FACEBOOK, INC. v. WINDY CITY INNOVATIONS, LLC
Oral Argument · Case 2018-1400 · 68:41
0:00
Judge Prost
The bench looks a little different.
0:01
Judge O'Malley is on the panel this morning.
0:04
And hopefully, if things work out,
0:06
is going to be participating in real time.
0:09
But in any event, she has access to the tapes,
0:13
and she will be participating in all the cases we hear today.
0:18
Ms. Keith.
0:24
Appellant Attorney (Heidi Lyn Keefe)
Thank you, Your Honors.
0:25
Good morning.
0:27
May it please the court, first I'd
0:29
like to just note that for the sake of brevity
0:32
of our oral arguments, we've actually
0:33
conferred with Learned Counsel.
0:35
And we will be submitting on the papers for the 657 and 552
0:40
appeals regarding the claim construction
0:42
issues that were raised.
0:44
Judge Prost
Let me just start off by telling you that that's nice,
0:48
and that's helpful.
0:49
But frankly, this is about what we need to hear from you.
0:52
Absolutely, Your Honors.
0:53
I will tell you that I don't know if this
0:55
is good news or bad news, but I think the panel is prepared
1:00
to focus, if not exclusively, at least
1:03
predominantly, not on the merits
1:05
issues of either the appeal or the cross appeal,
1:07
but on the question of Joinder.
1:09
Absolutely, Your Honor.
1:10
And you noted in your reply brief
1:12
that that's a predicate issue that we have to deal with.
1:15
So I don't want you to be all nervous,
1:17
like I got to get to the merits, whatever.
1:19
We may very well never get to the merits arguments.
1:21
And your briefing was very fulsome,
1:23
and we have your briefing to rely on.
1:25
So starting with Joinder.
1:27
Appellant Attorney (Heidi Lyn Keefe)
So typically, Your Honor, I wouldn't
1:28
do that until the rebuttal.
1:29
Would you like me to just address it
1:30
from the very beginning?
1:31
Judge Prost
Yes, that's what this argument I think is for.
1:33
Perfect.
1:33
I can't speak exclusively for everybody on the panel.
1:36
OK, so turning to Joinder, I guess my first question
1:39
is, where's the PTO?
1:42
Appellant Attorney (Heidi Lyn Keefe)
So right now, Your Honor, the PTAB
1:44
has issued a precedential.
1:46
Judge Prost
No, I know, but where are they in this case?
1:47
Because maybe I'm wrong.
1:49
I don't know that there's anything in writing.
1:51
But my historical experience since the AIA passed
1:56
was they would intervene in two circumstances.
1:59
One, if you weren't here, obviously you are.
2:01
But two, if there were questions about
2:03
interpretation of the AIA or those kinds of practices
2:07
and policies.
2:08
So I don't know if you've talked to the PTO.
2:11
I am just really don't understand
2:14
why they haven't intervened, because there's
2:16
a very important question of Joinder here, as you said.
2:19
And now that they've got a precedential opinion,
2:22
they obviously have something different to say, perhaps,
2:26
than they said in NIDAC.
2:27
So do you have any idea?
2:29
Would your expectation have been that they would have tried
2:32
to intervene in this case, given the Joinder issue?
2:35
Appellant Attorney (Heidi Lyn Keefe)
Given the, Your Honor, no.
2:37
I did not believe that they would have intervened
2:39
in this case, given the Joinder issue,
2:40
given that they came out with the precedential opinion
2:45
in Propanit.
2:46
And I think what, if it were me, I
2:49
would say that they think that Propanit set down
2:52
a precedential opinion of an administrative edict.
2:57
In other words, the Patent Office.
2:59
Judge Prost
I know, but if you were here, if you were the Patent Office
3:01
and you were here.
3:02
And we haven't spoken definitively,
3:05
I don't think necessarily, on whether the extent to which we
3:09
give any deference at all, let alone substantial Chevron
3:12
deference, which you've called for in your 28 letter.
3:15
Correct.
3:16
So wouldn't you think the Patent Office should and would
3:20
be here?
3:21
I mean, are you making an assumption
3:22
that we're going to accept that as a Chevron deference?
3:27
You think they're making that assumption,
3:29
that now that they've spoken in a precedential opinion,
3:31
end of story?
3:32
Appellant Attorney (Heidi Lyn Keefe)
I am making that assumption that that's
3:34
what they're thinking.
3:35
I don't at all have any inkling as to what
3:37
your honors are thinking.
3:38
We have actually argued that, in fact, we
3:42
believe that the Federal Circuit should give Chevron deference
3:46
to the Propanit decision because it is a precedential opinion.
3:51
It's the first that the Patent Office.
3:52
Judge Prost
I understand.
3:53
And in fact, it's very curious because in your 28 letter,
3:56
in the final paragraph, you say, quote, the PTO's
4:00
most precedential statutory interpretation of 315C,
4:05
provided after notice, public comment, and hearing,
4:09
is entitled to Chevron deference.
4:11
So do you think that because amicus briefs were invited
4:15
in a precedential opinion, that necessarily equates
4:19
with notice and comment rulemaking?
4:21
Appellant Attorney (Heidi Lyn Keefe)
I don't think they're exactly the same, your honor.
4:23
Certainly they're not.
4:24
They're not a fulsome rulemaking process
4:27
with everyone being invited.
4:29
But they do.
4:30
They do grant the Patent Office the public's input.
4:34
And there were actually six separate amici
4:36
from individuals, as well as corporations, and bodies
4:41
like the AIPLA.
4:43
Appellee Attorney
Ms. Keith, I've read all.
4:49
Yes, sir.
4:50
There is absolutely no legal basis
4:55
for that precedential opinion to be considered compliance
5:00
with the Administrative Procedure Act.
5:02
The Administrative Procedure Act very
5:05
clearly spells out what needs to be done for a regulation.
5:11
First of all, it has to come
5:12
from the official leadership of the organization.
5:16
And you can argue he was involved in this panel.
5:20
But secondly, you have to file in the Federal Register.
5:25
You have to go through certain steps.
5:28
You have to give public notice in a particular kind.
5:31
None of that was done.
5:33
So let me clarify.
5:34
For your thinking, and anybody else who thinks otherwise,
5:38
they can do all the precedential opinions they want.
5:42
And they can advertise them any way they want.
5:45
And it will never qualify under the Administrative Procedure
5:49
Act as a proper notice and procedure notice
5:54
and process under the APA.
5:56
So they can't get Chevron deference in any sense.
6:02
So you should put that out of your mind.
6:04
And move on from there.
6:06
Judge Prost
I appreciate it.
6:07
Let me just add to that.
6:08
And I'm not, you know, we'll all figure it out.
6:11
But I just want to ask you, leaving aside the APA issue,
6:16
isn't it just a matter, and we've got Kaiser now.
6:19
And granted, Kaiser dealt with our deference and not Chevron
6:22
deference.
6:22
But isn't what we're doing here in terms of construing 315
6:27
B and C just a matter of deciding
6:30
which statutory interpretation is the most reasonable, rather
6:34
than a matter of deference?
6:37
I mean, Kaiser lists factors when deference is due.
6:41
And it seems to me those factors are nonexistent here.
6:46
Appellant Attorney (Heidi Lyn Keefe)
Well, what I think is appropriate here, Your Honor,
6:48
I understand your point.
6:49
But what I think is most appropriate here, Your Honor,
6:51
is that this statute specifically gives discretion
6:56
to the commissioner to make these determinations.
6:59
And so as we see the director, I apologize, the director is given
7:04
the discretion.
7:04
I apologize.
7:04
And I don't think it's appropriate for the commissioner
7:05
to make the decision to decide whether or not
7:06
to allow these joiners.
7:08
And therefore, he's being given discretion to interpret 315.
7:13
And as we see in Meade and in the Chevron case itself,
7:17
when Congress is silent, or in fact,
7:21
actually passes the imprimatur on to the administrative agency,
7:26
that's when Chevron deference actually applies the most.
7:29
Judge Prost
No, I understand your point and I take your point.
7:31
But there's an issue that we have to get to in order
7:35
to put his deference.
7:37
He's got deference under the statute, no doubt.
7:39
The question is what the extent of the deference is.
7:43
And a predicate for that is to construe the statute.
7:48
I mean, we're talking about whether he has the discretion
7:51
to join time-barred parties or persons versus time-barred claims.
7:58
Because that's really the heart of this dispute.
8:01
I mean, the other side may say the issue is whether or not
8:05
you can join the same party, but my view of it, at least,
8:10
is whether it's the same party or a different party,
8:13
the real heart of the issue and the import for what we do here
8:17
is whether or not that otherwise time-barred party
8:21
who the director may have the discretion to join
8:24
is allowed to bring in issues that aren't covered
8:27
by the original petition.
