In Alarm.com Inc. vs. Hirshfeldthe United States Court of Appeals for the Federal Circuit has ruled that decisions of the Director of the United States Patent and Trademark Office reversing an ex parte review based on estoppel are subject to judicial review under the Administrative Procedure Act.

CONTEXT

In 2015, Alarm.com filed a series of motions seeking inter partes review (IPR) of patent claims held by Vivint Inc.[1] The Patent Trial and Appeal Board issued three final written decisions on IPRs, determining that Alarm.com had failed to meet its burden of proving that the disputed claims were unpatentable.[2]

Then, in 2020, Alarm.com filed three requests for ex parte reconsideration of those same claims but on different grounds than those presented in the IPRs.[3] Subsequently, the patent proprietor filed motions to terminate the re-examination proceedings.[4] Although the U.S. Patent and Trademark Office (PTO) initially assigned control numbers and filing dates to the requested reexamination proceedings, the Director issued three decisions, denying (and expunging) the patentee’s motions as irrelevant.[5] and quash the requests for ex parte review.[6]

Focusing on the requirement of 37 CFR § 1.510(b)(6) that the plaintiff must certify that “the statutory estoppel provisions of 35 USC [§] 315(e)(1)…do not preclude the plaintiff from filing the application for ex parte reconsideration”,[7] the Director concluded that Alarm.com could reasonably have raised its grounds for reconsideration in the IPRs and, as such, was barred under Section 315(e)(1) from submitting its requests for reconsideration ex leave.[8]

In each of the decisions, the Director issued a “General Policy and Practice Clarification” for the application of the estoppel precondition of Section 315(e)(1) that a particular ground for non- patentability asserted against a particular claim must be that which was “raised or could reasonably have [been] in the previous IPR involving the same application and the requester for reconsideration was the IPR applicant or a real party with an interest in or knowledge of the IPR applicant.[9]

In response to the Director’s decisions, Alarm.com filed a lawsuit in the U.S. District Court for the Eastern District of Virginia against the Director and the PTO.[10] Alarm.com brought its claims under Section 702 of the Administrative Procedure Act (APA), which provides that “[a] anyone aggrieved at law by reason of the agency’s action, or aggrieved or aggrieved by the agency’s action within the meaning of any relevant statute, is entitled to judicial review thereof.[11] According to the Alarm.com complaint, the director’s decisions overturning the ex parte review process were final agency actions that should be reversed as “arbitrary, capricious, an abuse of power, or otherwise not in accordance with law.” and “beyond statutory jurisdiction, authority or limitations, or within statutory law”.[12]

Subsequently, at the government’s motion, the District Court dismissed Alarm.com’s lawsuit because review of Alarm.com’s challenge to the vacatur decision based on estoppel was precluded.[13] Specifically, Alarm.com’s challenge to the director’s decision fell within the exception to APA review when “laws preclude judicial review.”[14]

DECISION ON APPEAL

The Federal Circuit vacated, determining that “the APA’s challenge to Alarm.com of the Director’s vacatur decisions based on estoppel is not precluded” where “[t]The text, the legislative scheme and the legislative history relating to ex parte review do not reveal a discernible enough intention to prevent judicial review of these decisions.[15]

Beginning with the “‘strong presumption’ in favor of judicial review”, the Federal Circuit sought “clear and compelling indications, drawn from the specific legislative history, and inferences of intent drawn from the legislative scheme as a whole, that Congress intended to ban the journal.”[16]

The text

The Federal Circuit explained that “[t]The only part of the statutory ex parte review regime that expressly excludes judicial review is § 303(c),” which states that “[a] the Director’s decision under paragraph (a) of this section that no new substantial issue of patentability has arisen shall be final and not subject to appeal. »[17] But, as the Federal Circuit noted, “the exclusion established by this enactment is narrowly defined.”[18] And the government agreed that “Section 303(c)…does not expressly prohibit the challenge of Alarm.com.”[19]

Statutory design

The Federal Circuit rejected the government’s argument that the statutory design of ex parte review provides clear and compelling evidence that Congress intended to prevent judicial review of decisions not otherwise expressly prohibited by Section 303 ( vs).[20] The government’s argument focused on § 306, which states: “[t]A patentee involved in re-examination proceedings … may appeal under the provisions of Section 134, and may seek judicial review under the provisions of Sections 141 to 144, with respect to any decision adverse to the patentability of any original or proposed amended or new patent claims. »[21]

