throbber
Case 5:20-cv-06128-EJD Document 95 Filed 02/04/21 Page 1 of 21
`
`MICHAEL D. GRANSTON
`Deputy Assistant Attorney General
`LESLEY FARBY
`Assistant Branch Director
`GARY FELDON, D.C. Bar No. 987142
`Trial Attorney
`United States Department of Justice
`Civil Division, Federal Programs Branch
`1100 L Street, NW
`Washington, D.C. 20044
`Telephone: (202) 598-0905
`Facsimile: (202) 616-8470
`Email: gary.d.feldon@usdoj.gov
`
`Attorneys for Defendant
`
`IN THE UNITED STATES DISTRICT COURT
`
`FOR THE NORTHERN DISTRICT OF CALIFORNIA
`
`SAN JOSE DIVISION
`
`
`
`) Case No.: 5:20-cv-06128-EJD
`APPLE INC., et al.
`)
`
`) Defendant’s Reply in Support of the Motion
`
`Plaintiffs,
`) to Dismiss Plaintiffs’ Amended Complaint
`
`
`)
`v.
`
`
`) Hon. Edward J. Davila
`
`
`
`)
`ANDREW HIRSHFELD,
`) Hearing Set for March 11, 2021, 9:00 a.m.
`Performing the Functions and Duties of the
`Under Secretary of Commerce for Intellectual )
`Property and Director of the United States
`)
`Patent and Trademark Office,
`)
`
`
`
`)
`
`
`Defendant.
`)
`
`
`
`
`

`

`Case 5:20-cv-06128-EJD Document 95 Filed 02/04/21 Page 2 of 21
`
`TABLE OF CONTENTS
`
`
`
`ARGUMENT ................................................................................................................................. 1
`
`I.
`
`Plaintiffs’ Claims Should Be Dismissed for Lack of Standing. ..................................... 1
`
`A.
`
`B.
`
`Denial of a Procedure, Without More, Is Not a Concrete Right Sufficient
`to Confer Standing. ................................................................................................. 1
`
`Plaintiffs Are Not Entitled to a Permanent Injunction, So Success on Their
`Claims Would Not Redress Their Purported Injury. .............................................. 3
`
`II.
`
`Plaintiffs’ Claims Are Non-Justiciable Under the APA. ............................................... 4
`
`A.
`
`B.
`
`The America Invents Act Displaces the APA’s Default Cause of Action. ............. 4
`
`The Director’s Unreviewable Discretion Over the Institution Decision
`Encompasses the Factors He Considers in Reaching that Decision. ...................... 7
`
`1.
`
`2.
`
`The AIA Contains No Meaningful Standard for the Director’s
`Discretionary Denial of IPR Petitions. ....................................................... 7
`
`In Making the IPR Institution Decision, the Director Must Balance
`Considerations Particularly Within the Agency’s Expertise. ................... 10
`
`C.
`
`The Director Adopting the Fintiv Factors Was Not a Final Agency Action
`Reviewable Under the APA. ................................................................................. 11
`
`CONCLUSION ........................................................................................................................... 13
`
`Defendant’s Reply in Support of the Motion to Dismiss Plaintiffs’ Amended Complaint
`Case No.: 5:20-cv-06128-EJD
`
`

