Court Opinion

ID: 9487266
Source: CourtListenerOpinion
Date Created: 2023-08-05 12:12:06.927708+00
Date Added: 2024-06-11T17:52:10.497140
License: Public Domain

MAYER, Circuit Judge, with whom MICHEL, Circuit Judge, joins,
dissenting.
I do not agree that we have jurisdiction over this appeal. The Commissioner exceeded his statutory authority in convening a new, expanded panel to reconsider the board’s original decision in Alappat’s appeal from the examiner. Because the Commissioner’s acts were not in accordance with law, the reconsideration decision cannot be a “decision of the Board of Patent Appeals and Interferences” within the meaning of 28 U.S.C. § 1295(4)(A) (1988), and this court has no jurisdiction to address the merits of the appeal. See In re Bose Corp., 772 F.2d 866, 869, 227 USPQ 1, 3 (Fed.Cir.1985) (an improperly constituted board may not render a valid decision over which this court may exercise its review jurisdiction). As the Supreme Court has said, “A court-martial [for which we may substitute “board”] is the creature of statute, and, as a body or tribunal, it must be convened and constituted in entire conformity with the provisions of the statute, or else it is without jurisdiction.” McClaughry v. Deming, 186 U.S. 49, 62, 22 S.Ct. 786, 791, 46 L.Ed. 1049 (1902).
The Patent Act provides that “[o]nly the Board of Patent Appeals and Interferences has the authority to grant rehearings.” 35 U.S.C. § 7(b) (1988). The Solicitor argues that the statute is ambiguous, that it is unclear what the composition of the “Board” must be for the “Board” to “grant rehearings” or to actually rehear an appeal. Therefore, this court should defer to the Commissioner’s interpretation of the meaning of this clause of section 7.
However, the Solicitor presents conflicting impressions of the board and its role. On one hand, he argues that the board is not an independent body, but is simply an extension of the former power of the Commissioner to *1572directly hear appeals from decisions of primary examiners.1 The board is an alternative avenue through which the Commissioner may make “policy” decisions, of which as head of the Patent Office, he is the final arbiter. This being the case, the Commissioner has broad discretionary authority to designate, or redesignate, panels to keep the board from rendering decisions contrary to his policy. Therefore, the “Board” that either grants rehearings or rehears appeals is whatever collection of members the Commissioner chooses to designate at any stage of the proceeding before a final decision is entered.
On the other hand, the Solicitor analogizes the board to a court. He says it regularly sits in panels of three, but is capable, as is this court, of sitting in expanded panels if certain criteria are met. He also compares the board to the Court of Appeals for the Ninth Circuit and its ability to sit en banc with less than the entire court. See 28 U.S.C. § 46(c) (1988); 9th Cir. Rule 35-3. The board also has this option, argues the Solicitor, and the use of limited “en bane” is discretionary with the Commissioner.
The Commissioner cannot have it both ways. Either the board is a quasi-judicial body, deciding each ease by applying existing law to the facts before it, or the board is simply an extension of the Commissioner’s office, making decisions on the basis of policy.
I think the statute is unambiguous and that it unarguably vests the power to grant rehearings in the board itself, free from undue interference by the Commissioner. The patent board is not the “alter ego” of the Commissioner; it is an adjudicative body which functions independently and has its own separate and distinct authority. See Animal Legal Defense Fund v. Quigg, 932 F.2d 920, 928, 18 USPQ2d 1677, 1684 (Fed. Cir.1991). The Commissioner may only influence a decision when he sits as a voting member of the board and in this role he serves as any other member. Id. at 929 n. 10, 18 USPQ2d at 1684 n. 10. It is on this assumption that this court has routinely reviewed patentability decisions of the board on the same basis as it does those of a court. See, e.g., In re King, 801 F.2d 1324, 1326, 231 USPQ 136, 138 (Fed.Cir.1986) (“Our review of a finding of anticipation [a fact question] is the same whether it was made by the board or by a district court.”); compare In re Bond, 910 F.2d 831, 833, 15 USPQ2d 1566, 1567 (Fed.Cir.1990) (anticipation is a question of fact for the board reviewed under the clearly erroneous standard), with Linde-mann Maschinenfabrik Gmbh v. American Hoist & Derrick Co., 730 F.2d 1452, 1458, 221 USPQ 481, 485 (Fed.Cir.1984) (applying same clearly erroneous standard to district court’s finding of anticipation); and In re McCarthy, 763 F.2d 411, 412, 226 USPQ 99, 100 (Fed.Cir.1985) (obviousness is reviewed for legal correctness without deference to the board’s determinations), with Gardner v. TEC Systems, Inc., 725 F.2d 1338, 1344, 220 USPQ 777, 782 (Fed.Cir.1984) (district court’s conclusion on obviousness “is one of law and subject to full and independent review in this court.”).
