Court Opinion

ID: 4471461
Source: CourtListenerOpinion
Date Created: 2020-01-10 16:01:53.732082+00
Date Added: 2024-06-11T12:43:06.486467
License: Public Domain

United States Court of Appeals
      for the Federal Circuit
                 ______________________

              PERSONAL AUDIO, LLC,
                 Plaintiff-Appellant

                            v.

                CBS CORPORATION,
                  Defendant-Appellee
                ______________________

                       2018-2256
                 ______________________

    Appeal from the United States District Court for the
Eastern District of Texas in No. 2:13-cv-00270-JRG, Judge
J. Rodney Gilstrap.
                 ______________________

               Decided: January 10, 2020
                ______________________

   JEREMY SETH PITCOCK, The Pitcock Law Group, New
York, NY, argued for plaintiff-appellant. Also represented
by JENNIFER ISHIMOTO, Banie & Ishimoto LLP, Menlo
Park, CA; PAPOOL SUBHASH CHAUDHARI, Chaudhari Law,
PLLC, Wylie, TX.

    STEVEN M. LIEBERMAN, Rothwell, Figg, Ernst &
Manbeck, PC, Washington, DC, argued for defendant-ap-
pellee. Also represented by SHARON DAVIS, JENNIFER
MAISEL, DANIEL MCCALLUM, BRIAN S. ROSENBLOOM.
               ______________________
2                    PERSONAL AUDIO, LLC v. CBS CORPORATION

    Before MOORE, REYNA, and TARANTO, Circuit Judges.
TARANTO, Circuit Judge.
     Personal Audio, LLC brought this case against CBS
Corporation, alleging that CBS infringed a Personal Audio
patent. A jury found for Personal Audio on infringement
and invalidity as to three claims of the patent. When the
Patent Trial and Appeal Board (Board) of the United States
Patent and Trademark Office (PTO) issued a final written
decision determining that those claims are unpatentable,
the district court, with the parties’ consent, stayed entry of
its judgment in this case until completion of direct review
of the Board’s decision in our court. We eventually af-
firmed the Board’s final written decision. The district court
then asked Personal Audio and CBS how they wished to
proceed, and they agreed that, under governing precedent,
CBS was entitled to entry of final judgment in its favor.
The district court entered such a judgment.
     Personal Audio appeals. To the extent that Personal
Audio challenges the Board’s final written decision, the dis-
trict court lacked jurisdiction to consider the challenges,
and we have no jurisdiction to review them on appeal from
the district court’s judgment. The exclusive avenue for re-
view was a direct appeal from the final written decision.
To the extent that Personal Audio challenges the district
court’s determination of the consequences of the affirmed
final written decision for the proper disposition of this case,
Personal Audio conceded that governing precedent re-
quired judgment for CBS. We therefore affirm the district
court’s judgment.
                              I
    Personal Audio owns U.S. Patent No. 8,112,504, which
describes a system for organizing audio files, by subject
matter, into “program segments.” ’504 patent, Abstract.
The system arranges the segments through a “session
schedule” and allows a user to navigate through the
PERSONAL AUDIO, LLC v. CBS CORPORATION                      3

schedule in various ways, such as skipping the remainder
of a segment, restarting a segment from its beginning, lis-
tening to predetermined “highlight passages” within a seg-
ment, or jumping to a “cross-referenced position” within
another segment. Id., col. 2, lines 21–56.
    In 2013, Personal Audio sued CBS, alleging infringe-
ment of the ’504 patent. Later that year, a third party (the
Electronic Frontier Foundation) petitioned for an inter
partes review (IPR) of claims 31–35 of the ’504 patent un-
der 35 U.S.C. §§ 311–319. The Board instituted a review
in April 2014, but the district court case proceeded to trial,
with the issues limited to infringement and invalidity of
claims 31–34. On September 14, 2014, a jury found that
CBS had infringed claims 31–34 and that CBS had failed
to establish by clear and convincing evidence that those
claims were invalid. The jury awarded Personal Audio
$1,300,000 as damages for CBS’s infringement.
     On April 10, 2015, the Board issued a final written de-
cision in the IPR under 35 U.S.C.§ 318(a), concluding that
claims 31–35 are unpatentable. Electronic Frontier Foun-
dation v. Personal Audio, LLC, No. IPR2014-00070, 2015
WL 13685137 (P.T.A.B.). Personal Audio and CBS agreed
to stay proceedings in the district court case pending this
court’s review of the Board’s decision pursuant to 35 U.S.C.
§§ 141(c) and 319 and 28 U.S.C. § 1295(a)(4)(A). Before
pressing the appeal of the Board’s decision in this court,
Personal Audio sought rehearing with the Board, making
two arguments that are relevant to this appeal: (1) that the
Board, through its final written decision, violated the Sev-
enth Amendment by reexamining jury findings and (2) that
the final written decision was unlawful because the inter
partes review scheme violates the Due Process Clause of
the Fifth Amendment. J.A. 583–85. After the Board de-
nied rehearing, Personal Audio appealed to this court. In
its opening brief in this court, Personal Audio continued to
assert that the Board’s final written decision violated the
Seventh Amendment. J.A. 2118.
4                   PERSONAL AUDIO, LLC v. CBS CORPORATION

