Thursday, December 06, 2012

Pregis loses on its APA arguments at CAFC

Of interest in the case Pregis v. Kappos AND Free-Flow

During the litigation of this case, Free-Flow conceded that its attorney’s argu- ments during prosecution were based on a misunderstanding of the prior art and were incorrect. Thus, at trial, Free-Flow argued Perkins ’397 was patentable over the prior art on a different basis. Pregis argues it should be permitted to bring an APA claim challenging the PTO’s reasons for allowance in addition to an invalidity de- fense—which is subject to a corresponding presumption of validity—in litigation against the patentee. Pointing to § 702 of the APA, Pregis asserts it was “adversely affected or aggrieved” by the PTO’s action because the Free-Flow Patents “purported to impose a direct regulation and restriction on Pregis’ business by excluding Pregis from making use of subject matter that was in the public domain . . . , and by exposing Pregis to claims for alleged infringement by its direct competitor, [Free-Flow].” Cross-Appellant Br. 55.

The argument had not fared well:

The district court dismissed Pregis’ APA claims and held that the Patent Act’s comprehensive scheme pre- cludes putative third party infringers from seeking judi- cial review of PTO decisions to issue patents. J.A. 3775– 76. The district court based its holding on Syntex (U.S.A.) Inc. v. United States Patent & Trademark Office, 882 F.2d 1570 (Fed. Cir. 1989), in which this court affirmed dis- missal of a suit against the PTO by a third party reex- amination requester.
Indeed, this court has twice previously stated that a potential infringer cannot sue the PTO under the APA to attack the validity of an issued patent. In Syntex, we framed the jurisdictional issue as whether the patent statute impliedly grants a third party requester a right to review of the PTO’s final decision in reexamination. Id. at 1572. This court determined in Syntex that the Patent Act’s “clear, comprehensive statutory scheme” indicates that Congress intended to limit appeals from reexamina- tion to the mechanisms specifically provided for by stat- ute. Id. at 1573. The creation of a right in a third party to challenge a result favorable to a patent owner after ex parte prosecution cannot be inferred. Id. at 1575. We explicitly pointed out that “a potential infringer may not sue the PTO seeking retraction of a patent issued to another by reason of its improper allowance by the PTO.” Id. at 1576.
In Animal Legal Defense Fund v. Quigg, 932 F.2d 920 (Fed. Cir. 1991) (“ALDF”), this court held that plaintiffs, various individual farmers and organizations whose goal is the protection of animals, lacked standing to sue under the APA to enjoin the PTO from issuing patents on multi- cellular living organisms because the plaintiffs failed to show injury traceable to the PTO’s actions, and because plaintiffs were outside the zone of interests addressed by the Patent Act.

Bowen is cited:

There is a “strong presumption” that Con- gress did not intend to prohibit all judicial review of a type of agency action. Bowen v. Mich. Acad. of Family Physicians, 476 U.S. 667, 672 (1986)

The AIA is mentioned in footnote 3:

Similarly, under the AIA, a third party may resort to either post-grant review or inter partes review after issuance. See AIA secs. 7(b), (c).

Of defenses:

Pregis argues that because not all PTO mistakes are recognized as defenses under § 282, a declaratory judgment action or the defenses in an infringement suit are not an adequate judicial remedy. See Aristocrat Techs. Australia Pty Ltd. v. Int’l Game Tech., 543 F.3d 657, 662- 63 (Fed. Cir. 2008) (improper revival of abandoned appli- cation is not a cognizable defense to infringement claim). Yet, the specific list of defenses available under § 282 reflects the deliberate judgment of Congress that not every error during prosecution should provide a defense to a claim of patent infringement.

Yes, i4i is cited:

Similarly, Pregis argues that the presumption of validity of an issued patent, which can be overcome only by “clear and convincing evidence,” renders patent litigation an inadequate alternative to review under the APA. Pregis asserts that a civil action under 5 U.S.C. § 702 would not give such weight to the PTO decision being challenged. 5 U.S.C. § 706. Regardless, a suit under the APA would impermissibly alter the burden of proof, set by Congress and confirmed by the Supreme Court, for invali- dating a patent. See 35 U.S.C. § 282; Microsoft Corp. v. i4i Ltd. P’ship, 131 S. Ct. 2238, 2246 (2011) (holding Congress chose the “clear and convincing” standard of proof by stating in § 282 that a patent is “presumed valid”).

The "as long as you get a chance" viewpoint of Florida Prepaid Postsecondary appears:

Furthermore, a judicial remedy is adequate for pur- poses of 5 U.S.C. § 704 even if it does not “provide relief identical to relief under the APA, so long as it offers relief of the ‘same genre.’” Garcia v. Vilsack, 563 F.3d 519, 523 (D.C. Cir. 2009). A private lawsuit against a third party, such as litigation of patent validity in an action against the patentee, need not be “as effective as an APA lawsuit against the regulating agency.” Id. at 525. The alternate remedy in court need only be “adequate” for it to supplant a suit under the APA. Id.; 5 U.S.C. § 704. In sum, the fact that the defenses available under 35 U.S.C. § 282, or in a challenge to a patent through inter partes reexamina- tion, are not identical to an APA suit does not render the carefully-considered judicial remedies provided by the Patent Act “inadequate.”4


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