8:28
That seems to me to be a very important issue.
8:31
We've spoken at a concurrence in NIDAC, I think,
8:34
Click to Call kind of referenced that.
8:36
So I agree there's discretion, but how do you
8:40
get past the first issue, which is, I think,
8:43
a more issue for us than the director,
8:46
this clear statutory interpretation?
8:47
Why should we rejoin your parties to be anything more
8:52
than parties as opposed to whether you can bring in
8:55
your issues with that?
8:56
Appellant Attorney (Heidi Lyn Keefe)
And so for that, Your Honor, I think
8:57
we also have to look to the statute itself.
8:59
And the statute itself.
9:00
If what Your Honor is saying is that it's absolutely
9:03
limited to only the claims that were in the original petition,
9:06
nothing more, never, only those claims, slash only those issues,
9:11
then the rest of the statute wouldn't also
9:13
require that the issues presented otherwise
9:17
meet the AIA standard, otherwise would
9:20
be eligible for the petition.
9:23
Judge Prost
You say that wouldn't have any meaning?
9:25
Of course it would, because it limits who can be a party.
9:28
They don't want just Joe and Mary.
9:30
They don't want just Mary from Lafayette Park to come in and join as parties.
9:34
They're putting a limit on who can be joined as a party.
9:38
And it can't be somebody, and that's
9:40
what these limitations are about.
9:43
They're talking about, they are limiting
9:44
who can be joined as a party, but that doesn't necessarily
9:48
answer the question about whether the issues raised
9:51
in those other petitions, if there's otherwise time barred,
9:54
are necessarily allowed to come in.
9:56
Do you understand the point I'm making?
9:57
Appellant Attorney (Heidi Lyn Keefe)
I absolutely understand Your Honor's question.
9:59
And unfortunately, I just disagree.
10:00
And then I'm going to go back to what you said.
10:00
The reason I disagree is because if you look to, for example,
10:03
Senator Kyle's statements about the fact
10:06
that they anticipated that other issues may arise,
10:11
that there would be other materials presented,
10:14
and we cite that in our brief.
10:15
It's actually discussed at length in the proponent decision
10:18
as well.
10:19
They all point to the section of 315 that talks about not only
10:25
can any person, so unfortunately it
10:27
can be someone from Walnut Creek or Lafayette who actually comes
10:30
in, any person can actually petition for a joinder,
10:34
but then the director has to receive the preliminary response
10:39
and then determine whether that petition warrants institution
10:43
under 314.
10:44
Appellee Attorney
Excuse me, Ms. Keith.
10:46
It does not say any person.
10:48
It says any person who properly files a petition
10:53
under section 311.
10:54
Correct.
10:55
In order to properly file a petition under section 311,
10:59
you have to meet a whole bunch of requirements, including,
11:05
as you know, not being the patent owner
11:08
and a variety of other things.
11:11
So it's not anybody can walk in.
11:14
Let me, if I may, pick up with the point
11:19
that Chief Judge Trost was working from.
11:22
Let's assume, hypothetically, the worst case for you.
11:28
Let's assume.
11:29
Okay.
11:29
Let's assume, hypothetically, that the statute means exactly what it says.
11:35
And what it says is that an interparty's review may not be instituted
11:42
if the petitioner requesting the preceding file more than one year after the
11:46
date on which the petitioner, etcetera, is served with a complaint alleging
11:50
infringement of the patent.
11:52
And that's a bar that will bar any petition by the same
12:00
party after the one year period. That's what the statute says. Let's assume we
12:07
think that's what the statute says. This is a hypothetical for you. I know your
12:11
position. I've read all those arguments that appear and I've even read the
12:17
argument in the other cases that have been before the PPR and so I we're not
12:24
going to persuade you but I'm not sure you're going to persuade us. So let's
12:28
proceed with this hypothetical. The worst case. Let me go to your factual case.
12:37
You tell us, this is what you've told us, you said the complaint was filed in the
12:42
Western District of North Carolina in 2015. Then you alleging infringement of
12:49
four patents. 830 claims in those four patents but by the way I'll give you a
12:55
chance to quarrel with the facts later. 830 claims not
13:00
specified. Then you tried to get a dismissal but the court never dealt with
13:06
it. Eventually there was a transfer in 2016 to the Northern District of
13:12
California and that court didn't deal with your dismissal motion either but it
13:17
did set a management conference for four months after the one-year bar expired.
13:26
Well there you're looking at that and let's
13:31
assume that you read the statute the way I'm proposing to you at the moment.
13:37
We'll read it. Which is you have no way of filing a second petition after the
13:44
statute is run and you can't join yourself. It's
13:53
grammatically impossible for someone to join themselves unless they happen to be
13:58
dead. Now, you're facing a death penalty,
14:02
and you have no way to file those follow-on petitions what would you do how would you deal
14:11
with that problem creatively if you were faced with it help me and that's what's puzzling me
14:16
is how do we get someone like you out of that dilemma under the worst case reading of the
14:23
Appellant Attorney (Heidi Lyn Keefe)
statute the problem here your honor was we were creative we actually filed an emergency motion
14:30
Judge Prost
with the district court you you absolutely acted responsibly and you also recognize that you had
14:37
a potential peril um peril here yes we did without doing that yes i'm not quarreling with what you
14:45
Appellee Attorney
did i'm only asking you what would you have done if you knew in advance if instead of having the
14:53
the pro-pac uh opinion and all the rest of that if you knew in advance you could not
14:59
file a late petition what would you have done as that time bar began to get near you what would
15:08
Appellant Attorney (Heidi Lyn Keefe)
you do what we did your honor is what we did because we weren't assured the court you asked
15:14
Appellee Attorney
the court for an expedited hearing it never happened correct now what and then we did
15:21
Appellant Attorney (Heidi Lyn Keefe)
unfortunately your honor we did the only thing that was available to us given that it was
15:25
physically impossible well not i guess it's not impossible
15:29
it was physically improbable both cost prohibitively and logistically and i'm not sure what the patent
15:35
office would have done if i had filed call it 30 petitions to try to accommodate all of the claims
15:42
that were at issue in the case i don't think it's practical bad law but let's assume we recognize
15:48
Judge Prost
830 potential claims in over four patents is the extreme correct but i think petitioners face this
15:56
all the time right i mean rarely do
15:59
complaints in the first instance at least do anything other than have some ambiguity in terms
16:06
of which actual claims were asserted but normally thank goodness most of the time we're dealing only
16:12
with a patent because no matter how you read the statutory language it says on a patent they can't
16:17
bring in another patent correct so they go ahead and they unless they can get an answer from the
16:23
district court they file petitions that are over inclusive possibly
16:30
and that and that happens normally i mean sometimes people who file complaints until they
16:34
have discovery that's why we have lots of amendments to complaints adding claims which can
16:39
always happen after the one year time absolutely your honor and that's the system we're dealing with
16:46
i mean i i respect that um i think i don't want to read into it but i'm assuming director yanku and
16:52
the rest of the people on this pop thing recognized that there should be what he calls a very limited
16:58
exception i don't want to read into it but i'm assuming director yanku and the rest of the people on this pop thing recognized that there should be what he calls a very limited exception
17:00
for that circumstance but if we can't read it into the statute then you'll do it what i think in the
17:09
normal circumstance most petitioners already do they're not faced with 830 claims they might be
17:15
faced with 20 claims versus three and they go ahead and protect themselves what would what would
17:21
Appellee Attorney
preclude you what would preclude you from within that one year period here's what you did you
17:28
filed a motion to expedite it was
17:30
denied you then petitioned within the one year period uh what you guessed were the relevant
17:37
claims that you thought were representative of the 245 and 657 patents right correct your honor
17:44
and the clock kept ticking understood your honor now if you were sitting there today
17:53
and you knew that clock was going to cut you off what would you next do i'm not sure honestly
18:00
Appellant Attorney (Heidi Lyn Keefe)
your honor that there was anything
18:01
else I could have done. The only two options are file on 830 claims or make an election.
18:08
Appellee Attorney
Why can't you file on 830 claims by a petition? I'm just asking, why can't you file a petition
18:16
and just list the numbers of all those claims, which is all you need to do to get the petition
18:23
in by the deadline? I'm just asking because I want to understand. In your papers, you said,
18:29
well, that's not fair to the PTO. That's not your problem. You're not the PTO. How do you protect
18:36
Appellant Attorney (Heidi Lyn Keefe)
yourself under these circumstances? So, Your Honor, if this court were to find that simply
18:42
listing the other claims was enough, we would do that. But the Patent Office has rejected all
18:51
petitions that don't give full evidence to every claim that's in the petition. It's not good enough
18:58
to say, here's a good example. Here's a good example. Here's a good example. Here's a good
18:59
example. Here's an exemplary claim one, and I want you to attach all of that same analysis to
19:04
everything else. There are page limits and costs. Each petition costs at least $30,000 just to file.
