In Re PALO ALTO NETWORKS, INC. ( 2022 )

Case: 22-145 Document: 31 Page: 1 Filed: 08/16/2022
United States Court of Appeals
for the Federal Circuit
______________________
IN RE: PALO ALTO NETWORKS, INC.,
Petitioner
______________________
2022-145
______________________
On Petition for Writ of Mandamus to the United States
Patent and Trademark Office in Nos. IPR2021-01151 and
PGR2021-00108.
______________________
ON PETITION
______________________
DOUGLAS HALLWARD-DRIEMEIER, Ropes & Gray LLP,
Washington, DC, argued for petitioner Palo Alto Networks,
Inc. Also represented by SCOTT ANTHONY MCKEOWN,
MATTHEW RIZZOLO; JAMES RICHARD BATCHELDER, ANDREW
T. RADSCH, MARK D. ROWLAND, East Palo Alto, CA.
PAUL J. ANDRE, Kramer Levin Naftalis & Frankel
LLP, Redwood Shores, CA, argued for respondent Centrip-
etal Networks, Inc. Also represented by JAMES R. HANNAH,
LISA KOBIALKA, HANNAH YUNKYUNG LEE; SCOTT M. KELLY,
BLAIR A. SILVER, BRADLEY CHARLES WRIGHT, Banner &
Witcoff, Ltd., Washington, DC.
JOSHUA MARC SALZMAN, Civil Division, Appellate
Staff, United States Department of Justice, Washington,
DC, argued for respondent United States Patent and
Trademark Office. Also represented by BRIAN M.
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2 IN RE: PALO ALTO NETWORKS, INC.
BOYNTON, SCOTT R. MCINTOSH; KAKOLI CAPRIHAN,
MICHAEL S. FORMAN, THOMAS W. KRAUSE, FARHEENA
YASMEEN RASHEED, Office of the Solicitor, United States
Patent and Trademark Office, Alexandria, VA.
______________________
Before DYK, REYNA, and CHEN, Circuit Judges.
Opinion for the court filed by Circuit Judge DYK.
Opinion concurring in the result filed by Circuit Judge
REYNA.
DYK, Circuit Judge.
ORDER
Palo Alto Networks, Inc. (“PAN”) petitions for a writ of
mandamus to compel the United States Patent and Trade-
mark Office (“USPTO”) to accept and consider its Requests
for Director Rehearing of decisions denying institution of
inter partes review (“IPR”) and post grant review (“PGR”)
for patents owned by Centripetal Networks, Inc. (“Centrip-
etal”). PAN argues that the Director’s current policy of re-
fusing to accept such requests is contrary to the
Appointments Clause of the U.S. Constitution, Art. II, § 2,
cl. 2, as interpreted by the Supreme Court in United States
v. Arthrex, Inc., 141 S. Ct. 1970 (2021). The USPTO and
Centripetal oppose, and oral argument was held on
June 21, 2022.
We deny the petition, concluding that there has been
no violation of the Appointments Clause.
BACKGROUND
I
“In 2011, Congress enacted the Leahy-Smith America
Invents Act (‘AIA’), Pub. L. No. 112-29, 125 Stat. 284
(2011), to ‘improve patent quality and limit unnecessary
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IN RE: PALO ALTO NETWORKS, INC. 3
and counterproductive litigation costs.’ H.R. Rep. 112-98,
pt. I, at 40 (2011).” Regents of the Univ. of Minn. v. LSI
Corp., 926 F.3d 1327, 1335 (Fed. Cir. 2019). Among its pro-
visions, the AIA created IPR and PGR proceedings to pro-
vide opportunities for the USPTO to “take a second look at
patents previously issued by the [agency].” Arthrex, 141 S.
Ct. at 1977.
The Patent Trial and Appeal Board (“PTAB” or
“Board”) is charged with rendering final written decisions
in such proceedings. 35 U.S.C. §§ 318(a), 328(a). 1 Typi-
cally, and in Arthrex itself, the members of the Board mak-
ing these decisions are all administrative patent judges
(“APJs”), who are appointed by the Secretary of Commerce
and are only removable for cause. § 6(a); Arthrex, 141 S.
