Source: https://www.ipwatchdog.com/2018/10/02/capella-photonics-challenges-federal-circuit-judgments-without-opinions/id=101826/
Timestamp: 2019-04-22 04:24:57+00:00

Document:
Capella Photonics, Inc. has filed a petition for certiorari arguing that the Federal Circuit’s practice of issuing judgments without opinion pursuant to Federal Circuit Rule 36 in appeals from the Patent Trial and Appeal Board violates 35 U.S.C. § 144, which provides that the Federal Circuit “shall issue . . . its mandate and opinion” to the PTO in such appeals. See Petition for Writ of Certiorari, Capella Photonics, Inc. v. Cisco Sys., Inc., et al., No. 18-314 (U.S. Sept. 6, 2018).
The underlying Federal Circuit appeal arose from multiple Inter Partes Reviews of two Capella patents on fiber-optic communications systems. The PTAB found the two patents invalid as obvious. Capella appealed, arguing, as relevant here, that (i) the PTAB’s obviousness conclusion was based on an erroneous construction of a critical claim term, and (ii) the PTAB had violated the Administrative Procedure Act by allowing petitioner Cisco to submit eleventh-hour supplemental evidence in support of its obviousness argument and then denying Capella an adequate opportunity to respond. The Federal Circuit affirmed the PTAB’s decision in a judgment without opinion pursuant to Rule 36, and then denied Capella’s subsequent petition for rehearing en banc (again without opinion).
Patent rights are public rights. In order to “promote the Progress of Science and useful Arts,” the government grants to inventors limited “public franchises” in the form of patents that allow the inventors to exclude others from making, using, or selling articles embodying their inventions for a specified period of time. It is critical to the functioning of the patent system that inventors, their competitors, the patent bar, and the general public understand the legal rules that govern the scope of those public franchises. Only then can the patent system fulfill its twin aims of incentivizing valuable innovation while also ensuring that exclusionary patent rights do not inhibit the “the full and free use of ideas in the public domain.” And only then can the relevant stakeholders be assured that they are governed by a legal framework that is rational and fair. The Federal Circuit’s routine practice of denying the public the guidance it deserves vis-à-vis the scope of patent protections thus threatens to undermine the very legitimacy of the patent system itself.
Pet. at 20 (citations omitted).
Second, Capella argues that a contrary reading of § 144—that is, a reading that would permit the Federal Circuit to issue Rule 36 judgments in PTAB appeals—would raise serious concerns under Article III of the Constitution. Capella contends that § 144’s requirement of an “opinion” in PTAB appeals “operates as an important constitutional safeguard: it mandates that the [Federal Circuit] show its work in adjudicating the legal issues raised by the parties, and it thus ensures . . . that substantive Article III review of federal patent-law questions is available to parties litigating before the Board.” Pet. at 25. Capella notes that the Supreme Court stressed in its Oil States decision that it was not considering whether the IPR process “would be constitutional without any sort of intervention by a court at any stage of the proceedings.” Id. at 24 (quoting Oil States Energy Servs., LLC v. Greene’s Energy Grp., LLC, 138 S. Ct. 1365, 1379 (2018)) (quotation marks omitted).
Capella closes by noting that, since the establishment of the modern PTAB, the Federal Circuit has issued Rule 36 judgments in approximately half of PTAB appeals—and “the problem is not going away.” Pet. at 27-28. This routine “derogation of the statutory scheme established by Congress and the constitutional protections afforded by Article III,” Capella asserts, “deprives all stakeholders in the patent system of critically important guidance concerning the scope of patent rights.” Id. at 28.
The respondents’ response to Capella’s petition is due October 11, 2018. The question presented in Capella’s petition was presented in another recent petition for certiorari in the case of Leon Stambler v. Mastercard International, Inc., No. 17-1140. The Court called for a response to the Stambler petition but ultimately denied certiorari on October 1, 2018.
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This petition should have about 1,000 supporting amicus briefs.

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