     On August 7, 2017, this court affirmed the Board’s final
written decision. Personal Audio, LLC v. Electronic Fron-
tier Foundation, 867 F.3d 1246, 1253 (Fed. Cir. 2017). The
Supreme Court denied Personal Audio’s petition for a writ
of certiorari on May 14, 2018. Personal Audio, LLC v. Elec-
tronic Frontier Foundation, 138 S. Ct. 1989 (2018).
     In December 2017, based on our decision affirming the
Board, the district court asked Personal Audio and CBS to
submit a joint status report. They did so on May 29, 2018,
after the Supreme Court denied certiorari from our deci-
sion. In the joint status report, Personal Audio stated that
it “continue[d] to believe that overturning the verdict of the
jury with a later IPR proceeding violates the Seventh
Amendment of the Constitution” and that “the outcome of
the IPR should not be given collateral estoppel effect, since
it was filed by a third party under a different standard.”
J.A. 423. But Personal Audio agreed to judgment against
it because “current authority supports rendering a judg-
ment in favor of the Defendant CBS.” Id.
    The district court entered judgment for CBS on July 11,
2018. One week later, on July 18, 2018, the PTO performed
the ministerial act, under 35 U.S.C. § 318(b), of issuing a
certificate that cancelled claims 31–35. Personal Audio
timely appealed to this court.
                              II
    Personal Audio does not challenge the IPR scheme or
even a particular provision of that scheme, or regulation
under the scheme, on its face. It alleges injury only from
the particular final written decision of the Board that ruled
claims 31−35 of its ’504 patent unpatentable. Personal Au-
dio presents challenges of two types involving the Board
decision, while invoking four constitutional bases and one
non-constitutional basis. First, Personal Audio presents
various challenges to the lawfulness of the Board’s final
written decision itself. Second, Personal Audio challenges
the district court’s ruling on the consequence of the
PERSONAL AUDIO, LLC v. CBS CORPORATION                        5

affirmed Board decision for this case—namely, that termi-
nation of Personal Audio’s assertion of the patent claims in
this still-live patent case is a required result of the affirmed
Board decision, even though the jury rendered a verdict in
Personal Audio’s favor.
     We do not have jurisdiction to hear challenges of the
first type, which squarely attack the validity of the Board’s
final written decision. The exclusive vehicle for bringing
such challenges is a direct appeal to this court from the fi-
nal written decision. As to challenges of the second type,
Personal Audio forfeited any argument that existing prec-
edent allows this panel to do anything but reject them. We
therefore affirm the district court’s judgment for CBS.
                               A
    Personal Audio contends that the Board, by issuing its
final written decision, violated the Reexamination Clause
of the Seventh Amendment, the Ex Post Facto Clause of
Article I, the Takings Clause of the Fifth Amendment, and
the Due Process Clause of the Fifth Amendment. 1 Of those
grounds, Personal Audio mentioned in the district court
only the Seventh Amendment ground. J.A. 423–24. We
consider the other grounds to be forfeited. Fresenius USA,
Inc. v. Baxter Int'l, Inc., 582 F.3d 1288, 1296 (Fed. Cir.
2009) (“If a party fails to raise an argument before the trial
court, or presents only a skeletal or undeveloped argument

