Profiles in IP Law: An Interview with Judge James Smith, Chief Administrative Patent Judge, United States Patent and Trademark Office

Vol. 5 No. 2

By

Denise DeFranco is a partner at Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, in Cambridge, Massachusetts, where she has been representing companies in patent infringement litigation in both trial and appellate courts for two decades. She can be reached at denise.defranco@finnegan.com.

Chief Judge James Donald Smith was appointed to the Board of Patent Appeals and Interferences as the Chief Administrative Patent Judge effective May 2011. He received a Juris Doctor degree from the School of Law at Duke University and a Bachelor of Science degree in electrical engineering from the University of Maryland at College Park.

Judge Smith has had a long career in the law and in intellectual property, including a brief time as an examiner at the USPTO. A former assistant dean of the law school at Emory University in Atlanta, Smith also served as a clerk at the Federal Circuit to the now-retired Chief Judge Paul Michel, as a patent litigator and patent prosecutor, and led international licensing and day-to-day management of in-house IP teams for three multinational corporations—Lexmark, Nokia, and most recently Baxter International, where he served as associate general counsel and chief intellectual property counsel.

This interview occurred on June 29, 2012.

Judge Smith, thank you for agreeing to meet with us today. How long have you been with the USPTO?

I began serving in May 2011. I’ve now been here about 14 months.

What have you enjoyed most about the job?

There have been many things to enjoy. It’s been quite a ride. I certainly have enjoyed the participation and the preparation for AIA and the new AIA trial proceedings. I’ve enjoyed tremendously the participation in the expansion of the Board from 100 to now nearly 150 judges; we should be at 165 by early August. All of that—what that has entailed, involving not only meeting the candidates, but the work with my colleagues at the Board to integrate the new judges—has provided a tremendous opportunity for getting to know our practice community better and getting to know the Board better. I would put those among the highlights.

Are you comfortable sharing what you’ve enjoyed least about the job?

I am comfortable. It might take me a while to think what that is. There has been so much to enjoy that what is at the bottom of the enjoyment stack may be challenging a little bit. In all honesty, what I have enjoyed most is also what I’ve enjoyed least. It is such a rare time in the history of the Board in terms of the number of exciting challenges we have before us and that has made for a tremendous opportunity to be pursuing our objectives aggressively all the time. But that is its own downside. There has been little time to do anything but all board all the time.

And that’s taxing.

Yes.

What have you found to be the most challenging in the last 14 months? I suppose it might be the same answer.

It’s the same answer.

Just all the responsibilities all the time.

Yes.

There has been a lot of administrative work over the last year with the hiring of the administrative patent judge and drafting the rules packages and dealing with all the comments from the patent community. Have you been able to dig into the substantive work of the Board of Patent Appeals and Interferences (Board or BPAI)?

Yes, and I’ve enjoyed it. The protocol of operation involves a substantial amount of delegation of duties from the Director to the Chief Judge, including, for example, deciding petitions and reviewing matters involving paneling for cases that are up for rehearing. Inasmuch as those are duties that I cannot delegate, no matter how much else I have to do, it is unavoidable that I end up very squarely in the substantive work of the Board. In addition, because I want to understand the work of the Board and I want my colleagues to know that I understand their challenges as well, I’ve also sat on panels in a number of cases, and intend to continue doing that and to do more of it. But certainly I have not declined to do that and have found that to be an especially enjoyable part of the job.

So you became one of the three panelists?

Yes. And I think I may have sat on one case where we had an enlarged panel of either five or seven. All the others where I’ve sat on the panel they have been three-person panels.

Turning to the hiring of the administrative patent judges, you mentioned earlier that the Board has grown from 100 judges to 150 under your tenure. How many have you hired personally?

Let me answer that this way. The Chief Judge and, for that matter, even the Undersecretary, does not really hire any judges. Judge appointments to the Board are made by the Secretary of Commerce and for constitutional reasons and in keeping with the constitutional scheme it is only a cabinet level officer who can appoint judges to the Board or, in effect, hire. The statute involving our operations, in fact, calls for the Secretary to make those appointments in consultation with the Undersecretary of Commerce for Intellectual Property and Director of the USPTO. They allow us the privilege of putting before them candidates for consideration. So we at the Board have worked to put together those slates, put names forward and, hopefully, secure their appointment to the Board.