`

`Case 5:20-cv-06128-EJD Document 95 Filed 02/04/21 Page 3 of 21
`
`TABLE OF AUTHORITIES
`
`Cases
`
`Almond Bros. Lumber v. United States,
`721 F.3d 1320 (Fed. Cir. 2013)................................................................................................... 9
`
`
`Am. Tort Reform Ass’n v. OSHA,
`738 F.3d 387 (D.C. Cir. 2013) .................................................................................................. 13
`
`
`Arden Wood, Inc. v. U.S. Customs & Immig. Servs.,
`480 F. Supp. 2d 141 (D.D.C. 2007) .......................................................................................... 11
`
`
`Bennett v. Spear,
`520 U.S. 154 (1997) .................................................................................................................. 11
`
`
`Block v. Cmty. Nutrition Inst.,
`467 U.S. 340 (1984) ................................................................................................................ 4, 5
`
`
`Broadgate Inc. v. U.S. Citizenship & Immig. Servs.,
`730 F. Supp. 2d 240 (D.D.C. 2010) .......................................................................................... 12
`
`
`Cal. Clinical Lab. Ass’n v. Sec’y of Health & Human Servs.,
`104 F. Supp. 3d 66 (D.D.C. 2015) .............................................................................................. 2
`
`
`Clarian Health W., LLC v. Hargan,
`878 F.3d 346 (D.C. Cir. 2017) .................................................................................................. 12
`
`
`Ctr. for Auto Safety v. Nat’l Highway Traffic Safety Admin.,
`452 F.3d 798 (D.C. Cir. 2006) .................................................................................................. 12
`
`
`Ctr. for Policy Analysis on Trade & Health (CPATH) v. Office of U.S. Trade Representative,
`540 F.3d 940 (9th Cir. 2008), as amended (Oct. 8, 2008) .................................................... 7, 10
`
`
`Cuozzo Speed Techs., LLC v. Lee,
`136 S. Ct. 2131 (2016) ....................................................................................................... passim
`
`
`Energy Transfer Partners, LP. v. FERC,
`567 F.3d 134 (5th Cir. 2009) .................................................................................................... 11
`
`
`Franklin v. Massachusetts,
`505 U.S. 788 (1992) .................................................................................................................. 12
`
`
`FTC v. Standard Oil Co. of Cal.,
`449 U.S. 232 (1980) ............................................................................................................ 11, 13
`
`
`Heckler v. Chaney,
`470 U.S. 821 (1985) ...................................................................................................... 7, 8, 9, 10
`
`
`
`Defendant’s Reply in Support of the Motion to Dismiss Plaintiffs’ Amended Complaint
`Case No.: 5:20-cv-06128-EJD
`
`

`

`Case 5:20-cv-06128-EJD Document 95 Filed 02/04/21 Page 4 of 21
`
`
`Hyatt v. OMB,
`908 F.3d 1165 (9th Cir. 2018) .................................................................................................... 5
`
`
`Inst. for Fisheries Resources v. Hahn,
`424 F. Supp. 3d 740 (N.D. Cal. 2019) ...................................................................................... 13
`
`
`JEM Broad. Co., Inc. v. FCC,
`22 F.3d 320 (D.C. Cir. 1994) .............................................................................................. 12, 13
`
`
`Judulang v. Holder,
`565 U.S. 42 (2011) .................................................................................................................... 10
`
`
`Lujan v. Defenders of Wildlife,
`504 U.S. 555 (1992) ................................................................................................................ 1, 2
`
`
`Lujan v. Nat’l Wildlife Fed’n,
`497 U.S. 871 (1990) .................................................................................................................. 11
`
`
`Miller v. French,
`530 U.S. 327 (2000) .................................................................................................................... 4
`
`
`Monsanto Co. v. Geertson Seed Farms,
`561 U.S. 139 (2010) .................................................................................................................... 4
`
`
`Oil States Energy Servs., LLC v. Greene’s Energy Grp, LLC,
`138 S. Ct. 1365 (2018) ................................................................................................................ 8
`
`
`People of Cal. v. FCC,
`39 F.3d 919 (9th Cir. 1994) ...................................................................................................... 10
`
`
`Planned Parenthood of Wis., Inc. v. Azar,
`316 F. Supp. 3d 291 (D.D.C. 2018) .......................................................................................... 12
`
`
`Pregis Corp. v. Kappos,
`700 F.3d 1348 (Fed. Cir. 2012)................................................................................................... 7
`
`
`RCM Techs., Inc. v. DHS,
`614 F. Supp. 2d 39 (D.D.C. 2009) ............................................................................................ 11
`
`
`Saint Regis Mohawk Tribe v. Mylan Pharm. Inc.,
`896 F.3d 1322 (Fed. Cir. 2018)................................................................................................... 8
`
`
`Sec. People, Inc. v. Iancu,
`971 F.3d 1355 (Fed. Cir. 2020)............................................................................................... 6, 7
`
`
`
`
`
`Defendant’s Opposition to Plaintiffs’ Motion for Summary Judgment
`Case No.: 5:20-cv-06128-EJD
`
` iii
`
`

