This month the Federal Circuit issued its opinion in New Vision Gaming & Development, Inc. v. SG Gaming, Inc., a patent case we have been following because it attracted an amicus brief. That brief argued that the Patent Trial and Appeal Board “trial system violates due process.” The brief pointed to an alleged “October Effect” where administrative patent judges allegedly “change their judging standards at the end and beginning of each performance evaluation period” and subjective performance evaluations that allegedly cause reasonable people to “question whether the PTAB invalidates patents so frequently because its constituent APJs try to please their budget-minded bosses through revenue-enhancing decision making.” Notably, Judge Moore authored a brief majority opinion vacating and remanding two decisions by the Patent Trial and Appeal Board based only on the Appointments Clause. Judge Newman concurred in part and dissented in part, but also did not address the alleged due process violation. This is our opinion summary.
In this case, New Vision made several arguments on appeal, including that the Board’s decisions should be vacated and remanded due to the Federal Circuit’s opinion in Arthrex, Inc. v. Smith & Nephew, Inc., but also because “the unusual structure for instituting and funding [America Invents Act] post-grant reviews violates the Due Process Clause in view of [Supreme Court cases], which establish ‘structural bias’ as a violation of due process.”
In her brief opinion for the court, Judge Moore did not address the alleged due process violation. Instead, she explained that, “[b]ecause Arthrex issued after the Board’s final-written decisions and after New Vision sought Board rehearing, New Vision has not waived its Arthrex challenge by raising it for the first time in its opening brief before this Court.” As a result, the court found that the Board’s decisions should be vacated and remanded for proceedings that are consistent with Arthrex.
In her concurring/dissenting opinion, Judge Newman also did not address the alleged violation of due process. Instead, she explained her view that, although Arthrex controlled, remanding this case may be unnecessary. She highlighted that it may not be appropriate for any Board proceeding on remand, because the parties had contractually agreed upon a forum selection clause providing that disputes must be heard in federal or state courts in Nevada. She highlighted that New Vision filed suit in Nevada’s federal district court, but SG Gaming filed petitions with the Board. Subsequently, the Board ignored the parties’ prior contractual agreement regarding the appropriate forum. Therefore, although she agreed with the majority’s decision to vacate the Board’s decision based on the Appointments Clause, Judge Newman found it inappropriate to remand this case to the Board without first resolving the forum selection issue. Notably, Judge Newman did not clearly express any view on how the forum selection issue should be resolved.