Federal district courts have subject matter jurisdiction over APA claims challenging the Patent Office’s denial of petitions for rulemaking

This is the latest in a series of appeals that is four decades in the making. The appellant has more than 400 patent applications pending before the U.S. Patent and Trademark Office (PTO). Those applications have more than 115,000 patent claims and claim the benefit of a filing date in the 1970s. A team of 14 patent examiners has been tasked with examining the appellant’s patent applications. After the PTO issued “Requirements” for certain information in those applications and to impose a limit on the number of claims the appellant could pursue – a procedure the appellant unsuccessfully challenged in an earlier appeal to the Federal Circuit – the PTO reopened prosecution of many patent applications.

This led to another suit in the district court, challenging the reopening of prosecution on the basis that it improperly delayed appeal of those applications. That suit ended in a grant of summary judgment for the PTO; no appeal was taken. While that suit was pending, however, the appellant filed a request for rulemaking at the PTO, asking it to promulgate a regulation eliminating Manual of Patent Examining Procedure (MPEP) § 1207.04, which was the basis for reopening of prosecution to enter a new grounds of rejection in the first instance. The PTO denied the appellant’s petition for a rulemaking. That led to the suit that would culminate in the instant appeal. The District of Nevada determined it lacked subject-matter jurisdiction and granted summary judgment dismissing the case.

The Federal Circuit reversed the dismissal, but affirmed the judgment on alternative grounds. The Federal Circuit explained that while Congress granted the Federal Circuit and the Eastern District of Virginia exclusive jurisdiction to review final decisions on patentability of patent applications, that grant of jurisdiction does not displace the jurisdiction of the district courts under the Administrative Procedure Act (APA) to review challenges to the PTO’s denial of a petition for rulemaking.

The Federal Circuit affirmed the judgment on alternative grounds. First, the Federal Circuit concluded that the appellant’s argument that MPEP § 1207.04 was improperly promulgated without notice and comment rulemaking was subject to a six-year statute of limitations and thus time-barred, since the cited section of the MPEP was first published in 2005. Next, the Federal Circuit concluded that the appellant’s argument that the MPEP conflicts with 37 C.F.R. § 41.39 was a “policy based challenge,” which “accrues at the same time as the right of action for a procedural challenge.” Thus, this theory was also time-barred. The Federal Circuit concluded, however, that the appellant’s argument that the MPEP conflicts with 35 U.S.C. § 6(b)(1) was not time-barred. Nevertheless, the Federal Circuit found that the PTO had properly interpreted the statute and that it was appropriate for the agency to impose certain procedural requirements and conditions before the Patent Trial and Appeal Board would decide an appeal from an examiner’s rejection.

A copy of the opinion can be found here