When I arrived, the Board was comprised of about 94 judges. Last summer and through the fall, I think we had the appointment of another five or so, some of whose names had been pending when I arrived. And then we had the rare and wonderful opportunity to gain approval for and the resources to allow the expansion of the Board to 200 judges by the end of fiscal year 2012. At that point we were at about 99 judges, so we have now put forward slates of candidates resulting in the addition of some 60 plus judges.

How are you training the new judges?

We’re doing many things and how we train them also differs to some degree depending on who they are. For example, we began our training of the Detroit judges by having all of the Detroit judges come to Alexandria. The number was relatively small. We had seven of them and they were here for five days during which we took them through all of our initial training modules that we give to all of our new judges. It was somewhat different with the Detroit judges because they were all present at the same time and they also had a number of other training judges and lead judges available to them that week. We collaborated with our IT and telework people so that they would be exposed to all they needed to learn to engage the telework challenges. We also were able to instruct them on use of the IT equipment and the like. That was particularly important with the Detroit judges because they began in May and we didn’t yet have a Detroit office. The mission before them was somewhat different. We were ahead of schedule on Detroit. Even though the office opened on July 13th, they were also working the day after Independence Day in the office. So that’s going very smoothly. Since the time they were here for their one week of training they have experienced what all our new judges are experiencing with regard to training.

Each judge has one or two mentor judges. We’ve altered the paneling assignments somewhat so that they sit on more cases with their mentoring judges, so they have the benefit of some sustained input from particular judges in helping them progress through the initial stages of doing this work. We also have classes set up for new judges that have to do with things like types of arguments that come to the Board on a regular basis and strategies for dealing with those arguments. We have classes directed to more difficult areas of the law where the law is in flux and discussing where the law is with the Board opinions on those subjects, how they look, and what the Federal Circuit decisions are looking like in those given areas at the present time. Of course, we never tell the judges how to decide individual cases. That not only would be wrong, but would probably be impossible to do given the number of judges and number of cases. But we have all of those discussions which are directed, on the one hand, at training judges and getting them ready to carry out the duties of the office, but also directed to overall Board consistency, making sure that the incumbent judges are also teaching in and learning from those classes. We’re doing it in a fairly broad way with many of the judges involved, all of them involved at one point or another, so the classes also can be used to drive overall Board consistency in our decision making.

I would like to transition into the consistency of the Board decisions. Does the BPAI consider itself bound by prior panel decisions of the Board?

We certainly are bound by those decisions that we designate “precedential.” We also have a category of decisions that can be “informative.” We are driving for consistency. We certainly view ourselves as, of course, bound by Federal Circuit decisions and, inasmuch as we’re hoping all of our decisions are consistent with Federal Circuit law, we certainly feel ourselves guided, if not actually bound, by all of our cases, certainly precedential cases.

You and I both worked at the Federal Circuit and know that the Federal Circuit has a process whereby they circulate panel decisions to other judges so they can have an opportunity to speak up and raise any potential inconsistencies. Does the Board have any sort of procedure such as that?

We ask our judges to speak up when they see issues that might touch on problematic areas or there is something unique about the case that warrants a warning to others who might be deciding cases with similar issues. There are instances where a case might well get additional visibility beyond the judges on the panel if the judges on the panel raise it. There is not a procedure where, in the normal course, panel drafts are circulated before the decision goes final. In the last 30 days, the BPAI has disposed of 1,000 cases. If we had a procedure by which the cases were on circulation beyond the panel, it probably would cause us to grind to a halt.

I wanted to raise the issue of the backlog with you. Has the Board implemented any procedures to reduce the backlog?

Yes. Our biggest initiative directed at reducing the backlog is related to or squarely addressed by the expansion of the Board: more judges, more decisions, lower backlog. We also are very driven with respect to making sure we optimize the efficiency of the panels in reaching decisions. One example of how we’re trying to drive that is with per curiam decisions. There are a couple of varieties of decision types that fall under the per curiam umbrella, at least as we are using that term. One is the panel adopting an examiner’s answer. For example, in the case of an affirmance we basically point to the examiner’s rationale as the panel’s rationale for a decision. Inasmuch as the panel is doing that, it may not designate a specific author from among the judges on the panel, but merely call the decision per curiam. In other instances, we may have a more expansive discussion of the rationale of the decision, still designating it as per curiam, where the decision is shorter in length and whereby using the term per curiam we can avoid perhaps an additional layer of discussion that might happen among the judges with respect to stylistic aspects, because no one panel member is taking stylistic ownership of the written decision. So the expansion of the Board is one big approach where we do see the backlog being attacked and then also we see that in efficiencies, including using per curiam decisions. These are the two major strategies, at least that we can identify in a concrete way.

