Finding that several of the patent owner’s communications were improper ex parte communications, the Patent Trial and Appeal Board (PTAB) entered an order granting in part the petitioner’s motion for sanctions. Apple Inc. v., Inc., et al., Case No. IPR2016-01198 and IPR2016-01201 (Dec. 21, 2018) (Boalick, Chief APJ).

After the PTAB issued its final written decisions (FWDs), Apple filed a motion for sanctions in light of six letters that VOIP-Pal’s former CEO and chairman and current advisor sent to the chief administrative patent judge and other judges. Apple argued that the letters violated Apple’s due process rights, the PTAB’s regulations and the Administrative Procedure Act (APA). VOIP-Pal opposed, arguing that Apple’s motion was untimely because Apple was aware of two of the letters but chose to do nothing, instead waiting until after the PTAB issued its FWDs. VOIP-Pal also argued that the letters were not ex parte communications because they only referenced a pending proceeding to illustrate a systemic concern and did not discuss substantive issues relevant to the proceedings themselves.

In granting Apple’s motion in part, the PTAB analyzed five issues:

  • Whether Apple’s motion was time-barred
  • Whether the letters from VOIP-Pal’s former CEO were ex parte communications
  • Whether Apple’s due process rights were violated
  • Whether Apple’s rights under the APA were violated
  • Whether VOIP-Pal should be sanctioned (and if so, what sanctions would be appropriate)

Regarding the first issue, the PTAB acknowledged that an FWD disposes of all issues that were or could have been raised and decided. The PTAB nevertheless found that Apple’s motion, which was filed after the FWDs issued, was not time barred because Apple did not become aware of four of the six letters until after the FWDs issued.

Regarding the second issue, the PTAB noted that the prohibition against ex parte communications with a PTAB member does not extend to communications referring to a pending case to illustrate a systemic concern. The PTAB found, however, that the letters at issue went beyond a discussion of a systemic concern and rather sought specific relief, including a request that the judges hearing pending cases be disqualified. The PTAB also found that VOIP-Pal participated in the preparation of the letters and Apple was not a party to the communications. Based on these facts, the PTAB found that the letters were improper ex parte communications.

Addressing the third issue, the PTAB found that Apple’s due process rights were not violated because Apple had no property rights of which it had been deprived. The PTAB acknowledged, however, that sanctions may still be imposed without a due process violation.

Turning to the fourth issue, the PTAB found that Apple’s rights under the APA were not violated. The PTAB reasoned that the APA prohibits ex parte communications “relevant to the merits of the proceeding,” and Apple failed to prove that the letters at issue had such relevance. The PTAB also found that one of the two remedies for improper ex parte communication is disclosure of the communications and their contents. The other remedy can be judgment against the patent owner, which the PTAB found was not appropriate here, since Apple had not been prejudiced.

Finally, addressing appropriate sanctions, the PTAB found that the appropriate relief was to have a new panel reconsider the FWDs on rehearing. In particular, the PTAB found that Apple had not been actually prejudiced, noting that Apple’s accusation of bias by the substitute panel was mere speculation, and that Apple failed to raise the relevant issues promptly despite possessing two of the six letters before FWDs issued.