United States: USPTO’s Refusal To Terminate An Inter Partes Reexamination Is Not A "Final Action" For Which The Agency Can Be Sued

Automated Merchandising Systems, Inc. v. Michelle K. Lee, Director, USPTO, No. 2014-1728, 2015 U.S. App. LEXIS 5801 (Fed. Cir. Apr. 10, 2015) (Taranto, J.). Click Here for a copy of the opinion.

On April 10, 2015, the Federal Circuit affirmed an Eastern District of Virginia summary judgment decision, finding that Automated Merchandising Systems Inc. ("AMS") could not sue the USPTO over its decision not to stop a reexamination following settlement of an underlying infringement suit. 

Following a consent judgment in an infringement suit between AMS and Crane Co., AMS requested that the USPTO terminate four related inter partes reexaminations (which had been requested by Crane).  AMS argued the district court consent judgment was a final decision that Crane failed to meet its burden of proving invalidity of the patents under reexamination.  The USPTO disagreed, because it did not consider the consent judgment a failure to prove invalidity.  AMS filed suit against the USPTO in the Eastern District of Virginia, where the court granted summary judgment in favor of the USPTO.  The district court held that prohibitions against maintaining a reexamination only apply where there has been an "actual adjudication on the merits."

AMS appealed to the Federal Circuit, where the USPTO argued for the first time that its refusal to terminate reexaminations was not a "final agency action" for which a federal agency may be sued.  In its decision, the Federal Circuit noted that the Patent Office may only be sued under the Administrative Procedure Act (APA) when a final decision has been rendered.  Because the only consequence flowing from the refusal to terminate a reexamination is that the party must continue to defend its interests, such a decision is not considered "final."  The Court further held that a decision would not be "final" unless it marked the end of the administrative decision-making process and was a decision from which "legal consequences will flow."  In light of the foregoing, the Federal Circuit held that the District Court's grant of summary judgment in favor of the USPTO was not in error.

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