The following arguments will be available live to the public, both in-person and through online audio streaming. Access information will be available by 9 AM ET each day of argument at: https://cafc.uscourts.gov/home/oral-argument/listen-to-oral-arguments/.
Monday, January 6, 2025, 10:00 A.M. ET
Odyssey Logistics & Tech. Corp. v. Brent, No. 23-2077, Courtroom 203, Panel B
Appellant Odyssey is the named applicant of U.S. Patent Application No. 11/678,021 (the "'021 application"). The '021 application was ultimately rejected under 35 U.S.C. § 101 as being directed to non-patentable subject matter. Both the Patent Trial & Appeal Board ("PTAB") and the Federal Circuit, in an earlier decision, ultimately affirmed the rejection.
Separately, the Supreme Court decided the Arthrex case in June 2021, holding that PTAB judges were principal officers who could not exercise unreviewable authority. To remedy any constitutional violation, the Court held that PTAB decisions must be subject to review by the Director of the USPTO. One week after the Arthrex decision, Odyssey requested Director Review of the PTAB's decision for its '021 application. Over a year later, the USPTO sent a letter to Odyssey saying that it was not accepting requests for Director Review of ex parte appeal decisions. Odyssey brought a civil suit in the District Court for the Eastern District of Virginia challenging the USPTO's decision, but the district court dismissed the case on the grounds that it lacked subject matter jurisdiction. The district court held that the Request for Director Review was akin to a motion for reopening or reconsidering a matter, whose denial is not reviewable.
Monday's argument will address whether the district court properly concluded it could not review the USPTO's refusal to consider Odyssey's Request for Director Review.
Odyssey argues that federal courts have jurisdiction over constitutional issues, and that Arthrex established that a Request for Director Review is a remedy under the Appointments Clause. Odyssey further contends that the Administrative Procedure Act ("APA") permits challenges to arbitrary and capricious agency actions. Thus, Odyssey maintains that the PTAB's final action is subject to judicial review. To buttress its claim, Odyssey cites post-Arthrex Federal Circuit decisions holding that a Request for Director Review was a proper remedy in PTAB ex parte appeal decisions. Odyssey also argues that the district court erred in finding that the '021 application was closed when it requested Director Review. Odyssey points to the facts that: (1) the '021 application file did not contain a Notice of Abandonment; (2) the USPTO's refusal letter did not indicate the application was closed; and (3) the Federal Circuit's previous opinion, affirming the PTAB's rejection, did not administratively close the '021 application.
Odyssey also denies that it waived any claim for Director Review by not raising it in the earlier Federal Circuit appeal. Odyssey contends that because Arthrex had not been decided when Odyssey first appealed, there was no waiver of this claim.
In response, the USPTO argues that the district court properly decided the denial was not subject to judicial review. The USPTO bases its argument on two grounds: (1) the USPTO's decision not to reopen a closed prosecution is within the agency's discretion; and (2) Odyssey waived the Appointments Clause arguments it now raises on appeal.
For its first ground, the USPTO cites to Federal Circuit decisions holding that the USPTO's refusal to consider a request for Director Review in a closed matter is within the agency's discretion and not subject to review. The USPTO argues that Odyssey's application was closed when the Federal Circuit first affirmed the PTAB's decision. The USPTO also points to its rules indicating that a proceeding is terminated when an appeal is terminated. Alternatively, the USPTO maintains that, even if the proceeding was not closed, the agency's decision was within its discretion to deny, and thus, not subject to judicial review.
The USPTO also argues that Odyssey's failure to assert its Appointments Clause argument in its initial appeal to the Federal Circuit amounts to a waiver. Specifically, the USPTO argues that Appointments Clause arguments are non-jurisdictional and must be timely presented and preserved. Because these arguments were available, even though not yet endorsed by Arthrex, the USPTO contends that Odyssey waived them by not raising them initially.
Monday, January 13, 2025, 10:00 A.M. ET
Lashify, Inc. v. U.S. International Trade Commission, No. 23-1245, Courtroom 203, Panel L
Lashify, Inc. appeals from the ITC's Opinion and Final Determination in Investigation No. 337-TA-1226, finding no violation pursuant to § 1337 and subsequently terminating its investigation. Lashify's patents claim artificial eyelash extensions that can be applied at home. Despite finding Lashify's asserted patents valid, the ITC held there was no violation, in part because Lashify failed to meet the economic prong of the domestic industry requirement for each asserted patent.
Monday's argument will address whether, and to what extent, domestic expenditures count toward § 1337(a)(3)(B)'s requirement of "significant employment of labor or capital ... with respect to the articles protected by the patent ... in the United States."
Lashify argues that it presented three alternative approaches for showing an economic domestic industry by "allocating expenditures to the articles protected by [its] patents." Accordingly, based on the text of § 1337(a)(3)(B), Lashify contends that its expense of capital, allocated for each patent, included expenses for sales, marketing, warehousing, and distribution. Both the Administrative Law Judge ("ALJ"), and, subsequently, a majority of the Commissioners reviewing the ALJ, found that "sales and expenditures" may be attributed to the domestic industry requirement only if there was a predicate showing of some other, sufficient "qualifying expenditure." Lashify wants the Court to adopt the rationale of the dissenting Commissioners, who emphasized that § 1337(a)(3)(B) does not prohibit the inclusion of non-manufacturing expenses.
Meanwhile, the ITC argues Lashify mischaracterizes the domestic industry determination as being based solely on Lashify's lack of domestic manufacturing. The ITC points to how sales and marketing expenditures are typically excluded absent "significant cognizable investments." Rather, the ITC contends Lashify's arguments on appeal attempt to create an avenue where the domestic industry requirement may be shown "based on substantially all sales and marketing expenditures," which neither the statute nor the legislative history for § 1337(a)(3)(B) support.
The ITC also argues that beyond the statutory and legislative history, substantial evidence supports the decision below based on Lashify's failure to produce sufficient evidence. Of note, the ITC argues the statements from Lashify's CEO, which purport to help establish the domestic industry prong, were properly excluded because the statements were produced after the close of both fact and expert discovery. For their part, the Intervenors agree with the ITC in that they view Lashify's arguments as an improper attempt to broaden the statutory language of § 1337.
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.
