971 F.3d 1355
Fed. Cir.2020Background
- Security People owned U.S. Patent No. 6,655,180 (locker lock). A competitor petitioned for inter partes review (IPR) in 2015; the PTAB issued a final written decision in 2016 finding the instituted claim unpatentable.
- Security People appealed to the Federal Circuit on patentability grounds; the Federal Circuit summarily affirmed and the Supreme Court denied certiorari. No constitutional arguments were raised on that appeal.
- Months after cert. denial, Security People sued the PTO in district court under the Administrative Procedure Act (APA), alleging the retroactive application of IPR to cancel its patent violated the Fifth Amendment due process clause.
- The PTO moved to dismiss, arguing (inter alia) the AIA funnels review of PTAB final written decisions exclusively to the Federal Circuit and thus forecloses collateral APA suits in district court.
- The district court dismissed for lack of subject-matter jurisdiction; Security People appealed to the Federal Circuit.
- The Federal Circuit affirmed, holding Congress’s statutory review scheme precludes district-court APA review of IPR final written decisions and that the Federal Circuit provides an adequate forum to adjudicate constitutional claims raised from an IPR.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether district courts may hear collateral APA suits challenging constitutionality of an IPR final written decision | Security People: District court can review under APA because the PTAB lacks authority to decide constitutional questions | PTO: AIA (35 U.S.C. §141(c)) channels review exclusively to the Federal Circuit, precluding district-court APA review | Held: Congress fairly discernedly precluded district-court APA jurisdiction; review lies in Federal Circuit |
| Whether the Federal Circuit can meaningfully adjudicate constitutional claims that may require factual development | Security People: Some retroactivity/as‑applied due-process claims require factual records the Federal Circuit cannot develop on appeal | PTO: Federal Circuit can take judicial notice, and the PTAB has fact‑finding tools if needed for appellate review | Held: Federal Circuit can meaningfully review; PTAB and appellate procedures accommodate necessary fact‑finding |
| When agency action is "final" for review (role of certificate of cancellation) | Security People: Deprivation of property (for due process) occurs only after PTO issues certificate canceling the claim | PTO: Final written decision is the agency’s final action; the certificate is ministerial and does not affect finality | Held: Final written decision is final agency action; certificate of cancellation is ministerial and irrelevant to finality |
| Whether failure to raise constitutional claims before the PTAB bars review or forces district-court APA suit | Security People: Could not raise constitutional claim earlier or on appeal until cancellation affirmed | PTO: If Board had authority, failure to raise would forfeit the claim; if not, no exhaustion is available and direct appeal is proper | Held: Failure to raise before the Board leads to forfeiture, not a new APA suit; direct appeal is the exclusive vehicle for such challenges |
Key Cases Cited
- Elgin v. Dep't of the Treasury, 567 U.S. 1 (2012) (statutory review scheme can preclude district-court jurisdiction; appellate court can decide constitutional claims and accommodate factfinding)
- Thunder Basin Coal Co. v. Reich, 510 U.S. 200 (1994) (framework for preclusion of district-court review when Congress provides an alternative statutory scheme)
- Block v. Community Nutrition Inst., 467 U.S. 340 (1984) (statutory scheme may indicate congressional intent to preclude collateral review)
- Free Enter. Fund v. Pub. Co. Accounting Oversight Bd., 561 U.S. 477 (2010) (recognized circumstances where district-court APA review remained appropriate; distinguished here)
- Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131 (2016) (Congress can preclude review of certain PTAB decisions within the AIA scheme)
- Franklin v. Massachusetts, 505 U.S. 788 (1992) (test for finality of agency action: completed decisionmaking and direct effect on parties)
- Bowen v. Massachusetts, 487 U.S. 879 (1988) (APA was not intended to duplicate specialized statutory review procedures)
- Pregis Corp. v. Kappos, 700 F.3d 1348 (Fed. Cir. 2012) (APA review barred when an adequate statutory remedy exists in specialized review scheme)
- Pers. Audio, LLC v. CBS Corp., 946 F.3d 1348 (Fed. Cir. 2020) (direct appeal to the Federal Circuit is the exclusive vehicle to challenge PTAB final written decisions)