Court Opinion

ID: 9346472
Source: CourtListenerOpinion
Date Created: 2022-12-19 16:00:55.682094+00
Date Added: 2024-06-11T16:30:59.924363
License: Public Domain

Case: 19-1956    Document: 127    Page: 1    Filed: 12/19/2022

         NOTE: This disposition is nonprecedential.

    United States Court of Appeals
        for the Federal Circuit
                  ______________________

                FALL LINE PATENTS, LLC,
                        Appellant

                             v.

 UNIFIED PATENTS, LLC, FKA UNIFIED PATENTS,
                    INC.,
                   Appellee

   KATHERINE K. VIDAL, UNDER SECRETARY OF
   COMMERCE FOR INTELLECTUAL PROPERTY
     AND DIRECTOR OF THE UNITED STATES
       PATENT AND TRADEMARK OFFICE,
                   Intervenor
             ______________________

                        2019-1956
                  ______________________

     Appeal from the United States Patent and Trademark
 Office, Patent Trial and Appeal Board in No. IPR2018-
 00043.
                  ______________________

                Decided: December 19, 2022
                  ______________________

     MATTHEW JAMES ANTONELLI, Antonelli, Harrington &
 Thompson, LLP, Houston, TX, for appellant. Also repre-
 sented by ZACHARIAH HARRINGTON, LARRY D. THOMPSON,
Case: 19-1956     Document: 127     Page: 2     Filed: 12/19/2022

 2              FALL LINE PATENTS, LLC   v. UNIFIED PATENTS, LLC

 JR.; SARAH RING, Porter Hedges LLP, Houston, TX.

     JAMES R. BARNEY, Finnegan, Henderson, Farabow,
 Garrett & Dunner, LLP, Washington, DC, for appellee.
 Also represented by DANIEL COOLEY, Reston, VA;
 JONATHAN R. BOWSER, Haynes & Boone, LLP, Washington,
 DC; JONATHAN RUDOLPH KOMINEK STROUD, Unified Pa-
 tents LLC, Washington, DC.

     SARAH E. CRAVEN, Office of the Solicitor, United States
 Patent and Trademark Office, Alexandria, VA, argued for
 intervenor. Also represented by DANIEL KAZHDAN, THOMAS
 W. KRAUSE, FARHEENA YASMEEN RASHEED.
                  ______________________

     Before HUGHES, BRYSON, and STARK,1 Circuit Judges.
 Hughes, Circuit Judge.
      In the wake of United States v. Arthrex, Inc., 141 S. Ct.
 1970 (2021), we remanded to the U.S. Patent and Trade-
 mark Office to allow appellant Fall Line Patents, LLC to
 seek Director rehearing of a final written decision of the
 Patent Trial and Appeal Board. Then-Commissioner for
 Patents Andrew Hirshfeld, who had been delegated the
 functions and duties of the Director during a vacancy of the
 office, denied the request for rehearing. Fall Line chal-
 lenges whether Commissioner Hirshfeld had the constitu-
 tional and statutory authority to act on requests for
 Director review. Our recent decision in Arthrex, Inc. v.
 Smith & Nephew, Inc., 35 F.4th 1328 (Fed. Cir. 2022), says
 that he did. Consequently, we affirm.

      1  Circuit Judge O’Malley retired on March 11, 2022.
 Circuit Judge Stark was added to the panel after Circuit
 Judge O’Malley retired from the Court.
Case: 19-1956    Document: 127       Page: 3    Filed: 12/19/2022

 FALL LINE PATENTS, LLC   v. UNIFIED PATENTS, LLC                 3

                                I
     Fall Line Patents, LLC was the respondent in an inter
 partes review proceeding that resulted in a final written
 decision by the Patent Trial and Appeal Board finding
 claims 16–19, 21 and 22 of U.S. Patent No. 9,454,748 B2
 unpatentable. Fall Line appealed that decision to this
 Court, and, on July 28, 2020, we issued a nonprecedential
 decision that rejected Fall Line’s real-party-in-interest
 challenge as unreviewable under 35 U.S.C. § 314(d) but va-
 cated and remanded in view of our then-binding precedent
 in Arthrex, Inc. v. Smith & Nephew, Inc., 941 F.3d 1320
 (Fed. Cir. 2019). Fall Line Pats., LLC v. Unified Pats., LLC,
 818 F. App’x 1014 (Fed. Cir. 2020). Following the Supreme
 Court’s decision in United States v. Arthrex, Inc., 141 S. Ct.
 1970 (2021), the Supreme Court granted certiorari and va-
 cated our decision in this case. Iancu v. Fall Line Pats.,
 LLC, 141 S. Ct. 2843 (2021).
     We then entered an order remanding the case to the
 U.S. Patent and Trademark Office for the limited purpose
 of allowing Fall Line the opportunity to request Director
 rehearing, which Fall Line did. The offices of Director and
 Deputy Director were vacant at the time, however, and so
 the responsibility of addressing Fall Line’s request fell to
 the Commissioner of Patents, Andrew Hirshfeld. Commis-
 sioner Hirshfeld ultimately denied the rehearing request.
     We then reinstated the appeal and granted Fall Line’s
 request for supplemental briefing to address whether Com-
 missioner Hirshfeld had the requisite authority to act on
 the request for further review. Fall Line argued that he did
 not, and that his exercise of the Director’s authority vio-
 lated the Appointments Clause and the Federal Vacancies
 Reform Act (FVRA). See Appellant’s Second Supplemental
 Brief at 2–4.
     After Fall Line submitted its supplemental brief, we
 held in Arthrex Inc. v. Smith & Nephew, Inc. (Arthrex II)
 that (1) “the Commissioner’s exercise of the Director’s
Case: 19-1956     Document: 127       Page: 4     Filed: 12/19/2022

