IPR’s Survive More Constitutional Challenges

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In Mobility Workx, LLC v. Unified Patents, LLC, [2020-1441] (October 13, 2021), the Federal Circuit concluded that Mobility’s constitutional arguments were without merit. Without reaching the merits of the Board’s decision, in light of Arthrex, it remanded to the Acting Director to determine whether to grant rehearing.

Mobility argued that the structure and funding of the Board violates due process. First, because “the fee-generating structure of AIA review[] creates a temptation” for the Board to institute AIA proceedings in order to collect post-institution fees (fees for the merits stage of the AIA proceedings) and fund the agency. Second, because individual APJs have an unconstitutional interest in instituting AIA proceedings because their own compensation in the form of performance bonuses is favorably affected.

The Federal Circuit found no merit to these defenses.

Mobility raised several additional constitutional challenges not raised before the agency that have been previously rejected by this court in other cases. Mobility argued that the Director’s delegation of his authority to institute AIA proceedings violates due process and the Administrative Procedure Act because the Director has delegated the initial institution decision to “the exact same panel of Judges that ultimately hears the case.” Mobility additionally argued that subjecting a pre-AIA patent to AIA review proceedings “constitutes an unlawful taking of property.” 

The Federal Circuit rejected these challenges.

Finally, Mobility raised an Appointments Clause challenge. The Federal Circuit agreed that a remand is required under the Supreme Court’s decision in Arthrex to allow the Acting Director to review the final written decision of the APJ panel pursuant to newly established USPTO procedures, and remanded the case.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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