We also are looking at other things like efficiencies where we have, for example, groups of panels who ordinarily would be paneled over some period of time to work on a group of cases. We might concentrate in time when they actually work on those cases with the idea that if they’re all working on those cases at the same time, with the panel conferences for those cases being prearranged, not only do we get the result sooner in time, but the total amount of judge resources spent in getting to the decision is reduced. We lock the panel in a room, virtually speaking, until they decide an entire group of cases. So far that has been effective. In 2010, we had 21 per curiam decisions. Already through the end of May 2012, we have 102 per curiam decisions. So we likely will have 10 to 12 times as many per curiam decisions this year as we had in 2010, and it’s an even larger ratio in comparison with 2011. Now, I can also say this about the backlog: The growth in the backlog has declined tremendously in response to the things we have done. There were times in the first or second quarter of the calendar year 2011 when in a 30-day period we received anywhere between 600 and 800 more cases than we disposed of in the same time period. That number has dropped dramatically. We are now able to predict that before the end of the summer 2012 the growth in the backlog will have stopped and the backlog will begin to diminish.

Has the Board considered any sort of accelerated track for appeals, similar to Track I accelerated examination, where an appellant would pay a fee to have their appeal expedited?

We have considered that. At this point it’s not something we’re choosing to do. For the time being, we’d prefer to accelerate across the entire docket of cases coming to the Board.

Is that something you might consider in the future once the backlog is reduced successfully?

Yes.

Has the Board seen an increase in appeals related to statutory subject matter under Section 101, post-Bilski and Prometheus, or have those Supreme Court decisions actually settled down those issues?

It would appear from the briefs we are receiving that many applicants do not believe that those issues have settled down. Whether they are right or wrong, the result is that we continue to see a number of appeals with those issues. I think it’s fair to say that sometimes even when those issues do not present themselves in the record on appeal, from time to time our judges seem to raise those issues themselves.

Turning to the new appeal rules that were published last December, the new rules provide a special petition procedure that tolls the time for submitting a reply brief. Will widespread use of this procedure aggravate the dependency and backlog issue?

So far we haven’t seen that come about. It’s still early in the use of the new rules. But we don’t think it will aggravate pendency problems.

Have mechanisms been put in place to ensure that those petitions are decided in a timely manner?

Yes. In general, I think petitions are being decided in a timely manner. We don’t yet have reason to believe that we need to devote any more resources to handling petitions. The number is manageable.

I realize the question that should probably precede the transition over to the new appeal rules. Some practitioners have noticed an increased tendency of the USPTO to grant a request for reexamination only to then turn around and issue a first office action allowance. Is that part of the USPTO’s attempts to clear the deck, so to speak, before PGRs and IPRs start rolling in?

I wasn’t aware that had been noticed. I don’t think the approach to reexams has changed in any way that is anticipatory of new proceedings. I think if that’s being observed, my guess is that it is not the result of or does not arise from any strategy on the part of the agency.

The Pre-Appeals Conference Program has proven quite successful in resolving patentability disputes quickly and efficiently. The USPTO recently mentioned in its comments to the final rules notice for the new appeal rules that there may be a separate rulemaking initiative related to the pre-appeal program. Can you comment on any efforts to improve or modify that program?

It’s probably best for me not to do that inasmuch as the drafting of such rules and certainly the institution of them is more in the realm of the Patent Corps than the Board. I think I can say this without fear of contradiction from the Director or the Commissioner of Patents. The Patent Corps has been working very collaboratively with us with regard to our backlog. Because, of course, our backlog is not merely a function of how quickly we decide cases, but how many cases come to us. So it certainly is useful and desirable for us to collaborate with regard to the input side of that equation. Every attempt is being made to make sure that cases that do not appropriately draw on Board resources for a decision don’t come to the Board. I think we will see more of that kind of collaborative activity. In recent times, for example, the agency has extended its pilot program directed to after amendment final rejections and making sure that it gives enough attention to after amendment finals so that if they obviate the need for appeal, the appeal resources can be saved.

Let’s transition to the AIA. Are you excited about the new procedures—the PGR and the IPR—that will be available to petitioners in September?

Yes.

