Last month, the Federal Circuit issued an order denying a petition for a writ of mandamus in In re Volkswagen Group of America, Inc., a patent case we have been following because it attracted an amicus brief. In this case, Volkswagen sought to have the Federal Circuit oder the United States Patent and Trademark Office to vacate its denial of a request for inter partes review. In the order, a panel of the court consisting of Judges Dyk, Reyna, and Hughes denied the petition. This is our summary of the order, which the panel issued per curiam.
The panel began by outlining the factual and procedural background:
Volkswagen Group of America, Inc. sought inter partes review (“IPR”) of Longhorn Automotive Group LLC’s patent in response to being sued for infringement. After concluding IPR would not be an appropriate use of agency resources, the Acting Director of the United States Patent and Trademark Office (“USPTO”) granted Longhorn’s request for discretionary denial. Volkswagen now petitions this court for a writ of mandamus seeking to vacate the non-institution decision and to direct the USPTO to reconsider institution without regard to discretionary considerations. The Director and Longhorn oppose.
After briefly addressing the standard of review—that institution decisions are “‘final and nonappealable’ . . . [and] relief by means of mandamus or direct appeal is ordinarily unavailable”—the panel noted that Volkswagen nevertheless sought relief on constitutional grounds. Specifically, the panel noted, Volkswagen argued “‘Congress delegated legislative power when it granted the Director the power to decide whether to adjudicate disputes involving patent validity,’ and also gave the Director ‘unbounded discretion to deny institution of’ IPR, and thus ‘Congress violated the nondelegation doctrine.’” The panel agreed that this argument raised “a constitutional issue as to which review is available.”
Turning to the merits of this constitutional challenge, the panel reasoned that, although “the Director’s ‘decision to deny a petition is a matter committed to [his] discretion[,]’ . . . that exercise of discretion does not necessarily involve legislative power.” To the contrary, the panel explained, “‘an agency’s refusal to institute proceedings,’ as is the situation here, ‘shares to some extent the characteristics of the decision of a prosecutor in the Executive Branch not to indict—a decision which has long been regarded as the special province of the Executive Branch.”
The panel rejected Volkswagen’s reliance on precedent. It emphasized how “the Fifth Circuit’s majority drew a sharp distinction between . . . ‘the ability to determine which subjects of its enforcement actions are entitled to Article III proceedings with a jury trial,'” which was considered “‘a delegation of legislative power,'” and “the discretion whether to launch an enforcement action in the first place, which constitutes ‘executive, not legislative, power.'”
The panel explained that “[t]he present situation is materially different in that it does not involve whether a procedure such as a jury trial should be allowed but rather involves a decision whether to institute proceedings.” Moreover, it said, unlike in the cited case, a “‘non-institution decision has no legal effect on the underlying patent rights and obligations,’ ‘leav[ing] a patent challenger’s actual legal rights and obligations unchanged.'” Accordingly, the panel concluded, “Volkswagen has provided no persuasive basis to conclude the Director exercises legislative power here.”
Based on this analysis, the panel denied Volkswagen’s petition.