By Jason Rantanen
Odyssey Logistics and Technology Corporation v. Iancu (Fed. Cir. 2020) Download opinion
Panel: Lourie, Reyna and Hughes (author)
Some of my biggest head-scratchers when I studied administrative law in law school were the timing rules for bringing challenges under the Administrative Procedures Act. It wasn’t because of a lack of comprehension, but instead due to the way these rules can block off judicial review of agency action. Individually the timing rules make sense, but collectively they produce a Three Bears-type situation: the timing of challenges has to be just right, or the challenge will get tossed for being either too early or too late.
This case involves two challenges to actions taken by the PTO and one challenge to a set of rules published by the PTO in 2011. The first two challenges were dismissed as two early and the third was too late.
Count I involved a request for rehearing by the relevant Technology Center Director following the Patent Trial and Appeal Board’s (PTAB) reversal of the examiner’s objections to Odyssey’s application. The request for rehearing was filed about five months after the PTAB decision. Odyssey challenged the propriety of the request on procedural grounds at the PTO, which were rebuffed, and then filed a challenge in the Eastern District of Virginia before the PTAB issued its decision on the substantive merits raised by the rehearing. The Federal Circuit affirmed the district court’s holding that there was not yet a “final agency action” under the APA. Nor did the Federal Circuit see this as a situation involving an abusive use of agency rules to delay proceedings that justified compelled action by the court.
In Count II, Odyssey challenged what it argued were new grounds for rejection by the examiner. However, the PTAB had not yet issued a decision at the time Odyssey brought the challenge. The result: dismissal for non-finality. Odyssey argued that the district court should have instead dismissed on mootness grounds, but the Federal Circuit said that wasn’t necessary: “[A] federal court has leeway to choose among threshold grounds for denying audience to a case on the merits….The district court did not err by “tak[ing] the less burden-some course.” Slip Op. at 11.
The final count was a challenge to certain amendments that the PTO made to its rules on practice for ex parte appeals in 2011. Odyssey argued that these amendments were facially invalid–that the regulations were unlawful generally. However, 28 U.S.C. § 2401 bars claims that are not brought within 6 years of the date the action accrues. Odyssey argued that the relevant triggering date was the effective date of the regulation (January 23, 2012) rather than the date it was published in the Federal Register (November 22, 2011), but the Federal Circuit disagreed: under both Fourth and Federal Circuit law, the relevant date for substantive facial challenges is the date of publication. Substantive facial challenges are different from “as applied” challenges, which accrue as of “the time of an adverse application of the decision against the plaintiff.” Id. at 13, quoting Hyatt v. U.S. Pat. & Trademark Off., 904 F.3d 1361, 1372 (Fed. Cir. 2018). The result was that Odyssey’s challenge, which was filed in district court on January 23, 2018, was time-barred by § 2401.
Edit: Shortly after I posted this, counsel for appellant contacted me to inform me that the statement “Odyssey challenged the propriety of the request on procedural grounds at the PTO, but then filed a challenge in the Eastern District of Virginia before the PTAB ruled on the request for rehearing” was incorrect: in fact, the lawsuit was filed after the petition for rehearing was granted but before the PTAB had issued a decision on the merits on the substantive issues raised by the rehearing. I’ve changed the above post to specifically refer to the “decision on the substantive merits raised by the rehearing.” I also made a few other edits to clarify the issue raised in Count I.
“Edit: Shortly after I posted this, counsel for appellant contacted me to inform me that the statement ‘Odyssey challenged the propriety of the request on procedural grounds at the PTO, but then filed a challenge in the Eastern District of Virginia before the PTAB ruled on the request for rehearing’ was incorrect: in fact, the lawsuit was filed after the petition for rehearing was granted but before the PTAB had issued a decision on the merits on the substantive issues raised by the rehearing.”
Why file before the decision on the merits?
The issue in the case was pretty clear: was the reference prior art? If it was, get that decided and then deal with it.
And if it wasn’t prior art, let the Board decide that on the request for rehearing.
This article does a bad job of describing what happened. The Board said the reference wasn’t prior art in its original decision. Then 5 months later, when the Board no longer had jurisdiction, the examiner wanted to present a creative new argument why it was prior art.
So according to this opinion, you can win a Board appeal, the decision can become final, the time to appeal that decision can expire, the Board can lose jurisdiction over the appeal, and yet the Board can still force you to repeat the appeal if the examiner asks?
Applicants don’t get second chances, the Examiner shouldn’t either.
If the reference wasn’t prior art under 102(e) the appellant should have let the Board issue a decision to that effect in response to the examiner’s request for rehearing.
“…, the time to appeal that decision can expire,…”
Appellant had no right to appeal. So what difference does it make that the two month time limit to appeal expired?
Yes, the examiner and the TC Director should have filed the request for rehearing within 2 months, but they didn’t.
“… the Board can lose jurisdiction over the appeal,…”
Not sure why that matters. The examiner is not required to allow the application if reversed by the Board. The examiner can request rehearing. The examiner did. And the Board granted the request and gave appellant a chance to respond. If the examiner’s “creative new argument why it was prior art” was incorrect, then simply explain why in the response.
Why is that so hard? Would’ve saved appellant a lot of time and money.
“…and yet the Board can still force you to repeat the appeal if the examiner asks?”
