Thursday, August 20, 2015

Gilbert Hyatt loses at CAFC; ED Va affirmed

From Hyatt v. Lee, a CAFC decision by Judge Moore:

Gilbert P. Hyatt appeals from the district court’s decision
that it lacked subject matter jurisdiction over his
Administrative Procedure Act (“APA”) claims against the
Patent and Trademark Office (“PTO”) and its acting
Director under 5 U.S.C. § 701(a)(2) and, alternatively,
that the PTO would have been entitled to summary
judgment for these claims. For the reasons discussed
below, we affirm the district court’s alternative holding
that the PTO would have been entitled to summary

The issue

Mr. Hyatt argues that the PTO’s publication of the
Requirements would violate § 122(a), because it would
result in the disclosure of confidential information about
his non-public pending applications. The PTO argues
that § 122(a), which allows the Director to disclose information
concerning pending patent applications where
“necessary to carry out the provisions of an Act of Congress
or in such special circumstances as may be determined
by the Director,” commits to the Director’s
discretion the authority to determine whether “special
circumstances” exist. The PTO asserts that agency determinations
of this type lie outside of the scope of the
APA. Alternatively, it argues that the Director correctly
determined that “special circumstances” exist and that
the disclosure of the Requirements is necessary to carry
out the provisions of an Act of Congress.

Bowen and Overton Park are cited:

There is a “strong presumption” favoring judicial review
of agency actions. Bowen v. Mich. Acad. of Family
Physicians, 476 U.S. 667, 670 (1986). However, this
presumption can be rebutted if “a statute’s language or
structure demonstrates that Congress wanted [the] agency
to police its own conduct.” Mach Mining, LLC v.
E.E.O.C., 135 S. Ct. 1645, 1651 (2015) (citing Block v.
Cmty. Nutrition Inst., 467 U.S. 340, 349 (1984)). For
example, § 701(a)(2) of the APA precludes judicial review
where “agency action is committed to agency discretion by
law.” 5 U.S.C. § 701(a)(2). This “very narrow exception”
to the presumption of judicial review is applicable only “in
those rare instances where ‘statutes are drawn in such
broad terms that in a given case there is no law to apply.’”
Citizens to Pres. Overton Park, Inc. v. Volpe, 401 U.S. 402,
410 (1971) (quoting S. Rep. No. 79-752, at 26 (1945)).

One argument by the USPTO did not fly:

Finally, like the statute at issue in
Webster, granting the FAA broad discretion to revoke an
aircraft inspector’s designation promotes the safety of the
public; there is no similar public safety interest at play

Were we to accept the PTO’s argument, the PTO could
shield virtually any disclosure from judicial review, so
long as the PTO claimed there were “special circumstances.”
Indeed, the PTO conceded at oral argument that if
§ 122(a) was unreviewable the PTO could disclose essentially
any information about any patent application, with
no review and no recourse, so long as there was no constitutional
violation. See Oral Argument at 30:30–37,
34:40–57, available at http://oralarguments.cafc. “We need
not doubt the [PTO’s] trustworthiness, or its fidelity to
law, to shy away from that result. We need only know—
and know that Congress knows—that legal lapses and
violations occur, and especially so when they have no
consequence.” Mach Mining, 135 S. Ct. at 1652–53.
Congress did not intend for the exception to swallow the

The CAFC split the baby on "scope of review":

Having found the PTO’s “special circumstances” determination
reviewable, we must next consider the scope
of that review. Unsurprisingly, the PTO and Mr. Hyatt
dispute the extent of our review. At oral argument, the
PTO relied on Mach Mining to argue that our review
should be limited to the bare minimum required by
§ 122(a)—“that the Director has, for example, not decreed
that all patents are special circumstances, but has identified
a discrete subset,” without any consideration of the
merits of the Director’s determination. Oral Argument at
33:53–34:03. Mr. Hyatt disagrees, arguing instead that
the PTO must show that “disclosure is necessary to serve
an important statutory or public interest.” Appellant’s
Br. 33. We hold that the proper scope of review lies
somewhere between these two extremes. The PTO must
not only determine that special circumstances exist, but
also that the special circumstances justify the specific
content to be disclosed. We review this determination for
abuse of discretion

End result

We hold that the Director did not abuse
her discretion when she found that the “special circumstances”
exception justified the otherwise-prohibited
disclosure of the Requirements. Because we hold that
§ 122(a)’s “special circumstances” exception permits the
PTO to disclose certain Requirements, we need not consider
whether the disclosure of the Requirements is
“necessary to carry out the provisions of an Act of Congress.”



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