Target Training Int'l, Ltd. v. Lee

• Citation: 1 F.Supp.3d 927
• Decision Date: 05 March 2014
• Docket Number: No. C 13–3057–MWB.,C 13–3057–MWB.
• Parties: TARGET TRAINING INTERNATIONAL, LTD., Plaintiff, v. Michelle K. LEE,Deputy Under Secretary for Commerce for Intellectual Property and Director of the United States Patent and Trademark Office, Defendant.
• Court: U.S. District Court — Northern District of Iowa

1 F.Supp.3d 927

TARGET TRAINING INTERNATIONAL, LTD., Plaintiff,
v.
Michelle K. LEE,¹Deputy Under Secretary for Commerce for Intellectual Property and Director of the United States Patent and Trademark Office, Defendant.

No. C 13–3057–MWB.

United States District Court,
N.D. Iowa,
Central Division.

Signed March 5, 2014.

[1 F.Supp.3d 928]

Cory A. McAnelly, Edmund J. Sease, R. Scott Johnson, McKee, Voorhees & Sease, PLC, Des Moines, IA, for Plaintiff.

Matthew J. Cole, U.S. Attorney's Office, Cedar Rapids, IA, for Defendant.

MEMORANDUM OPINION AND ORDER REGARDING DEFENDANT'S MOTIONS TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION
MARK W. BENNETT, District Judge.

TABLE OF CONTENTS

I.
INTRODUCTION
929

A.	PTO Proceedings	929
B.	The Action For Judicial Review	932

II.
APPLICABLE STANDARDS
934

A.	Dismissal For Lack Of Subject Matter Jurisdiction Or For Failure To State A Claim?	934
B.	Rule 12(b)(6) Standards For Dismissal For Failure To State A Claim	936

III.
THE DIRECTOR'S MOTIONS TO DISMISS
938

A.
Judicial Review Of The Rule 183 Decision
938

1.	Arguments of the parties	938
2.	The § 701(a)(2) exception	940

a.	Regional or Federal Circuit law?	940
b.	Scope of the exception	940
c.	Applications of the exception	942

3.
Applicability of the § 701(a)(2) exception to a Rule 183 decision
945

B.
TTI's Due Process Claim
948

1.	Arguments of the parties	949
2.	Analysis	949

IV.
CONCLUSION
951

[1 F.Supp.3d 929]

A patent holder has brought this action for judicial review of a determination by the United States Patent and Trademark Office (PTO) that an alleged infringer's inter partes reexamination request was filed on the last day before the statute authorizing such proceedings expired. The patent holder argues that the alleged infringer's inter partes reexamination request was not filed until two days later, when the alleged infringer's “Corrected Certificate of Service” was actually filed with the PTO. The Director of the PTO has moved to dismiss “for lack of subject matter jurisdiction” pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure. The Director argues that the PTO's determination of the filing date of the inter partes reexamination request was pursuant to a patent rule allowing the PTO to waive requirements not imposed by statute, but only by agency regulations, “in an extraordinary situation, when justice requires.” See37 C.F.R. § 1.183. The Director argues that a decision pursuant to this rule falls within the exception to judicial review for a decision “committed to agency discretion by law” in 5 U.S.C. § 701(a)(2) of the Administrative Procedures Act (APA).

I. INTRODUCTION A. PTO Proceedings

Plaintiff Target Training International, Ltd., (TTI), an Iowa corporation with its headquarters and principal place of business in Scottsdale, Arizona, is the assignee and owner of United States Patent No. 7,249,372 (the '372 patent). ² According to allegations in TTI's Amended Complaint,

[1 F.Supp.3d 930]

TTI is embroiled in litigation in the United States District Court for the Southern District of Texas with non-party Extended Disc North America, Inc. (EDNA), a United States company, and EDNA's franchisor, non-party Extended DISC International, Inc. (EDI), a Finnish corporation. In that action, TTI alleges a claim of contributory infringement of the ' 372 patent by EDNA, and claims of direct and contributory infringement of the ' 372 patent by EDI.

EDI initiated an ex parte reexamination proceeding concerning the '372 patent with the PTO on April 4, 2011. See, e.g., Amended Complaint (docket no. 8), Exhibit 2 (Decision on Appeal of EDI's ex parte reexamination request). The agency proceeding of interest here, however, is an inter partes reexamination (IPReex) proceeding concerning the '372 patent that EDNA purportedly filed with the PTO on September 14, 2012, and identified in PTO filings as “the '2307 proceeding.” TTI argues that EDNA's IPReex Request was actually filed on September 16, 2012, because that was the date that all parts of EDNA's IPReex Request, including an adequate certificate of service, were filed with the PTO. TTI alleges that the actual filing date of EDNA's IPReex Request was one day after the statute authorizing an IPReex proceeding expired and was replaced with a new statutory scheme authorizing an inter partes review (IPR) proceeding.³

[1 F.Supp.3d 931]