`

`Case 5:20-cv-06128-EJD Document 95 Filed 02/04/21 Page 5 of 21
`
`
`St. Clair v. City of Chico,
`880 F.2d 199 (9th Cir. 1989) ...................................................................................................... 3
`
`
`Summers v. Earth Island Inst.,
`555 U.S. 488 (2009) .................................................................................................................... 2
`
`
`Thryv, Inc. v. Click-to-Call Techs., LP,
`140 S. Ct. 1367 (2020) ................................................................................................................ 6
`
`
`Tribal Vill. of Akutan v. Hodel,
`869 F.2d 1185 (9th Cir. 1988) .................................................................................................. 10
`
`
`Ukiah Valley Med. Ctr. v. FTC,
`911 F.2d 261 (9th Cir. 1990) .................................................................................................... 13
`
`
`United States v. Alameda Gateway Ltd.,
`213 F.3d 1161 (9th Cir. 2000) .................................................................................................. 12
`
`
`Valero Energy Corp. v. EPA,
`927 F.3d 532 (D.C. Cir. 2019) .................................................................................................. 13
`
`
`Webster v. Doe,
`486 U.S. 592 (1988) .................................................................................................................... 8
`
`Statutes
`
`5 U.S.C. § 701 ................................................................................................................................. 8
`
` 5
`
` U.S.C. § 706 ............................................................................................................................. 7, 8
`
`
`35 U.S.C. § 141 ............................................................................................................................... 5
`
`35 U.S.C. § 314 ........................................................................................................................... 3, 4
`
`35 U.S.C. § 319 ........................................................................................................................... 3, 4
`
`
`Other Authorities
`
`Apple Inc. v. Fintiv, Inc.,
`IPR2020-00019, Paper 11 (P.T.A.B. Mar. 20, 2020) ....................................................... 1, 4, 12
`
`
`John R. Allison, et al, 82 U. Chi. L. Rev. 1073 (2015) .................................................................. 3
`
`Jonathan H. Ashtor, Does Patented Information Promote the Progress of Technology?,
`113 Nw. U. L. Rev. 943 (2019) .................................................................................................. 3
`
`
`
`Defendant’s Opposition to Plaintiffs’ Motion for Summary Judgment
`Case No.: 5:20-cv-06128-EJD
`
` iv
`
`

`

`Case 5:20-cv-06128-EJD Document 95 Filed 02/04/21 Page 6 of 21
`
`
`
`
`U.S. Patent & Trademark Office, PTAB Trial Statistics FY20 End of Year Outcome Roundup,
`IPR, PGR, CBM,
`https://www.uspto.gov/sites/default/files/documents/ptab_aia_fy2020_roundup.pdf................ 3
`
`
`
`Defendant’s Opposition to Plaintiffs’ Motion for Summary Judgment
`Case No.: 5:20-cv-06128-EJD
`
` v
`
`