Ct. at 1985. 2 Each proceeding is “heard by at least 3 mem-
bers of the [PTAB], who shall be designated by the Direc-
tor,” § 6(c), and “the [PTAB] shall issue a final written
decision with respect to the patentability of any patent
claim challenged by the petitioner,” §§ 318(a), 328(a). As
enacted, § 6(c) provided that “[o]nly the [PTAB] may grant
rehearings.” At the conclusion of the proceedings and any
related appeals, “the Director shall issue and publish a cer-
tificate canceling any claim of the patent finally deter-
mined to be unpatentable.” §§ 318(b), 328(b).
In Arthrex, a patentee, whose patent claims had been
found unpatentable by the PTAB, argued that APJs were
principal officers not properly appointed by the President,
1 All citations to statutory provisions refer to Title 35
unless otherwise indicated.
2 Although a PTAB panel is typically comprised
solely of APJs, the statute provides that the PTAB also in-
cludes “[t]he Director, the Deputy Director, the Commis-
sioner for Patents, [and] the Commissioner for
Trademarks.” § 6(a).
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4 IN RE: PALO ALTO NETWORKS, INC.
with the advice and consent of the Senate. The Appoint-
ments Clause requires that the President “shall nominate,
and by and with the Advice and Consent of the Senate,
shall appoint . . . [principal] Officers of the United States.”
Art. II, § 2, cl. 2. Thus, “[the President] may be assisted in
carrying out [executive] responsibility by officers nomi-
nated by him and confirmed by the Senate, as well as by
other officers not appointed in that manner but whose
work . . . must be directed and supervised by an officer who
has been.” Arthrex, 141 S. Ct. at 1976.
The Appointments Clause “is among the significant
structural safeguards of the constitutional scheme. By
vesting the President with the exclusive power to select the
principal (noninferior) officers of the United States, [it] pre-
vents congressional encroachment upon the Executive and
Judicial Branches.” Edmond v. United States, 520 U.S.
651, 659 (1997). And, in light of the “thousands of officers
[who] wield executive power on behalf of the President,”
“[a]ssigning the nomination power to the President guar-
antees accountability for the appointees’ actions”—there is
“a clear and effective chain of command down from the
President, on whom all the people vote.” Arthrex, 141 S.
Ct. at 1979 (citation and internal quotation marks omit-
ted). In this way, the Clause “preserve[s] political account-
ability,” Edmond, 520 U.S. at 663, by making clear who to
“blame,” Arthrex, 141 S. Ct. at 1979.
The Supreme Court in Arthrex held that section 6(c) of
the statute effectively granted APJs sole authority to ren-
der final decisions in violation of the Appointments Clause.
While the Director of the USPTO is vested with the “pow-
ers and duties” of the agency and is a Presidentially ap-
pointed, Senate-confirmed officer, § 3(a)(1), APJs are
members of the PTAB appointed by the Secretary of Com-
merce, § 6(a); yet APJs exercise significant executive power
by “issu[ing] . . . final written decision[s] with respect to
the patentability of any patent claim challenged” in an IPR
or PGR proceeding, §§ 318(a), 328(a). See Arthrex, 141 S.
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IN RE: PALO ALTO NETWORKS, INC. 5
Ct. at 1980–81. And although “[t]he Director fixes the rate
of pay for APJs, controls the decision whether to institute
[] review, and selects the APJs” to sit on a particular panel,
among other supervisory acts, id. at 1980, he had “no
means of countermanding the final decision” of the PTAB
by operation of § 6(c), id. at 1982. Hence, the Director was
“the boss, except when it comes to the one thing that makes
the APJs officers exercising ‘significant authority’ in the
first place—their power to issue decisions on patentabil-
ity.” Id. at 1980 (citation omitted). By “assign[ing] APJs
‘significant authority’ in adjudicating the public rights of
private parties, while also insulating their decisions from
review and their offices from removal,” the statute ran
afoul of the Appointments Clause. Id. at 1986 (citation
omitted).
