Latest Federal Court Case, 2/28/22
Alarm.com Inc. v. Hirshfeld, Appeal No. 2020-2102 (Fed. Cir. Feb. 24, 2022)
In an appeal from the U.S. District Court for the Eastern District of Virginia, the Federal Circuit addressed whether the ex parte reexamination statutory scheme precluded judicial review of the PTO Director’s vacatur decisions premised on estoppel under the IPR statutory scheme. The Federal Circuit held that an APA challenge to the Director’s decisions was not precluded from judicial review, reasoning that the text, statutory scheme, and legislative history did not evince a fairly discernable intent to preclude judicial review of the Director’s vacatur decisions based on estoppel.
Vivint, Inc. sued Alarm.com for infringement of three patents. In response, Alarm.com filed numerous petitions for inter partes reviews. The Board determined that the claims were patentable, and the Federal Circuit affirmed. Nevertheless, Alarm.com filed three requests for ex parte reexamination of those claims under the ex parte reexamination statutory scheme, presenting grounds that differed from the grounds it had presented in the IPRs.
The Director found that Alarm.com reasonably could have raised its reexamination grounds in the IPRs and so was estopped under the IPR statutory scheme from submitting each of its ex parte reexamination requests. On that basis, the Director vacated the proceedings. Notably, and relevant to the Federal Circuit’s reasoning here, the Director did not conclude that Alarm.com’s requests failed to raise a “substantial new question of patentability”—the question at issue on ex parte reexamination requests.
Alarm.com then filed a complaint in the district court against the Director, in his official capacity, and the Patent and Trademark Office. Alarm.com filed its complaint under the Administrative Procedure Act. The district court entered an order dismissing Alarm.com’s suit, reasoning that review of Alarm.com’s challenge to the vacatur decisions based on estoppel was precluded by the ex parte reexamination statutory scheme.
On appeal, the Federal Circuit reversed the district court. Emphasizing the well-established rule that there is a “strong presumption in favor of judicial review,” the Federal Circuit concluded that Alarm.com’s APA challenge to the Director’s vacatur decisions based on estoppel was not precluded from judicial review.
Turning first to the express terms of the statutory scheme, the Federal Circuit noted that the only portion of the ex parte reexamination statutory scheme that expressly precluded judicial review is narrowly defined and limited to a determination by the Director that no substantial new question of patentability has been raised. Because the Director’s estoppel determinations did not include any determination that no substantial new question of patentability had been raised, the Federal Circuit concluded that the sole express textual preclusion in the ex parte reexamination scheme did not support preclusion.
Next, the Federal Circuit rejected the argument that the ex parte reexamination scheme as a whole demonstrated a congressional intent to deprive requesters like Alarm.com of all rights of judicial review. The Federal Circuit reasoned that the argument lacked sufficient evidence to show the statutory scheme was one that clearly and convincingly established non-reviewability.
Finally, the Federal Circuit reviewed the legislative history and concluded that the legislative history did not support an inference of congressional intent to bar review of the determination in question.
The opinion can be found here.
ALSO THIS WEEK
In re: Violation of the Revised Protocols for In-Person Arguments and Related Order, Appeal No. 2022-9000 (Fed. Cir. Feb. 25, 2022)
Although not a patent case, we include this as a cautionary note to those who practice in the Federal Circuit. The Court addressed a disciplinary matter concerning two partners and a special counsel at a law firm who attempted to attend oral argument in violation of the Federal Circuit’s COVID protocols. Those protocols limit oral argument to “arguing counsel and no more than one attendee whose presence is necessary to assist or supervise arguing counsel.” Nobody else is permitted either in the building or in the courtroom. Two of the individuals at issue sought leave from the rule. Their motion was denied. Nonetheless, they went to court that morning, hoping that the panel would let them attend. Instead, they were ejected from the Court, and a disciplinary matter was commenced. The Court’s opinion, marked precedential, was stern and found against all three attorneys. Nonetheless, the disciplinary panel decided not to impose sanctions because “[r]espondents express earnest remorse, have not previously been accused of misconduct, and because this situation has not arisen before.” However, the Court concluded “the bar is on notice that this court takes compliance with these protocols very seriously and that sanctions will likely be imposed if a future violation of the protocols takes place.”
The opinion can be found here.
By Nika Aldrich