The role of the board is also readily apparent from the history of the Patent Office. The Office’s primary task is to answer questions on the patentability of inventions. The Commissioner has the authority to promulgate regulations consistent with the patent laws to aid the efficient operation of the Office. 35 U.S.C. § 6(a) (1988); see Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1425, 7 USPQ2d 1152, 1154 (Fed.Cir.1988). The Patent Office also has the responsibility to make individual determinations on patentability by examining particular applications. 35 U.S.C. § 131 (1988). Originally, these functions were colo-cated in the Office of the Commissioner, who had the authority to “administer” the Office as well as to act as the final stage of decision on individual applications by hearing appeals directly from the examiners. See M. Blom-mer, The Board of Patent Appeals and Interferences, 1992 AIPLA Bulletin 188 (October, 1992); P.J. Federico, The Board of Appeals 1861-1961, 43 J.Pat.Off.Soe’y 691 (1961) (summarizing the history of the board from its inception). Growth in the number of ap*1573plications and correspondingly of appeals, made it necessary to give the Commissioner help in hearing appeals. In 1861 the Board of Appeals was created, and the Commissioner was given the task of hearing appeals from this board’s decisions. 1992 AIPLA Bulletin at 190.
The Act of March 2, 1927, set up the division of authority in the Patent Office essentially as it exists today by abolishing the appeal to the Commissioner and delegating the task of hearing appeals solely to the newly expanded board. The Commissioner was made a member of the board along with the First Assistant Commissioner, the Assistant Commissioner and the examiners-in-chief. See Pub.L. No. 69-690, 44 Stat. 1335 (1927). The act separated the administrative function of running the Patent Office assigned to the Commissioner, from the adjudicatory function of deciding individual cases of patentability, delegated to the board. This division was retained in the 1952 Patent Act. See 35 U.S.C. §§ 6 and 7. The additional requirement that “examiners-in-chief shall be persons of competent legal knowledge and scientific ability” suggests the board is to render its decisions on legal and scientific bases independent of administrative and policy concerns. See id. § 7(a).
The independent character of the board comports with the arrangement of other adjudicatory bodies in the executive branch. For example, Congress has created agency boards of contract appeals and given them the authority to rule on disputes arising out of contracts between the government and private parties. 41 U.S.C. § 607 (1988). These boards preside over cases in which contract rights of private individuals and entities are directly pitted against the interests of the government. Likewise the patent appeals board resolves conflicts between individuals seeking exclusive rights to inventions and the government’s interest in promoting free exchange of technology. Both the board of patent appeals2 and the contract appeals boards3 function under similar grants of authority that, at least facially, are not limited by the authority of the head of the agency. Both bodies are in some sense, “designated” by their agency head, but this does not mean their decisions may be limited or controlled by that official. Historical and statutory notes explaining the authority of the boards of contract appeals state that the boards act independently, “not as a representative of the agency, since the agency is contesting the contractor’s entitlement to relief.” 41 U.S.C.A. § 607 notes; see also United States v. General Dynamics Corp., 828 F.2d 1356, 1364 (9th Cir.1987) (the “ASBCA is intended to be independent of the Department of Defense,” and its function is “strictly quasi-judicial”). By virtue of its similar function and statutory authority, the patent appeals board cannot be viewed as a “representative of the agency” because the Patent Office, through the examiner, also contests the entitlement of the applicant by arguing for rejection of the patent application.
