On October 15, 2013, Dominion Dealer Solutions, LLC filed a complaint in the U.S. District Court for the Eastern District of Virginia seeking review of the USPTO’s decisions denying petitions to institute inter partes review of five patents granted to Autoalert, Inc. Dominion faces an uphill battle in view of the discretion granted to the USPTO under  35 USC § 324 and the court’s previous decision dismissing Versata’s challenge of the USPTO’s decision to institute post grant review of its patent .

The Petitions for Inter Partes Review 

According to Dominion’s complaint, on October 1, 2012, Autoalert, Inc. sued Dominion for infringement of patents directed to “systems and methods for assessing and managing financial transactions.” On March 28, 2013, Dominion filed petitions for inter partes review of the five patents in suit. Dominion also sought a stay of the district court proceedings, which was granted on May 22, 2013.

On August 12 and 15, 2013, the USPTO denied the petitions. According to the complaint, the USPTO Patent Trial and Appeal Board (PTAB) improperly substituted its own judgment and its own understanding of the cited references for that provided by Dominion’s expert in the declarations submitted in support of the petitions.

Dominion asserts that the USPTO violated the Administrative Procedures Act (5 USC § 706(2)(A) and (C)) by denying the petitions in the face of “unrebutted evidence.”

The Statutory Hurdle

The inter partes review statue includes the following provision, in 35 USC § 314(d):

(d) No Appeal.—The determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.

(In the Versata case, the district court rejected Versata’s arguments that a parallel provision in the post grant review statute refers only to the non-availability of direct appeal to the Federal Circuit and not to an interlocutory appeal to a district court.)

The AIA Hurdle

In the Versata case, the district court found that the AIA as a whole precluded judicial review of the USPTO’s decision to institute a post grant review proceeding, because the AIA’s express language, detailed structure and scheme for administrative and judicial review, legislative purpose, and nature of the administrative action evince Congress’s clear intent to preclude subject matter jurisdiction over the PTAB’s decision to institute patent reexamination proceedings.” In particular, the court cited:

  1. The express language of the statute: 35 USC § 324(e) states, “[t]he determination by the Director whether to institute a post-grant review under this section shall be final and nonappealable.”
  2. The structure of the Post Grant Review statutes. The statutes set forth “detailed procedures for post-grant review and a detailed scheme for administrative and judicial review of those post-grant review proceedings,” none of which include district court review.
  3. The statute provides for appeal to the Federal Circuit. 35 USC § 329 provides that “A party dissatisfied with the final written decision of the Patent Trial and Appeal Board under section 328(a) may appeal the decision pursuant to sections 141 through 144 [to the Federal Circuit.”

Dominion will face an uphill battle establishing that these same factors and parallel provisions of the inter partes review statute do not preclude the court’s jurisdiction over its case.