The Board is not forcing appellant “to repeat the appeal.” They are requiring appellant to address an issue that the examiner claims they overlooked/misapprehended. If the reference isn’t prior art, use the opportunity to respond to the granted request for rehearing and explain it. Much cheaper and faster than a USDC action.
“Applicants don’t get second chances, the Examiner shouldn’t either.”
Applicants and examiners can request rehearing. There’s nothing “unfair” about that.
You’re not sure why jurisdiction matters?
As amply exemplified by this case, so that there is no black hole from which the appellant cannot escape. The priority date here is in 2000 – 20 years ago. The patent application should be allowed to progress past the PTAB phase according to the PTO’s own rules.
“You’re not sure why jurisdiction matters?”
No. The examiner could have simply re-opened with some other trumped up prior art. The TC Director (Mr. Vidovich) who signed the request for rehearing was the PTO’s designated “fixer” for “business method” cases that the PTO decided were never going to issue. It’s unfortunate, but the issue of whether the Board had jurisdiction to even decide the request for rehearing is a red herring to your concern over the “black hole from which the appellant cannot escape.”
If it wasn’t this particular method (i.e. request for rehearing) the PTO would have come up with some other way to never allow this application. They have decided that they don’t want to allow it and they never will. Not willingly anyway. Not with anything less than a Fed. Cir. reversal.
The only possible way for appellant to get an issued patent is to have the Board affirm whatever rejections the examiner, in cahoots with unnamed, unidentified higher ups at the PTO, cooks up next. And then a successful appeal to the Fed. Cir.
I feel for appellant. I really do. But it’s clear that the PTO has decided they are never going to willingly allow this application and appellant is going to have a very difficult time getting past that obstacle.
I wish them luck. But this attempt was doomed from the start.
“Why file before the decision on the merits?”
That is a ‘decision on the merits’ of a petition.
See comment at post 3.
Surely, you have seen the utter frustration of engaging in petitions practice, n’est-ce pas?
That’s right. There was a petition that the Board couldn’t conduct the rehearing because it no longer had jurisdiction. It was the Board’s decision on that petition that was alleged to be ultra vires action and violate the APA.
The opinion that the rehearing should be conducted, merits and all, and then at the end of it it decide whether there should have been a rehearing misses the point – finality. To delay the question of whether there should be a rehearing until after the rehearing has occurred is very inefficient. PTAB decisions should have a finality to them just like District Court decisions.
A Board decision reversing the examiner is not a final decision.
I have. It once took me three petitions to get the Office to finally acknowledge new grounds of rejection in an Examiner’s Answer.
That’s funny, as you are showing no appreciation of the issue here.
Again (but please let me know if I am in error), the “decision on the merits” referenced here is the decision of the petition.
As SunnyB references (albeit for possibly different reasons), the possibility of an endless trap within the Office should NOT be permitted.
The endless trap has always been there. And always will be. The examiner can re-open before a Board decision. After a Board decision. And there’s nothing much applicant can do. The courts are not going to intervene. Why some continue to tilt at this windmill is beyond me.
“And always will be.”
With a l0ser attitude like that, you land yourself in a self-fulfilling prophecy.
Fortunately, not all attorneys And innovators are such qu1tters.
(Tafas, Boundy, Katznelson, Malone, and the like exhibit how very wrong you are)
As noted at 1, a District Court DID intervene in an asserted case of apparently endless PTO prosecution reopening and decisional delays in the granted mandamus action [with discovery against the PTO] in the interesting pending Gilbert Hyatt EDVA D.C. case. As also noted, the APA allows for D.C. action for an agency refusal to act. [Hyatt presumably could have brought such an APA suit much earlier but had passed its statutory deadline?]
There are so many Hyatt cases. Do you have the case number for the mandamus action?
Sorry, I do not have that case number, since what I know about the case is mostly from a chat from Hyatt’s attorney for it. But there cannot be many other Gilbert Hyatt versus the PTO Director cases pending on the ED VA docket with Judge Ellas. Frankly I’m surprised it has not gotten more publicity.
The edit note reminds me of the “black hole” of petitions at the Office.
Any views on how that subject may color this present issue?
Terrible lawyering.
Agreeing with the first paragraph here re Odyssey Logistics and Tech. v. Iancu, this is law which I had difficulty getting even some corporate CPCs to understand. In short, just because you think the PTO is doing something unfair, or that you strongly object to, you normally can’t run off to a Court for relief before the PTO proceeding is finished and you have exhausted your PTO remedies. [Other than the limited grounds for an interlocutory appeal of a pending agency matter under the APA, such as agency refusal to act.] [Or, a very rarely granted mandamus action, like the interesting pending Gilbert Hyatt EDVA D.C. case, where this Odyssey Logistics Fed. Cir. decision is likely to be asserted by the PTO but is not as likely to succeed in view of peculiar PTO delaying conduct.]
But here the PTAB appeal was finished and the examiner reversed. 37 C.F.R. 41.35(b)(2) says the PTAB’s jurisdiction ended after two months. The request for rehearing was made over 5 months later. Shouldn’t the finality of a PTAB decision be binding on the Examiner at that point? There is nothing wrong with demanding that a request for rehearing to be filed within 2 months while the PTAB still has jurisdiction.
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