Centripetal Networks, LLC v. Palo Alto Networks, Inc. et al., Appeal No. 2023-2027 (Fed. Cir. Oct. 22, 2025)

In the Court’s only precedential opinion last week, a panel of the Federal Circuit considered issues surrounding the self-recusal of an administrative patent judge (APJ) from an inter partes review before the Patent Trial and Appeal Board.  Among other things, the Court held that it had jurisdiction to review the Board’s otherwise unappealable institution decisions in connection with the recusal.  While the Court found no error in the timing of the APJ’s recusal or his participation in the case beforehand, it did find that the Board failed to properly consider evidence pertaining to objective indicia of non-obviousness in its final written decision.  Accordingly, the Board’s ultimate decision of unpatentability was vacated and remanded for further proceedings.

The case concerned an IPR petition initially brought by Palo Alto Networks, challenging claims of a network security patent owned by appellant Centripetal Networks.  After the Board instituted review and roughly concurrently with Centripetal’s June 2022 request for rehearing of that decision, Cisco Systems and Keysight Technologies sought to join the IPR with petitions making identical arguments to Palo Alto Networks.  By the end of September 2022, Centripetal learned that one of the assigned APJs on the Board panel—APJ McNamara—had reported ownership of between $1,001 and $15,000 in Cisco stock in a public financial disclosure.  (Applicable executive branch ethics regulations provide a de minimis conflicts exemption for holdings of $15,000 or less in securities issued by a party to administrative proceedings.)

Three months later, Centripetal filed a motion seeking recusal of the entire panel and vacatur of the institution decision, claiming APJ McNamara’s conflict “cast a shadow over the entire panel of judges.”  Shortly thereafter in January 2023, the PTAB panel (including McNamara) denied Centripetal’s June 2022 rehearing request and also granted Cisco’s and Keysight’s joinder and institution requests.  The next day, APJ McNamara and one of the two other APJs assigned to the case withdrew from the panel, explaining that while Centripetal’s recusal motion was meritless, they were voluntarily withdrawing to simplify the proceedings.  After two new APJs were empaneled, the mostly-new panel denied Centripetal’s motion for vacatur and ultimately found the challenged claims unpatentable as obvious.

On appeal, Centripetal argued that all three institution decisions in which APJ McNamara participated should have been vacated, and that the Board’s failure to do so violated both applicable ethics rules and its due process rights.  The Court first considered whether it had jurisdiction to review these arguments notwithstanding 35 U.S.C. § 314(d), which provides generally that IPR institution decisions are not appealable.  Because Centripetal’s challenge did not turn on the interpretation of statutes concerning institution decisions—and instead implicated ethics rules and a constitutional due process challenge—the Court found the appeal “fits neatly into the categories of cases over which we have exercised jurisdiction.”

The panel went on to reject all of Centripetal’s arguments, affirming, inter alia, that Centripetal’s three-month belated recusal motion was untimely; that the applicable regulations did not require recusal for a financial interest less than the $15,000 de minimis threshold (and much less than the $25,000 threshold for non-parties, which Cisco was at the time of the original institution decision); and that Centripetal’s due process rights had not been violated on any of its asserted grounds.  The Court further held that “[e]ven if Centripetal’s recusal motion were timely and meritorious, it would still not justify vacatur,” since, inter alia, the only substantive institution decision at issue was made before Cisco even filed its petition, and Centripetal ultimately received a final written decision from a panel of three disinterested judges.

Notwithstanding its thorough rejection of Centripetal’s institution and recusal arguments, the Court did find that the Board improperly failed to consider evidence—developed in co-pending litigation between Centripetal and Cisco—suggesting that Cisco had copied Centripetal’s technology.  The Board had noted that the district court’s decision in that case had been vacated, but the Federal Circuit admonished that evidence of objective indicia of non-obviousness—like copying—must always be considered en route to a finding of obviousness.  Accordingly, the Court vacated the Board’s decision and remanded for further proceedings, suggesting (because appellees did not object) that the USPTO should consider assigning the case to a new APJ panel.

The opinion can be found here.

By Jason A. Wrubleski

This article summarizes aspects of the law and does not constitute legal advice. For legal advice with regard to your situation, you should contact an attorney.