As we reported back in October 2009, the Sigram Schindler case seeks to clarify the statutory provisions governing appeals from the Board of Patent Appeals and Interferences (“the Board”) in ex parte reexamination.  The statutory provisions governing appeal are ambiguous.  One section appears to allow patent owners to challenge Board decisions in the U.S. District Court for the District of Columbia, while another section appears to only allow appeals from the Board to the United States Court of Appeals for the Federal Circuit (“Federal Circuit”).  On December 18, 2009, Judge Ellis ruled on the summary judgment motions.  (Read that decision here: Sigram Schindler Memorandum Opinion No. 09cv935 (12-18-09).)  The court disposed of the case on procedural grounds, ruling that the case was not ripe for consideration.  We provide more detail below.

The statutory basis for appeals to the Federal Circuit for ex parte reexamination is 35 U.S.C. § 306.  Therein, the statute states that the patent owner may seek court review of Board decisions “under the provisions of sections 141 to 145 of this title.” (see 35 U.S.C. § 306)  Sections 141-144 deal with appeals to the Federal Circuit.  Section 145, on the other hand, appears to permit a civil action against the Director in the United States District Court for the District of Columbia.

However, allowing a civil action in ex parte reexamination appears to be inconsistent with Section 141 itself.  Specifically, Section 141 states that “[a] patent owner, or a third-party requester in an inter partes reexamination proceeding, who is in any reexamination proceeding dissatisfied with the final decision in any appeal to the [Board] under section 134 may appeal the decision only to the United States Court of Appeals for the Federal Circuit.” (See 35 U.S.C. § 141).  Section 141 thus appears to foreclose any civil action under section 145.

This anomaly is the result of amendments to the statutes as a result of passage of the American Inventors Protection Act of 1999 (“AIPA”).  The AIPA created the inter partes reexamination procedure.  The AIPA amended 35 U.S.C. § 141 to state that appeals from any reexamination may be taken only to the Federal Circuit.  Notably, it left unchanged § 306, which still permitted the patent owner in ex parte reexamination to seek review under § 145.  Thus, the cross reference in § 306 to § 145 is in tension with the AIPA amendment to § 141.

The PTO rules governing review of Board decisions are 37 C.F.R. §§ 1.301-304.  Notwithstanding the above noted anomaly, the PTO has interpreted the statutes to foreclose § 145 actions for any ex parte reexamination filed after November 29, 1999.  Specifically, Rule 303 states that “for an ex parte reexaminations filed on or after November 29, 1999, and for any inter partes reexamination proceeding, no remedy by civil action under 35 U.S.C. § 145 is available.”

The Rule 303 provision was recently challenged in the U.S. District Court for the Eastern District of Virginia in the case styled Sigram Schindler Beteiligungsgesellschaft MBH v. Kappos, No. 1:09cv935.  The plaintiff Sigram Schindler (“SSBG”) is a patent owner in the middle of an ex parte reexamination appeal to the Board.  It challenged PTO Rule 303 as being “in excess of [the PTO’s] statutory jurisdiction, authority, or limitations, or short of statutory right.”  Despite the fact that the Board had not yet rendered a decision in its appeal, SSBG sought a declaratory judgment action because the challenged Rule 303 currently purports to deprive SSBG of it right under § 306 to file a civil action in a D.C. District Court, thereby causing SSBG harm.  According to SSBG, it would have been forced to appeal to the Federal Circuit under § 141 and thereby waive its right to appeal under § 145, or file a civil action under § 145 and risk losing its right to appeal to the Federal Circuit under § 141 if the D.C. District Court determined that it lacked jurisdiction to hear the case after expiration of the sixty-day deadline for appealing to the Federal Circuit.

The PTO, on the other hand, challenged the ripeness of SSBG’s declaratory action because there was currently no justiciable “case” or “controversy” under Article III of the Constitution.  For instance, a favorable Board decision that reversed the examiner’s finding of unpatentability could preclude SSBG from seeking any review of the Board’s decision.  The PTO also challenged SSBGs standing to bring the suit.

In a memorandum decision dated December 18, 2009, the court ruled in favor of PTO, finding that SSBG’s request for judgment was “unripe because: (i) the BPAI has not yet rendered an adverse decision that would allow SSBG to seek court review of that determination, making the purported hardship contingent and speculative, and (ii) plaintiff has not demonstrated that the challenged regulation creates an immediate, direct, and significant hardship altering its day-to-day activities; and (iii) any hardship is remediable by 28 U.S.C. § 1631.”   28 U.S.C. § 1631 relates to “Transfer to cure want of jurisdiction.”  It provides a court finding that it has no jurisdiction to, in the interest of justice, “transfer such action or appeal to any other court in which the action or appeal could have been brought at the time it was filed or noticed, and the action or appeal shall proceed as if it had been filed in or noticed for the court to which it is transferred  on the date upon which it was actually filed in or noticed for the court form which it is transferred.”  Therefore, the court determined there was no “justiciable case or controversy, and thus no jurisdiction to reach the merits of whether 37 C.F.R. § 1.303 contravenes 35 U.S.C. § 306.”  (Id. at 22.)

Despite the fact that the court did not reach a decision on the merits, it appears clear that 2002 amendments to Section 141 did intend to foreclose Section 145 actions for ex parte reexaminations.  As noted above, this is how the Office construes these provisions.  Until such time as the issue is properly raised, it would behoove patent owners to assume that appeals in ex parte reexamination will go straight to the Federal Circuit.

The statutory basis for appeals to the Federal Circuit for inter partes reexamination is straightforward.  It is governed by 35 U.S.C. § 315.  Unlike the anomalous ex parte reexamination appeal statute, Section 315 states that the patent owner and the third party requester “may appeal under the provisions of sections 141-144.”  Thus, there is no ambiguity for inter partes reexamination and appeals from the Board may only be taken to the Federal Circuit.