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.