Versata v. Lee (Versata II) (Fed. Cir. 2015)
In this follow-up to Versata v. SAP (Versata I), the Federal Circuit holds that a district court has no jurisdiction over a direct challenge the PTO’s decision to institute a covered business method (CBM) review. This particular appeal stems from a laterally-filed E.D. Virginia lawsuit filed by Versata against the USPTO immediately after the USPTO’s decision to institute the CBM review. In the case, the patentee asked the court to set aside the PTAB’s decision to institute. The district court dismissed that case for lack of subject matter jurisdiction and failure to state a claim based upon the AIA’s express statement that the decision on whether to institute is not appealable and because of the detailed scheme for review provided by the statute.
In affirming the district court’s judgment against the case, the Federal Circuit failed to address a core statutory question – in particular, the statute indicates that the decision is “nonappealable,” but says nothing expressly about the collateral civil action filed by the patentee here.
Offering a tone of assurance, the Federal Circuit suggests that the lack of appellate review of the interlocutory institution decision is largely remedied by the broad review of a PTAB decision on the merits of a review proceeding.
[I]n Versata I we highlighted the fundamental importance of judicial review of agency action, both as a matter of historic case law as well as of statutory law. The importance of judicial review was recognized by the district court when it noted that an adequate remedy lay in appeal to the Federal Circuit, an appeal expressly provided in the AIA at the final written decision stage. We have thus acknowledged the balance Congress struck between its desire for a prompt and efficient review process at the USPTO, on the one hand, and, on the other, the necessary recognition of the traditional role of judicial review of agency action. In Versata I we found that balance carefully crafted, and consistent with the roles the Constitution assigns to the Judicial and Executive Branches.
This appeal was handled by the same panel that heard Versata I, and again Judge Plager wrote the majority opinion that was joined by Judge Newman. Judge Huges concurred in the results without opinion — apparently disagreeing with the majority’s statements regarding the importance of judicial review.
The point of CBM review was to get rid of junky, non-technological business method patents and make them more difficult (if not impossible) to “monetize.”
Get used to it.
Like U.S. Patent 8,572,279 “System and method for transmission of data”? But the PTAB denied institution of the CBM proceeding. Google v. SimpleAir, CBM2015-00019, May 19, 2015 Institution Decision.
Under Versata II, it seems that decision by the PTAB would not be reviewable by any court, whether by direct appeal or via an APA claim.
Malcolm,
I know that I have asked you before, but you have never answered (except when you boffed with the scientific method)
Define “technological” in a non-circular way.
Thanks
Wake me up when there’s a real factual problem, e.g., a decision to deny CBM review based on the fact that the defendant’s name “begins with a Z” or something equally arbitrary and capricious. As long as the PTO is keeping the gates for review as wide open as reasonably possible and is continuing to tank the worst patents ever, we should all be cheering. This is the hard work that needs to be done to clean up the massive mess created by the Federal Circuit (with much assistance from the PTO).
In this case you’ve got a defendant (Versata Software) who, quite frankly, deserves the corporate death penalty, whining about their junk patent deservedly being flushed down the tubes. I could really care less.
MM, your argument is akin to the question asked of the Crusader captain at the gates of Jerusalem. How can we distinguish between the Christians and Jews, and the Infidels?
We know the answer.
“Kill them all, and let God sort them out at the Gates of Heaven.”
Somebody’s gotta review their “takings” law…
Except that all patents aren’t necessarily tanked by the PTAB after institution of CMB review. Nor is review granted based on every petition.
It should go without saying (one lawyer to another) that if you want to succeed with a legal issue you should have some decent facts.
The problem so many patentees have, of course, is that they can’t tell the difference between a complete pile of junk and a valid, eligible claim. Whose fault is that? I can point out some specific names but that’s not really necessary. Suffice it to say that some folks have their eyes open and both feet on the ground, while others have their heads in the sand and their behinds massaged by grifters and money-grubbers who know how to push paper around and nothing else. Those latter folks are facing an uphill battle when it comes to expanding patent rights. It’s silly to explain why for the thousandth time.
Their behinds massaged…
Prof. Crouch must be so proud that you are slipping back into your s3xual innuendos again.
