Automated Merchandising Systems, Inc. v. Lee
782 F.3d 1376
Fed. Cir.2015Background
- AMS sued Crane for infringement of four patents; while litigation was pending Crane requested inter partes reexaminations at the PTO, which the PTO instituted.
- AMS and Crane settled the district-court suit; the court entered a consent judgment stating the parties "stipulate that [the four patents] are valid" and that the judgment is final.
- AMS repeatedly petitioned the PTO to terminate the ongoing reexaminations under 35 U.S.C. § 317(b), arguing the consent judgment was a "final decision . . . that [Crane] has not sustained its burden of proving the invalidity" and thus reexaminations could not be maintained.
- The PTO refused to terminate, treating its refusal as a final agency action; AMS sued the PTO in the Eastern District of Virginia under the APA and related statutes.
- The district court granted summary judgment to the PTO, reasoning the consent judgment was not an adjudication on the merits for § 317(b) purposes. AMS appealed to the Federal Circuit.
- The Federal Circuit affirmed, but on different grounds: it held the PTO’s refusal to terminate was not a "final agency action" under the APA and so was not judicially reviewable at this interlocutory stage.
Issues
| Issue | Plaintiff's Argument (AMS) | Defendant's Argument (PTO) | Held |
|---|---|---|---|
| Whether the PTO's refusal to terminate reexaminations is a "final agency action" under the APA | The refusal is final and reviewable; consent judgment is a final decision precluding reexamination under § 317(b) | The refusal is not final; intermediate and interlocutory—AMS can seek review after any adverse final reexamination decision | Held: Not final under Bennett; refusal is interlocutory and not judicially reviewable now |
| Whether the consent judgment qualifies as a "final decision . . . that [the party] has not sustained its burden of proving the invalidity" under § 317(b) | The consent judgment’s language suffices to trigger § 317(b) and bar maintenance of reexaminations | The PTO previously found no dispositive court decision of invalidity; district court held consent judgment not an adjudication on the merits | Court did not decide § 317(b) merits; district court’s merits reasoning affirmed by judgment outcome but the Federal Circuit resolved case on finality grounds |
| Availability of mandamus to compel termination of reexaminations | Extraordinary relief appropriate because APA review is unavailable now | Mandamus inappropriate because AMS has adequate remedy by appeal from any final adverse PTO decision | Held: Mandamus unavailable; adequate remedy exists on appeal from a final reexamination determination |
| Use of Declaratory Judgment Act to obtain review now | AMS could obtain declaratory relief to end reexaminations immediately | Declaratory relief is discretionary and inappropriate absent a final agency action or ripeness | Held: Declaratory relief unavailable; would circumvent APA and is inappropriate for nonfinal administrative action |
Key Cases Cited
- Bennett v. Spear, 520 U.S. 154 (U.S. 1997) (two-part test for final agency action)
- Franklin v. Massachusetts, 505 U.S. 788 (U.S. 1992) (core question whether agency completed decisionmaking and directly affected parties)
- Van Cauwenberghe v. Biard, 486 U.S. 517 (U.S. 1988) (interlocutory actions generally not final)
- FTC v. Standard Oil Co., 449 U.S. 232 (U.S. 1980) (initiation of administrative proceedings not final)
- Cooper Techs. Co. v. Dudas, 536 F.3d 1330 (Fed. Cir. 2008) (review of PTO refusal to terminate addressed on the merits)
- Patlex Corp. v. Mossinghoff, 771 F.2d 480 (Fed. Cir. 1985) (determination of substantial new question is preliminary)
- Mallard v. U.S. Dist. Court for the S. Dist. of Iowa, 490 U.S. 296 (U.S. 1989) (mandamus standards; adequacy of other remedies)
- Arbaugh v. Y & H Corp., 546 U.S. 500 (U.S. 2006) (limits of "drive-by" jurisdictional rulings)