`

`Case 5:20-cv-06128-EJD Document 95 Filed 02/04/21 Page 7 of 21
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`
`In Plaintiffs’ Memorandum in Opposition to Defendant’s Motion to Dismiss the
`Amended Complaint (“Opposition”), ECF No. 92, Plaintiffs fail to demonstrate either that they
`have standing to assert their claims or that their claims are justiciable under the Administrative
`Procedure Act (“APA”). The Court should therefore grant the Motion to Dismiss Plaintiffs’
`Amended Complaint (“Motion”), ECF No. 64, and dismiss with prejudice Plaintiffs’ Amended
`Complaint for Declaratory and Injunctive Relief (“Amended Complaint”), ECF No. 54.
`ARGUMENT
`The APA does not permit federal courts to intervene in the workings of administrative
`agencies whenever a regulated entity disagrees with agency policy. Before a court can even
`consider the merits of an APA claim, plaintiffs must establish that they have standing to
`challenge a policy and that the APA permits review of the challenged agency action. Here,
`Plaintiffs have failed to demonstrate standing and have not brought cognizable APA claims.
`I.
`Plaintiffs’ Claims Should Be Dismissed for Lack of Standing.
`Plaintiffs lack standing to assert the claims in the Amended Complaint because Plaintiffs
`have not alleged either an injury in fact or that any such injury would be redressed by relief that
`the Court could provide. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992).
`
`A. Denial of a Procedure, Without More, Is Not a Concrete Right Sufficient to Confer
`Standing.
`Plaintiffs cannot establish an injury in fact—i.e., “an invasion of a legally protected
`interest”—because there is no legal entitlement to inter partes review (“IPR”). Id.; see Cuozzo
`Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2140 (2016). Plaintiffs contend that they have
`nonetheless suffered a concrete injury because the application of the factors enumerated in Apple
`Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (P.T.A.B. Mar. 20, 2020), creates an increased risk
`that their IPR petitions will be denied, thus depriving them of their preferred procedure for
`contesting patent validity. Opp’n at 6-9. “But deprivation of a procedural right without some
`concrete interest that is affected by the deprivation—a procedural right in vacuo—is insufficient
`
`Defendant’s Reply in Support of the Motion to Dismiss Plaintiffs’ Amended Complaint
`Case No.: 5:20-cv-06128-EJD
`
`
`
`

`

`Case 5:20-cv-06128-EJD Document 95 Filed 02/04/21 Page 8 of 21
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`
`to create Article III standing.” Summers v. Earth Island Inst., 555 U.S. 488, 496 (2009); see also
`Lujan, 504 U.S. at 572 n.7. The injuries Plaintiffs identify—the loss of administrative patent
`judges’ expertise, more detailed decisions, and a lower standard of proof—are merely procedural
`differences between adjudicating patent validity in a district court trial versus an IPR proceeding.
`Opp’n at 7. “[T]he benefit . . . [of] the right to seek review . . . is a procedural right that is not
`nearly on par with the tangible substantive benefits” necessary for standing. Cal. Clinical Lab.
`Ass’n v. Sec’y of Health & Human Servs., 104 F. Supp. 3d 66, 77 (D.D.C. 2015) (emphasis in
`original) (internal quotation marks omitted). The concrete interests at stake in IPR proceedings
`are patent rights and their enforceability, and IPR institution or its denial does not alter those
`rights. Plaintiffs’ preference for one procedure over another to determine the validity of an
`existing patent is not the kind of right or benefit that can establish standing.
`Plaintiffs’ implicit suggestion that the difference in the number of patent claims
`invalidated in IPR proceedings compared with judicial proceedings constitutes a concrete interest
`fails both legally and factually. As a matter of law, the mere possibility that a patent will be
`invalidated at the end of a proceeding cannot be the basis for standing because it is inherently
`“conjectural or hypothetical,” not “actual or imminent.” Lujan, 504 U.S. at 560 (citation
`omitted). A patent challenge is not a game of chance, where the outcome depends on raw
`probability. Whether decided by an Article III court or the Patent Trial and Appeal Board
`(“Board”), patent validity is determined on the merits by competent decision-makers empowered
`to make such decisions. The Director’s discretion over IPR institution—discretion he exercised
`long before he adopted the Fintiv factors and which he could exercise based on factors less
`favorable to Plaintiffs than the Fintiv factors—does not determine any right to which Plaintiffs
`are legally entitled. See Cuozzo, 136 S. Ct. at 2140.
`In addition, Plaintiffs’ factual assertion in support of their standing is unavailing.
`Plaintiffs assert that district courts invalidate 23% of patent claims, Opp’n at 7, but studies that
`control for bad data show that the percent invalidated is around twice what Plaintiffs claim.
`
`Defendant’s Reply in Support of the Motion to Dismiss Plaintiffs’ Amended Complaint
`Case No.: 5:20-cv-06128-EJD
`
` 2
`
`

