PTO Need Not Terminate Inter Partes Re-exam Even After Parties Have Settled on Validity.

Sadao Kinashi | May 18, 2015

Automated Merchandising Sys. v. Lee

April 10, 2015

Before: Prost, Taranto, Fogel; Opinion by Taranto

Summary:

Inter partes re-exams were initiated during the litigation.  Parties settled the litigation, and the court issued consent judgment.  Patentee requested PTO to terminate the re-exams, but PTO refused to terminate alleging that there was no “decision” by the court.  Patentee sued PTO under Administrative Procedure Act (APA).  District court granted summary judgment in favor of PTO.  CAFC affirmed the summary judgment.

侵害訴訟中に当事者系再審査が開始された。その後当事者は和解し、それに基づいて地裁は和解判決を下した。特許権者は、米国特許庁に当事者系再審査の中止を請求したが、米国特許庁は、特許の有効性に関して裁判所の判決がなかったとして、中止を認めなかった。特許権者は、米国特許庁を行政手続法に基づいて訴えた。地裁は、米国特許庁の決定を維持するサマリ・ジャジメントを下した。CAFCもサマリ・ジャジメントを維持した。

Details:

Automated Merchandising Systems (AMS) sued Crane in the Northern District of West Virginia for infringement of four patents, U.S. Patent Nos. 6,384,402, etc. Later, Crane requested inter partes re-exams.  The PTO initiated the inter partes re-exams.

While the re-exams were under way, AMS and Crane settled their suit. The court issued a consent judgment stating that “[t]he parties stipulate that [the four patents] are valid,” that “all claims . . . are dismissed with prejudice,” and that “this judgment is final.” AMS then asked the PTO to terminate the re-exams under § 317(b).

317(b) FINAL DECISION.- Once a final decision has been entered against a party in a civil action arising in whole or in part under section 1338 of title 28, . . . if a final decision in an inter partes reexamination proceeding instituted by a third-party requester is favorable to the patentability of any original or proposed amended or new claim of the patent, then neither that party nor its privies may thereafter request an inter partes reexamination of any such patent claim on the basis of issues which that party or its privies raised or could have raised in such civil action or inter partes reexamination proceeding, and an inter partes reexamination requested by that party or its privies on the basis of such issues may not thereafter be maintained by the Office, . . . .

(35 USC §317(b)).

(a) The district courts shall have original jurisdiction of any civil action arising under any Act of Congress relating to patents, plant variety protection, copyrights and trademarks. No State court shall have jurisdiction over any claim for relief arising under any Act of Congress relating to patents, plant variety protection, or copyrights.

(28 USC §1338).

The PTO refused to terminate the re-exams alleging that there was no “decision” by the West Virginia court.  The PTO also stated that its refusal to terminate the proceedings was “a final agency action.”

AMS filed suit under Administrative  Procedure Act (APA) in the Eastern District of Virginia, AMS argued that, in light of the consent judgment, § 317(b) required the PTO to terminate the re-exams.

No statute expressly makes the refusal to terminate the inter partes re-exams immediately reviewable.  The APA provides:

Agency action made reviewable by statute and final agency action for which there is no other adequate remedy in a court are subject to judicial review. A preliminary, procedural, or intermediate agency action or ruling not directly reviewable is subject to review on the review of the final agency action. Except as otherwise expressly required by statute, agency action otherwise final is final for the purposes of this section whether or not there has been presented or determined an application for a declaratory order, for any form of reconsideration, or, unless the agency otherwise requires by rule and provides that the action meanwhile is inoperative, for an appeal to superior agency authority.

(5 USC §704).

The district court held that § 317(b)’s prohibition on maintaining a re-exam does not apply unless there has been “an actual adjudication on the merits.” and granted summary judgment in favor of the PTO.  AMS appealed to CAFC.

CAFC noted that two requirements must be met for an agency action to be final: (1) the action must not be of a tentative or interlocutory nature; (2) the action must be one by which rights or obligations have been determined. CAFC held that PTO’s refusal to terminate the inter partes re-exams here does not qualify as a final agency action under those standards.

CAFC explains that an ultimate determination regarding the validity of the patent claims will not occur until completion of any of the relevant re-exams, and that the re-exams could end with a decision in AMS’s favor.  CAFC stated that the only direct consequence of the PTO refusing to stop the proceedings is that AMS must continue to participate in the re-exams which is not enough to render that action final.

Accordingly, CAFC concluded that there is no final agency action, and affirmed the district court’s grant of summary judgment to the PTO.

Comments:

Inter pates re-exam has already been abolished as of 09/16/2012.

Q. How does settlement affect AIA-IPR and PGR?

A. PTO can terminate the proceedings upon a joint request of the requester and the patentee.  However, even if the parties have settled, the PTO has the discretion to refuse to terminate an IPR or PGR proceeding, if the proceeding has already advanced to a late stage.

317(a). IN GENERAL.–An inter partes review instituted under this chapter shall be terminated with respect to any petitioner upon the joint request of the petitioner and the patent owner, unless the Office has decided the merits of the proceeding before the request for termination is filed. If the inter partes review is terminated with respect to a petitioner under this section, no estoppel under section 315(e) shall attach to the petitioner, or to the real party in interest or privy of the petitioner, on the basis of that petitioner’s institution of that inter partes review. If no petitioner remains in the inter partes review, the Office may terminate the review or proceed to a final written decision under section 318(a).

327(a). IN GENERAL.–A post-grant review instituted under this chapter shall be terminated with respect to any petitioner upon the joint request of the petitioner and the patent owner, unless the Office has decided the merits of the proceeding before the request for termination is filed. If the post-grant review is terminated with respect to a petitioner under this section, no estoppel under section 325(e) shall attach to the petitioner, or to the real party in interest or privy of the petitioner, on the basis of that petitioner’s institution of that post-grant review. If no petitioner remains in the post-grant review, the Office may terminate the post-grant review or proceed to a final written decision under section 328(a).

Historical Structure Of Post-Issue Proceedings

 

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