Security People, Inc. v. Iancu, Appeal No. 2019-2118 (Fed. Cir. Aug. 20, 2020)
This week’s Case of the Week deals with whether a party can challenge the outcome of an inter partes review (IPR) under the Administrative Procedure Act (APA) on constitutional grounds. In short, the Federal Circuit held that a party cannot so challenge. This appeal stems from an IPR filed by a competitor, Security People, seeking review of certain claims of Security People’s US Patent No. 6,655,180. The PTAB instituted that IPR and issued a final written decision finding the sole instituted claim unpatentable. Security People appealed that decision, raising only issues of patentability, and the Federal Circuit affirmed the PTAB. Security People then filed a petition for certiorari at the Supreme Court, again raising only issues of patentability, but the Supreme Court denied the petition. Security People then filed the suit from which this appeal arises—an action against the USPTO in the Northern District of California, seeking declaratory judgment, under the APA, that retroactive application of an IPR proceeding to cancel claims of its patent violated its Fifth Amendment due process rights.
Sowinski v. California Air Resources Board, Appeal No. 2019-1558 (Fed. Cir. Aug. 21, 2020)
In this case, the Federal Circuit re-affirmed that res judicata may arise from a failure to prosecute a prior lawsuit. The individual plaintiff had previously sued the California Air Resources Board and others, alleging that credit auctions under California’s Cap and Trade Program infringed his patent directed to a pollution credit method, among other claims. In the prior suit, the plaintiff failed to respond to motions to dismiss that he had stipulated were “potentially case dispositive,” and the court had dismissed the action with prejudice as permitted by Ninth Circuit law. When the plaintiff brought identical claims against CARB in a subsequent lawsuit, the district court dismissed the action on res judicata grounds, also noting that the complaint was frivolous and failed to state a claim for relief.
The Federal Circuit affirmed the res judicata ruling, citing Ninth Circuit precedent, its own precedent, and Federal Rule of Civil Procedure 41(b) for the proposition that dismissal for failure to prosecute operates as an adjudication on the merits. The Court rejected plaintiff’s argument that the second suit pertained only to acts of infringement occurring after dismissal of the first suit, as the accused cap and trade activities were essentially the same as the activities held to be non-infringing in the prior lawsuit.