The America Invents Act (AIA) created a new procedure to litigate the validity of patents: the inter partes review (IPR). A party can file a petition for an IPR with the U.S. Patent and Trademark Office (PTO). Once the petition is filed, the Patent Trial and Appeal Board (PTAB), which is a part of the PTO, decides whether to institute an IPR. When the PTAB decides not to institute an IPR, the petitioner has few avenues for recourse. Recently, Dominion Dealer Solutions, LLC v. Lee, no. 3:13-cv-00699 (E.D. Va. Apr. 18, 2014), made clear that such recourse will not come from district courts.
Dominion was sued for patent infringement in district court. In response, Dominion filed IPRs challenging the validity of the five patents-in-suit. Included with its petitions were expert declarations opining that the asserted patents were obvious. The PTAB denied the IPRs, in part, because the expert’s testimony was “nebulous” and “unpersuasive.” Dominion’s petitions for reconsideration were also denied.
In response, Dominion filed a collateral suit against the PTO in district court for violation of the Administrative Procedure Act (APA). Dominion argued that the PTAB’s decisions were arbitrary, capricious, an abuse of discretion, contrary to law, and in excess of statutory authority. The PTO moved to dismiss and the question before the court was whether district courts are the proper recourse for challenging the PTAB’s decisions.
In general, the APA confers a general cause of action to obtain judicial review of an administrative agency’s (like the PTO’s) action, but only to the extent that the agency’s authorizing statute does not preclude judicial review. 5 U.S.C. § 701(a)(1). The AIA delineates the procedure for instituting an IPR. 35 U.S.C. § 314, subsection (a) states that an inter partes review may not be instituted unless the PTO’s director determines that the information presented in a petition shows that “there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition.” Subsection (d) states that “[t]he determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.” The court relied on subsection (d) to hold that Dominion’s collateral litigation in district court was, in effect, an appeal of the PTAB’s decisions.
The court also relied on Congress’s intent in creating the IPR process. The AIA was passed, in part, to decrease the amount of patent litigation. If every denial of a petition for IPR could potentially result in a collateral lawsuit in district court, the courts could be flooded with new patent cases. As this would frustrate the purpose of the IPR process, the court determined that Congress could not have intended for denials of IPR petitions to be disputed in district courts.
The Dominion decision makes clear that the recourse for a denial of an IPR petition is a request for reconsideration, not collateral litigation in district court.