You can’t help yourself, can you?
One lawyer to another: get into a field that you can believe in the work product produced as the cognitive dissonance is just not healthy for you.
Wake me up when the ends justify the means and Maclolm is not so overtly anti-patent.
when we are talking about jurisdiction, we are not talking about the merits
Except that the merits set forth in the petition are the criteria used by the PTAB to determine whether to institute review.
For the record: I’m all all for making it easier to obtain review of patents, especially the worst patents ever granted.
Of course, that’s not what’s driving these “concerns” about “jurisdiction”. On the contrary. What’s driving the “concerns” is the hurt fee-fees of junk patent holders. Screw ’em.
MM, one’s motive behind asserting a legal defense is irrelevant. This is like saying that Congress may ignore constitutional rights if it has an important legislative purpose. (And that, sir, is the position of the government consistently advanced in these litigations.)
one’s motive behind asserting a legal defense is irrelevant.
A lovely sentiment.
Unfortunately we’re dealing with some of the least noble actors in the history of the legal profession and everybody knows that. Everybody also knows that these folks were given a free lunch that they didn’t deserve. Everybody also knows that most of these folks are arrogant entitled whiners who just won’t quit.
It’s a bit weird to pretend that the bigger picture has no influence on judicial outcomes. The bigger picture always matters and, until we substitute one of NWPA’s mythcial computer judges for human judges (and program the computer to behave as like a ten year old who was born yesterday), that’s always going to be the case. For the most part, I don’t have a problem with human judges. I do have a bigger problem with human judges who are too ignorant to understand the bigger picture or who are easily corrupted by wealth. Those judges, thankfully, seem to be in the minority these days.
“Unfortunately we’re dealing with some of the least noble actors in the history of the legal profession and everybody knows that. Everybody also knows that these folks were given a free lunch that they didn’t deserve. Everybody also knows that most of these folks are arrogant entitled whiners who just won’t quit.”
Thanks Sheriff Arpaio. Gotta work hard to keepin’ them there evildoers from having any legal rights or access to the courts.
Watch out – there be children running through the field of rye that need saving…
/off sardonic bemusement
“Everybody also knows that most of these folks are arrogant entitled whiners who just won’t quit.”
But remember that it was the congress that so entitled them.
You are using that word in a twisted manner again…
…don’t forget the Quo and the fact that an exchange takes place (not some “freeloading” connotation)
There is no constitutional right to an invalid patent.
That makes as much sense as saying a defendant isn’t entitled to a presumption of innocence or a fair trial. You anti-patent people are ridiculous.
…or that people in the public eye should have no protection against libel….
/off sardonic bemusement
ID, I see you have joined the PTO litigation team. This is their argument in a nutshell.
With a man of your intellect now on their team, no doubt the Supreme Court will be convinced that if the Director believes your patent is invalid, he can ignore your constitution rights. This doctrine can extend to criminals caught in the act. Summary execution by arresting officers might be constitutional on the grounds that the guilty have no right to a fair trial.
Actually, I saw something like this happen on the very first episode of 24 I watched. I was so disgusted, I refused to watch another episode.
You saw rational thought on an episode of 24? That is surprising.
You went to law school; you know why comparisons between patentees and criminal defendants are inapt.
The law says there’s a presumption of validity in an issued patent. That’s it. Congress sets the terms on which you get a patent, and congress can set the terms on which it can be taken away. You know full well that in many cases, eminent domain, seizure of contraband, civil forfeiture, etc., the government can “take” with very low burdens. You might wish the law was different, and believe it should be, but that doesn’t make you right.
Tell me again about a taking with no appeal and no due process and no remuneration.
I am talking about the separate taking at the institution decision.
Tell me again about a taking with no appeal and no due process and no remuneration.
I am talking about the separate taking at the institution decision.
There’s plenty of due process and there is no reason for “renumeration” when you never should have gotten the handout in the first place.
This isn’t terribly difficult for most people to understand. Try harder.
Except not – notwithstanding your mere conclusory “statement.”
You just have to do better Malcolm. Try to pretend that you are a competent attorney.