    1    After briefing was complete, Personal Audio sub-
mitted a supplemental letter asserting an Appointments
Clause challenge to the Board’s decision. We have held
that any such challenge, even when made in a direct appeal
from the Board, is forfeited when not made in, or prior to
the filing of, the opening brief in this court. Customedia
Techs., LLC v. Dish Network Corp., 941 F.3d 1173, 1174
(Fed. Cir. 2019). The challenge is also, in any event, sub-
ject to the exclusive-jurisdiction bar discussed infra.
6                    PERSONAL AUDIO, LLC v. CBS CORPORATION

to the trial court, we may deem that argument waived on
appeal.”). But even if those grounds were not forfeited,
they would fail for the same reason that the Seventh
Amendment challenge to the Board decision fails: the dis-
trict court did not have jurisdiction to consider challenges
to the legality of the Board decision. We so conclude in ful-
filling our “independent obligation to determine whether
subject-matter jurisdiction exists.” Hertz Corp. v. Friend,
559 U.S. 77, 94 (2010).
     The Constitution gives Congress a broad power to de-
fine the jurisdiction of particular lower federal courts. Ar-
ticle III vests the “judicial power of the United States . . .
in one supreme Court, and in such inferior Courts as the
Congress may from time to time ordain and establish.”
Art. III § 1. In turn, Article I grants Congress the power to
“constitute Tribunals inferior to the supreme court.” Art. I
§ 8, cl. 9. The Supreme Court long ago held that the power
to create the lower federal courts includes a lesser power—
to define the jurisdiction of lower federal courts it creates.
Sheldon v. Sill, 49 U.S. 441, 448 (1850) (explaining that
“Congress, having the power to establish the courts, must
define their respective jurisdiction”); id. at 449 (“[H]aving
a right to prescribe, Congress may withhold from any court
of its creation jurisdiction of any of the enumerated contro-
versies.”); see Keene v. United States, 508 U.S. 200, 207
(1993).
    Congress has exercised this power to channel judicial
review of certain agency actions to specified lower federal
courts. The Administrative Procedure Act confirms this
fact when it commands that “[t]he form of proceeding for
judicial review is the special statutory review proceeding
relevant to the subject matter in a court specified by statute
or, in the absence or inadequacy thereof, any applicable
form of legal action . . . in a court of competent jurisdiction.”
5 U.S.C. § 703 (emphasis added). Congress has made dif-
ferent choices in different contexts about the channeling of
judicial review of agency action. Compare, e.g., 42 U.S.C.
PERSONAL AUDIO, LLC v. CBS CORPORATION                       7

§ 7607(b)(1) (providing for review of certain Environmental
Protection Agency decisions “only in the United States
Court of Appeals for the District of Columbia”) with, e.g.,
15 U.S.C. § 45(c) (providing for review of certain Federal
Trade Commission orders “within any circuit where the
method of competition or the act or practice in question was
used or where such person, partnership, or corporation re-
sides or carries on business”).
    While there is a “strong presumption that Congress in-
tends judicial review of administrative action,” Bowen v.
Michigan Acad. of Family Physicians, 476 U.S. 667, 670
(1986), that review may be exclusively routed to a specified
court of appeals. Where Congress has provided for decision
by an administrative body followed by appellate review in
a court of appeals, we must ask whether it is “‘fairly dis-
cernible in the statutory scheme’” that Congress has “pre-
cluded district court jurisdiction.” Thunder Basin Coal Co.
v. Reich, 510 U.S. 200, 207 (1994) (quoting Block v. Com-
munity Nutrition Institute, 467 U.S. 340, 351 (1984)). To
make that determination, we assess “the statute’s lan-
guage, structure, and purpose, its legislative history, . . .
and whether the claims can be afforded meaningful re-
view.” Id.
    In Elgin v. Department of Treasury, the Supreme Court
considered whether the Civil Service Reform Act (CSRA)
precludes district court review of an agency’s final adverse
action. 567 U.S. 1, 6 (2012). When an agency takes a final
adverse action against an employee, the employee is “enti-
tled to appeal to the Merit Systems Protection Board.” 5
U.S.C. § 7513(d). In turn, the CSRA gives our court “exclu-
sive jurisdiction” of, among other things, “an appeal from a
final order or final decision of the Merit Systems Protection
Board, pursuant to sections 7703(b)(1) and 7703(d) of title
5.” 28 U.S.C. § 1295(a)(9); see also 5 U.S.C. § 7703(b)(1)(A)
(“[A] petition to review a final order or final decision of the
Board shall be filed in the United States Court of Appeals
for the Federal Circuit.”). Interpreting these provisions
8                    PERSONAL AUDIO, LLC v. CBS CORPORATION