`

`Case 5:20-cv-06128-EJD Document 95 Filed 02/04/21 Page 9 of 21
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`
`Jonathan H. Ashtor, Does Patented Information Promote the Progress of Technology?, 113 Nw.
`U. L. Rev. 943, 965 (2019) (54.7% invalidated); John R. Allison, et al, 82 U. Chi. L. Rev. 1073,
`1100 (2015) (42.6% invalidated). Moreover, Plaintiffs cannot compare apples to oranges.
`Unlike a patent invalidity defense raised in a district court infringement proceeding, the Board
`can decide a patent’s validity only after an IPR petition demonstrates that the petitioner is
`reasonably likely to succeed on the merits. 35 U.S.C. § 314(a). Of patent claims challenged in
`IPR petitions in the past two fiscal years, the Board’s final written decisions found fewer than
`30% unpatentable.1 Thus, even if the possibility of a difference in outcomes between the two
`types of proceedings were relevant—and it most assuredly is not—Plaintiffs would not have met
`their burden to establish a concrete injury from the denial of inter partes review. See St. Clair v.
`City of Chico, 880 F.2d 199, 201 (9th Cir. 1989) (plaintiff bears burden on standing).
`
`B. Plaintiffs Are Not Entitled to a Permanent Injunction, So Success on Their Claims
`Would Not Redress Their Purported Injury.
`Plaintiffs contend that, presuming they are successful on their claims, their purported
`injury would be redressed because the Court could “set aside the [Fintiv factors] under the APA
`[and] enjoin their application.” Opp’n at 9 (quoting the Amended Complaint). Setting aside the
`precedential designations of NHK and Fintiv would not prevent the Director from considering
`any factors he deems relevant when exercising his statutory authority under 35 U.S.C. § 314(a)
`to decline to institute inter partes review. Thus, to provide Plaintiffs redress, the Court would
`have to issue a sweeping injunction against the Director considering the Fintiv factors or similar
`factors by another name in his decision-making. Plaintiffs admit as much. Opp’n at 11 n.6.
`However, the injunction Plaintiffs seek would not be appropriate for the Court to issue.
`
`
`1 U.S. Patent & Trademark Office, PTAB Trial Statistics FY20 End of Year Outcome Roundup,
`IPR, PGR, CBM,
`https://www.uspto.gov/sites/default/files/documents/ptab_aia_fy2020_roundup.pdf, at slide 13;
`U.S. Patent & Trademark Office, PTAB Trial Statistics FY19 End of Year Outcome Roundup,
`IPR, PGR, CBM,
`https://www.uspto.gov/sites/default/files/documents/ptab_aia_fy2019_roundup.pdf, at slide 15.
`
`
`Defendant’s Reply in Support of the Motion to Dismiss Plaintiffs’ Amended Complaint
`Case No.: 5:20-cv-06128-EJD
`
` 3
`
`

`

`Case 5:20-cv-06128-EJD Document 95 Filed 02/04/21 Page 10 of 21
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`
`A permanent “injunction is a drastic and extraordinary remedy, which should not be
`granted as a matter of course.” Monsanto Co. v. Geertson Seed Farms, 561 U.S. 139, 165
`(2010). Congress has entrusted the Director with providing policy guidance to the U.S. Patent
`and Trademark Office (“USPTO”) and committed the IPR institution decision to his discretion.
`Granting the requested injunction would put the Court in the untenable position of policing the
`Director’s deliberations when he makes institution decisions. Moreover, one of the Fintiv factors
`is the catch-all “other circumstances that impact the Board’s exercise of discretion, including the
`merits,” Fintiv, Paper 11 at 6, which underscores the difficulty of enforcing such a sweeping
`injunction. The Director would literally be enjoined from complying with his statutory
`obligation to consider the merits of IPR petitions when deciding whether to institute IPR
`proceedings. See 35 U.S.C. § 314(a). Finally, an injunction would invite disappointed IPR
`petitioners to seek relief in this Court whenever they asserted that the Director violated the
`Court’s injunction by considering a Fintiv factor in making an institution decision. The Court
`would then be improperly exercising its equitable powers to engage in precisely the kind of
`review Congress prohibited in § 314(d). See Miller v. French, 530 U.S. 327, 336-37 (2000)
`(clear statutory prohibition on jurisdiction forecloses courts’ equitable powers). As such,
`Plaintiffs have failed to establish redressability.
`Plaintiffs’ Claims Are Non-Justiciable Under the APA.
`II.
`The APA provides for judicial review only when (A) Congress has not displaced the
`APA’s default cause of action, (B) the challenged agency action is not committed to agency
`discretion by law, and (C) the action is final for purposes of APA review. Although failure to
`meet any one criterion for review would be fatal to the claims in the Amended Complaint,
`Plaintiffs fail to meet any of the three.
`A. The America Invents Act Displaces the APA’s Default Cause of Action.
`“[W]henever congressional intent to preclude judicial review is fairly discernable in the
`statutory scheme,” the APA does not provide a cause of action. Block v. Cmty. Nutrition Inst.,
`
`
`Defendant’s Reply in Support of the Motion to Dismiss Plaintiffs’ Amended Complaint
`Case No.: 5:20-cv-06128-EJD
`
` 4
`
`

