RE:RE:RE:RE:RE:RE:Quick Rule 36 Decision on Polaris Patents vs KingstonSome color on the Rule 36 decision from Law360:
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Fed. Circ. Shuts Down PTAB Petitioner's Arthrex Challenge
Fed. Circ. Shuts Down PTAB Petitioner's Arthrex Challenge
By Dani Kass
Law360 (November 6, 2019, 6:15 PM EST) -- The Federal Circuit has blocked Kingston Technology Co. from calling on the recent Arthrex decision to question the constitutionality of Patent Trial and Appeal Board judges, clearing the way for the appeals court Wednesday to uphold a ruling that left a Polaris Innovations Ltd. semiconductor patent Kingston had challenged intact.
U.S. Circuit Judge Jimmie V. Reyna had rejected Kingston's argument that PTAB judges are unconstitutionally appointed, as per the holding in Arthrex on Oct. 31, at the very beginning of oral arguments over the patent Monday. He said Kingston had waived its right to make that argument by leaving it out of its appellate brief and instead raising it for the first time in a contingent motion for remand Friday.
For backup, Judge Reyna cited the Federal Circuit's precedential Customedia Technologies LLC decision from Friday. There, the court said a party couldn't raise the Arthrex argument after leaving it out of its opening brief.
"We have the same situation in this particular case and on the basis of the court's decision in the order that I just cited, your motion is hereby denied," he told Kingston's counsel.
In a limited response Friday, Polaris had noted that Kingston's motion raising Arthrex was filed after business hours on the last business day before oral arguments. There was no excuse for such a delay, since the same argument played out at the PTAB in related litigation, with Kingston taking the opposite position it does now, Polaris said.
"At each step of the way, Kingston has steadily voiced its staunch disagreement with Polaris' position with respect to the appointments clause," it said.
At the board, Polaris had been the one arguing that the judges' appointments were unconstitutional, and Kingston shot back that "constitutionality arguments fail because there is no current precedent holding the IPR statutes to be unconstitutional," according to PTAB filings.
"Kingston was aware of and chose not to raise an appointments cause challenge in the present appeal," Polaris said Friday. "It may not, on the eve of argument, raise the issue for the first time now."
Polaris also pointed out that Kingston was the one that went to the PTAB to begin with, only to turn around and argue the board is unconstitutional when that would aid its case.
"Whether and to what extent Arthrex should apply when dissatisfied IPR petitioners seek to challenge the constitutionality of the body before which they themselves chose to bring their case after they lose is an issue of surpassing significance in many cases," Polaris said. "It is an issue which this court should decide after full briefing, not on the basis of late-night motions on the eve of oral argument."
As for Kingston's appeal on the patent-eligibility question, the panel affirmed the PTAB's decision without further explanation. The board's February 2018 ruling said Kingston failed to prove several patent claims were obvious over three combinations of prior art.
On Oct. 31, the Federal Circuit ruled in Arthrex Inc. v. Smith & Nephew Inc. that the way PTAB judges are appointed is unconstitutional because they do not receive enough oversight and supervision from the director of the U.S. Patent and Trademark Office. It struck down a part of the Patent Act that made it difficult for PTAB judges to be removed by their superiors, saying the risk of being fired will constrain their decisions and solve the problem.
In a separate case between Polaris and Kingston, also argued Monday, Polaris said the court needs to go even further, telling the Federal Circuit that the flaw requires the entire inter partes review system to be struck down. The panel has yet to release a decision in that case.
"We are thrilled to secure this victory on behalf of our client and are grateful for the opportunity to defend Polaris both before the PTAB and the Federal Circuit," Nathan Nobu Lowenstein of Lowenstein & Weatherwax LLP said in a statement. "There is no rest for the weary, however, as after the Federal Circuit argument on November 4, I have four IPR trials coming up in the next thirteen days, not to mention some 240 pages of briefing to finalize, and all of this coming just a month after my son was born has been quite the experience."
Counsel for Kingston didn't immediately respond to a request for comment Wednesday.
Circuit Judges Jimmie V. Reyna, Evan Wallach and Todd M. Hughes sat on the panel for the Federal Circuit.
The patent-in-suit is U.S. Patent No. 7,315,454.
Kingston is represented by David M. Hoffman and Michael J. Ballanco of Fish & Richardson PC.
Polaris is represented by Nathan Nobu Lowenstein and Kenneth Weatherwax of Lowenstein & Weatherwax LLP.
The case is Kingston Technology Co. Inc. v. Polaris Innovations Ltd., case number 18-1778, in the U.S. Court of Appeals for the Federal Circuit.
--Additional reporting by Britain Eakin. Editing by Jack Karp.