The Supreme Court held § 6(c) unenforceable “to the
extent that its requirements prevent the Director from re-
viewing final decisions rendered by APJs.” Id. at 1987.
Having “forb[ade] the enforcement of statutory restrictions
on the Director that insulate the decisions of APJs from
[her] direction and supervision,” id. at 1988, the Court re-
manded the case to the Director “to decide whether to re-
hear the petition” in the first instance, making “clear [that]
the Director need not review every decision of the PTAB.
What matters is that the Director have the discretion to
review decisions rendered by APJs.” Id. at 1987–88. In
parallel with the remand, the USPTO established interim
procedures for parties to request Director review of final
written decisions from IPR and PGR proceedings.
II
The present case involves a challenge to the procedures
relating to institution decisions rather than the provisions
governing final written decisions (at issue in Arthrex).
“The Director shall determine whether to institute” an
IPR or PGR proceeding based on a third party’s petition.
§§ 314, 324. The petitioner must show a likelihood of
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6 IN RE: PALO ALTO NETWORKS, INC.
success for its patentability challenge. The institution de-
cision is committed “to the Director’s unreviewable discre-
tion,” Arthrex, 141 S. Ct. at 1977, and is “final and
nonappealable,” §§ 314(d), 324(e). “By regulation, the Di-
rector has delegated this authority to the PTAB itself.” Ar-
threx, 141 S. Ct. at 1977; see 37 C.F.R. § 42.4(a) (“The Board
institutes the trial on behalf of the Director.”). We held in
Ethicon Endo-Surgery, Inc. v. Covidien LP, 812 F.3d 1023,
1033 (Fed. Cir. 2016), that “both as a matter of inherent
authority and general rulemaking authority, the Director
ha[s] authority to delegate the institution decision to the
Board.” However, the regulations do not provide for re-
hearing by the Director, though they do not preclude it.
They merely state that “[a] party may request rehearing on
a decision by the Board on whether to institute [a proceed-
ing].” 37 C.F.R. § 42.71(c).
III
Centripetal filed a complaint against PAN in district
court asserting infringement of, inter alia, U.S. Patent
Nos. 10,659,573 and 10,931,797. PAN then filed an IPR
petition for the ’573 patent and a PGR petition for the ’797
patent. After PAN filed its petitions, and while they were
pending, the USPTO updated its interim guidance regard-
ing Director review, noting that the agency “does not accept
requests for Director review of decisions on institution.”
SAppx 59; USPTO Resp. Br. at 6.
The PTAB denied institution. PAN then filed Requests
for Director Rehearing seeking Director review of the non-
institution decisions. The agency acknowledged receipt of
the requests but noted that “‘[a]t this time, the [USPTO]
does not accept requests for Director review of decisions on
institution . . .; parties may only request Director review of
final written decisions issued in inter partes reviews and
post-grant reviews.’ Arthrex Q&As, A9. The requests,
therefore, will not be considered.” Appx 34 (alterations in
original); see also Palo Alto Networks, Inc. v. Centripetal
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IN RE: PALO ALTO NETWORKS, INC. 7
Networks, Inc., IPR2021-01151, Paper 11 (P.T.A.B.
Mar. 17, 2022); Palo Alto Networks, Inc. v. Centripetal Net-
works, Inc., PGR2021-00108, Paper 10 (P.T.A.B. Mar. 17,
2022). In response to PAN’s request for clarification, the
USPTO further noted that PAN’s “rehearing requests will
not revert to the Board panel and there will be no further
review of the Board’s decision by the Office.” Appx 35.
PAN filed this petition for a writ of mandamus chal-
lenging the agency’s refusal to accept (and deliver to the
Director) its Requests for Director Rehearing. Thereafter,
the recently appointed Director updated the interim guid-
ance to state that “the Office does not accept requests for
Director review of institution decisions” but that “the Di-
rector has always retained and continues to retain the au-
thority to review such decisions sua sponte after issuance
(at the Director’s discretion).” SAppx 67. The Director has
since exercised that authority. See, e.g., OpenSky Indus.,
LLC v. VLSI Tech. LLC, IPR2021-01064, Paper No. 41
(P.T.A.B. June 7, 2022); Pat. Quality Assurance, LLC v.