`

`Case 5:20-cv-06128-EJD Document 95 Filed 02/04/21 Page 11 of 21
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`
`467 U.S. 340, 351 (1984) (quotation marks omitted). Here, § 314(d) evinces Congress’s intent to
`preclude judicial review of claims like Plaintiffs’ challenge to the Director adopting the Fintiv
`factors as a framework in deciding whether to exercise discretion to deny inter partes review.
`Plaintiffs’ arguments to the contrary lack merit.
`Plaintiffs initially argue that § 314(d)’s preclusion of judicial review of the Director’s
`denial of IPR institution does not apply because they are not bringing a direct appeal.2 They
`instead contend that the general presumption of judicial review under the APA applies “only [to]
`the exact type of [agency action] specified in th[e] provision” precluding review.3 Opp’n at 18-
`19 (citing Hyatt v. OMB, 908 F.3d 1165, 1170 (9th Cir. 2018), and claiming the two cases are
`“on all fours”). Not only does Hyatt not support this sweeping pronouncement, but Plaintiffs’
`contention is contrary to Supreme Court precedent. Hyatt considered only the “demonstratively
`narrow” bar on judicial review in the Paperwork Reduction Act and held only that it did not
`preclude the particular claim at issue in that case. 908 F.3d at 1171. Moreover, the Supreme
`Court has held that, in light of the statutory scheme of the America Invents Act (“AIA”),
`§ 314(d) establishes a broad bar on judicial review that encompasses all claims based on
`“questions that are closely tied to the application and interpretation of statutes related to the
`Patent Office’s decision to initiate inter partes review.” Cuozzo Speed Techs., 136 S. Ct. at 2140
`(quoting 5 U.S.C. § 704); see also id. at 2142 (precluding challenge based on § 312 pleading
`requirement). Whether raised on direct appeal or in a collateral attack under the APA, Plaintiffs’
`
`
`2 Under this point, Plaintiffs inaccurately claim that the Director has “urge[d] the Court to infer
`that §§ 141(c)’s and 319’s provisions addressing review of one type of challenge preclude all
`other challenges.” Opp’n at 18. As noted in the Motion, these statutes are relevant because they
`demonstrate that Congress envisioned a specific statutory scheme of judicial review of IPR
`decisions. As part of this scheme, under § 314(d), Congress made the decision to affirmatively
`bar judicial review of “whether to institute” IPR proceedings. That preclusion of review is what
`bars Plaintiffs’ claims here.
`3 Notably, Plaintiffs’ argument is at odds with Plaintiff Apple Inc.’s position in other cases,
`where it claims that there is direct review of the denial of IPR petitions. See Appellant Apple
`Inc.’s Combined Petition for Panel Rehearing and Rehearing En Banc, Apple Inc. v. Maxell, Ltd.,
`Nos. 2020-2132, -2211, -2212, -2213, 2021-1033, ECF No. 40 (Fed. Cir. Dec. 14, 2020).
`
`
`Defendant’s Reply in Support of the Motion to Dismiss Plaintiffs’ Amended Complaint
`Case No.: 5:20-cv-06128-EJD
`
` 5
`
`

