May 27, 2020

Courts Have No Jurisdiction Over Challenge to PTO Action Before Final Agency Decision

Before Lourie, Reyna and Hughes. Appeal from the United States District Court for the Eastern District of Virginia.

Summary: PTO procedural actions are not appealable before the Board has issued a final decision. Statute of limitations for facially challenging amendments to PTO rules runs from the date of publication.

Odyssey filed suit in the Eastern District of Virginia, challenging three procedural actions taken by the PTO. First, after the PTAB reversed an examiner’s rejection, the examiner requested rehearing rather than directly issuing a notice of allowance. In Count I, and before the PTAB had issued a final decision on the rehearing request, Odyssey challenged the procedural propriety of the rehearing request. Second, in a different Odyssey patent application, Odyssey appealed a final rejection and separately filed a petition demanding that the examiner make certain evidence part of the written record and provide additional explanation for the rejection. The Technology Center Director dismissed the petition as moot. In Count II, and while the appeal was still pending, Odyssey challenged the TCD’s petition dismissal. In Count III, Odyssey challenged the PTO’s 2011 amendments to its rules of practice in ex parte appeals. The PTO published the final rules more than six years before Odyssey raised its challenge, but Odyssey’s challenge came within six years of their effective date.

The district court dismissed Counts I and II for lack of subject matter jurisdiction, because the challenged actions were not yet final. The district court ruled Count III was barred by the six-year statute of limitations, based on the publication date of the final rules, not based on their effective date. The Federal Circuit affirmed on all three counts. For Counts I and II, the Federal Circuit noted that until the Board issues its final decisions, the PTO has not consummated its decision-making process and Odyssey’s rights and obligations have not yet been determined. For Count III, the Federal Circuit noted that under both Federal Circuit and Fourth Circuit precedent, a “facial” challenge to an agency rule is subject to the statute of limitations based on the publication date, and not the effective date.

Editor: Paul Stewart

Written by: Benjamin L. Van Arichem & Mark Kachner