VLSI Tech. LLC, IPR2021-01229, Paper No. 31 (P.T.A.B.
June 7, 2022).
DISCUSSION
“[A]ll courts established by Act of Congress may issue
all writs necessary or appropriate in aid of their respective
jurisdictions and agreeable to the usages and principles of
law.” 28 U.S.C. § 1651(a). To obtain a writ of mandamus,
the petitioner bears the “demanding, [but] not insupera-
ble,” burden of showing: (1) there are “no other adequate
means to attain the relief” requested, (2) the “right to issu-
ance of the writ is clear and indisputable,” and (3) “the writ
is appropriate under the circumstances.” Cheney v. U.S.
Dist. Ct. for D.C., 542 U.S. 367, 380–81 (2004) (citations
and internal quotation marks omitted).
The statute governing institution decisions bars ap-
peal. §§ 314(d), 324(e). Given that there is no adequate
remedy by way of direct appeal of decisions denying
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8 IN RE: PALO ALTO NETWORKS, INC.
institution, “we [have] conclude[d] that judicial review is
available in extraordinary circumstances by petition for
mandamus” in this court under 28 U.S.C. §§ 1295(a)(4),
1651. Mylan Lab’ys Ltd. v. Janssen Pharmaceutica, N.V.,
989 F.3d 1375, 1379–81 (Fed. Cir. 2021).
I
As a preliminary matter, Centripetal (but not the
USPTO) argues that PAN forfeited its Appointments
Clause challenge by seeking to initiate IPR and PGR pro-
ceedings, relying on our decision in Ciena Corp. v. Oyster
Optics, LLC, 958 F.3d 1157 (Fed. Cir. 2020). In Ciena, we
held that a petitioner forfeited its Appointments Clause
challenge to a final written decision where it “was content
to have the assigned Board judges adjudicate its invalidity
challenges until the Board ruled against it” and only after-
wards asserted that the members of the panel “were not
appointed in compliance with the Appointments Clause.”
Id. at 1159.
We need not decide whether PAN similarly forfeited its
Appointments Clause challenge by seeking institution de-
cisions under regulations that make no provision for Direc-
tor review (arguably a different situation from that
presented in Ciena) because “courts of appeals may forgive
waiver or forfeiture of claims that implicate structural con-
stitutional concerns.” Id. at 1160; see id. at 1161 (“While
the presence of a structural separation of powers issue can
justify considering a matter in the face of a clear waiver or
forfeiture, it does not compel it.”); see also Freytag v.
Comm’r, 501 U.S. 868, 878–79 (1991) (recognizing “discre-
tion to consider nonjurisdictional claims that had not been
raised below,” including “Appointments Clause objec-
tions”).
We conclude that it is appropriate to address PAN’s
structural constitutional challenge in this case despite pos-
sible forfeiture.
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IN RE: PALO ALTO NETWORKS, INC. 9
II
Relying on Arthrex, PAN argues that the categorical re-
fusal to accept requests for Director review of institution
decisions violates the Appointments Clause. Pet. at 2.
Even assuming non-institution decisions constitute “final
decision[s] on how to exercise executive power,” Arthrex,
141 S. Ct. at 1984; see Arthrex, Inc. v. Smith & Nephew,
Inc., 35 F.4th 1328, 1333 (Fed. Cir. 2022) (“Arthrex II”)
(“[A]n inferior officer generally cannot issue a final agency
decision[.]”), this case fundamentally differs from Arthrex.
Here, there is no structural impediment to the Director’s
authority to review institution decisions either by statute
or by regulation. Indeed, institution decisions are, by stat-
ute, the Director’s to make and are only made by the Board
as a matter of delegated authority.