19:11
And if you can only get within the 40 to 50 page limit, it's a word limit, not a page limit,
19:19
you can't possibly even print out what the claims are. Well, you can file multiple petitions. You
19:24
can, Your Honor. But if you can imagine, I think at this point when we calculated it, it would
19:29
have been something on the order of 30 petitions in order to accommodate everything.
19:35
Judge Prost
Firstly, this is obviously the extreme case. Completely. And one would hope that even though
19:42
policy, if it was just policy, it would dictate probably a win for you. But on the other hand,
19:49
policy would dictate that the patent owner has some skin in the game here too. It can't possibly
19:55
be to their advantage if they're only planning to assert a dozen claims.
19:59
At the end of the day in their complaint, it can't be to their advantage. And they're against
20:05
Facebook. They're not against some little guy. So you have the wherewithal, the bandwidth,
20:08
presumably to force their hand. The patent owner, it's not in his interest to have you file IPRs on
20:18
all of his patents and all of his claims. So he's got something, he's got an incentive to try to
20:24
figure it out sooner rather than later. Because if it's realistic that you are going to file on
20:29
all of them, then he is risking unnecessarily all of his claims. And particularly under SAS,
20:36
where they can make an institution decision and pick out three little claims and we're done.
20:42
So he's got a risk. It's not some patent owner, I got nothing to lose. I'm just going to try to
20:48
harass the petitioner. There's something to lose at the other end so that people will be reasonable.
20:54
Appellant Attorney (Heidi Lyn Keefe)
I disagree, Your Honor. There's nothing to lose for a patent owner. What a patent owner does is say-
20:59
All of this-
20:59
Judge Prost
All of his claims and all of his patents are now going to be in the IPR process.
21:03
Appellant Attorney (Heidi Lyn Keefe)
Because all he has to do is say, oh, and now I'm not going to assert those in court and I'm not
21:09
worried about those anymore. And meanwhile, he has drugged the defendant to spend hundreds of
21:16
Judge Prost
thousands of dollars. That's true. He's not going to assert them in this, but he's still,
21:20
what he's done is jeopardized his entire portfolio unnecessarily. And to me, there's possibly a cost
21:28
to that or a- I don't know. I don't know. I don't know. I don't know. I don't know. I don't know.
21:29
I don't know. I don't know. I don't know. I don't know. I don't know. I don't know. I don't know.
21:29
It's a disincentive to just willy-nilly do that if there's no reason. Obviously, there could be a
21:36
reason in some circumstances. Without discovery, he could not really know which of those claims
21:42
are probative. And that's fair enough, right? But, Your Honor, that risk exists the minute
21:46
Appellant Attorney (Heidi Lyn Keefe)
they file the lawsuit. Those claims are all potentially going to be invalidated the minute
21:51
they file a lawsuit without telling us what claims there are. It has nothing to do with,
21:55
oh, and now the disincentive is they could all be invalidated. That exists,
21:59
whether or not you go to the PTAB.
22:01
So there is no disincentive for patent owners.
22:05
In fact, the proponent decision, the director specifically talks about the gamesmanship
22:11
that is afforded to a patent owner who is able to say,
22:14
here is my pile of 300, 800, however many claims it is,
22:19
and I refuse to tell you what it is until after the bar date has passed.
22:22
Because I know it's either going to be cost prohibitive to you,
22:26
it's going to be man hours prohibitive to you, or something else.
22:29
So I'll end up with some claims that are free and clear
22:32
because you can't possibly file on them all.
22:34
It puts the entire burden on the defendant who has no way of knowing.
22:39
It then puts the entire burden on the patent office,
22:42
which I know you said it's their problem, not mine,
22:45
but it does still outweigh all of the problems.
22:49
They're all on the patent office and the people defending themselves from spurious claims.
22:54
Appellee Attorney
You may have a very good case for a better statute,
22:58
and I'm sure you're going to have a good one.
22:59
I would certainly support that personally.
23:01
But yours is remarkably the worst possible case of this fact pattern
23:11
that anyone could think of.
23:13
800, what was it, 800 and 30 claims,
23:18
and two judges who didn't pay attention.
23:22
Come back to that point for a minute.
23:24
Clearly the problem that's causing the whole problem is,
23:29
you have district judges who failed to require them
23:33
to produce the information that you kept asking for,
23:37
and you kept asking for it.
23:39
Judge Prost
And this is unique, though.
23:41
I'm not sure the same result would have come
23:42
if they hadn't been a change in venue.
23:44
So this is, it's not your fault.
23:47
It was double.
23:48
Appellee Attorney
The problem was double for the trial judges
23:51
because no one trial judge ever got a hold of the case.
23:54
It kept moving around on them.
23:56
Correct, Your Honor.
23:57
You couldn't write,
23:59
you couldn't write a script that was worse than this one
24:02
for challenging the sensibility of this patent.
24:06
And we recognize that.
24:07
And, you know, I suppose at some point
24:10
you might have said to your client,
24:13
we're screwed, go to the bankruptcy court.
24:16
But there's no reason for you to have done that.
24:19
There has to be a remedy somewhere in the system,
24:22
which is what we have to wrestle with.
24:24
What is the right remedy for someone caught in this?
24:28
Okay.
24:29
The problem is this case will probably never come up again
24:32
in the history of the United States.
24:34
You would really have to imagine the possibility of,
24:39
first, the transfer.
24:41
Second, the inordinately large number of claims.
24:46
They ought to do something about that.
24:48
And then the trial judges dropping the ball,
24:52
which admittedly happened.
24:54
And here you are, and the clock runs against you.
24:57
And here we've got this particular statute.
24:59
So you couldn't ask for a worse case
25:01
than the one you happen to have.
25:03
Now, the chief judge suggests one option for you,
25:09
which would have been to somehow file
25:13
any number of petitions, whatever you decide to do,
25:17
but you've got to get in before the deadline.
25:20
And you're pointing out why, practically,
25:23
that's not a good alternative for you.
25:26
I don't know whether going to the,
25:29
the patent owner and saying,
25:33
I'm going to file everything against you
25:36
and tie you up for the next 50 years
25:38
unless you contract with me to agree
25:41
that you're not going to add new claims.
25:44
I don't know if that would work.
25:46
Who knows?
25:47
Appellant Attorney (Heidi Lyn Keefe)
It would not, Your Honor.
25:48
Appellee Attorney
Probably in this set of circumstances, probably not.
25:52
Appellant Attorney (Heidi Lyn Keefe)
I've tried it in other circumstances,
25:54
and it doesn't work, Your Honor.
25:55
It doesn't work.
25:55
Appellee Attorney
You have tried that?
25:56
Appellant Attorney (Heidi Lyn Keefe)
I have tried it in other circumstances, Your Honor.
25:58
Appellee Attorney
Okay, that's helpful for us to know.
25:59
Appellant Attorney (Heidi Lyn Keefe)
It does not work.
26:00
Appellee Attorney
Patent owner says, go for it.
26:02
So let's assume, hypothetically,
26:05
that the statute doesn't provide a way out.
26:09
What do you suggest we do?
26:13
Appellant Attorney (Heidi Lyn Keefe)
The first thing I would do,
26:15
and I know Your Honor doesn't agree,
26:16
but I would urge you to re-look at what,
26:18
how the director analyzed the difference of the word person
26:21
between 311 and 315,
26:23
because I think that's very helpful.
26:25
But putting all that aside
26:27
and understanding that Your Honor is asking me,
26:29
assuming that there is,
26:31
there is no absolute time bar
26:32
and no ability to add claims after the time bar,
26:35
I would request that the court,
26:38
at least in its opinion,
26:42
indicate strongly urging,
26:44
I know you can't order it per se,
26:46
but urging district courts
26:47
to implement claim limitations
26:51
that no case have more than X number of claims
26:55
before the statutory period
26:57
so that judges know down below
26:59
how you feel about that type of gamesmanship.
27:02
At a minimum, that would help us as defendants
27:06
when we go in front of judges
27:07
asking for early claim limitation,
27:10
asking for courts to, at a minimum,
27:13
get infringement contentions early in the case
27:16
to what claims are going to be involved
27:18
so that we can approach the PTAB
27:20
in a timely manner with only the claims that are at issue.
27:24
And I would beg the court to at least do that.
27:26
Judge Prost
I appreciate your,
27:29
your input.
27:31
And, but let's,
27:32
just back to the statute,
27:34
maybe you can give me some help
27:35
because the option you didn't,
27:37
you left out was too bad, so sad.
27:40
Go to Congress and get them to make an amendment.
