2015-1812

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT
UNWIRED PLANET, LLC,

Appellant

v.

GOOGLE INC.,

Appellee

Appeal from the United States Patent and Trademark Office

Patent Trial and Appeal Board in
No. CBM2014-00006

BRIEF OF UNIFIED PATENTS INC.

AS AMICUS CURIAE IN SUPPORT OF
GOOGLE INC.S PETITION FOR REHEARING EN BANC

Kevin Jakel William G. Jenks

Jonathan Stroud Principal Attorney
Unified Patents Inc. JENKS IP LAW PLLC
1875 Connecticut Ave., NW 1050 17th Street, NW
Floor 10 Suite 800
Washington, DC 20009 Washington, DC 20036
(650) 999-0899 (202) 412-7964

Counsel for Amicus Curiae

 CERTIFICATE OF INTEREST

Counsel for Amicus Curiae certifies the following:

1. The full name of every party or amicus curiae represented by me is:

Unified Patents Inc.

2. The name of the real party in interest represented by me is:

Unified Patents Inc.

3. All parent corporations and any publicly held companies that own 10 percent

or more of the stock of the party or amicus curiae represented by me are:

No corporation or publicly held company owns 10% or more stock in

Unified Patents Inc.

4. The names of all law firms and the partners or associates that appeared for

the party or amicus curiae now represented by me in the trial court or

agency or are expected to appear in this court are:

Jenks IP Law PLLC: William G. Jenks.

February 6, 2017 Respectfully submitted,

By /s/ William G. Jenks

William G. Jenks
JENKS IP LAW PLLC
 Table of Contents

INTEREST OF AMICUS CURIAE............................................................................ 1

ARGUMENT .............................................................................................................2

I. The PTOs decision to institute was final and nonappealable and no

Cuozzo exception applies.................................................................................2

II. Even if the Court believes the PTOs decision to institute is

reviewable, it should nevertheless grant en banc review to determine
the appropriate deference afforded to that decision. ....................................... 3

III. Deference is owed to the PTO. ........................................................................ 6

A. The PTOs interpretation of financial product or service is

entitled to Chevron deference. .............................................................. 6

B. The PTO is entitled to deference regardless of the applicability

of Chevron to the PTOs interpretation in its rulemaking. ................... 9

CONCLUSION ........................................................................................................10

i
 Table of Authorities
Cases
Blue Calypso, LLC v. Groupon, Inc., 815 F.3d 1331 (Fed. Cir. 2016) .......... 5, 6, 10

Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141 (1989)..................3, 4

Cathedral Candle Co. v. U.S. Intl Trade Commn,

400 F.3d 1352 (Fed. Cir. 2005)..............................................................................9
Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.,
467 U.S. 837 (1984) ...................................................................................... 5, 6, 7
Cooper Technologies v. Dudas, 536 F.3d 1330 (Fed. Cir. 2008) ..................... 4, 5, 7

Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131 (2016) .............................. 2, 3, 5

SightSound Techs., LLC v. Apple Inc., 809 F.3d 1307 (Fed. Cir. 2015) .............5, 10
Skidmore v. Swift & Co., 323 U.S. 134 (1944) ..........................................................9
Versata Dev. Grp. v. SAP Am., Inc., 793 F.3d 1306 (Fed. Cir. 2015) ........ 4, 5, 6, 10
Statutes
35 U.S.C. 2(b)(2).....................................................................................................6
35 U.S.C. 324(e) .....................................................................................................2
Leahy-Smith America Invents Act, Pub. L. No. 112-29, 18,
125 Stat. 329-31 (2011) .........................................................................................6

Other Authorities
Changes To Implement Transitional Program for Covered Business Method
Patents, 77 Fed. Reg. 7080 (Feb. 10, 1012) (Proposed Rule) .................... 6, 7, 10

H.R. Rep. No. 112-98 (2011).................................................................................2, 8

H.R. Rep. No. 97-312 (1981).....................................................................................4