MM seems to have mostly covered it. But “due process” doesn’t ever necessarily entitled you to any specific process. And there are many examples of unappealable administrative decisions in general, and unappealable PTO decisions in particular. That goes for both a patentee and one seeking to challenge a patent. If we want to wax academic, we could ponder the question of whether it’s just for the PTO to “take” a “right” from everyone (except the patentee) by granting a patent in an ex parte proceeding in the first place.
As to the more general issue of “a taking with no appeal and no due process and no remuneration,” which seems to have no bearing on this discussion, but is interesting nonetheless, consider the example (previously discussed) of a non-judicial seizure of contraband.
ID, patents cover inventions – the creation of individuals. They do not take rights from the people.
Setting up strawman, as your mode of argument seems to suggest is your standard, makes you sound like a government lawyer.
What you phantom lay claim as “no bearing” is the exact point of your FAIL.
You have to unclench your eyes and engage, son.
“ID, [valid] patents cover [novel] inventions – the creation of individuals. They do not take rights from the people.”
FTFY.
OTOH, invalid patents–by definition–prevent “the people” from practicing the arts without any statutory or constitutional basis. Since there’s no right (or even statutory entitlement) to an invalid patent, no right is taken away when an invalid claim is canceled.
ID, invalid patents prevent nothing.
Where do you get this c r a p?
ID, this is the best argument the government has.
But it flies in the face of the constitution where cases and controversy are decided by courts and this, the high court has already ruled, applies to actions that were litigated in the courts of England in 1789.
Just so I understand your argument, is it that the courts heard appeals from all patent-office determinations in England in 1789, so they must do so today? If that’s not it, then I seem to have missed it and would appreciate clarification.
ID, I would recommend that you begin reading a few cases in this area of law so that you might get up to speed. Began with Murray’s Lessee.
I have no idea how you would transmute “actions” into appeals from patent office determinations as being equivalent.
However, the Supreme Court does not take fools lightly. I presume you would never make an argument like yours before the Supreme Court.
So that’s a “no” then.
You want to rely on condemnation cases, but you haven’t yet shown why the cancellation of an invalid patent should be treated as a taking. When I was in law school, we called that “begging the question.”
ID, Now I know you are playing games.
“Taking?”
What a joke. You have no clue at all.
What is Hughes smoking?
When a challenge is to jurisdiction (whether 101 applies at all, the construction of the statute), Hughes would deny all judicial review?
Can he be serious?
There is not one, none, nada, zilch, Supreme Court case that has ever allowed an agency to finally determine its own jurisdiction — as a matter of constitutional law, citing variously Article III and Due Process. How can Hughes believe that Congress has the power to overturn these cases?
“All” judicial review is not being denied, Ned.
Only judicial review of the decision to institute the CBM is being denied. Both parties (patentees and defendants) still have the opportunity to have all legal issues related to the patents validity and eligibility reviewed by the Federal Circuit and Supreme Court.
Not if the institution decision is to deny the petition to institute. Under Versata II, no issues decided by the Board in such a decision would be reviewable by any court.
What if the PTAB’s decision in Versata I had been that 101 is not a proper ground for challenge in a CBM proceeding, and institution was denied on that basis? Under Versata II, that decision could never be reviewed.
What if the PTAB’s decision in Versata I had been that 101 is not a proper ground for challenge in a CBM proceeding, and institution was denied on that basis?
That didn’t happen.
Any other concerns?
Not if the institution decision is to deny the petition to institute.
Right. Then you proceed in elsewhere where you will have right to judicial review.
Can you remind everyone: what’s the estoppel effect of a decision to deny a petition to institute a CBM?
“Not if the institution decision is to deny the petition to institute”
Can always bring an APA challenge if you think it was arbitrary n capricious brosefus.
Funny you should mention that 6, as it appears that Dave Boundy has already laid a foundation for such a move.
Do you remember the last time the Office tried a quick one and Dave smacked them down? Maybe the time before that?
That’s even if the good ship AIA has not already sunk…
“Do you remember the last time the Office tried a quick one and Dave smacked them down? Maybe the time before that?”
I remember one time Dave submitted some papers and thought that he smacked someone down when really all that happened was the office got bored and a change of leadership occurred.
