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IP Alert: Federal Circuit Holds District Courts Cannot Hear Challenges to PTAB Decisions

January 22, 2020

On January 10, in Personal Audio, LLC v. CBS Corporation, the Federal Circuit held that district courts lack jurisdiction to consider final written decisions of the Patent Trial and Appeal Board (PTAB).

In 2013, Personal Audio sued CBS, alleging infringement of U.S. Patent No. 8,112,504, which generally covers “a system for organizing audio files, by subject matter, into ‘program segments.’” Subsequently, a third party, Electronic Frontier Foundation, petitioned for an inter partes review (IPR) of certain claims of the ’504 patent. In 2015, the PTAB issued a final written decision, concluding that the challenged claims were unpatentable, and in 2017 the Federal Circuit affirmed this decision.

In 2018, the district court entered judgment for CBS, and the USPTO issued a certificate canceling the challenged claims of the ’504 patent.

Personal Audio appealed to the Federal Circuit, seeking in part to overturn the PTAB’s decision and raising several constitutional challenges to same. Rejecting the appeal, the court observed that Congress exercised its judicially affirmed power to specify jurisdiction through the Administrative Procedure Act, requiring patentees that are dissatisfied with the result at the PTAB to appeal directly to the Federal Circuit. As such, the court held that there was no procedural mechanism for Personal Audio to challenge the PTAB’s decision in the district court.

The court analogized the case to an earlier Supreme Court case, Elgin v. Department of Treasury, in which the Court examined whether district courts can review a federal agency’s final adverse decision against an employee under the Civil Service Reform Act (CSRA). The implementing statute provides that dissatisfied employees may appeal to the Merit Systems Protection Board, and from there to the Federal Circuit. There, the Court held that in light of statutory language and “the painstaking detail with which the CSRA sets out the method for covered employees to obtain review of adverse employment actions, it is fairly discernible that Congress intended to deny such employees an additional avenue of review in district court.”

Here, the Federal Circuit came to a similar conclusion with regard to PTAB decisions. The controlling statute, 35 U.S.C. § 319, states that a “party dissatisfied with the final written decision . . . under section 318(a) may appeal the decision pursuant to sections 141 through 144.” Section 141, for example, provides that a party dissatisfied with a final written decision of the PTAB may appeal the decision “only to the United States Court of Appeals for the Federal Circuit.” Finally, the Federal Circuit noted that Congress granted it “exclusive jurisdiction” to hear such appeals under another statute, 28 U.S.C. § 1295(a)(4)(A).

Thus, the Federal Circuit concluded that the district court did not have jurisdiction to hear Personal Audio’s appeal of the PTAB decision regarding the ’504 patent. This case provides guidance to litigants before the PTAB.

For more information, please contact Fitch Even attorney Vincent R. Meyer, author of this alert.

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