PTAB decisions can’t be challenged in district courts, says Fed Circuit
A patent owner who sought a review of the US Patent Trial and Appeal Board (PTAB)’s decision to invalidate parts of its patent in a federal district court should not have taken this action, the US Court of Appeals for the Federal Circuit has said.
In the ruling handed down yesterday, August 20, the Federal Circuit held that the arguments of locking company, Security People, “misapply fundamental concepts of administrative law,” and affirmed that the 2011 America Invents Act (AIA) precludes district court review of PTAB decisions.
Security People received a patent for a locker in 2003, parts of which were challenged by a rival in April 2015. Following its review, the PTAB then issued a final written decision finding parts of the patent invalid.
The company initially appealed against the board’s decision to the Federal Circuit, raising only issues related to the patentability of the patent. The court upheld the PTAB’s decision.
A few months later, Security People filed a suit at the US District Court for the Northern District of California, claiming that the cancellation of parts of its patent violated its constitutional rights, namely its “Fifth Amendment due process right”.
The PTAB argued the suit should be dismissed because: the district court lacked subject matter jurisdiction, Security People raised new arguments that it could have raised in an earlier proceeding, and that the suit was meritless on account of prior case law.
The district court agreed with the first argument, dismissing the suit on the basis of the court’s lack of subject matter jurisdiction and because the AIA holds that PTAB decisions should be reviewed “only” in the Federal Circuit.
On appeal, Security People argued that the PTAB lacked the authority to consider constitutional claims, and that the company had been unable to assert a constitutional challenge for the first time on appeal.
The Federal Circuit rejected Security People’s argument that constitutional questions raised by a PTAB final written decision must be reviewed in a district court, and that Security People could only raise its constitutional challenge after the Federal Circuit had affirmed the board’s final written decision
It said: “And if the Board does have authority to decide Security People’s constitutional claims, then Security People’s failure to raise those claims before the board would lead to it forfeiting those claims, not it gaining the ability to raise those claims in district court.”
The court also added: “More generally, we agree with the district court that the statutes providing for exclusive review of the board’s final written decisions in this court preclude district courts from exercising [Administrative Procedure Act] jurisdiction over claims challenging the constitutionality of a final written decision.”
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