By IPO Pakistan.

PTAB Metal strides into IPR to choose Apple movement for sanctions

On August 22nd, a request was entered in the entomb partes survey (IPR) procedures at present progressing between Bellevue, WA-based advanced mixed media correspondences designer VoIP-Buddy and Cupertino, CA-based customer gadget monster Apple Inc. The request expelled the board of managerial patent judges (APJs) that had been settling the IPR, supplanting them with Vice president APJ Scott Boalick and Bad habit Boss APJs Jacqueline Bonilla and Michael Tierney.

This is the second time the board of APJs has been totally changed in this specific IPR continuing. Initially, the board had comprised of APJs Barbara Benoit, Lynne Pettigrew and Stacy Beth Margolies. Albeit no clarification was given (as is run of the mill with the PTAB) the board was changed half a month after we detailed that APJ Margolies had beforehand spoken to Apple in patent encroachment procedures in U.S. region court.

The second panel of APJs assigned to this case included APJs Josiah Cocks, Jennifer Meyer Chagnon and John Hudalla. This panel, which was assigned to the casein June 2017, was the panel that issued the final written decision entered last November, find that the petitioner Apple had not proven the challenged patent claims were invalid. This was the same panel sitting on the case through January 19th of this year, when the PTAB entered an order regarding VoIP-Pal’s discharge of its prior counsel in the case.

Interestingly, although the order notes that all three APJs on the second panel were involved in the call regarding the change of counsel, the order itself only lists APJs Cocks and Hudalla as presiding over the case. That discrepancy is not explained in the Order, and is sadly typical of the lack of transparency seen in PTAB decisions and Orders. In an Article III Court it is customary, if not absolutely expected, that when any procedural irregularities occur they are explained with at least a footnote. Notions of substantial fair play and justice require at least that modicum of an appearance of propriety.

It seems extraordinarily unusual for a tribunal — any tribunal — to change change judges for purpose of ruling on a sanctions motion. If the letters from VoIP-Pal’s CEO did actually constitute improper behavior, the best people to decide that issue would be the panel of APJs who were assigned to the case at the time the behavior took place. Unquestionably, the APJs that were presiding over the case are in the best position to determine whether sanctions are appropriate. Most of the challenged behavior occurred during the timeframe that APJs Cocks, Chagnon and Hudalla constituted the presiding panel. Only one of Sawyer’s letters was sent prior to the first panel change, and if that panel was in fact changed because APJ Margolies had a conflict of interest it would be inappropriate for that panel to consider the sanctions motion.
While highly unusual for the PTAB to switch judges in midstream without any explanation, this kind of action does happen. It is also why observers so confidently claim the procedures of the PTAB are arbitrary and capricious.
The USPTO has engaged in the stacking of APJ panels in order to achieve policy outcomes, APJ Margolies is not the only APJ to have sat on a case where there was a blatant conflict of interest, in fact APJ Matt Clement has decided several dozen cases involving Apple, who he formerly represented. The PTAB also rather effectively squashes dissenting opinions by requiring permission to dissent and recently after an APJ did dissent in favor of a patent owner he was mysteriously and without explanation removed from the panel. We also know that subordinate APJs assigned to cases engage in extra-judicial, deliberative conversations with superiors relating to cases and issues, a clear and flagrant violation of the Administrative Procedure Act (APA), which requires decisional independence.
Minus any explanation as to why the panel was recently changed in the VoIP-Pal/Apple IPR, this situation is yet another example of the lack of transparency issuing from the PTAB and will undoubtedly have the effect of making it look as though the PTAB’s decision in this case was preordained, no matter which side prevails in the motion for sanctions.
One may be tempted to argue that changing the panel to constitute such a high-ranking panel will ensure consideration by PTAB leadership who aren’t under any influence, but if the PTAB does not similarly treat future sanctions motions legitimate questions will be asked about why Apple received special treatment. Furthermore, the optics of using a panel including APJ Tierney in a case involving Apple will no doubt raise some eyebrows given that once a challenge has been instituted Tierney has overwhelmingly sided with Apple. Indeed, according to data collected by Lex Machina, never once has a final decision involving both Apple and APJ Tierney ever led to a finding that all claims remained valid, and only once has Tierney sat on a panel where at least one claim remained valid.
Maybe all the more charming, Tierney sat as an APJ on the IPR documented by Apple against VirnetX where Apple could get around the statute of impediments for recording an IPR. Should the PTAB give Apple’s assents movement there will without a doubt be some who will consider this to be a second extraordinary support done by Tierney for Apple’s benefit.

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