`

`Case 5:20-cv-06128-EJD Document 95 Filed 02/04/21 Page 12 of 21
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`
`substantive claims are nothing more than challenges to the Director’s application of his statutory
`discretion to initiate IPR proceedings and are thus barred by § 314(d). See id.; see also Sec.
`People, Inc. v. Iancu, 971 F.3d 1355, 1357-58 (Fed. Cir. 2020) (holding that the AIA’s explicit
`review provisions “foreclosed the possibility of collateral APA review of inter partes review
`decisions by district courts” challenging the same agency action).
`Next, Plaintiffs rely on a misrepresentation of the Supreme Court’s language in Cuozzo
`concerning the availability of review. In the partial concurrence in Cuozzo, Justice Alito
`expressed concern that, if courts interpreted the AIA’s other prohibitions on judicial review
`consistent with the majority’s interpretation of § 314(d), the USPTO could disregard statutory
`eligibility requirements and thereby invalidate patents under one type of review proceeding on
`grounds that Congress reserved to another type. Cuozzo Speed Techs., 136 S. Ct. at 2154 (Alito,
`J., concurring in part). One hypothetical that Justice Alito posed was the possibility that the
`USPTO could institute post-grant review after it should have been time-barred—meaning that
`inter partes review should be the only type of review available—and invalidate a patent on legal
`grounds not available under inter partes review. Id. (Alito, J., concurring in part). In response to
`this example, the majority noted that it did “not categorically preclude review of a final decision”
`by direct or APA review when the USPTO “act[s] outside its statutory limits by, for example,”
`engaging in the hypothetical “shenanigans” that Justice Alito posited. Id. at 2141-42 (emphasis
`added). However, the Court went on to explain that, “[b]y contrast,” a claim based on “a statute
`closely related to th[e] decision to institute inter partes review” did not raise this troubling
`hypothetical. Id. at 2142.4 Here, Plaintiffs do not challenge the invalidation of a patent on
`grounds reserved to another type of administrative proceeding (which, incidentally, would be the
`
`
`4 Notably, the Supreme Court subsequently held that § 314(d)’s preclusion on judicial review
`was so robust that even an institution that allegedly violated a statutory time bar in the AIA was
`immune from review. Thryv, Inc. v. Click-to-Call Techs., LP, 140 S. Ct. 1367, 1373-74 (2020).
`Here, where Plaintiffs are complaining about agency inaction, their suggestion that Congress
`intended the courts to police the institution decision is even more far-fetched.
`
`
`Defendant’s Reply in Support of the Motion to Dismiss Plaintiffs’ Amended Complaint
`Case No.: 5:20-cv-06128-EJD
`
` 6
`
`

`

`Case 5:20-cv-06128-EJD Document 95 Filed 02/04/21 Page 13 of 21
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`
`type of concrete injury necessary for standing), nor are they challenging a final decision by the
`Board. Rather, they are challenging the Director’s interpretation and application of § 314(a), the
`statute governing institution. Thus, their claims are precisely the sort that the Court held would
`fall within the scope of § 314(d), which the Court explicitly distinguished from the improper
`invalidation of patent claims for which direct or APA review might be available.5 See id.; see
`also Sec. People, 971 F.3d at 1357-58 (explicit review provisions in AIA foreclose collateral
`attacks on same grounds).
`B. The Director’s Unreviewable Discretion Over the Institution Decision Encompasses
`the Factors He Considers in Reaching that Decision.
`An agency action is committed to the agency’s discretion, and thus exempt from judicial
`review, when a statute does not provide a “meaningful standard against which to judge the
`agency’s exercise of discretion” or when the action “requires a complicated balancing of a
`number of factors which are peculiarly within [the agency’s] expertise.” Ctr. for Policy Analysis
`on Trade & Health (CPATH) v. Office of U.S. Trade Representative, 540 F.3d 940, 944 (9th Cir.
`2008) (alteration in original), as amended (Oct. 8, 2008); see also Heckler v. Chaney, 470 U.S.
`821, 830 (1985). Here, both analyses support holding that the factors the Director considers
`when deciding whether to institute IPR proceedings are inappropriate for judicial review.
`1. The AIA Contains No Meaningful Standard for the Director’s Discretionary
`Denial of IPR Petitions.
`The AIA contains no standards by which the Court could judge the Director’s exercise of
`his unreviewable discretion under § 314(a).6 Despite Plaintiffs’ assertion to the contrary, they do
`
`5 Under this section of the Opposition, Plaintiffs also devote a paragraph to attempting to
`distinguish the instant case from Pregis Corp. v. Kappos, 700 F.3d 1348 (Fed. Cir. 2012). Opp’n
`at 19-20. However, the Director cited that case as an example of an instance in which a court
`found “APA actions precluded in even less clear-cut contexts” than the one here. Mot. at 11-12.
`That remains true, but the Director was not suggesting that Pregis—which concerned the
`availability of APA review under pre-AIA statutes—was controlling. Plaintiffs’ argument
`concerning that case is thus unavailing.
`6 Plaintiffs make the odd assertion that Heckler does not apply whenever a plaintiff frames its
`claim as a challenge to the scope of agency authority under 5 U.S.C. § 706(2)(C) because such
`claims depend only on statutory interpretation. Opp’n at 20-21. The Supreme Court in Heckler
`
`
`
`Defendant’s Reply in Support of the Motion to Dismiss Plaintiffs’ Amended Complaint
`Case No.: 5:20-cv-06128-EJD
`
` 7
`
`