The statutes provide that “[t]he Director shall deter-
mine whether to institute” proceedings. §§ 314, 324. Alt-
hough the Director delegated that authority to the Board,
37 C.F.R. § 42.4(a) (“The Board institutes the trial on be-
half of the Director.”), the Director plainly has the author-
ity to revoke the delegation or to exercise her review
authority in individual cases despite the delegation. 3 It
makes no difference that the Director delegated institution
3 As a matter of practice, the Director expressly re-
tained review authority (in guidance issued after PAN’s pe-
tition for mandamus), SAppx 67, and has since exercised
that authority, see OpenSky, IPR2021-01064, Paper No. 41;
Pat. Quality Assurance, IPR2021-01229, Paper No. 31.
And, as a matter of law, “the usual rule [is] that an agency
head’s delegation of her authority to subordinates is prem-
ised, at least in part, on the delegating official maintaining
the power to review the decisions of the delegee,” Villar-
real-Dancy v. U.S. Dep’t of the Air Force, No. 19-2985, 2021
WL 3144942, at *9 (D.D.C. July 26, 2021). See Arthrex, 141
S. Ct. at 1983–84.
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10 IN RE: PALO ALTO NETWORKS, INC.
authority to the PTAB without express “retention of any
avenue for Director intervention.” Reply Br. at 8 (emphasis
omitted). “That the Appointments Clause requires that a
[Presidentially appointed, Senate-confirmed officer] have
review authority does not mean that a principal officer,
once bestowed with such authority, cannot delegate it to
other agency officers,” Arthrex II, 35 F.4th at 1339, such as
the PTAB in this case.
The unambiguous identification of the Director as the
politically accountable executive officer responsible for in-
stitution decisions maintains the clear “lines of accounta-
bility demanded by the Appointments Clause,” from the
President to the Director, and allows the President to “at-
tribute [any] failings to those whom he can oversee.” Ar-
threx, 141 S. Ct. at 1981–82 (citation and emphasis
omitted). We see no Appointments Clause “infirmity in the
institution decision as the statute clearly bestows [] author-
ity on the Director.” Arthrex, Inc. v. Smith & Nephew, Inc.,
941 F.3d 1320, 1340 (Fed. Cir. 2019), vacated, 141 S. Ct.
1970.
We read the Supreme Court’s decision in Arthrex as
confirming that the statutory and regulatory provisions
concerning institution do not violate the Appointments
Clause. After reviewing the administrative scheme, and
specifically noting that “the Director has delegated [insti-
tution] authority to the PTAB itself,” Arthrex, 141 S. Ct.
at 1977, the Court concluded that the Director “controls the
decision whether to institute,” id. at 1980. The Court then
found that the power of APJs “to issue [final] decisions on
patentability” without the ability of the Director to review
such determinations offended the Appointments Clause.
Id. (emphasis added).
In every respect save the insulation of their deci-
sions from review within the Executive Branch,
APJs appear to be inferior officers—an under-
standing consistent with their appointment in a
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IN RE: PALO ALTO NETWORKS, INC. 11
manner permissible for inferior but not principal
officers. . . . If the Director were to have the author-
ity to take control of a PTAB proceeding, APJs
would properly function as inferior officers.
Id. at 1986–87 (citation and internal quotation marks omit-
ted). Thus, although not directly addressing the issue be-
fore us, this language strongly suggests that delegation to
the Board of the authority to decide on institution without
a mechanism for parties to subsequently request Director
review does not present Appointments Clause problems.
