Suing the USPTO for Issuing Bad Patents

Pregis v. Kappos and Free-Flow Packaging (Fed. Cir. 2012)

Pregis was bothered by its competitor Free-Flow's air-packaging patents and so, in 2009, Pregis sued Free-Flow for declaratory judgment of invalidity and non-infringement. In the same lawsuit, Pregis also sued the USPTO in order to prevent the agency from issuing two of Free-Flow's pending applications. When those two patents issued, Pregis amended its complaint to allege that the PTO's action in issuing the patents was "arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law." Under the Administrative Procedures Act (APA), Pregis argued, such an action should be nullified by the court.

The district court rejected those claims for lack of subject matter jurisdiction – holding that "the Patent Act and its own scheme clearly expresses Congress' intent to preclude putative third party infringers from seeking judicial review" under the APA of PTO decisions to issue patents.

On appeal, the Federal Circuit affirmed the dismissal – noting that its own prior precedent already holds "that apotential infringer cannot sue the PTO under the APA to attack the validity of an issued patent." See Syntex (U.S.A.) Inc. v. United States Patent & Trademark Office, 882 F.2d 1570 (Fed. Cir. 1989) and Animal Legal Defense Fund v. Quigg, 932 F.2d 920 (Fed. Cir. 1991).

We affirm the district court's dismissal of Pregis' APA claims and hold that a third party cannot sue the PTO under the APA to challenge a PTO decision to issue a patent. The comprehensive legislative scheme of the Patent Act "preclude[s] judicial review" of the reasoning of PTO decisions to issue patents after examination under 35 U.S.C. § 131, and competitors have an "adequate remedy in a court" for the issuance of invalid patents. 5 U.S.C. §§ 701(a)(1), 704.

It is not surprising that this creative lawyering was orchestrated by the pair of James Dabney and Professor John Duffy who previously orchestrated the KSR decision. Although the opinion by Judge Reyna is well written it leaves the court open to the argument that this is a patent law specific and protectionist decision that should instead be based on a broader look at how when and where APA challenges are allowed. I suspect that we can look forward to a petition for a writ of certiori in the upcoming months.

15 thoughts on “Suing the USPTO for Issuing Bad Patents

  1. Sorry, Independent inventor, that would be incorrect.

    Will you now provide an example as asked at 12:06 PM?

    Don’t have one? Simply state so and state that your rhetoric is empty wishful thinking.

    Time to put up Independent inventor.

  2. Wrong – unless you have an example of such a modern day advanced country that has ditched all IP laws…

    How about it MM? Put up or shut up.

  3. I am protecting this blog from lies.

    LOL. Everytime I think he can’t get any nuttier, this dude manages to crank it up another notch.

  4. You are mis-reading my post Leopold. All I am asking for is what the purveyors of the IP-free world indicate in how glorious their system is. Quite in fact, I am asking these people to prove their points by giving a real-world (this world) example.

    If anything, I am protecting this blog from lies.

    You are shooting your arrows in the wrong direction (yet again). Don’t you get tired of trolling me and being wrong?

  5. You’re lying again, anon. Not one person on this thread has “pretend[ed] the world actually has a modern advanced society that eschews intellectual property protection” in a single comment, much less in “repeated comments.”

    Remember, Dennis has prohibited lying on Patently-O.

  6. We pretend the world actually has a modern advanced society that eschews intellectual property protection in repeated comments, but when asked to provide but a single solitary example of such a wonderful country that we can follow its lead to Nirvana, no such example is ever given.

    Independent inventor, will you be the first to give such an example, or will you join the ranks of the anti-patentists that live in some alternate fantasy universe where things like communism actually have a chance of succeeding?

  7. Ben Franklin was anti-patent:

    I was listening to a fellow on the radio talk about his book, Poor Richard’s Lament, a biographical novel on Benjamin Franklin. One point he made about Franklin was he spent his first 42 years getting rich and the last 42 giving it away. Franklin was a world-class inventor, but he open sourced his designs, such as the lightening rod and the Franklin stove, two inventions widely used to this day. In spite of his friend Thos. Jefferson’s belief that intellectual property would help the little guy, Franklin would not go along with that regime.

    We pretend the world is so much more complicated and those people too backward to be relevant today. No, the problems today are the same as back then, and the solution the same. Open source it, eschew intellectual property rights.

  8. Incorrectly issued patents, whether valid or not, are still valuable. Invalid patents can be used to harass and extort other companies. Most often, it is cheaper for the target company to acquiesce to the troll’s demands and license rather than to go to court. Unfortunately, it is an unintended reality of the patent system.

  9. This just doesn’t look like it’s the “test case” for an APA challenge to the USPTO. The best case would be one with a true procedural error, such as a case where a patent application is improperly revived – a case where there is no other remedy for such a solution because you can’t find a patent invalid on a procedural error at the USPTO.

    They’ll file a cert petition, but for an obviousness problem, I can’t imagine this having any real chance of cert being granted.

  10. I thought they had also sued to prevent the issuance of a valid patent. This used to be within the rules as a protest or prior use proceeding. When Congress changed the law regarding publication of applications, these were banned.

    But I agree, with oppositions in place, there is no need for protests or prior user proceedings.

  11. The AIA also now already provides for greatly expanded third party prior art submissions in pending applications.

    Interesting to note that no discussion on the error in the Office rules has been picked up (the error being the Office ignores the section requirement by focusing on a sub-section and that section requirement still requires the applicant’s approval of items to be entered into the record)>

  12. The decision also, importantly, notes that Congress has provided inteferences, reexaminations, and now AIA PGR’s, for administrative proceeding challenges of PTO patent allowances, in addition to judical D.J. actions.

    The AIA also now already provides for greatly expanded third party prior art submissions in pending applications.

    A Sup. Ct. win on this? What about the general legal principle requring the exaustion of admiinistrative remedies before resorting to litigation? Why would any federal court want to encourage widespread AIA litgation “end runs” on decisions of any federal agency and all their administrative recourses?

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