Heinl v. Godici

• Decision Date: 30 May 2001
• Docket Number: Civil Action No. 01-458-A.
• Citation: 143 F.Supp.2d 593
• Court: U.S. District Court — Eastern District of Virginia
• Parties: Thomas HEINL, Plaintiff, v. Nicholas P. GODICI, Defendant.

Page 593

143 F.Supp.2d 593

Thomas HEINL, Plaintiff, v. Nicholas P. GODICI, Defendant.

Civil Action No. 01-458-A.

United States District Court, E.D. Virginia, Alexandria Division.

May 30, 2001.

Rouget Frederic Henschel, Lyon & Lyon LLP, Washington, DC, for plaintiffs.

Rachel Celia Ballow, U.S. Attorney's Office, Alexandria, VA, for defendants.

MEMORANDUM OPINION

ELLIS, District Judge.

This is an action by a patentee to prevent a second, and in his view, illegal reexamination of his patent. More specifically, plaintiff, Thomas Heinl, owner of Patent No. 4,903,691 ("the '691 Patent"), sues to enjoin defendant¹ from proceeding on a second reexamination of the '691 patent in Reexamination Control No. 90/005,809 ("the '809 Reexamination") on the ground that the second reexamination does not present a substantial new question of patentability, as required by 35 U.S.C. § 303.

I.

The '691 patent claims a set of surgical instruments for joining bone fragments. It issued on February, 27, 1990. Nine years later, on February 25, 1999, Medicon eG ("Medicon") filed a third-party request for reexamination. The PTO granted Medicon's request on April 27, 1999. See Reexamination Control No. 90/005,275 ("the '275 Reexamination"). The '275 Reexamination was based on Medicon's submission of (i) four medical instrument catalogs and (ii) a declaration by Karl-E Lieberman, a manager at Medicon, declaring on "information and belief" that the catalogs qualify as prior art with respect to the '691 Patent. On January 18, 2000, in the first office action in the '275 Reexamination proceeding, the examiner rejected the '691 Patent as anticipated by the four catalogs. On March 20, 2000, plaintiff filed a timely response to this office action, arguing that the rejection of the patent was in error because "[t]here is no evidence whatsoever in the Request for Reexamination that the [catalogs would constitute] a printed publication citable as prior art against [the '691 Patent]." Because the request for reexamination "failed to provide any evidence or showing that the [catalogs] would fall within the definition of prior art," plaintiff argued that the rejection of the '691 Patent should be withdrawn.² Medicon filed a further submission arguing that the catalogs are prior art and attached an additional declaration by Lieberman attesting to the prior art nature of the catalogs. The examiner refused to consider this submission, noting correctly that, by regulation, a third-party requester's participation in a reexamination ends with a reply to the patentee's statement in response to the request for a reexamination.³ And, because plaintiff here elected not to file a statement under 37 C.F.R. § 1.530 prior to the first office action on January 18, a reply by the third-party requester was properly not permitted.⁴ Accordingly, the third-party requester's second submission, including Lieberman's additional declaration, was not made part of the record in the '275 Reexamination.

Thereafter, on July 19, 2000, the examiner withdrew the rejection of the patent claims that had issued in the first office action and issued a Notice of Intent to Issue a Reexamination Certificate ("NIRC") for the '691 Patent. In doing so, it appears that the examiner found the record inadequate to reach a conclusion on whether the four catalogs constituted prior art with respect to the '691 Patent. For this reason, the examiner "withdrew the rejections based on the catalogs" and confirmed the claims of the '691 patent.

The final step in the patent reexamination process is the issuance of a certificate of patentability. No certificate of patentability has yet issued as a result of the '275 Reexamination. Instead, in the interim, Medicon filed a second request for reexamination on September 5, 2000. On the cover page of this reexamination request, Medicon states that this reexamination is "substantially the same as the first reexamination request" and "presents again and applies prior art submitted in [the '275 Reexamination] by the same third-party requester."

Less than a month later, on October 3, 2000, plaintiff filed a petition with the PTO seeking the denial or termination of the second reexamination request. On October 20, 2000, the PTO examiner, without addressing plaintiff's October 3, 2000 petition, issued an order granting the second reexamination request, now denominated the "'809 Reexamination." Thereafter on February 5, 2001, the Director issued a decision denying plaintiff's petition to terminate the '809 Reexamination. He gave two reasons for his decision. First, he noted that the '809 Reexamination was not filed for purposes of harassment, but rather to address a substantial new question of patentability, which had not been considered in the '275 Reexamination. And second, he noted that In re Portola Packaging, Inc., 110 F.3d 786 (Fed.Cir.1997), did not bar the '809 Reexamination because there, unlike the instant case, the second reexamination followed a concluded first reexamination. Here, the first reexamination — the '275 Reexamination — had not yet concluded, as no certificate of patentability had issued.