We find additional support from the Supreme Court’s
discussion of our earlier decision in In re Alappat, 33 F.3d
1526 (Fed. Cir. 1994). See Arthrex, 141 S. Ct. at 1985. As
noted in Arthrex, the plurality opinion in Alappat described
how a patent applicant at the time of Alappat could appeal
an adverse determination by a patent examiner to the
Board of Patent Appeals and Interferences and seek re-
hearing by the Board, but could not appeal to the Commis-
sioner of Patents and Trademarks. Arthrex, 141 S. Ct. at
1985 (quoting Alappat, 33 F.3d at 1535). However, the
Commissioner of Patents and Trademarks “retained ‘the
ultimate authority regarding the granting of pa-
tents’ . . . notwithstanding the lack of a formal appeal from
the Board’s decision.” Id.So too the decisions in various circuits, including our
own, have uniformly rejected similar Appointments Clause
challenges before and after Arthrex. For example, in In re
Grand Jury Investigation, 916 F.3d 1047 (D.C. Cir. 2019),
a pre-Arthrex decision, the D.C. Circuit affirmed an order
holding a party in civil contempt for failure to comply with
a grand jury subpoena issued by special counsel appointed
by the Attorney General. The affected party argued the
special counsel’s appointment violated the Appointments
Clause, but the court concluded that even though there
were regulations that purportedly limited the Attorney
General’s supervisory authority, that did not create a
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12 IN RE: PALO ALTO NETWORKS, INC.
constitutional infirmity in part because the “limitations on
the Attorney General’s oversight and removal powers are
in regulations that the Attorney General can revise or re-
peal, see 5 U.S.C. § 553(a)(2), (b)(A), (b)(B), (d)(3).” Id. at
1052. This meant special counsel “effectively serves at the
pleasure of an Executive Branch officer who was ap-
pointed” in compliance with the Appointments Clause. Id.
In another pre-Arthrex decision, Willy v. Administra-
tive Review Board, 423 F.3d 483, 491 (5th Cir. 2005) (cita-
tion omitted), the Fifth Circuit rejected a challenge to the
Secretary of Labor’s creation of an Administrative Review
Board comprised of inferior officers that “issue[d] final
agency decisions.” The court noted that “[t]he relevant
statutes expressly grant rulemaking, enforcement, and ad-
judicative authority to the Secretary” and concluded that
the Secretary’s “delegation of decision-making authority to
[the Administrative Review Board did] not violate the Ap-
pointments Clause.” Id. at 494 (emphasis added). So too,
in Varnadore v. Secretary of Labor, 141 F.3d 625, 631–32
(6th Cir. 1998), the Sixth Circuit concluded that the Secre-
tary of Labor’s “establishment of the [Administrative Re-
view Board] and delegation to it of final decision-making
responsibility is authorized under the Appointments
Clause.”
The same is true after Arthrex. Recently, in United
States v. Donziger, No. 21-2486, 2022 WL 2232222 (2d Cir.
June 22, 2022), the Second Circuit identified structural au-
thority, rather than supervisory activity, as a key consid-
eration under Arthrex. In Donziger, a district court had
appointed special prosecutors for a criminal contempt trial,
and the defendant argued that the prosecution violated the
Appointments Clause because the special prosecutors were
inferior officers who lacked supervision by a principal of-
ficer. Id. at *2. The Second Circuit agreed that the special
prosecutors were inferior officers but found no Appoint-
ments Clause violation because “it is clear that [they] are
subject to the supervision of the Attorney General” under
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IN RE: PALO ALTO NETWORKS, INC. 13
his “broad statutory authority to supervise all litigation in-
volving the United States.” Id. at *7. “Whether they were
in fact supervised is beside the point” because “‘[w]hat mat-
ters is that the [principal officer] have the discretion to re-
view decisions rendered by [the inferior officer].’” Id.
(quoting Arthrex, 141 S. Ct. at 1988). “The Constitution
does not mandate a minimum level of supervisory activity
over the work of inferior officers; rather, it requires as a
matter of structural authority that inferior officers be sub-
ject to the supervision and direction of principal officers.”
Id. Institution decisions made by APJs are similarly sub-
ject to supervision and direction by the Director, which sat-
isfies the Appointments Clause even if that authority is
not, in fact, exercised.