Your inability to face and understand reality is a bug, not a feature to your continued insistence on playing the f001.
The level of denial of the legal force that Dave Boundy brought forth should not be dismissed so out of hand. It is red and disingenuous and inte11ectually dishonest. Your don’t “get points” for being such an arse – you lose credibility.
That’s entirely your choice by the by, but you might want to remember that your chuckles only hurt you.
It’s kind of like Malcolm attempting to get on a soapbox and preach about honesty and integrity when he is the absolute least inte11ectuallyhonest person on these boards. He has no credibility and he continues to post (nine years and running) like credibility is not needed if he can merely repeat his short script of propaganda often enough. Take away his ad hominem and his “opinion/Belieb/policy” and quite literally, he has nothing.
Much like you and your propensity for your “funny” delusions.
I’m still waiting for MM to explain to us how 112(f) does not permit functional claiming. Because “logic and reason” or something.
Maybe it’s those “hurt fee-fee’s…?
Of course, even if he attempts to pretend to be a real lawyer and respond to you in an inte11ectually honest manner, he then would still need to address his canard of one-optional-claim-format-as-the-only-legal-claim-format outside of PURE functional claiming and in Prof. Crouch’s coined term of Vast Middle Ground of claims written with both structure and with words of the functional variety – fully allowed by Congress in the Act of 1952 (and as noted by Federico).
Do you really think Malcolm’s “integrity” stretches that far? That’s just not on his script.
…the usual roar of silence to a discussion point put on the table that is just “inconveniently” out of the reach of Malcolm’s short script.
One lawyer to a (supposed) another (Malcolm): try engaging the dialogue instead of monologuing and running away.
MM, when we are talking about jurisdiction, we are not talking about the merits.
Jurisdictional issues cannot be waived, are always present and are always reviewable by a court of law.
Hughes is arguing that a court of law cannot review jurisdictional issues even on review of a final judgment.
That position is so out there as to be beyond the pale.
Who came up with this idea? (Well, it was me, actually. I made this argument in our Mandamus position. It was thereafter adopted by the PTO/Justice.)
There are none so blind (i.e. Malcolm) then those that will not see.
The institution itself is separate from any decision on the merits.
The institution itself is an executive branch taking of certain sticks in the bundle of a granted property right.
This too shall fall (and this does align with Ned’s views).
Jurisdictional issues cannot be waived, are always present and are always reviewable by a court of law.
The *court*’s jurisdiction is an issue that cannot be waived, not an agency’s jurisdiction. Congress has the power to remove subject matter jurisdiction from the court, that’s their check on the judicial. There are plenty of times when the court has said they cannot act because Congress has withdrawn review authority. Stating that the decision to appeal will be non-appealable is just a removal of SMJ from the Fed Cir.
The statute isn’t be interpreted such that there is no mechanism by which someone who feels they have a right to act free of liability from a patent can challenge the patent, so what’s the problem? There’s still judicial review of the right, there’s just no guarantee of an administrative route. That’s fine.
This is not the case where Congress is trying to insulate its (or the executive’s) action completely from judicial review.
It’s called a taking, Random – looks like you too need to brush up a bit (and before you get in a tizzy, the legislative can pass laws that amount to a taking – provided certain conditions are met.
Guess what’s missing…
…and apparently you are eager to not take notice of the distinction between the taking associated with the institution decision itself and ANY secondary decision on the merits. There is NO “savings” coming from the second item to rectify the first item. It just does not matter if that second item can be appealed or not – the second item is not the first item, and the taking occurs at the moment of institution – regardless of anything else that happens.
Plenty of times, Random? Why don’t you read Crowell v. Benson that the Supreme Court sua sponte raised in B&B Hardware.
Matters that are within the discretion of the agency may be made non reviewable. But basic jurisdictional facts are always reviewable as a matter of constitutional law.
Now if Congress actually said that the courts could not review agency jurisdiction, that may be the first time it had ever done so in the history of the United States. Congress does not intentionally do such things. But if it did, Crowell v. Benson has already said that such an act would be unconstitutional.
Random has – shall we say – a quite “unique” view of constitutional law.
A pity then that it has no basis in this reality.
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