Merits Panels, Mo tions Panels, and Expanded Panels 1, 6 (Aug. 10, 2005) <http://www.uspto.gov/go/dcom/bpai/sop1.pdf>. As a result, had petitioner raised its objection in a timely fashion (through, for example, a petition to the Chief Administrative Patent Judge under 37 C.F.R. 41.3), the agency would have had the power to replace the panel member to whom petitioner now objects; the Director, the Chief Judge, or the Vice Chief Judge might have determined that there was "good reason to change the panel already designated" if, for example, any of those officials wanted to avoid the uncertainty that might arise from a challenge to the constitutionality of a certain Board member's appointment.
Thus, accepting petitioner's claim of futility would only ratify a course of action that deprived the agency of any chance to consider taking remedial steps to avoid the alleged constitutional problem. This then is an ap propriate case to follow the "general rule" that "courts should not topple over administrative decisions unless the administrative body not only has erred, but has erred against objection made at the time appropriate under its practice." Woodford v. Ngo, 548 U.S. 81, 90 (2006) (emphasis and quotation marks omitted).
d.	Rather than attempt to justify its waiver of its constitutional argument, petitioner asserts (Pet. 4, 15, 16, 19) that a separation-of-powers objection to the ap pointments of "judicial officers" implicates such a basic constitutional protection that it cannot be waived as long as the case is still on direct appeal.
This case, however, is distinguishable from those "'rare cas[es]'" in which this Court decided to "'exercise [its] discretion' to hear a waived claim based on the Ap pointments Clause." Plaut v. Spendthrift Farm, Inc., 514 U.S. 211, 232 (1995) (quoting Freytag, 501 U.S. at 879). Like Plaut, those rare cases generally involved this Court's supervision and protection of uniquely judi cial power, and especially Article III power. For exam ple, in Nguyen v. United States, 539 U.S. 69 (2003), this Court prevented a non-Article-III judge from exercising Article III jurisdiction in a criminal case. In Glidden Co. v. Zdanok, 370 U.S. 530 (1962), the Court considered whether certain judges on the Court of Claims and the Court of Customs and Patent Appeals were Article III judges and thus eligible to sit on federal district courts and courts of appeals. In Freytag, the Court addressed appointments within the Tax Court, which "exercise[d] judicial power to the exclusion of any other function" and was, unlike the Board here, determined by this Court to be "independent of the Executive and Legisla tive Branches." 501 U.S. at 891; see also Pet. 11 (recog nizing that the USPTO is "[u]nlike the Tax Court in Freytag").
Unlike all of those cases, petitioner's challenge con cerns the status of the appointments of some Executive Branch officials and does not affect the authority of any Article III court. Thus, no compelling reason exists for excusing petitioner's failure to observe the bedrock pro cedural rule that a non-jurisdictional argument is waived unless timely asserted. See United States v. Olano, 507 U.S. 725, 731 (1993) ("'No procedural princi ple is more familiar to this Court than that a constitu tional right,' or a right of any other sort, 'may be for feited in criminal as well as civil cases by the failure to make timely assertion of the right before a tribunal hav ing jurisdiction to determine it.'") (quoting Yakus v. United States, 321 U.S. 414, 444 (1944)).
Petitioner invokes Ryder and Nguyen as support for the proposition that this Court will "grant a judicial remedy" in a case on direct review. Pet. 3; see also Pet. 13-15. But this case is distinguishable from Ryder and Nguyen in several notable ways. First, the judicial rem edy in both of those cases was to vacate a criminal con viction on direct review. See Nguyen, 539 U.S. at 73, 83; Ryder, 515 U.S. at 179. This case does not, of course, involve a criminal conviction.
Second, in both Nguyen and Ryder, the Court stressed that its decision would affect no more than a handful of cases. See Nguyen, 539 U.S. at 81 n.12 ("We agree with the Government's submission that the im proper composition of the court below was 'an isolated, one-time mistake.'"); Ryder, 515 U.S. at 185 ("The par ties agree that the defective appointments of the civilian judges affect only between 7 to 10 cases pending on di rect review."). Here, by contrast, a decision on the mer its of petitioner's constitutional argument could affect far more than a handful of cases. The allegedly im proper appointment method has been used since 2000, and last year alone the Board decided more than 3,500 cases. See U.S. Patent and Trademark Office, Process Production Report, Final Report FY 2007 (visited July 25, 2008) <http://www.uspto.gov/web/offices/dcom/bpai/ docs/process/fy2007.pdf>. Accordingly, applying the de-facto-officer doctrine in this context would well serve its intended function of preventing "the chaos that would result from multiple and repetitious suits challenging every action taken by every official whose claim to office could be open to question." Ryder, 515 U.S. at 180 (cita tion omitted).
