If PTAB judges can decide cases involving former defense clients USPTO conflict rules must change

“My guess is most patent owners would be adamantly opposed to PTAB judges deciding petitions challenging patents brought by their former patent infringement defense clients.”

USPTO conflictIt is hard to imagine that a federal judge appointed for life under Article III of the United States Constitution would preside over a case where one of the litigants was a former client. Indeed, the Code of Conduct for Article III Judges of the United States has specific provisions that would seem to absolutely prohibit a judge from handling a case where a litigant is a former client.

Some may argue, perhaps correctly, that at some point any conflict requiring disqualification that might have existed as the result of an attorney-client relationship would subside, if not completely wash away. But after what length of time? Certainly, the answer is not after 18 months.

As was first reported by Steve Brachmann, Administrative Patent Judge Matt Clements represented Apple as patent infringement defense counsel up to his appointment as an APJ in March 2013. So far we have identified 17 final written decisions where Apple was the petitioner and Clements sat on the PTAB panel assigned to the case, with Clements authoring 4 of those decisions (see below for a full list and links). The earliest decisions we have found so far where Clements participated in Apple petitions are a series of CBM initiation decisions made in September 2014, just 18 months after he left private practice and joined the Patent Trial and Appeal Board (PTAB). These Apple CBM proceedings with September 2014 institution decisions were filed in April 2014, and obviously assigned to Clements well before the institution decisions were made public. The institution decision in CBM2014-00108 was authored by Clements. See also the institution decisions in CBM2014-00106 and CBM2014-00112.

Since the start of fiscal year 2015 there have been 4,624 post grant challenges filed at the United States Patent and Trademark Office (USPTO). Apple is the largest filer of post grant challenges, but over the roughly three and one half year period from the start of fiscal year 2012 and the beginning of 2016, Apple filed 252 post grant challenges. There is simply no reason why the PTAB had to assign Clements cases where Apple was a petitioner seeking to invalidate patent rights. There were literally thousands of other cases on which Clements could have sat without any real or perceived conflict of interest.

Some have started to defend Clements actions based on their belief that the decisions rendered were legally correct, therefore there was no wrong. Whether these decisions are legally correct and whether there were any wrongs committed are two entirely different questions. Judges are supposed to act such that there can be no question with respect to their impartiality, and even a hint of impropriety is to be avoided at all costs. Whether the decisions Clements made and participated in making are correct misses the point entirely. Clements participating as a Judge in petitions brought by a former client so soon after he represented that former client is an egregious lapse of judgment by someone.

If an APJ making decisions in a case within 18 months of having represented a former client complies with whatever USPTO conflict rules or guidelines apply to PTAB judges, the USPTO conflict rules or guidelines are too lenient and must be changed. PTAB judges should not be deciding cases involving post grant petitions filed by former defense clients, and under no circumstances is 18 months long enough to alleviate any concerns of bias or take away the appearance of impropriety.


Code of Conduct for Federal Judges

Canon 2A of the Code of Conduct for Article III Judges, under the title “Respect for Law,” says: “A judge should respect and comply with the law and should act at all times in a manner that promotes confidence in the integrity and impartiality of the judiciary.” The commentary that goes along with Canon 2A begins by tackling the issue of an appearance of impropriety. The comment, in relevant part, reads:

An appearance of impropriety occurs when reasonable minds, with knowledge of all the relevant circumstances disclosed by a reasonable inquiry, would conclude that the judge’s honesty, integrity, impartiality, temperament, or fitness to serve as a judge is impaired. Public confidence in the judiciary is eroded by irresponsible or improper conduct by judges. A judge must avoid all impropriety and appearance of impropriety. This prohibition applies to both professional and personal conduct. A judge must expect to be the subject of constant public scrutiny and accept freely and willingly restrictions that might be viewed as burdensome by the ordinary citizen.

Canon 3C of the Code of Conduct for Article III Judges, under the title “Disqualification,” reads in relevant part: “A judge shall disqualify himself or herself in a proceeding in which the judge’s impartiality might reasonably be questioned…”

In the situation where there is not a per se disqualification under Canon 3C, such as for personal bias, the judge served as a lawyer in the same controversy, or the judge or a family member has a financial interest, the judge may disclose the reason disqualification would seem appropriate under Canon 3C and leave it up to the parties to decide. In this situation, however, the rules are very specific.

The judge may participate in the proceeding if, after that disclosure, the parties and their lawyers have an opportunity to confer outside the presence of the judge, all agree in writing or on the record that the judge should not be disqualified, and the judge is then willing to participate. The agreement should be incorporated in the record of the proceeding.