27:43
I mean, my reading of the statute
27:45
for whatever it's worth is,
27:46
you know, I think I agree with Judge Plager
27:49
that the language does not get you where you need to go.
27:52
But the real, seems to me,
27:54
the real rub, the cause of the problem
27:56
is the language that says,
27:58
with the complaint alleging infringement of the patent.
28:03
Because we all know that doesn't mean any,
28:05
I don't know, does this patent act
28:07
refer to infringement of a patent?
28:09
You infringe claims and not the patent.
28:11
If the language there were complaint alleging infringement
28:14
of the claims, you would have an argument
28:16
that your clock course,
28:18
the one year clock corresponds to the claims
28:21
that are alleged in the complaint.
28:24
And that obviates the problem of amending complaints
28:27
and all of that.
28:28
So if you're gonna seek an amendment of the statute,
28:31
you might wanna, and I don't know, maybe it's subject.
28:33
Maybe you could make an argument
28:36
that infringement of the patent
28:38
can't possibly mean infringement of the patent
28:40
because that doesn't make any sense.
28:41
So it must mean infringement of the claims.
28:45
And if it means infringement of the claims
28:47
and it talks about the complaint
28:48
alleging infringement of claims,
28:50
then your clock only starts running
28:52
with respect to those claims that are in the complaint.
28:56
Just a thought.
28:57
Appellant Attorney (Heidi Lyn Keefe)
Your Honor just made the argument I was going to say
28:59
about patent versus claim and you can't infringe.
29:01
So you did exactly what I was gonna do.
29:03
Judge Prost
Yeah, but the problem is the language
29:05
and Congress knew how to say it
29:07
because helpful for petitioners
29:09
in the estoppel provisions that follow under E.
29:13
That's where I was gonna go.
29:14
They do refer to claims, not infringement of the patent.
29:19
They feel to infringement of the claims, right?
29:20
Appellant Attorney (Heidi Lyn Keefe)
Exactly, and Your Honor, that's-
29:22
Judge Prost
So that's a bad statutory situation for you
29:24
because Congress knew how to say claims and they didn't.
29:27
Appellant Attorney (Heidi Lyn Keefe)
But Congress also knew specifically
29:29
how to release the time bar.
29:31
And it said that the time bar did not apply
29:34
to proper petitions.
29:36
Anything that properly filed-
29:37
Appellee Attorney
Where does it say that?
29:38
Appellant Attorney (Heidi Lyn Keefe)
It says in the section on Joinder that says-
29:47
Judge Prost
Yeah, proper bar petitions under 311.
29:49
Appellant Attorney (Heidi Lyn Keefe)
Yes, exactly, Your Honor.
29:50
And so as long as they're proper under 311,
29:52
they're not time bars.
29:53
Yeah, but that doesn't help you get to,
29:53
Judge Prost
on this case, your arguments,
29:55
if we're construing the end of B, which is, they hold,
29:59
there's a total exception being requests for Joinder.
30:02
Correct.
30:02
So that means a request for a Joinder
30:04
and not everything, all of the issues in a petition,
30:08
doesn't get you over our reading of the word
30:11
party and persons, Joinder of party and persons,
30:15
not Joinder of inter-party proceedings.
30:17
So you're still, I understand your argument on that,
30:20
but I still-
30:21
Appellee Attorney
And I would still urge, sorry, Your Honor.
30:23
One possible solution for some of this, at least,
30:26
is for the Patent Office to recognize the difference
30:31
between Joinder and-
30:35
Consolidation.
30:36
Consolidation.
30:37
Consolidation.
30:37
Appellant Attorney (Heidi Lyn Keefe)
Which are for other matters involving the patent,
30:40
something like an interference or another ex parte
30:43
can all be consolidated.
30:44
No, no, no.
30:45
That's different.
30:46
Appellee Attorney
The Director may determine the manner in which
30:47
the inter-party's review or other proceeding or matter-
30:51
Correct.
30:52
May proceed, including providing for stay, transfer,
30:56
consolidation or termination of any such matter
30:59
or proceeding.
31:00
Correct.
31:01
And that gives the Director very broad power
31:04
to consolidate.
31:06
Now, that would suggest that someone could come in,
31:11
if they came in within the time bar, of course,
31:14
and file a petition and get the substance of the petition
31:21
consolidated with the original petition.
31:24
But that's not Joinder.
31:26
That's Consolidation.
31:27
Judge Prost
Correct, Your Honor.
31:28
Appellee Attorney
So the Director needs to get his act together
31:31
to make sure that he understands which way you gotta go
31:35
to get the substance of material across the boundary.
31:41
And that's not Joinder.
31:42
Joinder is Joinder of persons.
31:45
Appellant Attorney (Heidi Lyn Keefe)
But the problem here, Your Honor,
31:46
is that Consolidation doesn't affect, doesn't say,
31:49
and is not subject to the time bar,
31:51
whereas Joinder does.
31:52
No, that's absolutely-
31:52
No, it's not subject to the time bar.
31:54
And so that's-
31:54
Judge Prost
You're absolutely right.
31:55
Right, the only way you get the only exclusion
31:57
is for requests for Joinder.
32:00
Appellant Attorney (Heidi Lyn Keefe)
Correct, Your Honor.
32:01
Right.
32:01
And so that's why the Consolidation doesn't actually-
32:04
Judge Prost
But it still doesn't clarify
32:06
that you're joining something other than parties.
32:09
Appellant Attorney (Heidi Lyn Keefe)
And I think here, Your Honor, that's why I re-
32:11
Appellee Attorney
And remember, the time bar doesn't bar Consolidation.
32:15
Correct, Your Honor.
32:16
And it doesn't bar Joinder.
32:18
That can be done 10 years later if they want to.
32:21
It only bars the filing of the petition.
32:26
That is the basis to be Consolidated or Joined.
32:31
Appellant Attorney (Heidi Lyn Keefe)
So the Joinder has to happen within a month.
32:33
If Your Honor is asking the question that the petition has to be filed within a month,
32:38
that is the only way you can get a Joinder.
32:40
You can't have a Joinder, say, 10 years later.
32:42
It's only within that statutory period of 30 days after the institution decision.
32:48
That's so that the Patent Office can say, I've got this issue in front of me.
32:52
I'm getting ready to dive in wholeheartedly.
32:55
I'm going to log into the rest of it, so I want everything in that's going to be in.
32:59
But again, I would urge Your Honors to look at the distinction that is drawn in Propanit
33:04
between person and in 311, which says any person other than the patent owner,
33:12
and 315, which says any person and does not carve anything out.
33:17
If Congress had intended to carve out the petitioner, it could have.
33:23
The same way in 311, it says,
33:24
any person can bring an IPR other than the patent owner.
33:29
It does not do that in 315.
33:31
It doesn't say any person may apply for Joinder other than the petitioner.
33:35
So I would put those two-
33:36
No, no, no.
33:36
Judge Prost
But my problem is, even if we agree entirely with you that it can be the same party,
33:41
as you can tell from our questions, the rub for us is not whether or not you can join the same party.
33:47
It's what is joined, whether it's anything beyond the party itself,
33:51
whether it includes the claimant or not.
33:55
Appellant Attorney (Heidi Lyn Keefe)
And I would urge Your Honors to, again, look to Senator Kyle's comments,
33:59
which, as part of the legislative history, indicates that they assume there's going to be something else.
34:02
Appellee Attorney
With all due respect to Senator Kyle, who constantly gets cited to us,
34:06
his views are not the law.
34:08
Understood.
34:09
The law is what's written in the statute.
34:11
Let's face it, we have to deal with the statute.
34:13
I agree.
34:14
Appellant Attorney (Heidi Lyn Keefe)
The only other thing I would add for Your Honors, though,
34:16
is that there is a way out of this for this case.
34:18
And the way out of this for this case is waiver.
34:23
Tell us.
34:24
Argument was never made below by the patent owner.
34:28
This is in our briefing.
34:30
The patent owner actually asked for the patent office to exercise its discretion
34:37
and to deny joined under 315.
34:41
They acknowledged in that statement that the patent office had discretion.
34:46
Only here on appeal, for the first time, do they argue that the patent office did not have discretion.
34:54
Your Honors could find that they waived the argument of whether or not the patent office could act
35:01
by not using that argument down below.
35:05
Appellee Attorney
That's a very good point, and we will make a point of pursuing that with your colleague there.
35:14
Because we'd like to come out with a result in this case that makes sense,
35:21
but at the same time, we have to come out with an understanding of the statute that makes sense.
35:26
By the way, the statute works beautifully for the Me Too people.
35:31
Appellant Attorney (Heidi Lyn Keefe)
Correct, Your Honor.
35:32
Appellee Attorney
That's what it's designed to do, apparently.
