Christy, Inc. v. United States

Decision Date29 January 2019
Docket NumberNo. 18-657C,18-657C
PartiesCHRISTY, INC., Plaintiff, v. THE UNITED STATES, Defendant.
CourtCourt of Federal Claims

CHRISTY, INC., Plaintiff,

No. 18-657C

United States Court of Federal Claims

January 29, 2019

Patents; Inter Partes Review; Leahy-Smith America Invents Act; RCFC 12(b)(1); RCFC 12(b)(6); Takings Clause; Patents as Property; Public Franchise; Breach of Contract; Patents as Contracts; Illegal Exaction

Timothy C. Davis, Birmingham, AL, for plaintiff.

Jenna Munnelly, United States Department of Justice, Washington, DC, for defendant.


SWEENEY, Chief Judge

In this case, plaintiff Christy, Inc. ("Christy") contends that the invalidation of eighteen claims asserted in one of its patents effected a taking without just compensation in violation of the Takings Clause of the Fifth Amendment to the United States Constitution ("Takings Clause"), a breach of contract, and an illegal exaction. The invalidation of those claims occurred when the Patent Trial and Appeal Board of the United States Patent and Trademark Office issued a final written decision at the conclusion of an inter partes review of Christy's patent. Defendant moves to dismiss Christy's complaint for lack of subject-matter jurisdiction pursuant to Rule 12(b)(1) of the Rules of the United States Court of Federal Claims ("RCFC") and, alternatively, for failure to state a claim upon which this court can grant relief pursuant to RCFC 12(b)(6). As explained below, patents are neither contracts nor property for Takings Clause purposes. Further, the Patent and Trademark Office did not illegally exact Christy's funds. Therefore, the court grants defendant's motion and dismisses Christy's amended complaint.

A. Obtaining a Patent

Article I, Section 8, Clause 8 of the United States Constitution provides that "Congress shall have Power . . . To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and

Page 2

Discoveries."1 Congress exercises this authority through title thirty-five of the United States Code. See generally Pub. L. No. 593, ch. 950, 66 Stat. 792 (1952). Specifically, Congress has provided that "[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements" of title thirty-five. 35 U.S.C. § 101 (2012). The claimed invention must be novel; a person is not entitled to a patent if there is prior art regarding the claimed invention, i.e., if "the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public" prior to the filing of the patent application. Id. § 102. Further, the claimed invention must be nonobvious; even if a claimed invention is novel, a person is not entitled to a patent if "the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains." Id. § 103.

Patent applications must be submitted to the Patent and Trademark Office in writing and include a specification, a drawing, an oath or declaration, and the required fees. Id. § 111(a); see also id. § 41(a) (listing general patent fees). The specification

shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor or joint inventor of carrying out the invention. . . . The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the inventor or a joint inventor regards as the invention.

Id. § 112(a)-(b). Patent applications are then examined, and the Director of the Patent and Trademark Office (the "Director") "shall issue a patent" if, upon such examination, "it appears that the applicant is entitled to a patent." Id. § 131. Rejected or deficient applications are reexamined upon request of the applicant. Id. § 132. The applicant may appeal adverse decisions to the Patent Trial and Appeal Board upon payment of the appeal fee. Id. § 134; see also id. § 41(a)(6) (listing appeal fees). Decisions of the Patent Trial and Appeal Board are subject to appellate review in the United States Court of Appeals for the Federal Circuit

Page 3

("Federal Circuit").2 Id. § 141(a)-(b). Patents are generally valid for twenty years and "grant to the patentee, [and] his heirs or assigns, . . . the right to exclude others from making, using, offering for sale, or selling the invention throughout the United States or importing the invention into the United States."3 Id. § 154(a)(1)-(2).

B. Terminating a Patent

A patent owner's interest in a patent may be terminated in multiple ways.

First, a patent owner may terminate its interest in a patent by assignment. An interest in a patent (whether in the application stage or having already been granted) may be transferred via written instrument. Id. § 261.