If Congress intended to create a board that is not independent, but subject to the policy-making authority of the agency head, it would have specifically done so as it has in other contexts. For example, it specified that the secretaries of the military departments may correct the military records of an individual by acting “through” a civilian board. See 10 U.S.C. § 1552 (1988 & Supp. IV 1993).4 By the statute, the board acts as *1574the secretary would, it acts on his behalf. This contrasts sharply with the situation of the board of patent appeals on which the Commissioner acts simply as one member of the board. The Patent Act does give the Commissioner authority to designate the members who will sit on panels of the board, 35 U.S.C. § 7(b), but this is a far cry from a proviso that the board acts for the Commissioner, or the Commissioner acts “through” the board.
By way of another example, Congress specifically limited the independence of the Board of Veterans Appeals. See 38 U.S.C. § 7104 (1988). In addition to regulations of the department and precedent of the department’s chief legal officer, instructions of the secretary are specifically made binding upon the board in making its decisions. Id. § 7104(c).5 The statute also gives the chairman, who is directly responsible to the secretary, the authority to order reconsideration of board appeals to be heard by an expanded section of the board. Id. §§ 7101(a), 7103(a) & (b).
While the boards for the correction of military records and the Board of Veterans Appeals also serve a purpose similar to the boards of contract appeals and the patent board in that they preside over disputes with the government, their authority is significantly constrained by their subservience to the heads of those departments. Conversely, there is no similar limitation on the statutory authority of the patent appeals board in its adjudicatory role.
As a quasi-judicial adjudicatory body, the board is, or ought to be, imbued with certain court-like qualities. It accepts the submission of legal briefs, holds hearings, admits declarations, exhibits and affidavits upon a showing of good cause, issues written opinions, and has the power to remand cases to the examiner for action consistent with those opinions. See 37 C.F.R. § 1.191 et. seq. (1993). Inherent in this adjudicative posture are certain standards of conduct. Of primary importance are both the decisional independence of the individual members of the adjudicatory body, and assurance that the decisions of the body as a whole are free from undue influence. Once an agency head decides to delegate some of his discretionary decision-making power to a board, even in the absence of specific congressional command, much less the situation here, he must then respect the independent decisional authority of the board and refrain from attempting to influence its decisions. United States ex rel. Accardi v. Shaughnessy, 347 U.S. 260, 266, 74 S.Ct. 499, 503, 98 L.Ed. 681 (1954) (once the Attorney General has delegated authority to rule on deportation orders to the Board of Immigration Appeals, he must not attempt to influence the board’s decisions).
That courts and judges are to be free from outside influence in rendering decisions is unquestionably a basic concept of jurisprudence. See Chandler v. Judicial Council of Tenth Circuit, 398 U.S. 74, 84, 90 S.Ct. 1648, 1653, 26 L.Ed.2d 100 (1970) (“There can, of course, be no disagreement among us as to the imperative need for total and absolute independence of judges in deciding cases or in any phase of the decisional function.”). Executive agencies, even acting in their adjudicatory capacity, are not courts, but the Supreme Court has emphasized that they must conform to the same standards:
The maintenance of proper standards on the part of administrative agencies in the performance of their quasi-judicial functions is of the highest importance and in no way cripples or embarrasses the exercise of their appropriate authority. On the contrary, it is in their manifest interest. For, as we said at the outset, if these multiplying agencies deemed to be necessary in our complex society are to serve the purposes for which they are created and endowed with vast powers, they must accredit themselves by acting in accordance with the cherished judicial tradition embodying the basic concepts of fair play.