`

`Case 5:20-cv-06128-EJD Document 95 Filed 02/04/21 Page 14 of 21
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`
`not cite a single provision of the AIA that supplies any standard for the Court to apply in
`assessing whether the Director’s adoption of the Fintiv factors was arbitrary or capricious. See
`Opp’n at 20-21. Instead, Plaintiffs quote inapposite cases for the uncontroverted and
`unremarkable proposition that statutes committing a decision to agency discretion are rare. Rare
`though it may be, § 314(a) is just such a statute. Oil States Energy Servs., LLC v. Greene’s
`Energy Grp, LLC, 138 S. Ct. 1365, 1371 (2018) (“The decision whether to institute inter partes
`review is committed to the Director’s discretion.”); Saint Regis Mohawk Tribe v. Mylan Pharm.
`Inc., 896 F.3d 1322, 1327 (Fed. Cir. 2018) (stating that the Director “has complete discretion to
`decide not to institute review” and may deny review for “reasons such as administrative
`efficiency”). Indeed, in Cuozzo, the Supreme Court specifically cited § 701(a)(2) in observing
`that “the agency’s decision to deny a petition is a matter committed to the Patent Office’s
`discretion.” 136 S. Ct. at 2140 (no mandate to institute review).
`The only specific standard Plaintiffs identify is from the APA, not any provision of the
`AIA. Opp’n at 21 (arguing that the

This document is available on Docket Alarm but you must sign up to view it.


Or .

Accessing this document will incur an additional charge of $.

After purchase, you can access this document again without charge.

Accept $ Charge
throbber

Still Working On It

This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.

Give it another minute or two to complete, and then try the refresh button.

throbber

A few More Minutes ... Still Working

It can take up to 5 minutes for us to download a document if the court servers are running slowly.

Thank you for your continued patience.

This document could not be displayed.

We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.

Your account does not support viewing this document.

You need a Paid Account to view this document. Click here to change your account type.

Your account does not support viewing this document.

Set your membership status to view this document.

With a Docket Alarm membership, you'll get a whole lot more, including:

  • Up-to-date information for this case.
  • Email alerts whenever there is an update.
  • Full text search for other cases.
  • Get email alerts whenever a new case matches your search.

Become a Member

One Moment Please

The filing “” is large (MB) and is being downloaded.

Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.

Your document is on its way!

If you do not receive the document in five minutes, contact support at support@docketalarm.com.

Sealed Document

We are unable to display this document, it may be under a court ordered seal.

If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.


Access Government Site

We are redirecting you
to a mobile optimized page.





Document Unreadable or Corrupt

Refresh this Document
Go to the Docket

We are unable to display this document.

Refresh this Document
Go to the Docket