Argument Preview / Panel Activity

A second case being argued in January at the Federal Circuit that attracted amicus briefs is Apple Inc. v. Vidal. This case concerns an allegation that a district court erred in finding that 35 U.S.C. § 314(d) precludes judicial review of factors (the so-called Fintiv factors) adopted by the Director of the Patent and Trademark Office to govern decisions whether to institute inter partes review of patents. This is our argument preview.

In its opening brief, Apple points out that “[t]he APA embodies a ‘strong presumption that Congress intends judicial review of administrative action.'” Moreover, it argues, “Section 314(d) does not indicate any congressional intent to preclude review.” This is so, it argues, because “the plain text indicates, and the statutory context and purposes confirm, § 314(d) bars review only of ‘determination[s] . . . whether to institute [IPR].'” It, however, does not extend, Apple argues, “to claims challenging PTO rules and regulations that set standards to govern institution decisions.” Apple asserts “the district court’s interpretation of § 314(d),” by contrast, “would leave the PTO’s rules and regulations governing institution of IPR completely immune from judicial scrutiny—an ‘implausible’ result.” In the alternative, Apple contends, “[e]ven if § 314(d) could be extended to bar APA challenges to rules governing institution, it still would not bar Appellants’ suit because each claim falls within the exceptions to § 314(d).”

In its response brief, the government first argues that Apple “lack[s] standing to challenge” the relevant factors because its “alleged harm is not concrete and particularized enough to constitute an injury in fact.” Rather, the government argues, its “alleged injury is . . . too speculative to be ‘actual or imminent.'” The government further argues that “plaintiffs’ claims are not justiciable under the APA” because the Leahy-Smith America Invents Act “grants the Director unreviewable discretion to deny institution of [inter partes review], and the Supreme Court has held that the statute’s preclusion of review encompasses the application and interpretation of statutes closely related to institution.” It contends “[t]he Director’s determination regarding whether to institute proceedings when such proceedings are authorized, but not required, by statute is a classic example of the exercise of enforcement discretion that is not susceptible to judicial review.”

Apple, in its reply brief, Apple asserts it has standing because “Appellants have alleged an injury-in-fact that is fairly traceable to the [challenged factors] and that will be redressed by [their] invalidation—namely, that ‘the Director is using unlawful considerations that increase the risk of denial [of IPR], thereby depriving [Appellants] of the benefits of IPR.'” On the merits, Apple reasserts the arguments made in its opening brief.

Mylan Pharmaceuticals Inc. filed an amicus brief in favor of Apple. It argues that “[t]he America Invents Act’s bar on review of decisions whether to institute inter partes review does not block Plaintiffs’ challenge” because “the bar does not apply to district-court proceedings under the APA seeking purely prospective relief; it applies only to review of decisions to institute inter partes review of a patent.”

Dell Inc., SAS Institute Inc., Symmetry, LLC, Alliance for Automotive Innovation, and nine other “leading innovators and organizations” also filed an amicus brief in favor of Apple. That brief asserts that “Congress created IPR for district court defendants to challenge bad patents, but the [PTO’s] rule locks them out.” Further, the brief argues, “the Director of the PTO, acting through the Board, now denies institution of petitions just because petitioners are defendants in district court infringement actions” even though “these denials have nothing to do with the merits of a petition for IPR.”

Tesla Inc. and American Honda Motor Co., Inc. also filed an amicus brief in favor of Apple. This brief argues that the relevant rules were “not promulgated correctly and did not go through notice and comment,” thus rendering them “invalid under the Administrative Procedure Act.” Furthermore, the use of the factors “has disrupted fair and equal access to IPR proceedings in ways that are prejudicial to petitioners, including automotive and manufacturing companies looking for consistency and predictability.” Moreover, the brief argues, the factors are invalid because the way the factors were “declared to be a rule governing administrative action by the PTO—by fiat, post hac, without prior warning or notice—was unfair to the petitioners in [the cases in which they were adopted] and to all petitioners with petitions pending at the time.”

This case will be argued on Thursday, January 12. We will report on any developments.