On January 4th, the Patent Trial and Appeal Board (PTAB) issued what can only be considered a scathing response to a motion requesting an oral hearing which was filed by the Saint Regis Mohawk Tribe in a series of six inter partes review (IPR) proceedings in which the Saint Regis tribe is the patent owner. Applying some very interesting legal reasonings, including a due dates in the cases’ scheduling orders which passed before the Saint Regis tribe was the patent owner, the PTAB moved to prevent the Saint Regis tribe from filing any additional papers in these IPRs without prior authorization from the Board.
The PTAB’s decision to largely prevent the Saint Regis tribe from filing any additional papers in the case to which they are a party seems remarkable given the fact that the PTAB has opened up the proceedings of the Saint Regis trials to allow amicus briefings from third parties with an interest in the case. So, it would seem that the PTAB seems more interested in giving the agency’s supporters a say in these cases than the actual patent owner whose property rights are on the line, hardly the result one would anticipate if the PTAB were a court operating with any true sense of justice.
The Saint Regis tribe had originally filed its request for oral hearing to seek additional discovery in the case about the possibility of political pressure and financial interests which could have an effect on the PTAB’s decision in the IPRs. The Saint Regis tribe raised the possibility that ex parte oral or written communications could have occurred involving administrative patent judges (APJs) on the merits panels of these cases; such communications should be made public information under the terms of the Administrative Procedure Act (APA), a law which prohibits political pressure from being placed upon administrative judges such as APJs. On top of this, the Saint Regis tribe noted the non-trivial financial impact that a successful defense on sovereign immunity could have on the filing fees collected by the PTAB.
In denying the Saint Regis tribe’s request for oral hearing, the PTAB raised multiple objections to Saint Regis’ activities at the PTAB. First, the Saint Regis tribe filed the request for oral argument on the legal matters at issue without the Board setting a time for the Saint Regis tribe to file a request for oral argument on specific issues. Essentially, the Saint Regis tribe did not get the PTAB’s permission to raise those legal issues, yet the tribe raised those issues anyways. Further, the PTAB argued that the scheduling order’s deadline for parties to file a request for oral argument passed on July 20th, 2017, almost a full two months before Saint Regis became the patent owners in the case.
Although the PTAB could have expunged the tribe’s request for oral argument outright, it chose not to in order ensure that the record is clear on why the Saint Regis tribe’s request for discovery exceeded the scope of permissible discovery in IPR proceedings. Saint Regis sought discovery under 37 CFR § 42.51, which enables a single party to file for additional discovery. As the PTAB’s denial notes, however, the Saint Regis tribe was seeking additional discovery into the Board itself instead of another party in the case; the PTAB was not itself a “party” to the proceedings, it argued. “As a final note, we caution counsel for the Tribe that failure to comply with an applicable rule or order, abuse of discovery, and abuse of process are all grounds for sanctions,” the PTAB’s order reads.
Procedures at the PTAB require a party to email the merits panel to request a telephone hearing to seek permission to file a motion requesting additional discovery. But the party requesting the hearing cannot discuss legal issues in that email; those can only be explored during the telephone hearing. Counsel representing the Saint Regis tribe emailed the merits panel requesting a teleconference but that request was summarily denied. “That denial was intended to prevent us from making any legal arguments,” Evans said. “So the only avenue we had to make a record was to file a paper formally request an oral hearing.” Because there isn’t anything in the rules governing PTAB that gives the agency the ability to deny requests for oral hearings, the Board relied on a long-past deadline laid out in the original scheduling order to deny the request. “The process they’re employing against us is designed to prevent us from making any legal record,” Evans said. “That’s what’s really troubling. If they think that we’re wrong, fine. But they should let us file a brief and then rule on the legal issues we present.”
If the PTAB acted consistently in this fashion, denying a party’s request for discovery into ex parte communications with the merits panel after deadlines in the scheduling order had passed, that would be one thing. But the PTAB’s denial of the Saint Regis tribe’s request for oral argument looks dubious in light of the PTAB’s decision to allow a very similar request made by Apple as a petitioner in a different IPR. On December 20th, Apple filed a motion for judgment in favor of petitioner as sanction for improper ex parte communications by patent owner VoIP-Pal.com. Apple argued that the patent owner had engaged in a campaign of sending “threatening letters” accusing the Board of “criminal conspiracy” and that none of those letters had been presented to Apple. Such ex parte communications “irreparably tainted” the IPR proceeding in favor of VoIP-Pal, Apple argued, and Apple argued that the Board should reverse the final decision in the case and “provide a constitutionally correct process going forward.” (Whether the PTAB can even guarantee a constitutionally correct process in its trial proceedings is part of the question presented to the U.S. Supreme Court in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, a case which will be decided in 2018.) The day prior to Apple filing its motion, the PTAB granted Apple’s request for a telephonic hearing and authorized Apple to file its motion concerning the due process implications of ex parte communications and their impact on its trial. Most troubling, Apple’s motion demonstrates that PTAB does not publish ex parte communications into the administrative record as required by the APA, which is the exact issue Saint Regis requested discovery on.
The decision to deny the Saint Regis tribe the chance to have a phone hearing to explain its legal issues, in the context of the Board’s grant of a very similar motion made by Apple as a petitioner in another hearing, seems arbitrary and capricious to say the least. It certainly gives more sticking power to the tribe’s contention that financial interests may be compelling the PTAB to rule in certain ways; the Board wouldn’t even let the tribe brief the issue, attempting to sweep the problem under the rug by citing a deadline that passed before Saint Regis was even part of the trial, while basically allowing a petitioner bringing a case to the PTAB full reign to make the same argument well after any deadline for requesting an oral hearing would have passed. That certainly makes the PTAB seem much friendlier to the efficient infringer lobby bringing cases to its docket in a way that potentially highlights how that tribunal looks out after its own financial interests.
There are those who may very well contend that all of this is a natural extension of the fact that the PTAB is an alternative to district court in determining patent validity matters. And they would be right: the PTAB is an alternative to district courts, in much the same way that battery acid is an alternative to orange juice. Although Saint Regis is precluded from filing any additional papers in its IPR proceedings at the PTAB, Allergan, the original patent owner, filed a supplemental brief on litigation waiver issues on January 12th which argued against the PTAB’s findings on sovereign immunity defenses in other recent cases, such as the denial of the sovereign immunity defense issued by the PTAB in Ericsson, Inc. v. Regents of the University of Minnesota.