Hallmark Cards, Inc. v. Lehman, Civil Action No. 95-318 SSH.

Decision Date21 February 1997
Docket NumberCivil Action No. 95-318 SSH.
Citation959 F.Supp. 539
CourtU.S. District Court — District of Columbia
PartiesHALLMARK CARDS, INC., Plaintiff, v. Bruce A. LEHMAN, Assistant Secretary of Commerce and Commissioner of Patents and Trademarks, Defendant, and James River Corporation of Virginia, Intervenor-Defendant.

Herman A. Manuel, Edward W. Gray, Jr., Gray, Manuel & Lafalce, Washington, DC, for Plaintiff.

James T. Carmichael, Joseph G. Piccolo, Nancy J. Linck, Albin F. Drost, U.S. Patent & Trademark Office, Associate Solicitors, Arlington, VA, for Defendant.

Kathleen Ann Buck, Kirkland & Ellis, Washington, DC, for Intervenor-Defendant.

OPINION

STANLEY S. HARRIS, District Judge.

The following pleadings now are before the Court:

1. Defendant's Motion for Summary Judgment;

2. Plaintiff's Cross-Motion for Summary Judgment;

3. Plaintiff's Statement of Objections to the Commissioner's Statement of Material Facts as to Which There is No Genuine Issue and Plaintiff's Statement of Facts to Which There is No Genuine Issue in Support of Hallmark's Cross-Motion for Summary Judgment;

4. Intervenor's Memorandum of Points and Authorities in Support of the Defendant's Motion for Summary Judgment (hereinafter "Intervenor's Motion To Dismiss");

5. Plaintiff's Memorandum in Opposition to Intervenor's Memorandum in Support of the Commissioner's Motion for Summary Judgment (hereinafter "Opposition to Intervenor's Motion to Dismiss");

6. Defendant's Opposition to Plaintiff's Motion for Summary Judgment and Reply to Plaintiff's Opposition to Defendant's Motion for Summary Judgment;

7. Intervenor's Memorandum of Points and Authorities in Opposition to Plaintiff's Cross-Motion for Summary Judgment;

8. Intervenor's Statement of Objections to Plaintiff's Statement of Facts to Which There is No Genuine Issue in Support of Plaintiff's Cross-Motion for Summary Judgment;

9. Intervenor's Reply to Plaintiff's Opposition to Intervenor's Memorandum in Support of the Defendant;

10. Plaintiff's Reply in Support of its Cross-Motion for Summary Judgment; and

11. Plaintiff's Response to Intervenor's Reply to Plaintiff's Opposition to Intervenor's Memorandum in Support of the Defendant.

Upon consideration of the entire record, the Court grants intervenor's motion to dismiss.1 Although "findings of fact and conclusions of law are unnecessary in decisions of motions under Rule 12," Fed R. Civ. P. 52(a), the Court nonetheless sets forth its reasoning.

BACKGROUND

Plaintiff, Hallmark Cards, Inc., brought this action seeking reversal of a decision by defendant, the Commissioner of Patents and Trademarks (the "PTO"), to issue Certificates of Correction (the "Certificates") for United States Patents No. 4,721,499 (the "'499 patent") and 4,721,500 (the "'500 patent").

This action involves a challenge to a series of patents held by intervenor, James River Corporation of Virginia ("James River"). In November 1993, James River, the owner of the '500 and '499 patents, sued Hallmark in the United States District Court for the Eastern District of Wisconsin, charging, inter alia, that Hallmark infringed upon the '500 and '499 patents. See James River Corp. of Virginia v. Hallmark Cards, Inc., No. 93-C-1330 (E.D.Wis. Mar.17, 1995). In its first motion for summary judgment, Hallmark claimed that the patents were invalid based on James River's public use of the '500 and '499 patents more than one year prior to their stated filing dates in violation of 35 U.S.C. § 102(b).2 James River responded by stating that any failure on its part to make the necessary "specific references" in the '500 and '499 applications was a technicality that could, if necessary, be remedied through the issuance of a Certificate of Correction by the PTO under 35 U.S.C. § 255. By its request for Certificates of Correction, James River sought to amend the '499 patent to change its effective filing date by adding a specific reference to an earlier-filed 1984 application and to amend the '500 patent to change its effective filing date by adding a specific reference to an earlier-filed 1984 application and to an earlier-filed 1982 patent application.3