 4              FALL LINE PATENTS, LLC   v. UNIFIED PATENTS, LLC

 authority while that office was vacant did not violate the
 Appointments Clause,” and (2) “the Commissioner’s order
 denying Arthrex’s rehearing request on the Director’s be-
 half did not violate the FVRA.” 35 F.4th 1328, 1335, 1339
 (Fed. Cir. 2022). Furthermore, we explained how “the Pa-
 tent Act broadly empowers the President, acting through
 the Director, to delegate the Director’s duties as he sees
 fit.” Id. at 1335. In light of that decision, we issued an order
 directing Fall Line to “show cause . . . as to why we should
 not summarily affirm in light of Arthrex [II].” ECF No. 124
 at 2.
     Fall Line submits that it has an additional argument—
 not considered by us in Arthrex II—as to why delegation to
 Commissioner Hirshfeld was improper. We have jurisdic-
 tion under 28 U.S.C. § 1295(a)(4)(A).
                                II
      Fall Line argues “that the Patent Act does not author-
 ize delegations to the commissioners,” even if the Act au-
 thorizes delegations to other inferior officers. Appellant’s
 Response to Show Cause Order at 1 (emphasis in original)
 (citing Appellant’s Second Supplemental Reply Brief at 3–
 5). This argument is premised on the language of 35 U.S.C.
 § 3(b)(3), which allows the Director to appoint officers and
 employees to the agency (under § 3(b)(3)(A)) and delegate
 duties to them (under § 3(b)(3)(B)). See 35 U.S.C. § 3(b)(3)
 ( “The Director shall . . . appoint such officers . . . as the Di-
 rector considers necessary to carry out the functions of the
 Office, . . . and delegate to them such of the powers vested
 in the Office as the Director may determine.”).
     The office of the Commissioner, however, is established
 by 35 U.S.C. § 3(b)(2). See 35 U.S.C. § 3(b)(2)(A) (“The Sec-
 retary of Commerce shall appoint a Commissioner for Pa-
 tents . . . .”). Fall Line argues that because the office of
 Commissioner is created by § 3(b)(2)—as opposed to
 § 3(b)(3)—the delegation authority found in “[§] 3(b)(3)
 does not apply to Commissioner Hirshfeld at all[.]”
Case: 19-1956    Document: 127       Page: 5    Filed: 12/19/2022

 FALL LINE PATENTS, LLC   v. UNIFIED PATENTS, LLC               5

 Appellant’s Second Supplemental Reply Brief at 4. See also
 id. (“[C]ommisioners are uniquely not authorized to per-
 form the duties of the Director.” (emphasis in original)).
     We disagree with Fall Line’s argument for two reasons.
 First, we held in Arthrex II that the Patent Act—specifi-
 cally 35 U.S.C. § 3(b)(3)(B)—authorized the delegation of
 the Director’s duties to the Commissioner:
     Congress did authorize the President to select the
     Commissioner to temporarily perform the Direc-
     tor’s duties. That is because the Patent Act broadly
     empowers the President, acting through the Direc-
     tor, to delegate the Director’s duties as he sees fit.
     See 35 U.S.C. § 3(b)(3)(B) (“The Director shall . . .
     delegate to [officers and employees] such of the
     powers vested in the Office as the Director may de-
     termine.”); Patent and Trademark Office Efficiency
     Act, Pub. L. No. 106-113, § 4745, 113 Stat. 1501,
     1501A-587 (1999) (codified at 35 U.S.C. § 1 note)
     (The Director “may delegate any of [his] functions
     . . . to such officers and employees . . . as [he] may
     designate.”).
     ...
     The Patent Act bestows upon the Director a general
     power to delegate “such of the powers vested in the
     [PTO] as the Director may determine.” 35 U.S.C.
     § 3(b)(3)(B). There is nothing in the Patent Act in-
     dicating that the Director may not delegate this re-
     hearing request review function.
 Arthrex II, 35 F.4th at 1334–35, 1338 (all emphases and
 alterations in original). Our determination that § 3(b)(3)
 authorized the delegation to the Commissioner forecloses
 Fall Line’s argument to the contrary. Deckers Corp. v.
 United States, 752 F.3d 949, 959 (Fed. Cir. 2014) (“In this
 Circuit, a later panel is bound by the determinations of a
Case: 19-1956     Document: 127     Page: 6     Filed: 12/19/2022

 6              FALL LINE PATENTS, LLC   v. UNIFIED PATENTS, LLC

 prior panel, unless relieved of that obligation by an en banc
 order of the court or a decision of the Supreme Court.”).
      Second, we have already considered and rejected the
 argument that the delegation authority of § 3(b)(3)(B) is
 limited to delegates appointed by the Director under
 § 3(b)(3)(A). In arguing that delegating the authority to de-
 cide whether to institute inter partes review to the Board
 was improper, the appellant in Ethicon Endo-Surgery, Inc.
 v. Covidien LP argued that “the existence of 35 U.S.C.
 § 3(b)(3)(B), which allows the Director to delegate duties to
 officers and employees she appoints, evidences a congres-
 sional purpose to cabin the Director’s authority with re-
 spect to delegation.” 812 F.3d 1023, 1032 (Fed. Cir. 2016).
 We disagreed, holding that “§ 3(b)(3) cannot be read to
 limit the ability of the Director to delegate tasks to agency
 officials not mentioned in § 3(b)(3).” Id. at 1033.
                              III
      Having considered Fall Line’s final argument and
 found it unpersuasive, we affirm the Board’s decision find-
 ing claims 16–19, 21, and 22 of the ’748 patent unpatenta-
 ble.
                         AFFIRMED