Briefing is complete in an appeal asking the Federal Circuit to find that the America Invents Act (AIA) post-grant reviews violate the due process clause of the Constitution based on “structural bias.” New Vision Gaming & Development, Inc. (New Vision) v. SG Gaming, Inc. (SG), f/k/a Bally Gaming Inc., and Andrei Lancu, undersecretary of commerce for intellectual property and director of the United States Patent and Trademark Office (USPTO), Case No. 2020-1399, -1400. New Vision’s recently filed reply brief takes a creative approach to its constitutional argument, previewed by a two-page, attention grabbing introduction: “If a district court charged $20,000 to file a summary judgment motion, and then, after denying the motion, charged another $25,000 to proceed to the merits – and those fees funded court operations and the judges’ salaries and bonuses – that scheme would be considered unconstitutional.” Reply, p. 1. New Vision points to various facts regarding the structure and funding of the Patent Trial and Appeal Board (PTAB) that raise questions of possible “structural pecuniary” bias, arguing they establish an unacceptable appearance of structural pecuniary bias.
The reply walks through how the USPTO’s funding has evolved from 1990 to the present: In 1990, Congress controlled the USPTO’s fees. In 1999, Congress mandated that the USPTO become “business-like” and independently control its budget. The reply asserts the USPTO’s businesslike structure over fees/budgets peaked in 2011 when the AIA was passed. New Vision argues this defeats the USPTO’s argument that Congress is responsible for budget decisions/allocations and that the USPTO lacks the necessary control. Reply, pp. 5-6. New Vision emphasizes that the USPTO sets and retains all AIA fees.
The crux of New Vision’s due process argument is that the structure for institution decisions is problematic because PTAB leadership is involved in both running business operations and deciding cases on the merits. New Vision argues that the PTAB’s structure and funding “make it impossible for the public to know whether the PTAB leadership” takes actions solely on the merits or out of concern for whether decisions will cause fewer post-grant review institutions, thereby lowering revenue. Reply, p. 9. New Vision further argues it is especially important that decision-makers be free from any pecuniary bias. The reply states there is no relevant dispute regarding how administrative patent judges (APJs) are compensated and that the USPTO requires a minimum number of “decision units” for ratings and bonuses. The reply argues there is pecuniary interest in the outcomes based on this connection between institution decisions and ALJ pay.
While the reply certainly seems to allege bias, it argues that actual bias need not be shown and that the USPTO has presented no real dispute regarding pecuniary interest in institution decisions. In response to SG’s argument that the trial phase does not implicate due process issues, New Vision argues that if the initial decision is tainted by potential bias, the due process violation cannot be cured by the trial phase, citing Concrete Pipe & Prods. of Cal., Inc. v. Constr. Laborers Pension Tr. for S. Cal., 508 U.S. 602, 617 (1993). If New Vision’s creative due process argument gains traction, this will have a significant impact on post-grant reviews. This post does not address several other issues on appeal.