You’re looking forward to the challenge, more challenges?


I am looking forward to the challenge. I may be most excited about the new trial proceedings, not even as a Board person, but as an IP patent person. The opportunity for disputes to be resolved in a year is exciting. It threatens to revolutionize and improve in a revolutionary way our field, and that’s exciting. I think I would be excited about them even if my current duties were not at the Board. I’m all the more excited being at the Board because, of course, we get to help make it happen.

Are you at all personally concerned about whether or not the new Patent Trial and Appeal Board will be able to satisfy that one-year statutory limitation?

It would be wrong for me not to be concerned because we are focused on making it happen. We view it as our statutory obligation. It’s one of these things where the failure to give attention to it will in no way guarantee that it happens. And we want to guarantee that it will happen. It will take focused effort and attention and, inasmuch as that’s true, yes, I’m concerned about it. In fact, as many people will know from the proposed rules and the discussion that we had over them, including numerous town hall-style meetings during the AIA road show, we have looked at every part of the proposals to make sure that the rules facilitate completion in a year. We are excited about it. We view it as a challenge for us and an enormous opportunity for us and the system.

It seems that the statute and the rules allow for the administrative patent judges to exercise discretion on many issues, including resolving issues related to discovery. Does the Office have a plan to ensure consistency between the judges and their exercise of discretion, or will there be any attempt to limit their discretion beyond what is set forth in this statute or the rules?

Well, exercise of discretion is a pretty fundamental part of the judge’s job. We view the existence of discretion as a good thing. We also view consistency as a good thing. Our contested cases judges meet with each other on a regular basis to discuss how they are applying their discretion. That will not change. Of course, driving consistency in the trial section area is easier than doing it Board-wide because, of course, there are fewer contested cases judges—trial judges—than there are ex parte appeal judges. It’s a subset of the Board. We plan for them to continue to meet and discuss the application of their discretion. In fact, one of our training and consistency meetings in connection with the development of the rules just focused on a forward-looking view. For example, if the rules end up a particular way, what range of discretion does that leave and how would the various judges seek to apply that discretion? This is a preview discussion about the use of discretion even before the rules are final because we think that informs as to the development of the rules. It’s a good preparation for the discussion we have to have post-rules as to how we apply that discretion. We have in mind, again, that discretion is not a bad thing and that we’d like it to be applied consistently.

Will discovery in the PGR and IPR proceedings be confined to depositions of declarants—for example, in situations where declarations are put into the record—and will deposition questions be limited to the four corners of the declaration?

I hesitate to answer that question. I think it is clearly the case that we want, and that the statute contemplates, the evidence put forth by declarations being put to the challenge of cross-examination. I don’t think the rules entirely exclude other kinds of evidence, but I would refer you to at least the rules in their proposed form for further elaboration.

Can you shed light on whether things like interrogatories will be allowed or whether you could probe into the basis for a declarant’s opinion?

To some extent the rules allow flexibility in discovery where the parties are able to agree to certain mechanisms. Inasmuch as that is true, there are a number of things that end up not being precluded. Again, fundamentally, we want the right evidence to be produced so we can get to the right answer. But we also need to make sure that discovery happens on a schedule that allows the final decision to be made in a year. Within those parameters there are a number of possibilities.

The statute indicates that the parties to a PGR and IPR may settle and that if the parties do settle, the Patent Trial and Appeal Board will have discretion regarding whether or not to issue an ultimate decision on the issues that are before the Patent Office. Can you shed any light on how that might work? For example, can you describe any circumstances where a decision might issue despite a settlement between the parties?

I think no one would disagree with the general proposition that the USPTO has and should have more to think about than merely the interests of the parties, which is to say our decisions very much concern the public interest. There are situations, for example, where parties would be willing to settle, but evidence already has come forward casting serious doubt on the patentability of an invention. That’s what the statute certainly envisions. We wouldn’t view it as correct to exit that proceeding merely based on what the parties have agreed.

Turning to the threshold standard for granting a PGR—more likely than not that at least one claim in the petition is unpatentable—and the standard for granting an inter partes review—a reasonable likelihood that the petitioner would prevail with respect to at least one claim—do you view those standards as different or that the standard for granting a PGR is somehow lower than the standard for granting an IPR?

