In one of the first decisions addressing the constitutionality of the America Invents Act, Judge Gerald Bruce Lee of the EDVA has rejected a claim that inter partes review proceedings deprive a patentee of the right to have the matter adjudicated by an Article III judge. Cooper v. Lee, Case No. 1:14CV672 (E.D. Va. Feb. 18, 2015), found here.
Carl Cooper is an inventor and owner of numerous patents. In 2013, he sued Square, Inc. for infringement of several patents. Square filed a petition to institute inter partes review proceedings, and the district court stayed the patent infringement suit. The PTO instituted an inter partes review proceeding over Cooper's constitutionality objection, and Cooper filed suit in district court challenging that ruling.
Judge Lee denied the claim and entered summary judgment in favor of the PTO on the grounds that Cooper had not exhausted his administrative remedies. After reviewing the history of administrative review of patents both pre-AIA and under the AIA, Judge Lee ruled that (1) Congress intended the exhaustion doctrine to apply to inter partes review; (2) the exhaustion doctrine applied to constitutional claims; and (3) none of the exceptions to the exhaustion doctrine applied.
Judge Lee quickly determined that the exhaustion doctrine applied to inter partes review, noting that the express language of the AIA, the detailed statutory scheme, provisions for appellate review and the designation of the Federal Circuit as the tribunal for judicial review, demonstrated a congressional intent that the administrative process conclude before any review of the PTAB's decisions on inter partes review.
Judge Lee also easily disposed of the claim that the exhaustion doctrine did not apply to a constitutional challenge and that the exceptions to the exhaustion doctrine applied. Judge Lee noted that requiring exhaustion was particularly appropriate because Cooper's administrative remedy may eliminate the need to decide the constitutional question. Since the statute was not patently unconstitutional, and Cooper suffered no cognizable injury other than litigation costs pending the completion of inter partes review, no exception to the exhaustion doctrine applied. In particular, the Court noted, the Federal Circuit had twice upheld the constitutionality of PTO administrative proceedings for ex parte reexaminations, and there was no constitutionally-significant distinction between those proceedings and inter partes review, suggesting that Cooper's constitutional challenge would ultimately fail.
Cooper's constitutional challenge, Judge Lee held, should properly be raised in the Federal Circuit on appeal of any adverse decision by the PTAB. The day after Judge Lee's ruling, Cooper filed his appeal to the Fourth Circuit.
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