USPTO “abused” authority in reexam patent process, rules Fed Circ
The US Patent and Trademark Office (USPTO) acted “capriciously” by approving a reexamination of smart home tech company Vivint’s patent, despite previously dismissing several “nearly identical petitions”, according to the US Court of Appeals for the Federal Circuit.
In a precedential decision handed down on Wednesday, September 29, the Federal Circuit held that the USPTO should not be able to grant an ex parte patent reexamination when "nearly identical" inter partes review (IPR) petitions have already been rejected.
In a highly critical summation, the court chastised the office for committing a legal error in allowing the reexamination. “Vivint contends the patent office abused its discretion and acted arbitrarily and capriciously by ordering reexamination, and thereafter, refusing to terminate that proceeding. We agree,” it said.
Background
The dispute between the two companies arose in 2015 when Vivint sued Alarm.com for infringing four patents covering remote monitoring systems, including US patent 6,717,513. Alarm.com filed 14 PR petitions at the USPTO, all of which were rejected.
In its final IPR rejection, the board criticised Alarm.com for engaging in “undesirable, incremental petitioning,” and using prior board decisions to “as a roadmap to correct past deficiencies.”
Alarm.com then requested an ex parte reexamination of all claims of the ’513 patent. repackaging the same arguments raised in its final IPR petition.
Alarm.com presented four questions of patentability for the office to review, two of those questions came directly from its earlier petition.
The Federal Circuit noted that “vast swaths of the ex parte reexamination request [were] copied, almost word for word”, from its earlier IPR petition.
But based on Alarm.com’s request, the USPTO ordered a reexamination for all claims of the ’513 patent, concluding that Alarm.com had raised substantial new questions of patentability despite the previous IPRs.
Vivint countered that the USPTO could not decline to institute IPR based on abusive filing practices, yet grant reexamination on essentially the same facts.
The office dismissed Vivint’s petition, holding that any petition raising such issues must be filed before reexamination is ordered.
In a second petition, Vivint held the office had acted arbitrarily and capriciously by applying the same law to the same facts and reaching a different conclusion.
But the USPTO rejected Vivint’s follow up arguments, holding that the granting ex parte reexamination was not inconsistent with denying an IPR.
The office further argued that given the difference in character between the ex parte reexamination regime and the IPR regime, there can be a public interest in reexamination that goes beyond the interests, or propriety of behaviour, of a particular challenger.
The Federal Circuit disagreed, holding that it saw no difference between the IPR and ex parte reexamination processes that would justify such conduct and nothing short of termination of the reexamination would be appropriate.
Accordingly, the Federal Circuit vacated and remanded the decision with instructions for the USPTO to dismiss.
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