35:36
I don't know whether Congress went through all these alternative scenarios and figured out,
35:43
let's deal with the Me Too people, and the rest of them got to worry about their own problems,
35:47
or the district courts will worry about it, or the Court of Appeals will unscramble it when the time comes.
35:53
But it's clearly the statute works for Me Too's.
35:56
Appellant Attorney (Heidi Lyn Keefe)
I agree with that, Your Honor.
35:57
Appellee Attorney
It doesn't work for people who are gamed the way you people were, whether intentionally or not.
36:05
I'm not going to offer an opinion at the moment.
36:09
But you ended up having changes in what claims they were going to pursue against you
36:17
without an opportunity to file a petition on those claims.
36:22
Now, we have to keep in mind that you can still go,
36:27
before the district court, and litigate the validity of all of the claims that are being pursued against you.
36:35
You don't have to do it in the PTO.
36:38
Correct, Your Honor.
36:39
It's nice to do it in the PTO, and we're all in favor of the, at least I shouldn't speak for others,
36:45
I'm in favor very much of the AIA circumstance.
36:48
I always wanted the agency to have a way to clean up its act, and that's what we have.
36:55
But it may be under some circumstance.
36:57
It just isn't available.
36:59
I don't know.
36:59
That's what we're trying to kind of think through.
37:02
Is this a case where your only remedy is to litigate the validity of these claims in the district court?
37:11
You still can, can't you?
37:13
Appellant Attorney (Heidi Lyn Keefe)
It honestly depends on the outcome here, Your Honor, because of estoppel provisions and what have you.
37:19
So if Joinder does not apply, then we can litigate those claims at the district court because estoppel will not apply.
37:26
Estoppel, yeah.
37:27
You always have the specter of...
37:29
Judge Prost
Can I ask you two more questions?
37:30
I know we've held you here for a long time, and you've been very helpful, and it's appreciated,
37:34
but two little questions just to save my clerk some time.
37:37
Thank you, Your Honor.
37:38
You seem to know this stuff off the top of your head.
37:40
My vague recollection was the Kyle legislative history.
37:44
I thought that was what Senator Kyle was arguing, there ought to be a one-year time bar versus a six-month time bar
37:51
to make sure that we can cover it.
37:53
So I'm not sure, am I right about that or wrong about that?
37:57
Appellant Attorney (Heidi Lyn Keefe)
So Your Honor's right in that that's how the conversation started, that's the early part,
38:03
but then by the time it arrives to, and with Joinder, we're talking about adding additional issues.
38:08
So he is directly addressing the issue of Joinder, including the possibility of other issues.
38:13
Judge Prost
But that wasn't only in the context of saying that's why we need to extend it for a year and not for six months.
38:19
That's correct, Your Honor.
38:20
Okay.
38:20
One other quick question.
38:21
Am I right here that at the end of the day, if we were to decide that Joinder was not permitted in this circumstance,
38:28
both sides derive a little bit of a benefit because they've got their cross-appeal cases.
38:34
So some of, a few, as I try to tabulate all of these millions of claims that are out here,
38:40
it seems to me that a few of the cases they lost on their cross-appeal,
38:44
a few of those claims would be saved if they couldn't have been joined.
38:47
But I think some of the claims in your appeal, which were the board found, that were not obvious.
38:55
Correct.
38:56
I think that you would sort of...
38:57
You would benefit by, you know, getting rid of the board's decision with respect to those claims.
39:04
Appellant Attorney (Heidi Lyn Keefe)
Theoretically, Your Honor, but I would argue that given the way that the case is working out down below,
39:09
the ones that matter are the 245.
39:11
And that's why all of the ink was spilled on the 245 in the briefing.
39:15
And that's why we're focusing on that.
39:17
Judge Prost
And that's what we won't give you a chance to focus on, but we will.
39:20
Appellant Attorney (Heidi Lyn Keefe)
And I understand that, Your Honor.
39:21
I absolutely understand that.
39:23
And I actually appreciate Your Honor's insights and all of your questions.
39:26
I think the only other...
39:28
The only other thing that I would urge is that when I was rereading Meade
39:33
and the name that I can never remember how to pronounce,
39:35
it starts with a P that the Federal Circuit actually wrote an opinion on.
39:40
It's the...
39:40
Let me get you the title.
39:42
When I reread the Pesquera, the Chevron, and the Meade decisions this morning,
39:47
one of the things that stood out was that all of the judges in all of those panels
39:52
contemplated the idea that sometimes Congress is silent because it actually wants...
39:58
the agency to figure out a way to make this work.
40:02
And here, we do have the agency figuring out a way to make that work.
40:06
And whether Your Honors give it Chevron deference, which I still think it should have, or not,
40:11
it still shows that the agency is trying to figure out a way to make an ambiguous statute work for everyone involved,
40:19
including very limited exceptions like the case that we have here.
40:24
Appellee Attorney
Let me make one point clear, at least from my view.
40:28
Please, Your Honor.
40:29
The statute is not ambiguous.
40:30
There's nothing ambiguous about this statute.
40:33
It requires construction.
40:35
We have to say what it means.
40:38
But there's nothing ambiguous about it.
40:41
It's straightforward.
40:42
It says exactly what it means.
40:45
Now, whether that's a good idea or not is a whole other issue.
40:51
I think I've gathered from this, from your viewpoint, at least in terms of the outcome,
40:59
there's a workaround for you, which is the waiver issue.
41:03
Correct, Your Honor.
41:04
We will take I at least for it.
41:12
Another possible workaround, which I'm kind of attracted to,
41:17
is to construe the term patent in the 315B to be a clerical error,
41:26
and what they meant to say was claims.
41:29
The beauty of that would end the possibility of this kind of litigation,
41:37
if we can call it that.
41:37
Appellant Attorney (Heidi Lyn Keefe)
Your Honor, I would be happy with that.
41:42
Appellee Attorney
But that wouldn't solve your problem, because you still came in after the statute.
41:48
Appellant Attorney (Heidi Lyn Keefe)
It may not solve the problem here,
41:50
but it would give me comfort in being able to advise my clients in the future.
41:54
Appellee Attorney
Yeah, which is part of what our responsibility is.
41:56
See, we've got, this case is several layers.
42:00
Understood, Your Honor.
42:01
It's your problem on the merits, and it's what to do about others whose cases are going to be,
42:08
be affected.
42:11
Appellant Attorney (Heidi Lyn Keefe)
Correct, Your Honor.
42:12
Thank you very much.
42:13
I thank you, Your Honor.
42:15
Judge Prost
And we'll restore a few minutes of rebuttal if we need.
42:17
Appellant Attorney (Heidi Lyn Keefe)
Okay, your turn.
42:19
Judge Prost
Thank you.
42:22
Appellee Attorney
Good morning.
42:23
Good morning.
42:23
May it please the Court.
42:25
Your case rests on waiver.
42:28
Why don't you go right to it?
42:30
Appellant Attorney 2 (Heidi Lyn Keefe)
Your Honor, I will address waiver.
42:34
With regard to waiver, the first thing is that this issue was raised by a concurring judge
42:42
in the institution decision.
42:44
Petitioner seems to be saying that it was waived somehow at the institution phase by failing
42:49
to make an argument, a preliminary response.
42:52
Preliminary responses aren't even required.
42:54
So, I don't see how there could have been a waiver by not raising it in a preliminary response.
42:59
Now, after institution, we appealed to the Federal Circuit.
43:02
We filed a mandamus saying this is improper under the reading of the statute.
43:06
We attached the opinion, the concurring opinion of the judges at the Patent Office.
43:10
And the Federal Circuit told us, you'll have your chance on appeal.
43:13
And so, then, we took that issue, which was in the record in the case, as us having gone
43:17
to the Federal Circuit, mandamus-ing on this issue as being in the record in this case.
43:22
And that's how we arrived here, and that's why we don't think it's waived.
43:24
It seems like Petitioner is arguing with it that the argument was waived because of a
43:29
failure to address it at the preliminary response phase, which I don't see how that could be
43:34
a waiver since we don't even need to file one.
43:37
Judge Prost
Can I, um, I don't know if you have anything to add, whether or not you're surprised or,
43:45
um, not clear on why the PTO isn't here as an intervener, given that we've got not just
43:51
a statutory provision at the AAA, but an intervening, so to speak, uh, precedential opinion.
43:58
Do you have any insight into that?
44:00
Appellant Attorney 2 (Heidi Lyn Keefe)
Your Honor, I, I don't know why the Patent Office isn't here, why, why they even would
44:04
be here.
44:05
Um, from...
44:05
Judge Prost
Well, because they presumably, I mean, well, your friends left to defending that we ought
44:10
to give Chevron deference to a precedential opinion of theirs.
44:14
I don't think that's the case.