Hallmark submitted a letter to the PTO opposing James River's requests for Certificates of Correction. Before the Wisconsin court issued judgment on the validity of the patent, the Commissioner issued the requested Certificates of Correction. The Certificates of Correction had the effect of validating James River's patents. Hallmark then filed a petition under 37 C.F.R. § 1.182 urging reversal of the decision to issue the Certificates. The PTO denied the petition, and Hallmark filed this action against the Commissioner of the PTO requesting that the Certificates be ordered withdrawn. Hallmark also filed a motion with the Wisconsin court asking that court to stay its resolution of that action pending resolution of this case. The Wisconsin court denied both the motion to stay and the motion for summary judgment. The court observed that if the Commissioner's issuance of the Certificates were overturned, Hallmark could apply for relief under Federal Rules of Civil Procedure 50, 59, or 60. The Wisconsin court considered Hallmark's second motion for summary judgment in a separate opinion.4 See James River Corp. of Virginia v. Hallmark Cards. Inc., 915 F.Supp. 968 (E.D.Wis.1996). The Wisconsin court again denied Hallmark's motion for summary judgment and held that the patents were not invalid under the statutory "on sale bar." Id. The court found that the Certificates, which had been issued pursuant to 35 U.S.C. § 255, corrected the patentee's alleged mistakes of failing to make the specific reference to the grandparent application of the '499 patent and the specific reference to the grandparent and great-grandparent application of the '500 patent, as required by § 120 of the Patent Act.

At issue in the predecessor infringement action and the case before this Court is the `date of application' of the '500 and the '499 patents. The '500 patent was filed on June 3, 1986, and contained a specific reference to application Set. No. 764,965, which was filed on August 12, 1985. Thus, the "date of the application" of the '500 patent is, at the latest, August 12, 1985. The parties disagree about whether the '500 patent also includes a "specific reference" to two earlier applications. If the '500 patent is entitled to the benefit of the two earlier application dates, its effective "date of application" would move back to April 13, 1982. It is undisputed that the '500 patent was "in public use" in October 1981. As a result, whether the patent is valid under 35 U.S.C. § 102(b) depends on whether the patent is entitled to the benefit of the earlier application filing dates.

The situation is similar with regard to the '499 patent. The application for that patent was filed on June 3, 1986, and contained a specific reference to application Set. No. 777,873, which was filed on September 20, 1985. It is thus undisputed that the patent's "date of application" is, at the latest, September 20, 1985. It has also been determined that the t499 patent was "in public use" in November 1983. Pursuant to 35 U.S.C. § 102(b), the '499 patent is invalid unless it is entitled to the benefit of the application date of an earlier filing on March 20, 1984.

DISCUSSION

In considering a motion to dismiss, the Court takes plaintiff's factual allegations as true. Maljack Productions, Inc. v. Motion Picture Ass'n of Am., Inc., 52 F.3d 373, 375 (D.C.Cir.1995). However, the Court need not accept legal conclusions that are presented as factual allegations. Kowal v. MCI Communications Corp., 16 F.3d 1271, 1276 (D.C.Cir.1994).

I. Subject Matter Jurisdiction

Plaintiff asserts that this Court has jurisdiction to review the PTO's decision to issue Certificates of Correction under 28 U.S.C. § 1338(a) and 35 U.S.C. §§ 6, 255. The Court disagrees. The Court lacks subject matter jurisdiction over plaintiff's claims and must, therefore, dismiss the case pursuant to Federal Rule of Civil Procedure 12(b)(1). Sections 6 and 255 do not refer to any right of judicial review. While § 1338(a) grants to federal district courts exclusive jurisdiction over civil actions "arising under" any federal statute relating to patents, that section does not create any right of civil action in the first instance. The test for determining whether a right of action exists was set forth in Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 108 S.Ct. 2166, 100 L.Ed.2d 811 (1988); see also Aerojet-General Corp. v. Machine Tool Works, 895 F.2d 736, 741 (Fed.Cir.1990).

Under Christianson, jurisdiction under § 1338(a) extends only to those cases in which (1) a well-pleaded complaint establishes either that federal patent law creates the cause of action, or (2) plaintiff's right to relief necessarily depends upon resolution of a substantial question of federal patent law in that the patent law is a necessary element of one of the well-pleaded claims. 486 U.S. at 808-10, 108 S.Ct. at 2174. Plaintiff asserts that it meets the second prong of the Christianson test. However, plaintiff neglects an overriding principle of statutory analysis: the presumption favoring judicial review of administrative action is overcome when the statutory framework enacted by Congress implicitly precludes a right to the relief sought. Hitachi Metals, Ltd. v. Quigg, 776 F.Supp. 3, 7-8 (D.D.C.1991). In the instant action, the Congressional framework precludes the right of third parties to file a civil action in the case of the issuance of a Certificate of Correction; the third party's recourse for the alleged errors made by the PTO is to raise the issue as a defense in an infringement suit.5

This Court stated in Hitachi Metals that "the Patent Statute is addressed to patent owners and patent applicants." 776 F.Supp. at 8. The Court went on to state that "the patent examination process is an ex parte proceeding, not an...

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