Finally, in Piano Factory Group, Inc. v. Schiedmayer
Celesta GmbH, 11 F.4th 1363 (Fed. Cir. 2021), also decided
after Arthrex, we rejected an Appointments Clause chal-
lenge to the Trademark Trial and Appeal Board (“TTAB”). 4
The TTAB issued a final decision cancelling the registra-
tion of a federal trademark, and the appellant challenged
the decision as a violation of the Appointments Clause
based on the alleged lack of Director review. Significantly,
just as in the context of the PTAB’s institution decisions
and final written decisions post-Arthrex, “there are
no . . . statutory restraints on the Director’s authority [to
rehear TTAB panel decisions],” id. at 1372, leaving the Di-
rector free to review such decisions in compliance with the
Appointments Clause. See Arthrex, 141 S. Ct. at 1986–
88.
4 Under the current statute, which was enacted after
the TTAB’s decision, the Director has the express “author-
ity to reconsider, and modify or set aside, a decision of the
[TTAB].” 15 U.S.C. § 1068 (Trademark Modernization Act
of 2020, Pub. L. No. 116-260, div. Q, tit. II, subtit. B, § 228,
134 Stat. 1182, 2209–10).
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14 IN RE: PALO ALTO NETWORKS, INC.
We rejected the contention that, irrespective of the Di-
rector’s authority, failure to “guarantee litigants the oppor-
tunity to obtain Director review of adverse [] decisions”
constitutes a violation of the Appointments Clause. Piano
Factory, 11 F.4th at 1374. We reiterated that “the Appoint-
ments Clause was intended to prevent unappointed offi-
cials from wielding too much authority, not to guarantee
procedural rights to litigants, such as the right to seek re-
hearing from the Director . . . . [W]hether the Director
elects to exercise [her review] authority does not affect the
status of ATJs [or APJs] as inferior officers under the Ap-
pointments Clause.” Id. Under Arthrex, “[w]hat matters
is that the Director have the discretion to review [final] de-
cisions,” 141 S. Ct. at 1988, which the Director has in this
case.
We conclude that the delegation of authority as to
whether to institute IPR and PGR proceedings to the Board
and the Director’s policy refusing to accept party requests
for Director rehearing of decisions not to institute do not
violate the Appointments Clause.
Accordingly,
IT IS ORDERED THAT:
The petition is denied.
FOR THE COURT
August 16, 2022 /s/ Peter R. Marksteiner
Date Peter R. Marksteiner
Clerk of Court
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United States Court of Appeals
for the Federal Circuit
______________________
IN RE: PALO ALTO NETWORKS, INC.,
Petitioner
______________________
2022-145
______________________
On Petition for Writ of Mandamus to the United States
Patent and Trademark Office in Nos. IPR2021-01151 and
PGR2021-00108.
______________________
REYNA, Circuit Judge, concurring.
I concur with my colleagues that PAN’s petition for
writ of mandamus should be denied. But I disagree as to
why.
The Supreme Court has long recognized that manda-
mus is a “drastic and extraordinary remedy reserved for
really extraordinary causes.” Cheney v. U.S. Dist. Court for
D.C., 542 U.S. 367, 380 (2004) (internal quotations and ci-
tations omitted). In fact, mandamus relief is to be granted
only where the petitioner has demonstrated (1) it has no
other adequate means to attain the desired relief; (2) it has
a clear and indisputable right to issuance of the writ; and
(3) the writ is appropriate under the circumstances. Id.This court also recognizes that mandamus is an extraordi-
nary remedy to be granted only in rare circumstances. See,
e.g., Mylan Lab’ys Ltd. v. Janssen Pharmaceutica, N.V.,
989 F.3d 1375, 1379 (Fed. Cir. 2021); Waymo LLC v. Uber
Techs., Inc., 870 F.3d 1350, 1357 (Fed. Cir. 2017); JAMES
Case: 22-145 Document: 31 Page: 16 Filed: 08/16/2022
2 IN RE: PALO ALTO NETWORKS, INC.
WM. MOORE ET AL., MOORE’S FEDERAL PRACTICE § 111.61
(3rd ed. 2013).
The analysis, therefore, of whether a petition meets the
high standard for mandamus begins and ends with a prin-
cipled focus on the specific relief sought by the petitioner.