Morgan v. United States, 304 U.S. 1, 22, 58 S.Ct. 773, 778, 82 L.Ed. 1129 (1938). To allow the Commissioner to gerrymander the *1575composition of the board to insure a preordained result directly conflicts with the concept “that in administrative proceedings of a quasi-judicial character the liberty and property of the citizen shall be protected by the rudimentary requirements of fair play.” Id. at 14-15, 58 S.Ct. at 775. See also Utica Packing Co. v. Block, 781 F.2d 71, 78 (6th Cir.1986) (decision of the Department of Agriculture reversed because the secretary’s removal of the adjudicating officer who rendered the original decision and assigning a new one to rule on a petition for reconsideration violated due process.) “There is no guarantee of fairness when the one who appoints a judge has the power to remove the judge before the end of proceedings for rendering a decision which displeases the ap-pointer.” 781 F.2d at 78.
Because the board is a quasi-judicial body, and its proceedings must conform to judicial standards and be free from undue influence by the Commissioner, there is no mistaking the meaning of 35 U.S.C. § 7(b). By its terms, the power to grant reheatings resides solely in the board and that power is separate and distinct from the powers of the Commissioner. Thus the decision to grant a rehearing must be made by the “Board” without interference by the Commissioner; he is limited to his membership on the board with a single vote. Although the Commissioner does have additional authority to designate panels, it is limited by the need to protect the board’s decisional independence. See Ethicon, 849 F.2d at 1428, 7 USPQ2d at 1156 (Commissioner may conduct activities in the Patent Office “so long as he does not violate the statute.”). In this respect the Commissioner holds a position on the board similar to a chief judge of a court, who has only one vote on a case, but has additional administrative authority.
In his dual role, as “rule-maker” for the Patent Office, and as “judge” when sitting on a panel of the board, the Commissioner is in a position similar to a federal judge on the United States Sentencing Commission. The Supreme Court has said it is not inherently impermissible for a judge to play such a dual role: “[T]he Constitution, ... does not forbid judges to wear two hats; it merely forbids them to wear both hats at the same time.” Mistretta v. United States, 488 U.S. 361, 404, 109 S.Ct. 647, 671, 102 L.Ed.2d 714 (1989). So too the Commissioner; when dealing with the board, he is as limited in his authority as any other member, and may not wear his policy-making “hat” or seek to force preordained, policy-driven decisions.
The procedure to grant rehearing, although not the subject of formal rule,6 must be consistent with the quasi-judicial character of the board itself, and must conform to the same standards as other judicial bodies. When a court grants a “rehearing,” it means one of two things: that the case is heard again by the original panel, or is heard by the entire court sitting en banc. See, e.g., Fed.R.App.P. 35, 28 U.S.C.App. (1988); Fed. Cir.R. 40 (1993) and Practice Note (petitions for rehearing); D.C.Cir. Rule 15, 28 U.S.C.A. (1993). In keeping with this practice, once a ease is heard by a properly designated panel of the Board of Patent Appeals and Interferences, and a decision rendered, rehearing may be granted and the case reheard only by the “Board,” i.e. the original panel or the board as a whole. There is no room for any intermediate procedure. Just as it would be impermissible for the chief judge of a court *1576to personally decide that a case should be reheard by an “expanded” panel and then pack the panel with judges known for conforming views, such action by the Commissioner is likewise unacceptable.
That the Commissioner “stacked” the board is abundantly clear. After the original panel rendered a decision favorable to Alap-pat, the Commissioner designated an expanded panel to rehear the ease consisting of himself, the Deputy Commissioner, an Assistant Commissioner, the Chairman and Vice-Chairman of the board, and the original three panel members. With himself and the four other “command group” members making up a majority of the board rehearing the appeal, the outcome was assured. These five members voted together, and the original panel filed an emphatic dissent.