Joe Matal, A Guide to the Legislative History of the America Invents Act:
Part I of II, 21 Fed. Cir. B.J. 435 (2012) ...............................................................8

ii
Joe Matal, A Guide to the Legislative History of the America Invents Act:
Part II of II, 21 Fed. Cir. B.J. 539 (2012) ........................................................9, 10
P. Andrew Riley, Jonathan Stroud, & Jeffrey Totten, The Surprising Breadth of
Post-Grant Review for Covered Business-Method Patents,
15 Colum. Sc. & Tech L. Rev. 235 (2014) ............................................................9
Transitional Program for Covered Business Method PatentsDefinitions of
Covered Business Method Patent and Technological Invention,
77 Fed. Reg. 48734 (Aug. 14, 2012) (Final Rule) .................................................8

iii
 INTEREST OF AMICUS CURIAE 1

Unified Patents Inc. is a member organization dedicated to deterring non-

practicing entities, or NPEs, from extracting nuisance settlements from operating

companies based on patents that are likely invalid before the district courts and

unpatentable before the Patent and Trademark Office. Unifieds more than 150

members are Fortune 500 companies, start-ups, automakers, industry groups, cable

companies, banks, manufacturers, and others dedicated to reducing the drain on the

U.S. economy of now-routine baseless litigations asserting infringement of patents

of dubious validity.

As part of its mission, Unified files post-grant procedures against patents it

believes are unpatentable. In 2016, Unified was the fifth most frequent petitioner

before the PTAB, and is by far the most frequent filer of any non-litigating party.

Here, Unified is concerned with ensuring that PTAB proceedings remain a

timely and cost-effective tool for challenging a broad range of patents, and that the

expert agency remains free to work for the public interest. These proceedings are

so frequently used and well-liked by parties in part due to the Congressional bar on

appeal from intermediate institution decisions that the panel opinion here fails to

1
Both parties have consented to the filing of this brief. Neither partys counsel
authored this brief in whole or in part; neither party nor party counsel contributed
money that was intended to fund preparing or submitting the brief: no person
other than the amicus curiae, its members, or its counselcontributed money that
was intended to fund preparing or submitting the brief. See Fed. R. App. Proc. 29.
enforce. The proceedings have effected Congresss intent and have been widely

adopted in part because of the agencys well-considered rules and consistent

application of those rulesrules that are stable and only subject to challenge under

the deferential standards of the Administrative Procedure Act. The panel opinion,

in contrast to prior opinions of this Court, likewise fails to review the PTO ruling

under thoseor anydeferential standards. Ultimately, post-grant review of

covered business methods (CBMs) should be preserved as an important tool for

efficiently challenging the patentability of a particularly noisome subset of patents

Congress and the Supreme Court have explicitly disapproved. The panel decision

undermines the efficiency and stability of those proceedings and should be

vacated.

ARGUMENT

I. The PTOs decision to institute was final and nonappealable and no

Cuozzo exception applies.

The decision to institute here, as in all CBM proceedings, was final and

nonappealable. 35 U.S.C. 324(e). The AIA provides a more efficient system

for challenging patents that should not have issued and limit[s] unnecessary and

counterproductive litigation costs. H.R. Rep. No. 112-98, pt. 1 at 3940 (2011).

The bar on appeals exists to ensure that party resources and PTO power are

focused entirely on the resolution of patentability and not on some minor statutory

technicality. See Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2140 (2016).

2
 In Cuozzo, the Supreme Court held that the bar on appeals applies where

the grounds for attacking the decision to institute [an AIA proceeding] consist of

questions that are closely tied to the application and interpretation of statutes

related to the Patent Offices decision to initiate [the proceeding]. Id. at 2141.

That is the case here. The sole issue concerns the PTOs interpretation of a phrase

within the statute defining covered business methods. That statutory definition is

related toindeed, it is inextricably bound up withthe PTOs decision to

institute.