44:15
I don't think our court has necessarily definitively decided what kind of deference, if any, we
44:19
give to precedential opinions.
44:21
Don't you think that's kind of significant for that?
44:23
Appellant Attorney 2 (Heidi Lyn Keefe)
Your Honor, it may be significant to, to, from my perspective of representing my client,
44:29
you know, it has certain significance.
44:30
Whether it has greater significance to the patent community and to the Patent Office,
44:34
it, it may.
44:35
Judge Prost
Um, but can I ask you, you, there's another element of surprise in this case in terms
44:41
of who didn't say what when.
44:43
And that is your friend.
44:44
Very promptly after this precedential opinion in March, sends us a 28J letter saying, okay,
44:52
now we got a precedential opinion, you ought to give Chevron deference, yada, yada, here's
44:56
what they've decided.
44:57
In your briefing, initially, you kind of don't, your argument for all these board decisions
45:06
that go against you is, who cares?
45:08
They're non-prec opinions.
45:09
The board has not yet spoken out in a precedential way.
45:13
You didn't respond to their 28J.
45:15
Why not?
45:17
I mean, do you, do you agree with it?
45:21
Appellant Attorney 2 (Heidi Lyn Keefe)
I don't necessarily agree with it, Your Honor, but.
45:24
Judge Prost
Well, don't necessarily.
45:25
Do you agree that we should give Chevron deference to board precedential opinions?
45:29
Appellant Attorney 2 (Heidi Lyn Keefe)
Absolutely not, Your Honor.
45:30
Judge Prost
Okay.
45:31
So you disagree with it.
45:32
Appellant Attorney 2 (Heidi Lyn Keefe)
I disagree with it, Your Honor.
45:33
Okay.
45:33
Judge Prost
Why don't you, why didn't you respond?
45:35
I mean, we had a lot of 28Js and there's a little abuse of the proceeding with people
45:39
overdoing it.
45:41
But, um, in this case, they say something about a precedential opinion.
45:45
The precedential opinion dislodges some of your earlier arguments because you didn't
45:52
know they were going to issue a precedential opinion.
45:54
Why did you not come and give us some help on what we do with this?
46:00
Appellant Attorney 2 (Heidi Lyn Keefe)
Your Honor, I, I think it was more towards the first point you had made, which was, you
46:06
know, in terms of submitting things to the court without the authority to do so.
46:10
I don't know that we, um, we thought we had that opportunity.
46:14
Judge Prost
If there's an intervening, I mean, this is the quintessential question.
46:17
This is the quintessential 28J circumstance, right?
46:20
They took advantage of it.
46:22
You don't think they're filing a 28J letter on this precedential opinion was improper.
46:26
Right.
46:27
It's exactly the kind of thing that they should do.
46:30
Appellant Attorney 2 (Heidi Lyn Keefe)
Right?
46:31
I haven't considered that, but it sounds like the court feels it was.
46:35
Judge Prost
Okay.
46:38
So we've got a circumstance, if we construe the language of the statute about infringement
46:45
of a patent to mean infringement of a patent and not infringement of the claims.
46:49
Okay.
46:50
We've got a circumstance where they were stuck in your view with filing an IPR dealing
46:55
with 830 claims.
46:58
How can that be what Congress intended in terms of the system if at the end of the day
47:03
you're going to be forced to peer down that to a dozen?
47:07
Appellant Attorney 2 (Heidi Lyn Keefe)
Your Honor, I can tell you that there is another layer to this iceberg that isn't even before
47:12
this court, which is that when these, when the petitions were filed and when the case
47:16
was filed, it was filed against Windy City.
47:19
It was filed by Windy City against Facebook.
47:21
And against Microsoft.
47:23
Microsoft and Facebook, between the two of them, filed 12 IPRs against the patents here.
47:29
Microsoft managed to file IPRs against all the claims that it wanted to.
47:34
Appellee Attorney
Managed to what?
47:34
Appellant Attorney 2 (Heidi Lyn Keefe)
File IPRs against all the claims that it wanted to.
47:37
Judge Prost
How do we know?
47:38
I mean, they were in this, I don't know about that, but what it wanted to, that has no meaning
47:43
for me.
47:44
If I'm a responsible lawyer for a petitioner and I know my one-year clock is going to run,
47:50
they were absolutely right.
47:53
They're begging the district court, come and tell us what claims are at issue because we
47:57
don't want to forfeit our right to file an IPR.
48:00
Is that not correct?
48:02
That's...
48:03
Were they not at risk without filing an IPR here on 830 claims?
48:10
Appellant Attorney 2 (Heidi Lyn Keefe)
Your Honor, there are two patents that are primarily at issue here.
48:14
One is the 245 patent.
48:16
The other is the 657 patent.
48:18
The 657 patent is the one with many, many claims.
48:21
And that one, if you're asking for how someone could address that, Microsoft filed an IPR
48:27
on the same day that Facebook did in essentially the same case before the same district court
48:31
and used a representative claim.
48:35
And they got an institution.
48:37
And so that would be a mechanism to accomplish that.
48:39
Judge Prost
What's the status of that case?
48:40
Appellant Attorney 2 (Heidi Lyn Keefe)
They settled, Your Honor.
48:42
Okay.
48:42
They settled.
48:43
Judge Prost
But you file a complaint that says Facebook, accuses Facebook of meeting the claims of
48:51
the patents in suit.
48:53
And you don't identify which ones.
48:55
If you're representing the defendant in this kind of complaint, do you not feel like you
49:01
have to in order to preserve your rights file an IPR involving all of the claims of the
49:06
patents in suit?
49:07
Appellant Attorney 2 (Heidi Lyn Keefe)
Your Honor, I think they would have to to preserve their rights.
49:11
Additionally, with regard to the 245 patent...
49:14
Judge Prost
How can that be right, though, as a policy matter?
49:16
Okay.
49:16
Maybe we don't do policy, but don't you appreciate and understand why the director and the
49:21
president and this presidential board felt that there had to be at least a limited exception
49:25
to the rule to prevent that unnecessary use of resources by them, by you, by the patent
49:34
office to get IPRs involving 830 claims when that's ultimately absolutely not necessary?
49:41
Appellant Attorney 2 (Heidi Lyn Keefe)
Your Honor, there is another...
49:43
If we're looking at 830 claims across four patents, which is the case here, the situation
49:49
would be the same.
49:51
It would be the same if it were 15 claims per patent, but there were just more patents
49:54
in the case.
49:55
There would still be a deadline.
49:56
Facebook and Microsoft would have still had to do the work to get the IPRs filed by the
50:00
deadline.
50:01
And with regard to the 245 patent, which is, as my colleague had expressed, one of the
50:09
patents that everyone was prepared to really address today on the merits, that patent only
50:13
had 55 claims, and there was no reason why, specifically for one patent with 55 claims,
50:18
why Facebook couldn't file an IPR with 55 claims.
50:22
Many others have done it.
50:24
Microsoft filed IPRs against many more than 55 claims in the same case.
50:27
Okay.
50:27
Let me give you a hypothetical.
50:28
Judge Prost
Let's assume you filed this complaint and you identified six claims across the board,
50:32
or six claims for each patent.
50:34
So they go in and they file their IPRs and they're covered.
50:38
And then, 366 days later, you amend your complaint to add six more claims.
50:46
Under your view of the statute, would they be time-barred in filing an IPR?
50:57
That's a yes or no.
51:01
Appellant Attorney 2 (Heidi Lyn Keefe)
Yes.
51:02
Yes, they're time-barred.
51:03
Judge Prost
They're time-barred.
51:04
How can that be right?
51:05
Appellant Attorney 2 (Heidi Lyn Keefe)
Your Honor...
51:06
Judge Prost
Does the statute...
51:07
You think the statute differentiates?
51:09
Like, we wanted to give...
51:10
Clearly, the statute wanted to give petitioners an alternative room with the PTO.
51:17
So they were saying, okay, but yeah, if somebody amends their claim one year later, that's
51:22
out...
51:23
They're out of the ballgame?
51:28
Appellant Attorney 2 (Heidi Lyn Keefe)
Your Honor, in those cases, I mean, as Your Honor has both expressed, this is a situation
51:39
that is not the norm in terms of the transfer and then the delay in California.
51:42
Judge Prost
But people amend complaints all the time.
51:45
Appellant Attorney 2 (Heidi Lyn Keefe)
Yes, Your Honor, but generally not to allege additional claims, because that's done in
51:49
contentions.
51:49
Appellee Attorney
The hypothetical is a hypothetical, and it's designed to focus on a particular problem.
51:56
And the question is, is that problem...
51:59
Is that problem built into this system?
52:00
And if that problem is built into this system, could Congress have ever intended the problem
52:07
to be there with no solution?
