In Re Boloro Global Ltd., No. 19-2349 (Fed. Cir. 2020)

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The Patent Trial and Appeal Board, in an ex parte appeal, affirmed an examiner’s rejection of claims in Boloro’s patent applications. Boloro moved to vacate. The Director of the Patent and Trademark Office acknowledged that the administrative patent judges (APJs) were not constitutionally appointed at the time of the Board’s final decision. The Federal Circuit has previously held that the appropriate remedy for such a constitutional violation was to vacate the Board’s decision and to remand for reassignment to a different panel of APJs for a new hearing and decision. The Director urges that the same remedy should not be extended to ex parte proceedings, like the Boloro proceedings, because the Director possesses “complete control over the initial examination” and could at any time before the Board proceedings have directed the issuance of Boloro’s patents but did not, consistent with the Board’s subsequent decisions. The Federal Circuit rejected that argument and remanded to the Board.

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Case: 19-2349 Document: 35 Page: 1 Filed: 07/07/2020 United States Court of Appeals for the Federal Circuit ______________________ IN RE: BOLORO GLOBAL LIMITED, Appellant ______________________ 2019-2349, -2351, -2353 ______________________ Appeals from the United States Patent and Trademark Office, Patent Trial and Appeal Board in Nos. 14/222,613, 14/222,615, and 14/222,616. ______________________ ON MOTION ______________________ MICHAEL RAYMOND CASEY, Oblon, McClelland, Maier and Neustadt, LLP, Alexandria, VA, for appellant. Also represented by JAMES LOVE; CARLOS RAFAEL VILLAMAR, The Villamar Firm PLLC, Falls Church, VA. ROBERT J. MCMANUS, Office of the Solicitor, United States Patent and Trademark Office, Alexandria, VA, for appellee Andrei Iancu. Also represented by THOMAS W. KRAUSE, FARHEENA YASMEEN RASHEED, MOLLY R. SILFEN, NICHOLAS THEODORE MATICH, IV, DANIEL KAZHDAN; COURTNEY DIXON, SCOTT R. MCINTOSH, MELISSA N. PATTERSON, JOSEPH H. HUNT, Appellate Staff, Civil Division, United States Department of Justice, Washington, DC. ______________________ Case: 19-2349 Document: 35 Page: 2 Filed: 07/07/2020 IN RE: BOLORO GLOBAL LIMITED 2 Before LOURIE, DYK, and REYNA, Circuit Judges. DYK, Circuit Judge. ORDER Boloro Global Limited moves to vacate and remand the underlying decisions of the Patent Trial and Appeal Board in these appeals from the Board’s decisions in ex parte appeals, affirming the examiner’s rejection of claims in Boloro’s patent applications. The Director of the United States Patent and Trademark Office opposes the motion. Both parties have filed supplemental briefing in support of their respective positions. The Director acknowledges that, under the reasoning of this court’s decisions in Arthrex, Inc. v. Smith & Nephew, Inc., 941 F.3d 1320 (Fed. Cir. 2019), and VirnetX Inc. v. Cisco Sys., Inc., No. 2019-1671, 2020 WL 2462797 (Fed. Cir. May 13, 2020), the administrative patent judges (APJs) were not constitutionally appointed at the time the Board’s final decision on appeal was issued. See Director’s 2d Suppl. Resp. at 3–4 (conceding that it follows under the reasoning of the Supreme Court’s decision in Freytag v. Comm’r, 501 U.S. 868, 882 (1991), as understood in VirnetX, that “APJs were principal officers for purposes of all governmental functions of their office”); see also id. at 4 (conceding that, even if the Director could refuse to issue a patent if the Board approves an application, that would not render an APJ an inferior officer). In both Arthrex and VirnetX, this court held that the appropriate remedy for such a constitutional violation was to vacate the Board’s decision and to remand for the purpose of reassigning the matter to a different panel of APJs for a new hearing and decision. Arthrex, 941 F.3d at 1338– 39; VirnetX Inc. v. Cisco Sys., Inc., No. 2019-1671, slip op. at 2 (Fed. Cir. Jan. 24, 2020). The Director urges that the same remedy should not be extended to ex parte proceedings because, according to the Director, he possesses Case: 19-2349 Document: 35 Page: 3 Filed: 07/07/2020 IN RE: BOLORO GLOBAL LIMITED 3 “complete control over the initial examination” and could at any time prior to the Board proceedings have directed the issuance of Boloro’s patents but did not, consistent with the Board’s subsequent decisions. But the Director having conceded that the APJ’s appointments were unconstitutional, we see no principled reason to depart here from the resulting remedy applied in Arthrex and VirnetX. Accordingly, IT IS ORDERED THAT: (1) Boloro’s motion to vacate and remand is granted. The Patent Trial and Appeal Board’s decision is vacated, and the case is remanded to the Board for proceedings consistent with this court’s decision in Arthrex. (2) Each side shall bear its own costs. FOR THE COURT July 7, 2020 Date /s/ Peter R. Marksteiner Peter R. Marksteiner Clerk of Court

Primary Holding

Federal Circuit applies its "Arthrex" holding to a Patent Trial and Appeal Board order in an ex parte appeal, vacating and remanding that order because the administrative patent judges were not constitutionally appointed at the time of the Board’s final decision.

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