15 F.4th 1146
Fed. Cir.2021Background
- Mobility Workx owns U.S. Patent No. 8,213,417, which claims a system using a "ghost" foreign agent/mobile node to proactively allocate wireless resources and reduce handoff delays.
- Unified Patents petitioned for inter partes review (IPR) challenging claims 1–7 as obvious; the PTAB held claims 1, 2, 4, 5, and 7 unpatentable and upheld claims 3 and 6.
- On appeal Mobility raised constitutional challenges to the PTAB’s structure and procedures (for the first time on appeal), including Tumey-style due process and Appointments Clause claims; it also sought relief under United States v. Arthrex.
- The Federal Circuit took judicial notice of several government documents relied on by Mobility and concluded the Tumey and other new constitutional challenges lacked merit without remanding for fact-finding.
- The court nonetheless remanded under Arthrex to permit Acting Director review (i.e., to allow Mobility to seek Director rehearing under the USPTO’s Arthrex procedures) and stayed resolution of the merits pending that review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Fee-generation / Tumey due process challenge | PTAB/lead APJs have an institutional incentive to grant institution (and collect post-institution fees) which biases decisions | USPTO funding is ultimately controlled by Congress; leadership APJ budget roles are too remote to create a Tumey violation | Rejected — congressional appropriation and remoteness of APJ budget role defeat Tumey claim |
| APJ performance bonuses/salary incentives | APJs receive bonuses/salary increases tied to decisional units, creating personal financial incentive to institute IPRs | Decisional units are awarded for decisions authored regardless of outcome; APJs can obtain non‑AIA work to meet thresholds, so any incentive is remote | Rejected — any financial interest is too remote to violate due process |
| Delegation of institution to PTAB / APA due process complaint | Director unlawfully delegated institution to the same APJs who adjudicate, creating commingling of investigative and adjudicative functions and bias | Agency delegated for efficiency; prior precedent permits delegation; Director retains statutory authority and oversight mechanisms | Rejected on these facts; court declined to hold delegation unlawful here (citing prior precedent) |
| Appointments Clause / Arthrex relief | APJs unconstitutionally insulated; court should provide relief beyond remand (e.g., direct relief ordering claims confirmed) | Arthrex requires remedy; agency implemented Director review procedures; further remedies should be sought at agency level first | Court remanded for Acting Director to decide whether to grant rehearing under Arthrex; retained jurisdiction and stayed merits pending that process |
Key Cases Cited
- Tumey v. Ohio, 273 U.S. 510 (1927) (due process bars adjudicator having a direct pecuniary interest in outcomes)
- Dugan v. Ohio, 277 U.S. 61 (1928) (distinguishing Tumey where judge’s salary was fixed and interest in fines was remote)
- Ward v. Monroeville, 409 U.S. 57 (1972) (due process violation where mayor had executive financial responsibility and fines funded the municipality)
- United States v. Arthrex, Inc., 141 S. Ct. 1970 (2021) (remedy for Appointments Clause defect: permit principal‑officer review of PTAB decisions)
- Celgene Corp. v. Peter, 931 F.3d 1342 (Fed. Cir. 2019) (addressing constitutional challenges to PTAB raised on appeal)
- Ethicon Endo‑Surgery, Inc. v. Covidien LP, 812 F.3d 1023 (Fed. Cir. 2016) (upholding Director’s delegation of institution to the Board under prior precedent)
- Patlex Corp. v. Mossinghoff, 771 F.2d 480 (Fed. Cir. 1985) (rejecting reexamination fee‑structure due process challenge)
- Delaware Riverkeeper Network v. FERC, 895 F.3d 102 (D.C. Cir. 2018) (agency fee‑funding structure did not create Tumey conflict where Congress controls appropriation)
- United States v. Benitez‑Villafuerte, 186 F.3d 651 (5th Cir. 1999) (statistical workload‑linked funding too tenuous to create due process violation)
- Withrow v. Larkin, 421 U.S. 35 (1975) (discussion of commingling investigative and adjudicative functions and APA §554(d) considerations)