Judges and Academics Tell CAFC to Reject SAP’s Mandamus Bid Over Revocation of Vidal’s Discretionary Denial Guidance

Judges and Academics Tell CAFC to Reject SAP’s Mandamus Bid Over Revocation of Vidal’s Discretionary Denial Guidance

SAP, a global technology firm headquartered in Germany, renowned for developing software, is currently challenging a patent through the U.S. Patent Office’s review process and is urging the court to enforce a rescinded policy. The case, now before the U.S. Court of Appeals for the Federal Circuit, involves a writ of mandamus filed by SAP, seeking to compel the United States Patent and Trademark Office (USPTO) to apply its June 21, 2022 guidance memo to pending IPR petitions and to not pressure SAP or any IPR petitioner into forfeiting an invalidity argument in related district court litigation.

Discretion and Due Process in IPR Proceedings: Experts Push Back Against SAP’s Mandamus Petition

The legal battle over the USPTO’s decision to rescind former Director Kathi Vidal’s discretionary denial guidance has intensified, with new amicus briefs supporting the agency’s authority. Central to the dispute is whether the USPTO acted within its legal and constitutional bounds in revoking Vidal’s interim guidance, which had shaped how the agency exercised discretion in instituting IPRs. While SAP and earlier amici argued that the reversal threatens legal certainty and fairness, the latest briefs present a strong counterargument—rooted in legal precedent and the foundational principles of administrative law.

Judges and Scholars Defend USPTO’s Discretion

In a compelling brief filed on July 18, three retired federal judges, a former Vice Chair of the International Trade Commission (ITC), and six legal scholars opposed SAP’s request. Notable signatories included retired Chief Judge Randall Rader of the Federal Circuit, retired Federal Circuit Judge Kathleen O’Malley, and retired Chief Judge Susan Braden of the U.S. Court of Federal Claims. Joining them were Ronald A. Cass, former ITC Vice Chair, along with law professors such as Adam Mossoff of George Mason University’s Antonin Scalia Law School and Kristen Jakobsen Osenga of the University of Richmond School of Law. The brief emphasizes that IPR petitioners like SAP do not hold a constitutional property interest in the adjudication of their petitions, which is a necessary predicate for applying constitutional due process protections, making due process protections inapplicable in this context. This argument directly undermines SAP’s claim that rescinding the guidance violated its procedural rights.

Moreover, the brief cites multiple Supreme Court rulings, including United States v. Arthrex, Inc. (2021), SAS Institute Inc. v. Iancu (2018), and Cuozzo Speed Techs., LLC v. Lee (2016), to underscore the administrative and discretionary nature of the IPR process. In Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, the Court affirmed that IPR proceedings address public rights, not private rights, and are thus firmly within the scope of administrative discretion.

SAP’s Own Contradiction

Adding weight to the rebuttal is a pointed critique of SAP’s legal inconsistency. The brief highlights that SAP’s current position starkly contradicts its earlier arguments in the Oil States case. At that time, SAP asserted that patent owners were on notice that their patents could be challenged through processes like IPR, which inherently include discretionary denials. By that same reasoning, the brief argues, SAP should have understood—since IPRs were introduced in 2011—that discretionary decisions are a core, expected feature of the review mechanism. As the brief plainly states, “Applying SAP’s own reasoning from its Oil States brief, SAP was on notice here since the creation of IPR proceedings in 2011 that discretionary denials can and will occur.”

No Grounds for Reliance on Interim Guidance

Adding further support for the USPTO, Satya Marar, a Visiting Postgraduate Fellow at the Mercatus Center at George Mason University, submitted a separate brief contesting the validity of SAP’s reliance on the rescinded guidance memo. Marar argued that the Vidal memo was explicitly an interim document that had not gone through the formal rulemaking process mandated by the Administrative Procedure Act (APA). Because it lacked the permanence and legal authority of a properly promulgated rule, SAP could not reasonably claim any protected reliance. Citing federal court precedent, the brief stresses that interim policies do not create enforceable reliance interests—and granting SAP’s mandamus petition could dangerously elevate informal guidance to binding law. The Court has also made it clear that the USPTO Director has the unreviewable discretion to decide whether to institute an IPR proceeding, 35 U.S.C. § 314(d).

The Broader Constitutional Stakes

Both briefs emphasize that granting SAP’s petition could upset the constitutional balance between Congress and administrative agencies. Forcing the USPTO to apply rescinded guidance would effectively elevate non-binding memos to the level of enforceable rules—bypassing Congressional intent and weakening the authority conferred on the USPTO under the America Invents Act (AIA). Such precedent could chill the evolution of agency policy, allowing private actors to lock agencies into outdated frameworks and curtail the discretion Congress intended. Marar cautioned that this would breach the separation of powers, intruding on agency functions and sidestepping key APA safeguards like the notice-and-comment process.

The latest amicus briefs in SAP v. USPTO represent a pivotal development in the ongoing debate over administrative discretion in the U.S. patent system. As the Federal Circuit reviews SAP’s mandamus petition, it must assess not only the procedural fairness of shifting policies but also the broader constitutional and institutional stakes. With distinguished judges, scholars, and policy experts cautioning against judicial overreach and affirming the legitimacy of agency discretion, the case is poised to influence how interim guidance is interpreted and relied upon. Regardless of the outcome, the court’s ruling will have implications well beyond a single IPR proceeding.