But, according to the court, the affirmative grant in § 306 and its associated provisions of the patentee’s right to review “a different decision” – that is, a decision adverse to patentability in a patent proceeding reconsideration ordered – “is not sufficient to rebut the presumption of reviewability as a recognized principle and precedent” for other proceedings such as the one at issue in this appeal.[22]

Legislative history

The Federal Circuit has recognized that “the strongest government evidence” of an intent to frustrate judicial review in legislative history is a statement in a House Judiciary Committee report, which states, in the relevant part: “Subsection 303 (c) makes final and without appeal the Commissioner’s decision not to conduct a reconsideration” and “[a] party to the re-examination proceeding could still argue in any subsequent litigation that the PTO erred and that the patent is invalid on the basis of the cited prior art.[23] But the court explained that “there is no reason to infer that the Committee in 1980 was referring to anything other than the system of ex parte review it was adopting at the time”.[24] Specifically, this regime “provided for the PTO to determine whether a substantial new issue of patentability was presented, but the estoppel and multiplicity provisions that now apply, to see §§ 315(e)(1), 325(d), (e)(1), were not added to the statute until well after the 1980 enactment.”[25] Moreover, when Congress enacted the AIA in 2011, “it chose to make no substantive changes to § 303(c)” while modestly modifying other parts of the statutory design.[26] Thus, the court concluded that the evidence of legislative history “is too weak to override the text and the presumption of judicial review that accompanies it.”[27]

Based on this review of the text, statutory design, and legislative history, the Federal Circuit “reversed the district court’s decision that Alarm.com’s claims 5 USC §§ 706(2) ( A), (C) challenging the Director’s decisions to quash the ex parte reconsideration proceeding is excluded” and remanded to further proceedings.[28]

CONCLUSION

informed of this decision if they successfully argue that a patent applicant is barred under section 315(e)(1) from submitting a request for reconsideration because the applicant could reasonably have raised his or her grounds in a Prior PGD. Following this decision, judicial review will be available to the challenger under the APA. At the same time, patent challengers will want to keep the APA standards in mind when determining whether to challenge a decision to rescind an ex parte review proceeding under Section 315(e). (1). Finally, this decision provides guidance to practitioners on the types of statutory interpretation arguments that are likely to succeed in post-grant proceedings before the Federal Circuit.

[1] Alarm.com Inc. vs. Hirshfeld, no. 21-2102, sheet op. at 2, 4-5 (Fed. Cir. Feb. 24, 2022).

[2] Identifier. at 2.5. Alarm.com had previously appealed the Commission’s decisions, and the Federal Circuit upheld. Identifier. at 5.

[3] Identifier. Although the requests for ex parte review presented different grounds than those in the IPS, some references identified in the requests were raised in the IPS or submitted as attachments to the IPR petitions. To see Decision Sua Sponte To leave ex-parte Date of Filing of Request for Reexamination and Request to Dismiss as N/A Application for U.S. Patent No. 6,147,601 at pages 11-16 (June 4, 2020).

[4] To see Decision Sua Sponte To leave ex-parte Date of Filing of Request for Reexamination and Request to Dismiss as N/A for U.S. Patent No. 6,147,601 at 1-2 (June 4, 2020)

[5] Identifier. at 2 o’clock.

[6] Alarm.com Inc., op. at 5.

[7] Identifier. at 5-6.

[8] Identifier. at 6.

[9] Identifier.

[10] Identifier.

[11] 5 USC § 702.

[12] Identifier. at §§ 706(2)(A), (C).

[13] Alarm.com Inc., op. at 7 O’clock.

[14] 5 USC § 701(a)(1).

[15] Alarm.com Inc., op. at 9 o’clock.

[16] Identifier. (citing Cuozzo speed technicians. LLC vs. Lee579 United States 261, 273 (2016),

[17] Identifier. at 10 (citing 35 USC § 303(c)).

[18] Identifier.

[19] Identifier. (quoting Gov’t Br. at 39).

[20] Identifier. at 13, 19.

[21] 35 USC § 306.

[22] Alarm.com Inc., op. at 13.

[23] Identifier. at 20 (citing HR Rep. No. 96-1307, pt. 1, at 7 (1980), as reprinted in 1980 USCCAN 6460, 6466).

[24] Identifier. at 21.

[25] Identifier.

[26] Identifier.

[27] Identifier. at 22.

[28] Identifier. at 23 years old.

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