PTO's Refusal To Terminate Pending Reexaminations Is Not Appealable

In Automated Merchandising Systems, Inc. v. Lee, No. 14-1728 (Fed. Cir. Apr. 10, 2015), the Federal Circuit affirmed the district court's dismissal of Automated Merchandising Systems, Inc.'s ("AMS") challenge to the PTO's refusal to terminate four pending inter partes reexaminations because the PTO's refusal was not a "final agency action" within the meaning of the APA. Slip op. at 3.

AMS sued Crane Co. ("Crane") in the Northern District of West Virginia for infringement of U.S. Patent Nos. 6,384,402; 6,794,634; 7,191,915; and 7,343,220. Crane then requested inter partes reexamination for each patent and the PTO instituted all four reexaminations, finding that Crane had raised substantial new questions of patentability. While the reexaminations were underway, AMS and Crane settled their suit in the Northern District of West Virginia. Pursuant to the settlement, the district court issued a consent judgment stating that the parties stipulated that the four patents were valid, that all claims were dismissed with prejudice, and that the judgment was final. AMS then made several requests to the PTO to terminate the reexaminations under 35 U.S.C. § 317(b). The PTO refused.

AMS then filed suit in the Eastern District of Virginia, arguing that the consent judgment required the PTO to terminate the reexaminations. The district court granted SJ in favor of the PTO, dismissing AMS's suit and finding that § 317(b)'s prohibition on maintaining a reexamination did not apply because the consent judgment was a dismissal based on settlement, not an adjudication on the merits. AMS appealed.

"The PTO's refusal was anything but the consummation of the [PTO's] decisionmaking process; it was, instead, interlocutory in nature. Bennett [v. Spear, 520 U.S. 154, 178 (1997)]. An analogy is apt: the PTO's refusal to stop the proceedings here was as interlocutory, as far from final, as the run-of-the-mill district-court denial of a motion to dismiss. SeeVan Cauwenberghe v. Biard, 486 U.S. 517, 524 (1988)." Slip op. at 8 (first alteration in original) (internal quotation marks omitted).

On appeal, the Federal Circuit first examined whether it could consider the PTO's argument that its refusal to terminate the reexamination was not a "final agency action," even though the PTO did not raise the argument in the district court. Although the Court declined to decide whether the APA�s final-agency-action requirement was a jurisdictional requirement, the Court determined that...