Source: https://www.ipwatchdog.com/2018/10/05/cafc-hyatt-apa-challenges-time-barred/id=102041/
Timestamp: 2019-04-22 04:27:12+00:00

Document:
Beginning in the mid-2000s, the United States Patent and Trademark Office (“PTO”) issued final rejections for a number of Mr. Hyatt’s applications, which he subsequently appealed to the Patent Trial and Appeal Board(“PTAB”). The examiners never filed answers to Mr. Hyatt’s briefs, and the PTAB never acquired jurisdiction over his appeals. The PTO instead reopened prosecution of 80 previously rejected applications. Mr. Hyatt, in turn, filed a lawsuit in Nevada district court alleging unreasonable delay of his applications by reopening of prosecution instead of hearing the appeals.
While the lawsuit was still pending, Mr. Hyatt also filed a petition for rulemaking with the PTO requesting that the USPTO repeal or declare unenforceable MPEP § 1207.04. Mr. Hyatt challenged the PTO’s subsequent denial of his petition in Nevada district court under the Administrative Procedure Act (“APA”), arguing that the PTO procedures were “arbitrary and capricious, in excess of statutory authority, and without observance of procedure required by the law.” The district court dismissed the action for lack of subject matter jurisdiction and further declined to transfer the case because Mr. Hyatt’s claims were “likely precluded” by his prior unreasonable delay lawsuit. On appeal, the Federal Circuit reversed the court’s dismissal for lack of subject matter jurisdiction but affirmed its grant of the PTO’s motion for summary judgment, because Mr. Hyatt’s claims were either time-barred or relied on erroneous statutory interpretation.
First, the Federal Circuit found the district court had subject matter jurisdiction over Mr. Hyatt’s APA claim under both 28 U.S.C. §§1331 and 1338(a) as the question of whether the PTO has violated the APA in applying its own regulations raised a substantial question under the patent laws. Furthermore, the exclusive jurisdiction of the Federal Circuit and E.D. Va. to hear civil actions under 35 U.S.C. § 145 that ask for reviewof PTAB decisions “does not displace the district court’s jurisdiction over APA challenges to the PTO’s denial of a petition for rulemaking.” The court did not need exclusive jurisdiction over denials of petitions for rulemaking in order to protect its future jurisdiction.
Thus, had Mr. Hyatt requested any relief regarding the 80 pending claims in the present lawsuit, the outcome of the Court’s holding may have been different.
Mr. Hyatt’s argument that the PTO promulgated MPEP § 1207.04 without notice-and-comment was a procedural argument. The right of action accrued when the agency adopted the rule in 2005. Mr. Hyatt’s failure to bring his notice-and-comment claim until ten years later rendered it time-barred. Furthermore, because the 2014 amendment to MPEP § 1207.04 merely clarified the meaning of an existing term and was not substantive, the statute of limitation was not reset then. Similarly, the PTO’s discussions of reopening prosecution in 2011 and 2013 did not restart the statute of limitation.
Mr. Hyatt’s argument that MPEP § 1207.04 conflicted with 37 C.F.R. § 41.39 was neither procedural nor substantive but instead a “policy-based challenge,” and the right of action also accrued in 2005 – with the adoption of the provision – again rendering the challenge outside the six-year statute of limitations period.
However, Mr. Hyatt’s argument that MPEP § 1207.04 violated 35 U.S.C. § 6(b)(1) was a substantive challenge, and right of action accrued in 2015 with the PTO’s denial of Mr. Hyatt’s petition for rulemaking – an adverse application of MPEP § 1207.04 against him. Nonetheless, the court found that the claim was based on an erroneous interpretation of § 6(b)(1) and thus lacked merit.
Under § 6(b)(1), the PTAB has the duty to, “on written appeal of an applicant, review adverse decisions of examiners upon applications for patents pursuant to section 134(a).” However, “the text does not require the PTAB to reach the merits of every appeal that is filed.” The PTO may instead impose procedural conditions prior to PTAB’s review of an appeal, which may result in its dismissal. An examiner’s decision not to reopen prosecution is merely“another condition that must be satisfied before an appeal reaches the Board.” Furthermore, reopening prosecution does not deprive applicants of their right to appeal final examiner rejections – once the examiner adds new grounds for rejection, an applicant may appeal it.
An APA challenge to a rule within the MPEP on procedure or policy grounds must be filed within six years of rule adoption. The PTAB is not required to reach a decision on an appeal if the examiner chooses to reopen prosecution during that appeal.

References: § 1207
 § 145
 § 1207
 § 1207
 § 1207
 § 41
 § 1207
 § 6
 § 1207
 § 6
 § 6