together, the Supreme Court determined that “extrastatu-
tory review is not available to those employees to whom the
CSRA grants administrative and judicial review.” Elgin,
567 U.S. at 11. The Court summarized the CSRA’s proce-
dural protections and explained that “[g]iven the painstak-
ing detail with which the CSRA sets out the method for
covered employees to obtain review of adverse employment
actions, it is fairly discernible that Congress intended to
deny such employees an additional avenue of review in dis-
trict court.” Id. at 11–12.
     We draw a comparable conclusion about the exclusivity
of appeal to this court as the mechanism for judicial review
of Personal Audio’s challenge to the final written decision
of the Board in the IPR here. Congress has provided that
a “party dissatisfied with the final written decision . . . un-
der section 318(a) may appeal the decision pursuant to sec-
tions 141 through 144.” 35 U.S.C. § 319. Under section
141(c), a “party to an inter partes review . . . who is dissat-
isfied with the final written decision of the [Board] under
section 318(a) . . . may appeal the Board’s decision only to
the United States Court of Appeals for the Federal Circuit.”
35 U.S.C. § 141(c) (emphasis added). Sections 142–144 de-
tail how this appeal must proceed, with each provision ex-
pressly referring to this court only. 35 U.S.C. § 142 (“When
an appeal is taken to the United States Court of Appeals
for the Federal Circuit, the appellant shall file . . . a written
notice of appeal” within a prescribed time . . . .”); id. § 143
(providing that “the Director shall transmit to the United
States Court of Appeals for the Federal Circuit a certified
list of the documents comprising the record” and “shall
have the right to intervene in an appeal”); id. § 144 (“The
United States Court of Appeals for the Federal Circuit
shall review the decision . . . [and] [u]pon its determination
the court shall issue . . . its mandate and opinion . . . .”).
Finally, Congress has expressly given this court “exclusive
jurisdiction” to hear “an appeal from a decision of . . . the
PERSONAL AUDIO, LLC v. CBS CORPORATION                      9

[Board] with respect to a[n] . . . inter partes review under
title 35.” 28 U.S.C. § 1295(a)(4)(A) (emphasis added).
    Those provisions make it more than “fairly discerni-
ble,” Elgin, 567 U.S. at 10, that judicial review of the law-
fulness of the Board’s final written decision here was
limited to an appeal to this court under the just-recited pro-
visions. That is enough in a case like this, where Congress
has provided an adequate channel for review rather than
foreclosed judicial review altogether or of particular consti-
tutional or other claims. See id. at 8−10. As described
above, Personal Audio took such an appeal, and there is no
basis for any conclusion that the opportunity provided in
that appeal was inadequate for the assertion and adjudica-
tion of any properly preserved challenge to the final written
decision as unlawful. We conclude that Congress’s affirm-
ative grant of an exclusive, direct-review procedure for fi-
nal written decisions deprives the district court of
jurisdiction to hear Personal Audio’s collateral attack on
the final written decision in this case.
                              B
     Personal Audio also challenges the district court’s hold-
ing that the necessary consequence of the affirmed final
written decision was termination of this case in favor of
CBS. This challenge is not to the final written decision, but
to the application of the decision, once affirmed, to dispose
of the patent infringement and invalidity assertions in this
case—and, now, to the application of the PTO’s ministerial
cancellation of the claims at issue a week after the district
court’s judgment was entered. This challenge was not ju-
risdictionally foreclosed to the district court by the exclu-
sive review scheme we have discussed, and we have
jurisdiction pursuant to 28 U.S.C. § 1295(a)(1) to hear Per-
sonal Audio’s appeal on this point.
    Personal Audio, however, forfeited any argument that
our existing precedent is not determinative against it. In
the status report submitted to the district court, Personal
10                   PERSONAL AUDIO, LLC v. CBS CORPORATION

Audio made no argument at all for distinguishing this case
from the cases in which we held that district court actions
had to terminate when a Board unpatentability ruling as
to the relevant patent claims was affirmed on appeal. See,
e.g., XY, LLC v. Trans Ova Genetics, 890 F.3d 1282, 1294
(Fed. Cir. 2018); Dow Chemical Co. v. Nova Chemicals
Corp. (Canada), 803 F.3d 620, 628 (Fed. Cir. 2015); ePlus,
Inc. v. Lawson Software, Inc., 789 F.3d 1349, 1358 (Fed.
Cir. 2015); Fresenius USA, Inc. v. Baxter Int’l, Inc., 721
F.3d 1330 (Fed. Cir. 2013). To the contrary, in the joint
status report, Personal Audio agreed that “current author-
ity supports rendering a judgment in favor of the Defend-
ant CBS” and that “there is no current precedent for doing
otherwise at this time.” J.A. 423.
    The panel lacks authority to reconsider the precedent
that Personal Audio agrees was adverse and controlling.
Only the en banc court may reconsider this precedent
within this court. We therefore affirm the district court’s
judgment.
                             III
     The judgment of the district court is affirmed.
                        AFFIRMED