PATENT CASE OF THE WEEK
Knowles Electronics LLC v. Iancu, Appeal No. 2016-1954 (Fed. Cir. 2018)
In an appeal from an inter partes reexamination, the Federal Circuit affirmed a decision by the PTAB invalidating a patent concerning microphones. The case was decided on the construction of a claim term and whether a new ground of rejection was raised by the PTAB.
However, perhaps the more compelling issue for purposes of precedent was disposed of by the majority opinion in a single footnote, though garnering a 13-page dissent from Judge Newman. That issue concerned the standing of the Director of the PTO to participate in appeals after a successful petitioner declines to participate.
The inter partes reexamination was brought by third-party requester Analog Devices, Inc. After the PTAB ruled in its favor, Analog Devices declined to defend the judgment in its favor before the Federal Circuit on appeal. Given the lack of an appellee, the Director of the PTO intervened, defended the PTAB’s determination, and participated at oral argument. After oral argument was completed, the Federal Circuit accepted separate briefing on whether the Director had standing to participate. In a page-long footnote, the panel majority held that he did.
The majority concluded that the Director “has an unconditional statutory ‘right to intervene in an appeal from a [PTAB] decision. 35 U.S.C. § 143.” The majority stated that “precedent allows the USPTO to intervene to defend a PTAB decision when a petitioner withdraws on appeal, necessarily implying jurisdiction,” and citing cases, including In re Cuozzo Speed Techs., LLC. In that case, the Director intervened in the appeal and, subsequently, Garmin, the petitioner, moved to withdraw as part of a settlement agreement with Cuozzo. On appeal to the Supreme Court, the case was recaptioned Cuozzo Speed Techs., LLC v. Lee; at the time, Michelle Lee was the Director of the PTO. The Supreme Court held that “the Patent Office may intervene in a later judicial proceeding to defend its decision—even if the private challengers drop out.” Based on that determination, the panel majority in Knowles held that the “Director of the USPTO, thus, has standing.”
In her dissent, Judge Newman disagreed that § 143 or Cuozzo gave the Director carte blanche standing with respect to any issue subject to appeal. Rather, Judge Newman distinguished between the right of the Director to intervene and the Director’s standing to maintain the appeal on the merits in the absence of an appellee. According to Judge Newman, a Director only has standing to step into the shoes of the appellee where the PTO’s own practices are being appealed, not to defend the merits of the appellee’s case. For example, in Cuozzo, the Director defended the use of the broadest reasonable interpretation standard for claim construction on appeal. Such a challenge is a challenge to the PTO’s own “procedures and regulations,” and results in an injury to the agency itself. But, “when an intervenor is the only entity remaining on its side of the dispute, the intervenor must have an interest sufficient to satisfy Article III in order to continue the litigation.” Thus, “in the rare situation where there is no remaining appellee and the intervenor has asserted no injury to itself, the intervenor of right does not have independent standing to continue the litigation.”
After providing an analysis of numerous cases, Judge Newman concluded that, although the AIA provided a statutory right of intervention to the Director, “Intervention is designed to permit participation by entities with interests in the matter before the court. When the intervenor does not have an independent interest or injury, and no party remains as appellee on the side favored by the intervenor, the requirements of intervenor status are not met.”
Opinion can be found here