52:10
It doesn't make any sense, because it was clear what Congress wants to do is to permit
52:17
a defendant who's claimed against in a lawsuit to be able to go to the PTAB and get what
52:26
they consider to be quicker and better results than they do by litigating it in the district
52:33
courts on the validity question and the prior art stuff and all the rest of that.
52:38
And all of a sudden, there's this one set of situations where the patent owner can make
52:47
a change in the claims after the one-year statute is run.
52:53
It's just the way it works out.
52:54
And your answer is, too bad.
52:57
You lose the AIA.
53:00
Now, the question is, first of all, does that make any sense?
53:05
But more importantly, is that what the statute requires?
53:09
Appellant Attorney 2 (Heidi Lyn Keefe)
The statute explicitly requires for a patent, filing an IPR against...
53:14
A claim of patent infringement against a patent.
53:17
Judge Prost
No, it says the complaint.
53:18
Sorry.
53:19
What does it mean, a complaint alleging infringement of the patent?
53:23
How do you infringe a patent?
53:24
Appellant Attorney 2 (Heidi Lyn Keefe)
Well, Your Honor, there's no requirement in district court that you allege all of the
53:30
claims that you're going to pursue in that court in your complaint.
53:33
Usually, courts, California, other courts, have contention processes whereby you name
53:40
the claims you're going to pursue in that case at a certain point.
53:43
And so there's nothing...
53:44
Judge Prost
But you talk about, I mean, I don't know, maybe you're right, but it seems to me even
53:49
in this case, you just listed the patents.
53:53
You didn't identify any claims.
53:55
But you certainly said, meet the claims of the patent in suit.
53:59
You didn't say, infringe the patent.
54:04
Appellant Attorney 2 (Heidi Lyn Keefe)
Your Honor, I think at that point, that might be some kind of Iqbal Twombly issue about
54:10
pleading, how you have to construct your pleading.
54:13
But my understanding is that you allege infringement of claims of a patent.
54:19
Judge Prost
That's exactly right.
54:19
No, I agree.
54:20
So we all agree you allege infringement of claims of the patent.
54:25
Can you allege infringement of the patent?
54:28
Is there such a thing?
54:29
Appellant Attorney 2 (Heidi Lyn Keefe)
Yes, Your Honor.
54:30
That's why it's called patent infringement and not patent claim infringement.
54:33
The action itself.
54:35
Judge Prost
And let me ask you, in the amendments, so even if you were to allege, hypothetically,
54:41
if there's a complaint and they say, we've alleged claims one, two, and three, if your
54:48
client is a potential petitioner or a defendant, you're going to have to tell your client,
54:53
you better go file an IPR, not just on the claims of the patent that's been alleged,
54:59
but on all of the claims of the patent that's been alleged, because they will have free
55:05
reign to file amendments after the one year passes, right?
55:09
Appellant Attorney 2 (Heidi Lyn Keefe)
That's correct, Your Honor.
55:10
And that's what I've advised my clients.
55:12
Judge Prost
And that's what, in your experience, that's what petitioners are doing now.
55:17
They're filing IPRs on all of the claims of a patent, even if only certain claims have
55:21
been identified.
55:22
Appellant Attorney 2 (Heidi Lyn Keefe)
That's right.
55:23
And that's what I did in this exact case.
55:25
Appellee Attorney
Isn't there a general rule, I don't know if you think to run this down, but I thought
55:33
there was a general pleading rule that requires that pleadings be specific about the cause
55:41
of action.
55:42
Appellant Attorney 2 (Heidi Lyn Keefe)
That's correct, Your Honor.
55:43
The equal-
55:43
Appellee Attorney
And your cause of action was breach of certain claims, but you never, or infringement of
55:50
certain claims, but you never said what those claims were.
55:54
Appellant Attorney 2 (Heidi Lyn Keefe)
That is an issue for the district court and not for the-
55:59
Appellee Attorney
Wasn't your pleading subject to summary dismissal?
56:05
Appellant Attorney 2 (Heidi Lyn Keefe)
Your Honor, I don't know.
56:06
I have to admit that I'm not the counsel in the district court in this case, so I don't
56:11
know the full history of that.
56:13
But I would imagine that in a case, if we're talking hypothetically, that those concerns
56:17
are addressed at the dismissal stage by filing a motion to dismiss under Rule 12, alleging
56:24
that the complaint fails to state a claim under Iqbal or Twombly.
56:27
Appellee Attorney
Right.
56:27
That's a better disposition.
56:31
You heard me recite what I understood from sorting through all these briefs, what seems
56:38
to be the history of this case.
56:40
You don't disagree with that history as I recited it, do you?
56:44
Appellant Attorney 2 (Heidi Lyn Keefe)
As you have recited it, I did not hear any inaccuracies, but I would defer to the record.
56:49
Unknown
Okay.
56:49
Judge Prost
Can I, just since you didn't respond to the 28J, can you give us your view of the
56:54
law in terms of what deference, if any, is owed to the Patent Office in light of a precedential
57:01
opinion?
57:02
Appellant Attorney 2 (Heidi Lyn Keefe)
Your Honor, it's our position that it's, the Chevron analysis, in terms of whether
57:08
it should be given Chevron deference, as Your Honors had stated earlier today, that is only
57:17
given when the statute has some ambiguity.
57:19
And our reading of the statute, we don't see anything other than the plain reading of the
57:23
statute.
57:24
And as Your Honors had said, it may need to be construed, but there's nothing ambiguous
57:27
about the statute.
57:28
And statutory interpretation, that's something well within the purview of this Court, and
57:33
the Patent Office can't rewrite a statute even if it designates the opinion as precedential.
57:38
The statute's the statute.
57:39
Perhaps someone needs to take that up with Congress.
57:42
I would say one thing about a mechanism if this issue were not to be reached in this
57:47
case, which is that we've only raised this issue as a cross-appeal issue, and specifically
57:52
with regard to the 24J.
57:54
In the alternative, our position is still that the merits of the petition in that case
58:01
were correct, the Patent Office came to the correct decision, the claims are not unpatentable,
58:05
that was a final written decision, and that this issue need not even be reached.
58:09
But if it were to be reached because of some issue with regard to the Patent Office's analysis
58:15
of invalidity, then we would get to this issue.
58:19
Appellee Attorney
You went a little fast there.
58:22
Let me be sure I followed you.
58:24
If we hold the worst case, which I started with Ms. Keith about, that the follow-on petitions
58:35
by Facebook coming after the statutory period had run in 2016, if we hold that all those
58:45
follow-on petitions were invalid, your win under those follow-on petitions would be wiped
58:54
out as well as your losses, wouldn't they?
58:59
You can't have it both ways.
59:02
Appellant Attorney 2 (Heidi Lyn Keefe)
I don't think we presently have a loss under that.
59:04
So it would only be a loss if this Court were to reverse the PTAB.
59:08
So we're in a winning disposition there, which is why we didn't appeal.
59:11
No, no, no.
59:11
Okay.
59:11
Judge Prost
I think I understand what you're saying, but I have a different kind of a question with
59:16
that, is that, as I mentioned to Ms. Keith, some of the claims that they lost on that
59:23
is subject to their appeal.
59:24
Were the new stuff that came in under Joinder.
59:27
Some of your claims in your cross-appeal was the new stuff.
59:33
So I understand you're saying if you won and we reversed the Board on all of your cross-appeal
59:40
stuff, including the new stuff, that moves out the Joinder issue.
59:43
Is that what you were saying?
59:44
Appellant Attorney 2 (Heidi Lyn Keefe)
What I was saying, Your Honor, with regard to the 245, I just want to talk about the
59:48
245 patent, the remainder of the patents we were willing to submit on the briefing.
59:51
For the 245 patent, which is the only one currently alive in District Court right now,
59:55
all the other patents have been not elected to go forward to trial.
60:00
So with regard to the 245 patent, the patent owner has won all of the claims at issue there.
60:06
The Patent Office found that every claim petitioned was not obvious, non-obviousness for all of
60:13
those claims.
60:13
We won both the claims in the original petition as well as the follow-on petition.
60:17
Okay.
60:18
So Facebook has appealed that decision and argues that the Patent Office got it wrong,
60:24
which we disagree with.
60:25
We only mentioned the statutory issue of, could we even be here, should we even be
60:32
here at all, in response to their argument that they should, that you, Your Honor, should
60:37
find the patent to be obvious.
60:39
And so our argument is only, so they're here asking this Court to overturn the Patent Office's
60:43
finding of non-obviousness, to find the patent is obvious.
60:46
And so our response to that is, if we have to reach that issue and you're not going to
60:53
disagree with the Patent Office's obviousness decisions, we are not going to agree with
60:55
We have to go into all the merits of, should we even have been here to begin with, which
60:59
raises the statutory question.