I believe they are different and intended to be different and that the application of them similarly will carry out that difference. I think the reasonable likelihood standard is actually lower than the more likely than not standard. More likely than not is something more than 50 percent, whereas reasonable likelihood is something more than unreasonable. I don’t know where unreasonable could be; 15 percent might be unreasonable or maybe 20 percent, but reasonable, as in nonfrivolous, might in fact be less than more likely than not and, yet, a sufficient basis for looking into the issues brought forward by the petition.

The standard for inter partes reexamination recently has changed from substantial new question to more likely than not, but practitioners have noticed that the statistics for granting reexams have not changed. Can you comment on that?

I can explain how we arrived at the estimate with regard to the number of proceedings we expect to see, which we were required to do as part of the proposed rulemaking. One may well look at the number and, because the number is very similar to the percentage associated with inter partes reexamination and the substantial new question standard, think that we view that standard and the standards in the new statute as not much different than substantial new question. In fact, that’s not the case. There are several things to dial into the equation to get to a prediction as to how many of the petitions will be granted. One element, which is not all that apparent in looking at the numbers we’ve put forward, is how the behavior of the petitioners will change. That is, if one is working with a substantial new question as the standard, one petitions with that standard in mind. Ninety-two percent (or whatever the percentage is) of the people who’ve been putting forward have been putting forward essentially asking the question: Is there a new question there? We don’t think they will be asking that question as they petition for the new proceedings. Mindful of the proceeding, they likely will exercise some good judgment as to whether or not it is useful to advance the petition, especially because it is not an inexpensive thing to do. Presumably, the petitioners will be as insightful in determining which petitions would be granted as petitioners have been for inter partes reexamination under the substantial new question standard.

Earlier you mentioned the Detroit satellite office. Will the administrative patent judges in the new Detroit satellite office hear only cases that are prosecuted in the Detroit office or will they help handle the entire workload of the Patent Office?

The entire workload of the Patent Office.

Chief Judge Smith, I’d like to finish with two questions. Do you have any dos and don’ts for young practitioners before the Board, especially now that you’ve sat as a Board member and have probably seen some counsel that are better than others? Do you have any insights to share with our younger practitioners?

I would say this: Have an honest discussion with your clients with regard to the patentability of the invention that’s the subject of the application. We affirm rejections a good number of times. Some of those affirmances truly are worthy of the discussion as to whether or not affirmance is appropriate. In many instances, the appeal is somewhat wanting of merit. It would be good if the lawyers representing their clients did their best to advise the client as to which cases have merit.

Is it fair to say that what you’re suggesting is that when an argument is weak, it is usually not because of the lawyer’s performance but because of the substance of the argument that they’re making?

That is often the case, yes. And it is probably more the case when the rejection is affirmed and it was easy for the board to get to the affirmance. In that subset of what we see, it’s probably more a function in the weakness of the claimed invention than it is the advocacy. Because to some extent, at this tribunal as at others, it does not all rest on the quality of the advocates. Sometimes the facts speak through regardless of the advocates.

You’ve been a user of our patent system for decades and now that you’ve been inside of the sausage-making machine for 14 months, what have you learned that you’d like to share with the community that the rest of us don’t know?

They say you should never share anything about the sausage-making. In any event, I am more impressed than I ever thought I would be as to the capabilities of so many people within this agency, and that goes for several parts of the agency. Certainly there are very impressive people in every part of it. I’m particularly impressed, quite honestly, with the capabilities of the Board. We have truly outstanding judges and we have not suffered in that regard as the Board has expanded. The qualifications of the average judge on this Board are amazing. First, of course, there is that quality of good judgment which they have, which is always impressive to see. By any other measure I am impressed. For example, our long-term agency people who have become judges—the number of applications they have reviewed, which is to say prosecutions they have been involved in on the agency side is, for several of these judges, in the hundreds and thousands. It is true of many of our biotechnology judges that earned Ph.D. degrees, held post-doctoral fellowships, demonstrated stellar accomplishments in law school, and had a decade or more of legal practice before coming to the Board. There are lots of those people in all of our different areas at the Board. Gaining the in-person and up-front knowledge of that is perhaps the thing that I’ve learned that I most want to share with people on the outside.

Thank you very much for sharing your candid thoughts with us today and thank you for your time.

My pleasure. Thank you.

Advertisement

ABA-IPL at the ABA Annual Meeting

PTAB Book ad

  

Copyright book ad

 

Landslide Webinar

 

  • About LANDSLIDE

  • Subscriptions

  • More Information

  • Contact Us

Advancing Intellectual Property Law®