The Solicitor argues that the large size of the board, over forty members, would make it unwieldy to sit as a whole. According to the Solicitor, like the Ninth Circuit, the board has the power to sit in “limited en banc” panels, at the discretion of the Commissioner. The circuit courts, however, have express statutory authority to divide themselves into smaller “administrative units” to hear cases en banc if the circuit has more than fifteen active judges.7 The board has no similar statutory authority and any attempt by the Commissioner to provide for limited en banc, by rule or otherwise, would be inconsistent with the exclusive authority of the board to grant rehearings. If the large size of the board impedes its operation by making it difficult to rehear cases en banc, congressional consent for an alternative procedure like the circuit courts’ should be sought. Because no such statutory authority now exists, however, the power of the board to grant reheatings is limited to the two choices available to other adjudicatory bodies, rehearing by the panel or by the entire board. The “rehearing” in this case was not accomplished by either of the two permissible options, so the decision of the. expanded panel was not a decision of the “Board” within the meaning of the jurisdictional statute of this court and we have no authority to reach the merits, no matter how great their perceived importance.
However, we always have jurisdiction to the extent necessary to determine the jurisdiction of our subordinate tribunals, as well as our own. Bender v. Williamsport Area School District, 475 U.S. 534, 541, 106 S.Ct. 1326, 1331, 89 L.Ed.2d .501 (1986) (“every federal appellate court has a special obligation to ‘satisfy itself not only of its own jurisdiction, but also that of the lower courts in a cause under review1 ... ‘[When the lower federal court] lack[s] jurisdiction, we have jurisdiction on appeal, not of the merits but merely for the purpose of correcting the error of the lower court in entertaining the suit.’ ”) (citations omitted, bracketed material in original); accord C.R. Bard, Inc. v. Schwartz, 716 F.2d 874, 877, 219 USPQ 197, 200 (Fed.Gir.1983). For the same reason we lack jurisdiction to hear this appeal, so too did this board in its reconsideration. Accordingly, I would “correet[] the error” of the board by vacating its decision.
The decision of the court to take jurisdiction nevertheless, raises another troubling issue. If the Commissioner is correct, as the court apparently thinks, the board must be seen as simply an extension of the Commissioner’s policy-making authority and thus not independent. If this is so, the standard by which this court reviews decisions of the board is questionable. It is now the practice, dubious from the start, to review the board under the same standard as we review a district court. In re King, 801 F.2d at 1326, 231 USPQ at 138. Questions of law are reviewed de novo, while findings of fact are examined to determine whether they are clearly erroneous. E.g., In re McCarthy, 763 F.2d at 412, 226 USPQ at 100 (obviousness is reviewed for legal correctness without deference to the board’s determinations); In re Bond, 910 F.2d at 833, 15 USPQ2d at 1567 (anticipation is a question of fact for the board reviewed under the clearly erroneous standard). But if the board is simply implementing policy set out by the Comm^ioner, its decisions cannot be considered “legal” but must be subject to review as statements of agency policy. How such agency policy deci*1577sions are to be reviewed is not uniformly agreed upon by the courts; some review them for abuse of discretion, some for whether they are arbitrary and capricious, and some virtually refuse to review them at all.8 Regardless of which of these standards would be most appropriate, it at least may be said that the standard of review applied by this court to the board should include a good deal more deference than has been applied heretofore.9 Our practice is inconsistent with our review of agency boards of contract appeals. Those boards are “independent” of their agencies, and yet the Contract Disputes Act directs that their fact finding be reviewed under the deferential “substantial evidence” standard. See 41 U.S.C. § 609(b) (1988); Triaoc-Pacific v. Stone, 958 F.2d 351, 353 (Fed.Cir.1992). If the court is correct that the patent appeals board is less “independent” and makes policy-based decisions, then arguably it should be reviewed more deferentially than contract appeals boards, not less so, as now.
The court seems inclined to let this matter slide, but I believe the decision today upholding jurisdiction puts the issue squarely before us, and the ramifications of that decision should not go quietly unnoticed. We should not pretend we are reviewing judicial decisions if they are really nothing more than policy actions. Even on a more deferential standard of review, however, I would still hold the Commissioner’s manipulation of the board illegal.