Although Cuozzo acknowledged that avoiding the bar on appeal might be

possible, it required exceptional circumstances to do so. See id. at 214142. None

exist here. There is no constitutional infirmity in allowing the patent-at-issue to be

challenged; likewise, the ground asserted was one that the proceeding was

designed to resolve and appellant was afforded a full and fair opportunity to meet

and respond to that ground in the proceeding below.

Thus, this Court should act en banc to vacate the panel decision and return

the case to the panel to resolve the merits issue, patentability.

II. Even if the Court believes the PTOs decision to institute is reviewable,
it should nevertheless grant en banc review to determine the
appropriate deference afforded to that decision.

The Court of Appeals for the Federal Circuit was created to provide

nationwide uniformity in patent law. Bonito Boats, Inc. v. Thunder Craft Boats,

3
Inc., 489 U.S. 141, 162 (1989) (quoting H.R. Rep. No. 97-312 at 20 (1981)).

When panels within this Court issue conflicting decisions it undermines the

stability of the law and the purpose of this Court.

Here, there are at least three panel decisions that cannot peacefully coexist.

They apply varying levels of deference to PTO statutory interpretations in

equivalent circumstances, none agree, and only the en banc court can cure that

conflict.

In Cooper Technologies, the Court applied Chevron deference in reviewing

the PTOs interpretation of the statutory phrase original application. Cooper

Techs. Co. v. Dudas, 536 F.3d 1330, 133233 (Fed. Cir. 2008). The agencys

interpretation was upheld despite the fact thatas herethe interpretation

accompanied a final rule that incorporated the statutory phrase verbatim. Id. at

133841.

In Versata, another panel applied a similar but different standard of

deference. Versata Dev. Grp., Inc. v. SAP Am., Inc., 793 F.3d 1306 (Fed. Cir.

2015). There, the Court upheld the PTOs interpretation of financial product or

service, holding that a claimed method for determining a price of a product was

a covered business method, in part because the expertise of the USPTO entitles

[it] to substantial deference. Id. at 1312, 1325 (internal quotations omitted). The

Court did not cite Chevron nor did it rely on Cooper Technologies despite

4
petitioners argument that the PTOs interpretation was entitled to deference

under Cooper Technologies. See id. at 1325.

Versata was followed in at least two subsequent cases. In SightSound, the

Court upheld the PTOs finding that the claims were directed to activities

financial in nature, and were thus covered, without reaching Chevron because

the scope-of-CBM-review argument raised by patentee was decided by Versata.

SightSound Techs., LLC v. Apple Inc., 809 F.3d 1307, 1311, 1315 (Fed. Cir. 2015).

Blue Calypso likewise honored Versata, noting that opinions examination of the

relevant legislative history, the PTO Final Rulemaking, and the particular

legislative history relied on by the PTO before examining the Boards decision

which applied the PTO standardand finding it neither arbitrary nor capricious.

Blue Calypso, LLC v. Groupon, Inc., 815 F.3d 1331, 1338, 1340 (Fed. Cir. 2016).

The present case applies a third standard, review de novo. Unwired

Planet, LLC v. Google Inc., No. 2015-1802, at 6 (Fed. Cir. 2016) (Panel Op.). In

doing so, it rejects any deference whatsoever to the PTO on the same statutory

interpretation at issue in Versata. Further, the panel rejects deference due to

purported infirmities that were present in Cooper Technologies. Indeed, the case

for deference is stronger here, given the PTABs consistent use and reliance on the

interpretation at issue. It is stronger still, since the Supreme Court applied Chevron

deference to the PTOs IPR rules, post-Versata. See Cuozzo, 136 S.Ct. at 214243.

5
 Presented with the diverging levels of deference applied by these panels,

companies and the public are left unsure as to what law applies, and what statutory

interpretations promulgated by the PTO will receive deference. En banc review is

necessary to resolve this confusion.

III. Deference is owed to the PTO.

A. The PTOs interpretation of financial product or service is

entitled to Chevron deference.

The PTOs interpretation in this case has the hallmarks of deference owed.