Of course, a federal judge could (and perhaps should) conclude that adjudicating a matter involving a former client creates a personal bias, which creates a per se disqualification. If that is not the case, then the parties would have to be notified and given the opportunity to discuss outside the presence of the judge. If and only if all parties agree in writing can the judge continue on the case.


Real Party-in-Interest

Unlike federal judges who have a specific Code of Conduct that is available for everyone to see, there seem to be no similar public Code of Conduct rules or regulations that govern Administrative Patent Judges at the PTAB. I understand that there is an internal set of guidelines that govern conflicts of interest, and there is a two-year bar under those internal USPTO conflict guidelines. Assuming that is true and there is a two-year bar, Clements participating in at least several of Apple’s petitions seems to have violated even an exceptionally lenient internal USPTO conflict guideline by participating in cases involving Apple less than 2 years after he was representing them as defense counsel.

It is worth nothing that 37 CFR 41.37(c)(1) requires appellants to identify the real party-in-interest in order to allow members of the Patent Trial and Appeal Board (PTAB) to comply with ethics regulations that mandate the avoidance of a conflict of interest (see MPEP 1205.02). Similarly, 37 CFR 42.8 requires the real party-in-interest to be identified with the filing of a post grant challenge. The Office Patent Trial Practice Guide explains that identifying the real party-in-interest in a post grant proceeding is in part “to assist members of the Board in identifying potential conflicts…” (see page 48759).

If identification of the real party-in-interest is so important perhaps that transparency should be a two-way street. Perhaps there should be a public Code of Conduct for PTAB judges, and perhaps the USPTO should give stakeholders the opportunity to be heard on whether 2 years is an appropriate length of time to ameliorate a conflict of interest, or the appearance of impropriety that exists when deciding cases dealing with former defense clients.

My guess is most patent owners would be adamantly opposed to PTAB judges deciding petitions challenging patents brought by their former patent infringement defense clients.


Final Written Decisions with Clements on the panel

  1. Apple, Inc. v. Smartflash LLC, CBM2014-00106 (September 25, 2015)
  2. Apple, Inc. v. Smartflash LLC, CBM2014-00112 (September 25, 2015)
  3. Apple, Inc. v. Smartflash LLC, CBM2015-00016 (March 29, 2016)
  4. Apple, Inc. et al v. e-Watch, Inc., IPR2015-00412 (May 6, 2016)
  5. Apple, Inc. et al v. Smartflash LLC, CBM2015-00028 (May 26, 2016)
  6. Apple, Inc. et al v. Smartflash LLC, CBM2015-00029 (May 26, 2016)
  7. Apple, Inc. et al v. Smartflash LLC, CBM2015-00031 (May 26, 2016)
  8. Apple, Inc. et al v. Smartflash LLC, CBM2015-00032 (May 26, 2016)
  9. Apple, Inc. v. DDS Technology Management, Inc., IPR2015-00373 (June 17, 2016)
  10. Apple, Inc. et al v. e-Watch, Inc., IPR2015-00414 (June 22, 2016)
  11. Apple, Inc. v. Smartflash LLC, CBM2015-00123 (November 7, 2016)
  12. Apple, Inc. v. Smartflash LLC, CBM2015-00124 (November 7, 2016)
  13. Apple, Inc. v. Smartflash LLC, CBM2015-00127 (November 7, 2016)


Final Written Decisions authored by Clements

  1. Apple, Inc. v. Smartflash LLC, CBM2014-00108 (September 25, 2015)
  2. Apple, Inc. v. Smartflash LLC, CBM2015-00017 (March 30, 2016)
  3. Apple, Inc. et al v. Smartflash LLC, CBM2015-00033 (May 26, 2016)
  4. Apple, Inc. et al v. Smartflash LLC, CBM2015-00133 (November 10, 2016)



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Join the Discussion

11 comments so far.

  • [Avatar for LLdc]
    May 8, 2017 12:05 pm

    No doubt happens under Michelle Lee. Step down Administrative Patent Judge Matt Clements.

  • [Avatar for Anon]
    May 3, 2017 03:35 pm

    As for the notion of “seeming odd” that a person with more intimacy with (and power to) changing law would have less ethical guidelines (the very reason attorneys have ethical guidelines in the first place is our proximity to the law), one might also question the actitivies (and opinions) of law professors (academics).

    Not only does this group often engage in legal activism, they also actively shape the thinking of each new generation of attorney; and yet, balderdash from this group runs rampant (not to steal the thunder from Night Writer, who also shares a certain disdain for the “looseness” that so often accompanies the work of Academics…)

    Note as well the rumination of a certain Congressman bemoaning the “Billions of dollars that ‘Tr011s’ cost” – clear reference to the very debunked academic speaking point of yesteryear that still is getting mileage.

