Risk Update

IP Risk Week (Part 5) — Patent Trial and Appeal Board Conflicts Allegations

Posted Dan Bressler

“DOJ Brief to CAFC Slamming Apple Highlights PTAB Code of Conduct Problem” —

  • “This particular mess relates to the Patent Trial and Appeal Board (PTAB) and the astonishing reality that the Administrative Patent Judges (APJs) on the PTAB are not bound by any Code of Judicial Conduct, as is applicable to Article III federal judges. Instead, PTAB Judges are only bound by the same ethics standard that applies to all other employees, which requires them to recuse themselves from any decisions relating to former employers for one year. That is how several PTAB Judges have been able to adjudicate inter partes review (IPR) and covered business method (CBM) challenges filed by a former litigation client – Apple, Inc.”
  • “It makes absolutely no sense for PTAB Judges to be allowed to adjudicate matters dealing with former clients. How the USPTO has allowed for this to happen is a mystery, and why they continue to allow it to happen is nothing short of a startling display of indifference.”
  • “The content of the Dr. Sawyer letters included a series of allegations of various criminal activities and other ethical infractions. For example, in a letter dated June 21, 2017, Dr. Sawyer complained about the cancellation rates for IPRs and suggested potential ethical violations posed by conflicts of interest with administrative patent judges (APJs) which went unreported by Apple. In the final letter, Dr. Sawyer suggested that the PTAB engaged in potential criminal violation of the Racketeering Influenced and Corrupt Organizations (RICO) Act and that IPR proceedings operated as a ‘killing field’ for small inventors.”
  • “Clearly, these types of ex parte communications are not the appropriate way to handle the grievance; sanctions followed, but the USPTO did remove the PTAB panel, which Apple did not appreciate. Although no explanation as to why the panel was removed was forthcoming, Dr. Sawyer’s allegations were not the made-up rantings of a lunatic. APJ Stacy Beth Margolies had previously represented Apple in several patent litigation matters, so at a minimum there was an appearance of impropriety.”
  • “It is unconscionable for the USPTO to continue to allow the PTAB to operate without a separate, distinct and legitimate Code of Conduct that at a minimum mandates recusal when an APJ cannot objectively preside over both parties in the proceeding.”

For more detail on this one, see: “More PTAB Conflicts: APJ Margolies Once Again Assigned to Apple Petitions.”

And going even deeper, a fascinating analytics-driven review of the PTAB trial outcomes (charts and commentary galore) involving a judge who served as lawyer that represented Apple in patent infringement matters while working for a prominent firm (2006-2013), then became an administrative patent judge at APJ (2013-2019), and was subsequently hired as Sr. Legal Counsel, IP Litigation by Apple: “By the Numbers: APJ Matt Clements and Potential Pro-Apple Bias at the PTAB.”