More specifically, TTI alleges that EDNA filed its IPReex Request concerning the '372 patent pursuant to then-existing versions of 35 U.S.C. §§ 311 and 312, with a separate “Certificate of Service” stating that service of the Request had been made on TTI by first class mail on September 14, 2012. The Director states, in her brief in support of her original Motion To Dismiss (docket no. 7–1), at 2, the PTO found in administrative proceedings, see Amended Complaint, Exhibit 5 (decision on request for reconsideration at 6), and TTI apparently does not dispute, that EDNA's initial “service” of its IPReex Request was actually by parcel post, but applicable regulations required service by first class mail. TTI alleges that, on September 15, 2012, the PTO's electronic filing system indicated the electronic filing of a “Second Certificate of Service,” stating that “a second copy of the Request” had been served by mailing a document (with a stated tracking number) on September 14, 2012. On September 16, 2012, the PTO's electronic filing system indicated the electronic filing of a “Corrected Certificate of Service,” stating that copies of EDNA's IPReex Request had been served by first class mail on September 14, 2012. Consequently, TTI alleges that the PTO initially assigned EDNA's IPReex Request a filing date of September 16, 2012.

TTI alleges, however, that, at some point, the PTO unilaterally, without notice, and without explanation adjusted the records regarding EDNA's IPReex Request to reflect a filing date of September 14, 2012, the last day that the IPReex statute was in force. Consequently, on November 14, 2012, TTI filed its first petition (a “Rule 181 Petition,” pursuant to 37 C.F.R. § 1.181) requesting that the PTO change the filing date of EDNA's IPReex Request from September 14, 2012, back to September 16, 2012. On November 28, 2012, EDNA filed a petition opposing TTI's “Rule 181 Petition.” Amended Complaint, ¶¶ 37–40, Exhibit 3 (Decision On Petitions Under 37 C.F.R. § 1.181 at 2). On December 7, 2012, while TTI's “Rule 181 Petition” was pending, the PTO issued an order granting IPReex of the '372 patent in the '2307 proceeding. Id. at ¶ 47, Exhibit 3 (Decision On Petitions Under 37 C.F.R. § 1.181 at 2). The Director of the PTO's Central Reexamination Unit eventually denied TTI's “Rule 181 Petition” on June 5, 2013. Id. at ¶ 51, Exhibit 3 (Decision On Petitions Under 37 C.F.R. § 1.181 at 7).

On June 25, 2013, TTI filed a Request for Reconsideration of the June 5, 2013, denial and decision. Id. at ¶ 55, Exhibit 4. On September 6, 2013, the Director of the Central Reexamination Unit dismissed

[1 F.Supp.3d 932]

TTI's Request for Reconsideration and maintained the “reassigned” filing date of September 14, 2012. Id. at ¶ 61, Exhibit 5 (Decision On Petitions Under 37 C.F.R. 1.181 (decision on TTI's Request for Reconsideration)). The “Decision” section of the September 6, 2013, ruling stated the following, in its entirety:

Patent owner (petitioner) requests reinstatement of September 16, 2012 as the filing date of the request. Petitioner disputes affording the Request a filing date of September 14, 2012 because the certificate of service through first class mail was not received by the Office on the same day the service itself was rendered. Petitioner argues that there is no authority in the Rules that Reexamination Request[s] can be filed piece-meal at the Office and obtain a filing date that precedes the last piece or part to be filed. Petitioner supports these arguments with the language of 37 C.F.R. § 1.915 and 37 C.F.R. § 1.919.

It is agreed that Rule 915 requires third party requester to include a certificate of service in the Request and that Rule 919 requires that all parts of the Request must be received by the Office to afford a filing date.

However, it is not agreed that the Office lacks authority to afford the '2307 proceeding a filing date of September 14, 2012. As stated in Rule 183, “[I]n an extraordinary situation, when justice requires, any requirement of the regulations in this part which is not a requirement of the statutes may be suspended or waived by the Director or the Director's designee, sua sponte, or on petition of the interested party.” The statute (35 U.S.C. § 311) governing the filing for inter partes reexamination does not require the filing of a certificate of service with the Request. The filing and the manner of filing the certificate of service are solely required by regulation. As such, these requirements can be suspended or waived under the authority and conditions set forth in Rule 183.

In the instant proceedings, the record is clear that patent owner was serviced [sic], not once but twice, with the Request on September 14, 2012. Specifically, patent owner was initially serviced [sic] by way of parcel post through the USPS (as evidenced by “SECOND CERTIFICATE OF SERVICE” filed September 14, 2012) and served again by way of first class mail through the USPS (as evidenced by “CORRECTED CERTIFICATE OF SERVICE” filed September 16, 2012). As such, the Office deemed, sua sponte, under the authority of Rule 183 that justice required the '2307 proceeding be afforded a filing date of September 14, 2012.

Accordingly, patent owner's petition is dismissed.

Amended Complaint, Exhibit 5 (Decision On Petitions Under 37 C.F.R. § 1.181 (decision on TTI's Request for Reconsideration), 5–6 (emphasis in the original)).

B. The Action For Judicial Review

TTI now seeks judicial review, pursuant to the Administrative Procedures Act (APA), 5 U.S.C. §§ 701–06, of the PTO's refusal to reinstate a filing date of September 16, 2012, for EDNA's IPReex Request. In both...