61:00
Judge Prost
I think I know what you're saying, but I think you're wrong.
61:04
Because we looked at this initially because we thought there was a waiver issue.
61:07
Because somewhere in your patent, you talk about, in your summary of argument, you use
61:13
it as an alternative with respect to Facebook, which seems to be what you're saying here,
61:18
that it's their appeal that you think.
61:21
Okay.
61:21
But then in the argument section, you have, you cite, actually, the IPRs and everything,
61:30
and it includes the ones in your cross-appeal.
61:34
So I don't, I think all of those issues are joined, so to speak.
61:40
And that if we are going to deal with Joinder here, it affects everybody across the board.
61:44
Am I wrong about that?
61:45
I understand what you're saying, but that's what you said in your summary of argument.
61:49
And I thought, oh, good.
61:50
We are limited in what we have to look at here.
61:52
But then when I read your argument, and I'm trying to be fair to you, because it's your
61:56
brief and what's covered, I read it as being broader.
61:59
It's page 39 of your red brief.
62:01
Appellant Attorney 2 (Heidi Lyn Keefe)
Your Honor, I believe you are correct with regard to the 657 patent.
62:05
Because this, Facebook had done this in two patents, in the 657 patent and the 245 patent.
62:09
I was only speaking with regard to the 245 patent, which is the one that we were arguing
62:14
about today, and that Facebook had said they were going to submit on the papers for the
62:17
remainder of the arguments for the other patents.
62:19
Judge Prost
Yeah.
62:19
But just because you're doing it on the papers.
62:20
The issues are still before us.
62:22
It doesn't matter to me whether you're...
62:23
There's no difference whether you argue it or submit it on the papers.
62:27
It's still an issue before us.
62:28
It doesn't take it off the table.
62:30
Right?
62:31
Appellant Attorney 2 (Heidi Lyn Keefe)
I think that's correct, Your Honor.
62:33
Appellee Attorney
I'm not...
62:34
Well, the point I was trying to make, and trying to find out if you agree with it, is
62:39
if we hold that any of the claims identified in the petitions filed after the one-year
62:50
man, if we hold that all of those claims were not before the PTO, so there's no decision
62:59
from the PTO in your favor on those claims, you lose.
63:08
Appellant Attorney 2 (Heidi Lyn Keefe)
Not exactly, Your Honor.
63:10
We still have claims that we prevailed on.
63:13
Yeah.
63:14
Judge Prost
It covers only a niche of the cross-appeal.
63:16
Yeah.
63:17
Appellant Attorney 2 (Heidi Lyn Keefe)
It only covers a niche of that appeal, which are some of the claims.
63:20
I think it was...
63:21
I don't have the claims in front of me.
63:22
I understand.
63:23
1923, in that range of the patent.
63:25
But the argument that the Patent Office made, and that obviousness combination, still applies
63:31
to all the claims across the patent.
63:33
So if the Patent Office's decision is upheld and the claims are found to be non-obvious,
63:36
that should apply to all the arguments for all the claims across all the patents.
63:40
And so this issue of...
63:42
It's unfortunate, as Your Honor had said, in terms of that this is where this issue
63:47
of statutory interpretation, which seems to be of great import, is...
63:51
Is being litigated.
63:53
But that would not be a loss for Windy City if it were to be overturned in that way on
64:00
the statute.
64:00
Judge Prost
One final question, and thank you very much.
64:02
You've been very helpful, is do you think that the court, given...
64:07
Let's assume at the extreme that we feel that it's proper and appropriate for us to reach
64:12
all of these issues, deference to a precedential opinion, all of the statutory constructions
64:18
with regard to Joinder.
64:19
Would we not benefit from asking the PTO for its views on these matters, even though
64:25
it's neglected to intervene on its own accord?
64:28
Do you have a reaction to that?
64:32
Appellant Attorney 2 (Heidi Lyn Keefe)
Your Honor, my reaction is that as a patent lawyer, perhaps, but from my client's perspective,
64:41
I don't know that it is really of any great import to my client, whether or not the Patent
64:46
Office weighs in on this issue.
64:47
But perhaps as a patent lawyer, it makes sense.
64:51
Judge Prost
I appreciate that very much.
64:54
Thank you.
64:55
So do you just want to comment on that last question?
65:05
Sure.
65:06
Appellant Attorney (Heidi Lyn Keefe)
I would be happy to have the Patent Office weigh in here.
65:08
I think it would be helpful for everyone so that you have a more fulsome record.
65:13
But I think, Your Honor, still can find that this may not be the right case for that, because
65:17
you can rely on the waiver argument.
65:19
The waiver, I'm not...
65:21
I wasn't asking them to waive or not waive at the time of the POPR.
65:25
The argument I'm talking about is the argument...
65:28
the argument that they made in their opposition to our motion for joinder.
65:33
On appendix at page 7372 and appendix at 8148, patent owner acknowledges that in its
65:47
opinion, the Board has discretion to deny the motion for joinder on its original...
65:54
on our petition.
65:55
They then received a ruling...
65:58
contrary, because the Board said, yes, it is in fact joined.
66:01
They didn't ask for rehearing.
66:03
They never raised the issue below, ever, as to whether or not the Patent Office had discretion.
66:09
The first time that issue was raised was in this appeal on the cross appeal.
66:16
And so an issue not raised below is deemed waived.
66:20
There's nothing...
66:20
Judge Prost
Can I just ask you for the citation in your blue brief where you preserved the waiver
66:26
argument?
66:27
Where was that in your brief?
66:28
Appellant Attorney (Heidi Lyn Keefe)
It wasn't in our blue brief because the issue of joinder didn't come...
66:33
wasn't raised until the cross appeal.
66:36
So...
66:36
Fair enough.
66:37
It wasn't raised.
66:38
And so in the yellow brief, it is in our yellow brief.
66:42
And it's in our yellow brief...
66:43
Judge Prost
Yes, page 24, I get it.
66:45
Appellant Attorney (Heidi Lyn Keefe)
Correct, Your Honor.
66:45
Exactly right.
66:47
Judge Prost
And then did they respond to that in gray?
66:49
I'm sorry.
66:50
There's so many issues in this case that I lost track.
66:53
I don't know if they did respond.
66:54
Not that I had seen, Your Honor.
66:58
Yeah, they did.
66:59
They did respond to that.
66:59
I have a question.
66:59
I don't know if I have it on page two.
67:00
Okay.
67:00
Appellee Attorney
We'll take it.
67:01
Let me ask you related to the question of getting the patent office views, which I
67:08
think...
67:08
Appellant Attorney (Heidi Lyn Keefe)
Yes, Your Honor.
67:09
Appellee Attorney
I agree with the Chief.
67:10
I think we might benefit from doing that.
67:14
If we do that, do we need to then give you two an opportunity to respond, or are you
67:22
comfortable with our just getting their views for the record?
67:26
Appellant Attorney (Heidi Lyn Keefe)
I always welcome an opportunity to help Your Honors and respond.
67:29
But if Your Honors found that there was plenty of paper and you'd already heard enough from
67:33
me, I would be fine with submitting on whatever the patent office said.
67:36
Yeah, that's tricky though.
67:36
Judge Prost
I don't know.
67:37
I will see if the panel decides to go that route, because in the normal course, if the
67:42
Board had intervened, obviously, it hardens.
67:46
Correct.
67:46
And obviously, you think the Board's going to be on your side, so it's more his shtick
67:50
than yours as to whether or not you'd want to respond.
67:53
But it seems like regular order when the PTO is making an intervention or is intervening,
67:59
is that the parties get to react to that.
68:02
Appellant Attorney (Heidi Lyn Keefe)
And that was my only point, because obviously, I think they're going to be consistent with
68:05
proponent, but I wouldn't want to waive all rights to comment if all of a sudden he came
68:09
in and said something contrary.
68:10
Appellee Attorney
Your offer to help us was certainly appreciated.
68:14
Appellant Attorney (Heidi Lyn Keefe)
I appreciate that, Your Honor.
68:15
All right.
68:15
We really appreciate your time, Your Honors.
68:17
This is difficult.
68:18
Judge Prost
Well, thank you both very much.
68:18
And I realize this may not have gone the way you expected.
68:21
But one, trust that you had very extensive briefing on all of Merritt's issues and all
68:27
of your arguments.
68:28
So don't feel like you forfeited anything by the argument today.
68:31
But you both have been very helpful.
68:32
Thank you.
68:33
Appellant Attorney (Heidi Lyn Keefe)
We appreciate it, Your Honors.
68:34
Thank you very much.
68:34
Appellee Attorney
We may yet decide the merits at some time in the future.
68:37
Appellant Attorney (Heidi Lyn Keefe)
And we would appreciate that too, Your Honor.
68:39
All right.
68:39
The case is submitted.