Second, the Patent and Trademark Office may terminate a patent based on failure to pay fees. See id. § 41(b)(2), (c)(1). Once a patent is granted, its owner must periodically pay fees for the Patent and Trademark Office to "maintain[] in force" the underlying patent; these fees are known as maintenance fees. Id. § 41(b)(1).

Third, a patent owner may have a patent (or one or more of its claims) declared invalid in judicial proceedings. See id. § 282(c). A patent owner whose patent is infringed may seek available remedies by filing a civil action in federal district court.4 Id. § 281; 28 U.S.C. § 1338 (2012); see also 35 U.S.C. § 271 (describing acts that constitute patent infringement). If the federal government is the alleged infringer, the patent owner must sue in the United States Court of Federal Claims ("Court of Federal Claims"). 28 U.S.C. § 1498(a). A defendant in a patent infringement action may assert prior commercial use, noninfringement, absence of liability for infringement, unenforceability, or invalidity of the patent itself or one or more of its claims. 35 U.S.C. §§ 273(a), 282(b). A patent, and each claim thereof, is "presumed valid," and a party asserting invalidity has the burden of establishing such invalidity by clear and convincing evidence. Microsoft Corp. v. i4i Ltd. P'ship, 564 U.S. 91, 95 (2011) (quoting 35 U.S.C. § 282(a)). Alternatively, rather than waiting to be sued for patent infringement, a party can file a civil action in federal district court for a declaratory judgment that a patent, or one or more of its claims, is "invalid, unenforceable, or not infringed." Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 573 U.S. 208, 214 (2014); see also 28 U.S.C. § 2201(a) (providing federal district courts with jurisdiction over certain types of declaratory judgment actions).

Page 4

Finally, there are various types of administrative proceedings in which a patent (or one or more of its claims) may be cancelled. See Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2137 (2016) ("For several decades, the [Patent and Trademark Office] has also possessed the authority to reexamine—and perhaps cancel—a patent claim that it had previously allowed."). These types of administrative proceedings include ex parte reexamination, post-grant review, and inter partes review. See Leahy-Smith America Invents Act, Pub. L. No. 112-29, § 6, 125 Stat. 284, 299-313 (2011) (codified as amended at 35 U.S.C. §§ 311-329) (providing for post-grant review and inter partes review).

Any party may request ex parte reexamination of a patent on the basis of prior art upon filing a written petition and paying a fee. 35 U.S.C. § 302. A patent owner may also "request supplemental examination of a patent . . . to consider, reconsider, or correct information believed to be relevant to the patent." Id. § 257(a). The Patent and Trademark Office must then determine, within three months after the filing of the reexamination petition, "whether a substantial new question of patentability affecting any claim of the patent concerned is raised by the request." Id. § 303(a). If such a substantial new question is raised, the office institutes ex parte reexamination proceedings. Id. §§ 257(b), 304. The Patent and Trademark Office may also institute ex parte reexamination proceedings on its "own initiative" at "any time." Id. § 303(a). Ex parte reexamination proceedings are "conducted according to the procedures established for initial examination." Id. § 305. During ex parte reexamination, the patent owner may propose amendments or additional claims to the patent at issue "to distinguish the invention as claimed from the prior art cited . . . or in response to a decision adverse to the patentability of a claim" of the relevant patent. Id. A patent owner dissatisfied with the result of ex parte reexamination proceedings may appeal to the Patent Trial and Appeal Board, and then to the Federal Circuit. Id. §§ 134(b), 141(b). Upon the conclusion of ex parte reexamination proceedings, including appeals, the Patent and Trademark Office issues a certificate confirming any claims determined to be patentable, cancelling any claims determined to be unpatentable, and incorporating any amendments or new claims determined to be patentable into the patent. Id. § 307(a).

Post-grant review allows any party to request, within nine months of a patent being granted or reissued, that one or more claims in a patent be cancelled on the grounds of invalidity. Id. § 321. The burden of establishing unpatentability in a post-grant review proceeding is preponderance of the evidence. Id. § 326(e). To institute post-grant review proceedings,...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT