United States: Asset Transferee Cannot Appeal Reexamination

The Federal Circuit dismissed the appeal in Agilent Technologies, Inc. v. Waters Technologies Corp., because the appellant was not a "third-party requester" dissatisfied with the final decision in an inter partes reexamination proceeding, as required by 35 USC § 141. Although Agilent was a transferee of relevant assets, it had not shown that it was the successor-in-interest to the original third-party requester. The same statute affords the right to appeal final decisions in post grant review and inter partes review proceedings, but different language may prove more flexible.

The Relationship Between The Appellant And The Third Party Requestor

The Federal Circuit notes the following chronology of events relevant to the relationship between Agilent and Aurora:

  • On March 27, 2012, Aurora SFC Systems, Inc. sought inter partes reexamination of U.S. Patent 6,648,609. Thus, Aurora was the third party requestor.
  • In August of 2012, Agilent acquired "substantially all" of Aurora's assets and "agreed to be bound by the outcome of the ... reexamination proceeding[] and [related] patent infringement litigation."
  • After August 2012, Aurora file a response in the reexamination proceeding.
  • In March of 2013, in response to the patent owner's appeal of the Examiner's rejections, Aurora filed a cross-appeal to the USPTO Board.
  • On April 26, 2013, Aurora filed a paper asking to change the real-party-in-interest from Aurora to Agilent.
  • After April 26, 2013, both Aurora and Agilent participated in the proceedings at the Board, and Aurora's counsel appeared as the respondent at the Oral Hearing on April 23, 2014.
  • The Board's final decision named Aurora as the third party requestor and named Aurora's counsel as counsel for the third party requestor.
  • Aurora opposed the patent owner's motion to add Agilent as a defendant in the related patent infringement litigation, the motion was granted, and Aurora and Agilent now are parties in that litigation.

The Statute At Issue

The statute at issue is the "pre-AIA" version of 35 USC § 141:

A patent owner, or a third-party requester in an inter partes reexamination proceeding, who is in any reexamination proceeding dissatisfied with the final decision in an appeal to the Board of Patent Appeals and Interferences under section 134 may appeal the decision only to the United States Court of Appeals for the Federal Circuit.

The court also noted parallel language in § 315(b):

(b) THIRD-PARTY REQUESTER.- A third-party requester-
(1) may appeal under the provisions of section 134, and may appeal under the provisions of sections 141 through 144, with respect to any final decision favorable to the patentability of any original or proposed amended or new claim of the patent; and
(2) may, subject to subsection (c), be a party to any appeal taken by the patent owner under the provisions of section 134 or sections 141 through 144.

The Question Presented — Right To Appeal Reexamination

The Federal Circuit decision was authored by Judge O'Malley and joined by Chief Judge Moore and Judge Taranto.

The first section of the court's analysis sets the parties straight as to the legal question at issue.

Although the parties frame this dispute as one relating to jurisdiction, it is properly framed as one relating to whether Agilent has a cause of action. Jurisdiction and standing are concepts distinct from each other, though they are related for Article III purposes, and distinct from having the right to maintain a cause of action. These are not interchangeable terms and should be used with care.

According to the court, "[t]he question the parties raise, in fact, is whether Agilent is a member of a class of litigants that may enforce a legislatively created right or obligation created under 35 U.S.C. § 141." The court noted that both § 141 and § 315(b) confer a right to appeal only to the "third party requestor."

The court also explains why Agilent was correct to abandon its arguments based on being a privy of Aurora. In particular, the court noted that the fact that the estoppel provisions of the reexamination statute (§ 317) refer to privies while the appeal provisions do not, shows that "Congress recognized the difference" and therefore must have intended to only give third party requestors–and not their privies–a right to appeal.

Turning to Agilent's arguments that it was "Aurora's factual and legal successor in interest," the court found that the facts outlined above did not support Agilent's position. The court particularly commented on Aurora's continued participation in the reexamination proceeding, the months-long delay between the asset transfer and the paper filed to name Aurora as the real party-in-interest, and the failure to substitute Agilent as the third party requestor. The court also did not appreciate that Agilent had not made the asset transfer agreement of record, but instead chose to rely on a four-page declaration attesting to its effect.

[The declaration] is an incomplete account of the agreement and does not allow us to verify all of Agilent's claims and develop our own understandings.

Importantly, the court did not decide that if Agilent had shown that it was Aurora's successor-in-interest then it would have had a right to appeal, since Agilent did not make the threshold factual showing. Thus, "whether and under what circumstances a change in the identity of the third-party requester can occur" remains unanswered.

Right To Appeal In Patent Trials

The reexamination proceeding underlying this appeal was filed a few months before the AIA replaced inter partes examination proceedings with inter partes review proceedings. The version of § 141 that applies to patent trials uses different language for the right to appeal, giving "a party" to the proceeding a right to appeal:

c) POST–GRANT AND INTER PARTES REVIEWS.–A party to an inter partes review or a post-grant review who is dissatisfied with the final written decision of the Patent Trial and Appeal Board under section 318(a) or 328(a) (as the case may be) may appeal the Board's decision only to the United States Court of Appeals for the Federal Circuit.

Thus, the decision here may not directly impact patent trial appeals. However, patent trial appeals may raise other interesting standing questions, such as whether a party has Article III standing to bring an appeal.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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