The PTO has ample authority to resolve any ambiguity. The PTO invoked

both its general (35 U.S.C. 2(b)(2)) and specific (e.g., AIA 18) rulemaking

authority in promulgating these rules. See Changes To Implement Transitional

Program for Covered Business Method Patents, 77 Fed. Reg. 7080, 7094 (Feb. 10,

2012) (Proposed Rule) (invoking, among other powers, 35 U.S.C. 2(b)(2) and

the Leahy-Smith America Invents Act, Pub. L. No. 112-29, 18, 125 Stat. 329-31

(2011)). Either authority is sufficient to resolve a statutory ambiguity and satisfy

the so called Chevron step zero.

As recognized by other panels, there is a statutory ambiguity as to what

constitutes a financial product or service. Versata, 793 F.3d at 1325 (the statute

on its face covers a wide range of finance related activities); see Blue Calypso,

815 F.3d at 1338; Panel Op. at 8 n.5 (recognizing Blue Calypsos acceptance of a

portion of the PTOs interpretation). Because Congress has not directly spoken to

6
the precise question at issue, step one of Chevron is satisfied. Chevron U.S.A.,

Inc. v. Natural Res. Defense Council, Inc., 467 U.S. 837, 842 (1984).

Indeed, the panel opinion itself highlighted formidable evidence of extant

ambiguity when it invoked the inconsistent views among relevant legislators as

to the scope of CBM review. See Panel Op. at 1011. Those inconsistent views

among senators as to the breadth and application of the statutory definition they

were in the process of passing undoubtedly demonstrate the statutory ambiguity

that warrants agency resolution.

The panel should have next addressed whether the PTOs interpretation was

based on a permissible construction of the statute. Chevron, 467 U.S. at 843.

Instead, it reviewed the statutes meaning de novo while finding fault with the

PTOs mechanism for interpreting the statute. See Panel Op. at 6; id. at 9 (The

PTO did not adopt the general policy statement through rulemaking procedures.).

Under Cooper Technologies, however, the PTOs interpretation of a statute

it is charged with administering is not subject to the notice-and-comment-

rulemaking requirement. See Cooper Techs., 536 F.3d at 133637 (highlighting

that interpretive rules are not subject to the formal notice-and-comment

requirements); see also Proposed Rule, 77 Fed. Reg. at 7083 (invoking Cooper

Technologies to explain notice and comment are not required).

7
 In any event, the PTO resolved the ambiguity here after notice-and-comment

rulemaking. The resulting statutory interpretation was reasonably foreseeable.

Comments 1 through 5, received by and responded to by the PTO, demonstrate that

the interpretation of the phrase financial product or service was considered and

vetted in the rulemaking of which all parties were on notice. Transitional Program

for Covered Business Method PatentsDefinitions of Covered Business Method

Patent and Technological Invention, 77 Fed. Reg. 48734, 4873536 (Aug. 14,

2012). This is bolstered here by the PTABs analysis of the standard, and its

consistent use of the standard across multiple CBM reviews, discussed below.

Finally, the resulting statutory interpretation comports with the legislative

history. The only relevant AIA Congressional Report discusses CBM review as

respond[ing] to the patent troll lawsuits created by the issuance of poor

business-method patents. H.R. Rep. 112-98 at 54; see also Joe Matal, A Guide to

the Legislative History of the America Invents Act: Part I of II, 21 Fed. Cir. B.J.

435, 437 n.8 (2012) (Only one committee report, H.R. Rep. No. 112-98 (2011),

was issued by a committee during the Congress in which the AIA was enacted.)

Congresss response to the patent troll problem instructed the PTO to

implement a provisional post-grant proceeding for review of the validity of any

business method patent. H.R. Rep. 112-98 at 54 (emphasis added); see also P.

Andrew Riley, Jonathan Stroud, & Jeffrey Totten, The Surprising Breadth of Post-

8
Grant Review for Covered-Business-Method Patents, 15 Colum. Sc. & Tech. L.

Rev. 235, 260262 (2014) (demonstrating Congressional intent for broad CBM

review through legislative history); Joe Matal, A Guide to the Legislative History

of the America Invents Act: Part II of II, 21 Fed. Cir. B.J. 539, 62638 (2012).