On March 6, 2001, plaintiff informed the PTO that he was considering seeking judicial review of the Director's February 5 decision denying plaintiff's petition seeking the denial or termination of the '809 Reexamination. After a two week review of its decision, the Director informed plaintiff that it would adhere to its initial denial of plaintiff's petition. Following this, plaintiff filed the instant action on March 22, 2001. On April 6, 2001, plaintiff's motion for a temporary restraining order was denied, but to expedite resolution of the matter, the hearing on the merits — presented via the PTO's motion to dismiss — was advanced and consolidated with the hearing on the motion for a preliminary injunction, pursuant to Rule 65(a)(2), Fed.R.Civ.P. See Heinl v. Godici, C.A. No. 01-458-A (E.D.Va. Apr.6, 2001) (Order). Thereafter, the parties submitted supplemental memoranda and presented further oral argument. Accordingly, the matter is now ripe for resolution.

II.

Plaintiff seeks judicial review of the PTO's decision to grant the '809 Reexamination request and an injunction enjoining the PTO from proceeding on a second reexamination of the '691 Patent. The threshold question is whether there is jurisdiction for judicial review of this PTO decision.

A. 35 U.S.C. § 303(c)

At the threshold, the PTO argues that 35 U.S.C. § 303(c) bars judicial review of the Director's decision granting a reexamination of the '691 Patent. This argument founders on § 303(c)'s plain language,⁵ which explicitly addresses only a denial of a petition for reexamination, not the grant of such a petition. Nor is the statute's focus solely on the denial of a reexamination the result of accident or inadvertence. The House Committee Report also focuses solely on the effects of the denial of a petition for reexamination, noting that the statute's judicial review bar would not deprive a requester of any legal right in the event of a denial of reexamination because the requester remains free to urge the same invalidity argument in subsequent infringement litigation. In sum, because § 303(c)'s language and rationale address only PTO decisions to deny reexamination petitions, the statute does not bar review of PTO decisions to grant reexaminations. The PTO's argument to the contrary simply asks the language of the statute to carry more weight than it can bear.

Undeterred by the narrow, but clear focus of the statute's text, the PTO next argues that a more expansive interpretation of § 303(c) is supported by the Federal Circuit's holdings in In re Etter, 756 F.2d 852 (Fed.Cir.1985) and Joy Manufacturing Co. v. National Mine Service Company, Inc., 810 F.2d 1127 (Fed.Cir.1987). This argument fails as neither decision, closely read, supports such a conclusion. Although both opinions include broad statements suggesting that § 303(c) covers both grants and denials of reexaminations,⁶ it is clear that both statements are mere dicta. The parties agree this is so in Joy Manufacturing, but dispute whether it is so in Etter.

The central question before the Federal Circuit in Etter was whether the presumption of validity found in 35 U.S.C. § 282, which is clearly applicable in patent infringement suits, must also be applied to claims in reexamination proceedings.⁷ Thus, the proper interpretation of § 303(c) was not before the Etter court, from which it follows that the statement in Etter concerning § 303(c) was necessarily dictum. The Etter opinion, moreover, focused only on the effect of a decision to deny a request for reexamination. In the end, Etter and Joy Manufacturing do not support the PTO's effort to expand § 303(c) beyond its plain meaning, which only bars judicial review of PTO decisions to deny reexamination.

Yet, this conclusion does not end the jurisdictional analysis. It remains to be seen whether the Administrative Procedure Act and its related doctrines allow judicial review of the PTO's decision to grant reexamination in the circumstances of this case.

B. Administrative Procedure Act

The Administrative Procedure Act ("APA"), 5 U.S.C. §§ 701-06, governs decisionmaking by federal agencies and specifically limits judicial review of agency actions to review of "final" agency actions. APA, 5 U.S.C. § 704, provides, in pertinent part, that

Agency action made reviewable by statute and final agency action for which there is no other adequate remedy in a court are subject to judicial review. A preliminary, procedural, or intermediate agency action or ruling not directly reviewable is subject to review on the review of the final agency action.

5 U.S.C. § 704 (emphasis added). The rationale of the final agency action principle is clear. Judicial review prior to a final determination by an agency is likely to interfere with the "proper functioning of [an] agency and [create] a...