In my view, the majority loses sight of the precise remedy
PAN seeks. “PAN seeks a writ of mandamus from this
Court pursuant to the provisions of 28 U.S.C. § 1651 and
Rule 21(a) of the Federal Rules of Appellate Procedure com-
pelling the agency to accept (and deliver to the Director for
consideration) its Requests for Director Rehearing in Nos.
IPR2021-01151 and PGR2021-00108.” Pet. at 2. PAN “re-
spectfully requests that the Court issue a writ of manda-
mus to the Director of the Patent and Trademark Office to
accept PAN’s Requests for Director Rehearing for consider-
ation on the merits by the Director.” Id. at 19.
According to PAN, mandamus is required because the
Director’s “categorical refusal to accept Requests for Direc-
tor Rehearing related to institution decisions insulates an
entire category of final agency decisions from Director re-
view and thus runs afoul of [the Appointments Clause].”
Pet. at 1. In other words, the agency has nailed shut its
window for filing Requests for Director Rehearing.
I generally agree that a categorical denial by the Direc-
tor to accept any requests for review raises potential con-
stitutional concerns. But I need not reach that question
and its related analysis because two circumstances under-
cut PAN’s claim that the Director categorically refuses to
accept Requests for Director Rehearing.
First, in denying PAN’s requests for review, the Direc-
tor noted that she was not accepting requests for review
“[a]t this time.” App’x 34. This suggests that there is no
“categorical refusal” to accept requests for review, but ra-
ther, that the Director has exercised her discretion not to
invoke her review authority. The window is not nailed
shut; it is closed for the moment.
Case: 22-145 Document: 31 Page: 17 Filed: 08/16/2022
IN RE: PALO ALTO NETWORKS, INC. 3
Second, the Director precisely exercised her review au-
thority in two other actions where she granted sua sponte
review of determinations denying institution. 1 See, e.g.,
OpenSky Indus., LLC v. VLSI Tech. LLC, IPR2021-01064,
Paper No. 41 (P.T.A.B. June 7, 2022); Pat. Quality Assur-
ance, LLC v. VLSI Tech. LLC, IPR2021-01229, Paper
No. 31 (P.T.A.B. June 7, 2022). This outcome is consistent
with the Patent Office guidance published April 22, 2022.
The guidance provides that “the Director has always re-
tained and continues to retain the authority to review [in-
stitution] decisions sua sponte.” Patent Office SApp’x 67.
In my view, the Director’s exercise of discretion to grant
review in those two actions pulls the rug out from under
PAN’s petition. The agency window is open after all.
I would deny the petition for writ of mandamus on
grounds that it fails to meet the high standard set for man-
damus relief. First, this is not an extraordinary case re-
quiring extraordinary relief. PAN’s desired relief already
exists. The facts here are clear. The agency has a process
for the Director to exercise her discretion to accept (and
thereby consider) requests for review. This process aligns
with the Supreme Court’s decision in United States v. Ar-
threx, 141 S. Ct. 1970, 1988 (2021) (“To be clear, the Direc-
tor need not review every decision of the PTAB. What
matters is that the Director have the discretion to review
decisions rendered by APJs.”).
Second, PAN also fails to demonstrate a clear and in-
disputable right to a writ that would compel the Director
to do what she has already done. We should not compel an
1 The Director granted sua sponte review in these ac-
tions after PAN filed its petition and Centripetal and the
Patent Office filed their response briefs, but before PAN
filed its reply brief. In its reply, PAN noted that the Direc-
tor had not granted sua sponte review until after PAN had
filed its petition. Reply at 9.
Case: 22-145 Document: 31 Page: 18 Filed: 08/16/2022
4 IN RE: PALO ALTO NETWORKS, INC.
agency to take specific action that the agency demonstrates
it has already taken. And third, because the remedy PAN
seeks already exists, the issuance of a writ would not be
appropriate under the circumstances. Mandamus should
be reserved for extraordinary cases requiring extraordi-
nary relief and not serve to provide declaratory relief in a
run-of-the-mill action.