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Federal Circuit Strikes Down Free–Flowing Claim Against Patent Office

December 7, 2012

It’s a rough–and–tumble world in the air–filled packaging cushion industry by all appearances. In April 2009, Pregis sued its competitor, Free–Flow, seeking a judicial ruling that Pregis did not infringe a Free–Flow–owned patent, and that the patent was invalid.

But Pregis did not stop there. Pregis also asserted a claim against the Patent Office under the federal Administrative Procedure Act (APA), first seeking to block issuance of two more Free–flow patents, then, after the patents were approved, seeking a ruling that their issuance was arbitrary, capricious, an abuse of discretion, or otherwise unlawful. The APA provides the usual recourse for parties aggrieved by federal agency action. Even so, the district court dismissed the claims against the Patent Office on the theory that, unlike most other agencies, the Patent Office cannot be sued for decisions relating to the issuance of patents under the APA. On appeal, the Federal Circuit affirmed, “hold[ing] that a third party cannot sue the [Patent Office] under the [Administrative Procedure Act] to challenge a [Patent Office] decision to issue a patent. The comprehensive legislative scheme of the Patent Act ‘preclude[s] judicial review’ of the reasoning of [Patent Office] decisions to issue patents after examination…and competitors have an ‘adequate remedy in a court’ for the issuance of invalid patents.”

As Dennis Crouch points out at Patently–O, it would be surprising if the brains behind this legal challenge didn’t have their sights set on the Supreme Court when they brought this claim. It will be interesting to see if the high court takes the case, and, if so, whether it agrees with the Federal Circuit that the Patent Office and patent laws are special cases beyond the reach of the Administrative Procedure Act. This case and the Exela Pharma case mark a new trend in creative lawyering by accused infringers seeking relief under the APA from what they see as bad patents.

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