  • [Avatar for Anon]
    May 3, 2017 03:24 pm

    Gene, any update on the apparent block of the multi-USC/CFR posts?

    You might note that I have at least been able to post the authors and the publisher of the desk reference of mine from which I tried to quote the “additional” ethics that may apply.

  • [Avatar for Gene Quinn]
    Gene Quinn
    May 3, 2017 02:59 pm

    Veritas @6-

    Interesting comment. Why would I correct something that I don’t know to be untrue? Scott McKeown cited a generic PTO rule that deals with conflicts. That rule does not mention either the PTAB or judges, but rather applies to all USPTO employees. If there is no specific Code of Conduct that applies to PTAB judges that would be utterly shocking, and the USPTO will have to answer a lot of very difficult questions.

    As far as knowing whether Clements breached ethics rules, stay tuned for my next column which will be up shortly. What I’ll say for now is it would seem odd that an Administrative Patent Judge would have a much lower standard for conflict of interest than would a patent practitioner.

    So since Scott McKeown does not speak for the USPTO and the USPTO has refused to answer whether there is a specific Code of Conduct applicable to PTAB judges, it would seem the question is still open.


  • [Avatar for Patent Investor]
    Patent Investor
    May 3, 2017 10:20 am

    For Smartflash’s patents to have been allowed to be attacked by CBM IPRs in the first place shows that the decision making skills, if not motives, of the panels in question are certainly circumspect.

  • [Avatar for Veritas]
    May 2, 2017 11:00 pm

    Gene, in your final comment (#37) on Steve’s post, you link to the PTO ethics guidelines and it’s clear you are now aware that the recusal period under the guidelines is one year. And yet you haven’t corrected your statement above, in this post, that there’s a two-year bar that APJ Clements appears to have violated. That is irresponsible at best, and libelous at worst. If you want to debate whether PTO’s recusal period is sufficient, that’s fine, but don’t continue to state in a public discussion that someone breached government ethics rules once you know they haven’t.

  • [Avatar for Ternary]
    May 2, 2017 06:06 pm

    I truly had hoped that this was an aberration, a limited incident. This list literally took my breath away. It really gets worse and worse. Please, do not give up on the good work Gene/Steve. Somewhere down the line some sanity has to return to the system. (though I have been hoping that for a while, and it only seems to get worse, and more uncontrolled and irrational)

    We have had clients accusing the system of being corrupt. Our counter argument usually was that a not favorable decision should not be viewed as corruption. That seems to be very naive now.

  • [Avatar for Anon]
    May 2, 2017 12:19 pm


    There are many things that remain in the shadows of the USPTO.

    Even as that agency has a rule that all aspects of the prosecution of applications are to be done on the written record, aspects remain in the shadows.

    Take as an example, the SAWS debacle. While I do not doubt that the particular distinct program of SAWS may have been discontinued as the Office announced, the very announcement made by the Office in its handling of SAWS volunteered the admission that SAWS was but one of many such “shadow” programs.

    Combine that as well with the record number of “shareholder” visits (read that as $ lobbiests) for which there are no recorded minutes of the closed doors meetings, and the goings-ons of the Office reek of the perception of political influence peddling – regardless of any existence of said influence peddling or not.

    And of course, given that the executive agency known as the patent office has one of the worst separations of function and control between the “political” and its “judicial” functions, those very same judicial functions (read that as PTAB) the current discussions on the topic of “perceptions” comes as no real surprise (disappointment, yes; surprise, no).

  • [Avatar for David]
    May 2, 2017 11:48 am

    The PTAB’s conduct of conduct guidelines should not be internal. They should be publicly available like those for the district courts.

  • [Avatar for Curious]
    May 2, 2017 11:36 am

    A little off-topic, but when is this administration going to do something about naming a new Director of the USPTO? This process is dragging on forever.

  • [Avatar for Curious]
    May 2, 2017 11:34 am

    I mean really — this is a no-brainer. If you are an APJ, you shouldn’t be on any panel in which one of the parties is a former client. I can see an exception if you were an associate and your firm represented one of the parties but you never did any work for that client. Also, if you have been an APJ for a substantial number of years (e.g., 5 years??), then that might be another exception. There are PLENTY of APJs capable of working in any particular technology group, so there isn’t an absolute need for a particular APJ to work a particular IPR.

    I hate to say this, but this appears to be another example where the USPTO says — “the rules apply to other agencies, not to us.”

    I assume this particular APJ is acting ethically in making his determinations. However, the appearance just looks bad, and there is no way around it.

    What’s the purpose of designating the real party in interest if such a designation is going to be ignored?