Realvirt, LLC v. Lee
Decision Date | 14 April 2016 |
Docket Number | Case No. 1:15-cv-963 |
Citation | 179 F.Supp.3d 604,119 U.S.P.Q.2d 1045 |
Court | U.S. District Court — Eastern District of Virginia |
Parties | Realvirt, LLC, Plaintiff, v. Michelle K. Lee, Defendant. |
Joseph Scafetta, Jr., Ditthavong & Steiner PC, Alexandria, VA, for Plaintiff.
Ayana Niambi Free, U.S. Attorney's Office, Alexandria, VA, for Defendant.
In this 35 U.S.C. § 145 action, plaintiff challenges a United States Patent and Trademark Office (“PTO”) decision rejecting the patentability of the inventions claimed in U.S. Patent Application Serial No. 07/773, 161 (the “ '161 Application”). At issue on plaintiff's motion for partial summary judgment, filed before the conclusion of discovery, are (i) whether the PTO's defense of lack of standing is barred by the doctrine of collateral estoppel, and (ii) whether the PTO's claim for attorney's fees pursuant to 35 U.S.C. § 145 must be stricken. Because the matter has been fully briefed and argued orally, it is now ripe for disposition.
The undisputed material facts set forth here are derived from the parties' statements of undisputed material facts, which are based almost entirely on the Administrative Record (“AR”).
Plaintiff first contends that it is entitled to summary judgment with respect to the PTO's defense that plaintiff lacks standing to bring this suit because the administrative proceedings have already established that plaintiff has an ownership interest in the '161 Application, and therefore the PTO's standing defense is barred by the doctrine of collateral estoppel.
The Supreme Court, explaining the collateral estoppel doctrine, has noted that “once an issue is actually and necessarily determined by a court of competent jurisdiction, that determination is conclusive in subsequent suits based on a different cause of action involving a party to the prior litigation” or that party's “privies.” Montana v. United States , 440 U.S. 147, 153, 99 S.Ct. 970, 59 L.Ed.2d 210 (1979) (quotation marks and citation omitted). Although neither party has cited any authority—nor has any been found—for the proposition that the doctrine of collateral estoppel applies with respect to PTO administrative proceedings, the Supreme Court has recognized that in some circumstances, the factual findings of an administrative body should be given preclusive effect in subsequent litigation. See Univ. of Tenn. v. Elliott , 478 U.S. 788, 799, 106 S.Ct. 3220, 92 L.Ed.2d 635 (1986) ( ). Importantly, however, the Supreme Court has further made clear that collateral estoppel should be applied to decisions of administrative agencies only where an administrative body “act[ed] in a judicial capacity and resolve[d] disputed issues of fact properly before it which the parties have had an opportunity to litigate.” Id. at 797–98, 106 S.Ct. 3220 ; see also Regions Hosp. v. Shalala , 522 U.S. 448, 463–64, 118 S.Ct. 909, 139 L.Ed.2d 895 (1998) (). In addition, the Fourth Circuit1 has explained that the doctrine of collateral estoppel may be applied only if the party seeking to invoke collateral estoppel can establish:
In re Microsoft Corp. Antitrust Litig, 355 F.3d 322, 326 (4th Cir.2004).
These principles, applied here, compel the conclusion that the collateral estoppel doctrine does not apply to bar the PTO's standing argument. To begin with, “there is a general consensus among courts that ... [a] patent prosecution is not an adversarial, litigation-type proceeding, but a wholly ex parte proceeding before the PTO” because “ 'although the process involves preparation and defense of legal claims in a quasi-adjudicatory forum, the give-and-take of an adversary proceeding is by and large absent.' “ In re Method of Processing Ethanol Byproducts & Related Subsystems ('858) Patent Litig. , No. 1:10–ML–02181–LJM, 2014 WL 2938183, at *7–8 (S.D.Ind. June 30, 2014) (quoting Hercules, Inc. v. Exxon Corp. , 434 F.Supp. 136, 152 (D.Del.1977) ).2 Indeed, PTO proceedings lack the opportunity for cross-examination, discovery, and other tools available to adversarial litigants, and in fact, “because of the ever increasing number of applicants before it,” the PTO “must rely,” as occurred here, “on applicants for many of the facts upon which its decisions are based.” Norton v. Curtiss, 433 F.2d 779, 793 (C.C.P.A.1970).3 Thus, where, as here, the underlying administrative proceedings were non-adversarial and wholly ex parte it is clear that the doctrine of collateral estoppel does not apply. Elliott, 478 U.S. at 797–98, 106 S.Ct. 3220 ; see also Regions, 522 U.S. at 463–64, 118 S.Ct. 909 ( ).
Moreover, even assuming, arguendo, that the doctrine of collateral estoppel applies where, as here, the underlying administrative action was an ex parte pr...
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Realvirt, LLC v. Lee
...interest in the '161 Application to proceed with its claims, that was not a final determination. See Realvirt, LLC v. Lee, 179 F.Supp.3d 604, 604–05, 607–09 (E.D. Va. 2016). Indeed, "the PTO cannot—and does not—determine ownership of patent applications because questions of title are ground......
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...and the third addresses whether that issue was necessarily determined in the prior proceeding. See, e.g., Realvirt, LLC v. Lee, 179 F. Supp. 3d 604, 607-08 (E.D. Va. 2016); United States v. Maxwell, 189 F. Supp. 2d 395, 402-03 (E.D. Va. 2002). Here, it is undisputed that the issue sought to......
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Medtronic Vascular, Inc. v. TMT Sys.
...claims in a 42 quasi-adjudicatory forum, the give-and-take of an adversary proceeding is by and large absent." Realvirt, LLC v. Lee, 179 F.Supp.3d 604, 607 (E.D. Va. 2016) (internal quotation omitted), aff'd sub nom., Realvirt, LLC v. Iancu, 734 Fed.Appx. 755 (Fed. Cir. 2018); see also id. ......