B. The PTO is entitled to deference regardless of the applicability of

Chevron to the PTOs interpretation in its rulemaking.

Finally, even where the PTOs construction of the Patent Act is not entitled

to Chevron deference, it is still entitled to at least deference under Skidmore v.

Swift & Co., 323 U.S. 134 (1944). In Cathedral Candle, this Court explained:

[T]he Supreme Court intends for us to defer to an agency

interpretation of the statute that it administers if the agency has
conducted a careful analysis of the statutory issue, if the
agencys position has been consistent and reflects agency-wide
policy, and if the agencys position constitutes a reasonable
conclusion as to the proper construction of the statute.

Cathedral Candle Co. v. U.S. Intl Trade Commn, 400 F.3d 1352, 1366 (Fed. Cir.

2005). This deference applies even if the Court might not have adopted that

construction without the benefit of the agencys analysis, i.e., after review de

novo. Id.

The PTOs analysis was careful. The gathering and analysis of comments

during the rulemaking and the detailed analysis provided by the PTAB so

demonstrate. See A4042 (Institution Decision); A42 n.3 (collecting PTAB cases).

9
 Moreover, the PTO is the body best positioned to analyze the statutory

definition, which is a modifiedand expandedversion of PTO classification

705. See Matal Part II at 63738; see also Proposed Rule, 77 Fed. Reg. at 7083.

That modification was made to capture business method patents issued under other

classifications, and exclude some patents that issued in class 705. Matal Part II at

638. No one understands the PTOs classification scheme better than the PTO.

In addition, the PTOs construction has been consistent. In the four cases

discussed above, the PTAB relied on the PTOs understanding expressed in the

final rulemaking. See Versata, 793 F.3d at 1324; SightSound, 809 F.3d at 1311;

Blue Calypso, 815 F.3d at 1340, Panel Op. at. 4; see also supra Part II (analyzing

cases). The deference applied by the panels and their outcomes varied, but the

PTO was consistent in its interpretation.

Finally, the PTOs interpretation is long-standing. The construction

preceded the filing of the first AIA petition and has been used ever since. It has

been relied on in deciding the hundreds of CBM petitions filed since 2012. And it

has been applied and upheld, at least in part, before this Court.

CONCLUSION

For these reasons, the panel opinion should be reheard by the en banc Court.

10
Respectfully submitted,

By /s/ William G. Jenks

William G. Jenks
JENKS IP LAW PLLC

11
 CERTIFICATE OF COMPLIANCE WITH TYPE-VOLUME
LIMITATION, TYPEFACE REQUIREMENTS,
AND TYPE STYLE REQUIREMENTS
1. This brief complies with the type-volume limitation of Federal

Circuit Rule 35(g) because the appeal was docketed July 9, 2015 (i.e., before April

1, 2016) and, under the applicable rules, the brief contains 10 pages excluding the

parts of the brief exempted by Federal Rule of Appellate Procedure 32(a)(7)(B)(iii)

and Federal Circuit Rule 32(b).

2. This brief complies with the typeface requirements of Federal

Rule of Appellate Procedure 32(a)(5) and the type style requirements of Federal

Rule of Appellate Procedure 32(a)(6). The brief has been prepared in a

proportionally spaced typeface using Microsoft Word 2010 in 14-point Times New

Roman font.

/s/ William G. Jenks

William G. Jenks
 CERTIFICATE OF SERVICE
I hereby certify that, on this 6th day of February, 2017, I caused to be

electronically filed the foregoing BRIEF OF UNIFIED PATENTS INC. AS

AMICUS CURIAE IN SUPPORT OF GOOGLE INC.S PETITION FOR

REHEARING EN BANC using the Courts CM/ECF filing system. Counsel for

the Appellant and Appellee were electronically served per FED. R. APP. P. 25 and

FED CIR. R. 25(a) and 25(c).

/s/ William G. Jenks

William G. Jenks