. The Commissioner has publicly set forth this view in an April 29, 1992, letter to the members of the board, reprinted in 44 PTCJ (BNA) 43 (May 14, 1992).

. "The Board of Patent Appeals and Interferences shall, on written appeal of an applicant, review adverse decisions of examiners upon applications for patents and shall determine priority and patentability of invention in interferences declared under section 135(a) of this title. Each appeal and interference shall be heard by at least three members of the Board of Patent Appeals and Interferences, who shall be designated by the Commissioner.” 35 U.S.C. § 7(b).

. "Each agency board shall have jurisdiction to decide any appeal from a decision of a contracting officer (1) relative to a contract made by the agency, and (2) relative to a contract made by any other agency when such agency or the Administrator has designated the agency board to decide the appeal." 41 U.S.C. § 607(d).

.In pertinent part, § 1552 reads as follows:
(a)(1) The Secretary of a military department may correct any military record of the Secretary’s department when the Secretary considers it necessary to correct an error or remove an injustice ... such corrections shall be made by the Secretary acting through boards of civilians of the executive part of that military department.

. Section 7104(c) reads as follows: "The Board shall be bound in its decisions by the regulations of the Department, instructions of the Secretary, and the precedent opinions of the chief legal officer of the Department.”

. The lack of formal, published regulations covering the procedure to grant rehearings may itself make the Commissioner’s practice of designating a new, or expanded panel unlawful. Re-designation in this case was outcome-determinative. As such, the redesignation practice affected substantive rights of the applicant. Under the Administrative Procedure Act, “substantive rules of general applicability," as well as "the general course and method by which [the agency's] functions are channeled and determined," are required to be published in the Federal Register. 5 U.S.C. § 552(a)(1)(D) & (a)(1)(B). There are no published rules or notices or even general explanations of how redesignation (or designation) of panels is to be accomplished by the Commissioner. "The Administrative Procedure Act was adopted to provide, inter alia, that administrative policies affecting individual rights and obligations be promulgated pursuant to certain stated procedures so as to avoid the inherently arbitrary nature of unpublished ad hoc determinations. See generally S.Rep. No. 752, 79th Cong., 1st Sess., 12-13 (1945); H.R.Rep. No. 1980, 79th Cong., 2d Sess., 21-23 (1946).” Morton v. Ruiz, 415 U.S. 199, 232, 94 S.Ct. 1055, 1073, 39 L.Ed.2d 270 (1974).

. 28 U.S.C. § 46(c) (1988); Pub.L. No. 95-486 § 6, 92 Stat. 1633 (Oct. 20, 1978). Currently only the Ninth Circuit qualifies under this statute.

. See, e.g., Mada-Luna v. Fitzpatrick, 813 F.2d 1006, 1015 (9th Cir.1987) ("[Algency decisions made pursuant to general statements of policy may be judicially reviewable at least for abuse of discretion.” [citations omitted]); Mercury Motor Express, Inc. v. United States, 648 F.2d 315, 319 (5th Cir.1981) (policy statements reviewed under arbitrary, capricious standard); American Trucking Association, Inc. v. United States, 755 F.2d 1292, 1298 (7th Cir.1985) ("[T]he scope of our review [of a statement of general policy] would be exceedingly narrow, and our approval of the Commissioner's action would therefore be virtually assured.”).

. This court has taken a step in that direction in its review of the Trademark Trial and Appeal Board. See Eastman Kodak Co. v. Bell & Howell, 994 F.2d 1569, 26 USPQ2d 1912 (Fed.Cir.1993) (applying Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), to a decision of the TTAB, which is treated as if it were the "agency," and holding the TTAB’s interpretation of an ambiguous provision of the trademark statute reasonable, rather than undertaking a de novo interpretation of law).

. Robert Cecil, the Third Marquess of Salisbury, was one of the great Prime Ministers of nineteenth-century England. See R.K. Massie, Dreadnought — Britain, Germany, and the Coming of the Great War (1991).