Third, in both Nguyen and Ryder, no intermediate appellate court had been able to vet the merits of the decision reached by the allegedly tainted panel. In Nguyen, this Court was the only tribunal to review the decision of an improperly constituted panel of the Ninth Circuit. In Ryder, although the decision of the Coast Guard Court of Military Review had been affirmed by the Court of Military Appeals before it reached this Court, that intermediate court had less discretion "to review claims of error, revise factual determinations, and revise sentences" than the tainted panel. 515 U.S. at 187. Here, petitioner cannot contend that the Federal Circuit was unable to address the merits of its claims about patentability, since those were precisely the claims that were pressed and passed upon.
Finally, Ryder held that a litigant is not entitled to a decision on the merits of a constitutional appointments challenge unless he makes a "timely challenge to the constitutional validity of the appointment of an officer who adjudicates his case." 515 U.S. at 182. In that case, the Court noted that the petitioner had "raised his ob jection to the judges' titles before those very judges and prior to their action on his case." Ibid. In Nguyen (which also implicated this Court's supervisory powers over Article III courts, 539 U.S. at 74), the challenge was presented to the first tribunal that reviewed the tainted court. Petitioner's challenge was not raised in the manner found to be sufficiently timely in either Ry der or Nguyen.
3.	There is an independent reason why certiorari should be denied. Legislation that would remove the grounds for petitioner's constitutional objection is cur rently pending in Congress and may well be enacted soon. On July 21, 2008, the chairman of the Senate Judi ciary Committee introduced S. 3295, which was co-spon sored by the ranking minority member of the Judiciary Committee. See 154 Cong. Rec. S6976 (daily ed.). The next day, the bill was discharged from committee, and it passed the Senate by unanimous consent. See 154 Cong. Rec. S7079 (daily ed. July 22, 2008). An identical bill, H.R. 6362, has been pending in the House of Represen tatives, where it is co-sponsored by the bipartisan lead ership of the Judiciary Committee and its Subcommittee on Courts, the Internet, and Intellectual Property. See 154 Cong. Rec. H6088 (daily ed. June 25, 2008).
If S. 3295 also passes the House of Representatives and is enacted, it will amend 35 U.S.C. 6(a), so that ad ministrative patent judges would no longer be appointed by the Director. They would instead be "appointed by the Secretary of Commerce, in consultation with the Di rector." S. 3295, 110th Cong., 2d Sess. § 1(a)(1)(B) (2008). The Secretary of Commerce is indisputably a "Head of Department" under the Appointments Clause. See Freytag, 501 U.S. at 886; id. at 918-919 (Scalia, J., concurring in part and concurring in the judgment); Pet. 10-11. As a result, that part of the bill would enable the Department itself to eliminate future constitutional objections along the lines raised by peti tioner by providing for appointment of all current and future administrative patent judges by the Secretary, and thus dramatically reduce the importance of resolv ing the questions presented here.
S. 3295 would also go further. It contains additional provisions that would affect the viability of constitu tional challenges in the "small subset of the Board's de cisions [that] are presently subject to direct review" and thus, according to petitioner (Pet. 14), subject to consti tutional challenge. It would affect those cases in two ways. First, it would add a new subsection (c) to 35 U.S.C. 6. For each administrative patent judge who, before the bill's enactment, "held office pursuant to an appointment by the Director"-i.e., for every one of the judges whose appointment petitioner contends is consti tutionally invalid-subsection (c) would authorize the Secretary of Commerce, "in his or her discretion, [to] deem" the Secretary's appointment of that judge "to take effect on the date on which the Director initially appointed the administrative patent judge." S. 3295, § 1(a)(1)(C). In other words, if the Secretary chose to re-appoint certain sitting judges, those appointments could be made nunc pro tunc. Second, S. 3295 would also provide an express statutory directive to apply the de-facto-officer doctrine in this context, by adding a new subsection (d) to 35 U.S.C. 6, reading as follows: "It shall be a defense to a challenge to the appointment of an administrative patent judge on the basis of the judge's having been originally appointed by the Director that the administrative patent judge so appointed was acting as a de facto officer." Ibid.
