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In a matter of first impression, the U.S. District Court for the District of Columbia recently held that the American Inventors Protection Act of 1999 (the Act) requires patent owners to appeal reexamination decisions of the Board of Patent Appeals and Interferences (Board) directly to the Federal Circuit. Teles AG v. Kappos, Case No. 11-vc-00476 (D.D.C., Mar. 5, 2012) (Howell, J.).
A competitor of Teles sought ex parte reexamination of Teles’ patent covering a telecommunications routing switch. During reexamination, the examiner found that certain claims were obvious, and the Board affirmed. Teles brought a civil action under 35 U.S.C. § 306 in district court seeking to overturn the Board’s decision. Teles expressly stated in its complaint that it filed suit in district court because it intended to prove non-obviousness by taking advantage of “discovery mechanisms available through the Federal Rules of Civil Procedure that are not available during appellate review at the Federal Circuit.” In other words, Teles intended to compel discovery from third-parties to obtain evidence that was not in front of the U.S. Patent and Trademark Office (USPTO) during reexamination.
The USPTO moved for dismissal for lack of subject matter jurisdiction, arguing that § 306 does not confer jurisdiction on a district court for an appeal by a “patent owner.” Judge Howell agreed with the USPTO and transferred the case to the Federal Circuit. Judge Howell examined the language of §§ 134, 141, 145 (all referenced in § 306), as well as § 306 before and after amendments made by the Act in 1999. Prior to 1999, § 306 provided patent owners a right to appeal reexamination decisions to the Board under § 134, and then it allowed “court review of any Board decision under sections 141 to 145.” Sections 141-144 provided direct appeal to the Federal Circuit for “patent applicants,” while § 145 provided for a civil action against the USPTO in the District of Columbia for “an applicant.” Courts had previously held that a patent owner could file a § 145 civil action to contest a reexamination decision prior to the Act.
After 1999, the Act amended §§ 134 and 141 to expressly include reference to both patent applicants and patent owners, while § 145 continued to only reference patent applicants. The Act’s amendments to § 134 partitioned this section into three parts: (a) “Patent applicant,” (b) “Patent owner,” and (c) “Third-Party.” Furthermore, § 145 was amended to refer to “§ 134(a)” instead of “§ 134.” Thus, the court reasoned that Congress must have intended to limit § 145 civil actions only to patent applicants. According to the court, an examination of the legislative history for the 1999 amendments confirmed this intention.
Practice Note: Teles is not the first party to grasp the advantages of discovery in a civil action when challenging a Board decision. No less than two other actions challenging reexamination rulings under § 145 are currently pending. Recently, a patent owner sought a ruling from the U.S. District Court for the Eastern District of Virginia that an inter partes reexamination is a “contested case” in order to allow access to discovery during reexamination. In a similar vein, the Supreme Court heard oral arguments in January of this year in Hyatt v. Kappos, in which a patent applicant sought de novo review in a civil action under § 145 following the Board’s affirmance of rejection during primary examination. The Federal Circuit, en banc, agreed that Hyatt was allowed to submit further evidence of patentability not before the Board in his § 145 civil action. The decision in Hyatt v. Kappos is expected later this term.
© 2013 McDermott Will & Emery