Because the pending legislation will, if enacted, elim inate or ameliorate constitutional objections like peti tioner's in both current and future cases, there is no need for this Court to address the questions petitioner raises. Moreover, even if the pending legislation is not enacted, there is no reason this Court must decide those questions in the first instance. The Federal Circuit will presumably have the opportunity to do that in other cases, which would preserve this Court's usual status as "a court of final review." Adarand, 534 U.S. at 110 (cita tion omitted; emphasis added). Under the circumstan ces, a decision by this Court on the constitutional ques tion would be premature.
4.	Finally, because petitioner would be unlikely to prevail on the merits of its underlying claim of patent ability, this case is an especially poor vehicle to make an exception to the usual rules of waiver in order to reach out and decide a constitutional question that has never been addressed by any other court. Cf. Department of Commerce v. United States House of Representatives, 525 U.S. 316, 343 (1999) ("If there is one doctrine more deeply rooted than any other in the process of constitu tional adjudication, it is that we ought not to pass on questions of constitutionality * * * unless such adjudi cation is unavoidable.") (quoting Spector Motor Serv., Inc. v. McLaughlin, 323 U.S. 101, 105 (1944)).
Petitioner's arguments on the merits were rejected not only by the Board member to whose appointment petitioner objects, but also by the patent examiner, the other members of the Board that decided its case, and the three-judge panel of the Federal Circuit. The court of appeals, in particular, considered the merits of petitioner's challenges at length and unanimously re jected each of them. It rejected petitioner's claim con struction argument without showing any "deference" to the Board. Pet. App. 14a, 16a-19a. With regard to peti tioner's other two arguments, it reviewed the Board's "ultimate determination of obviousness de novo." Id. at 15a (citation omitted). Although the court of appeals reviewed the Board's underlying findings of fact for "substantial evidence," ibid., the court's "obviousness" analysis drew extensively from this Court's subsequent decision in KSR International Co. v. Teleflex Inc., 127 S. Ct. 1727 (2007), and concluded that an ordinary arti san would understand that "the inputs to a circuit do not change the circuit itself," and that "any conventional multiplexer circuit"-including transmission gate multi plexers like those in the patent claim here-"could be utilized to implement the 2:1 multiplexer circuits in [the prior art]." Pet. App. 25a-27a. The court of appeals also rejected another claim-construction argument that peti tioner raised in its petition for panel rehearing. Id. at 118a-120a. Thus, even assuming that the Board's deci sion were to be vacated and the case remanded to the agency for another review of the patent examiner's deci sion, petitioner gives no reason to believe that it would at last succeed in establishing that its patent claims were not obvious.
1	Even if petitioner could not have submitted the article as a "perti nent and significant authorit[y]" that had "come to [its] attention * * * after oral argument but before decision," pursuant to Rule 28(j) of the Federal Rules of Appellate Procedure, petitioner could still have moved for leave to file a supplemental brief raising the constitutional question. The Federal Circuit recently granted such a motion, raising the same Appointments Clause objection in another case that had already been fully briefed. See In re DBC, No. 2008-1120 Docket entry No. 29 (Fed. Cir. June 19, 2008). If petitioner here had filed such a motion before the court of appeals made its decision on the merits of patentability, that could have mitigated at least some of the "concerns for gamesmanship" that this Court recognizes are applicable whenever a party raises a technical defect only after it learns that it lost its other arguments on the merits. Nguyen v. United States, 539 U.S. 69, 81 n.12 (2003).
2	Unlike its Appointments Clause challenge, petitioner's proposed interpretation of the de-facto-officer doctrine was not even included in its petition to the court of appeals for rehearing en banc. For the reasons discussed above, see pp. 5-10, supra, it is thus equally subject to the Court's customary practice of not addressing issues that were not raised in the lower courts.
3	Petitioner argues (Pet. 15-17) that the alleged defect is not merely "technical," but does not contest that the administrative patent judge in question is a "person of competent legal knowledge and scientific ability," 35 U.S.C. 6(a), who was statutorily eligible to serve notwith standing any defect in his appointment. Cf. Nguyen, 539 U.S. at 80 (finding that non-Article-III judges do not meet "the statutory require ments set by Congress for the composition of the federal courts of appeals").

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