Can the USPTO Be Sued Under the APA for Issuing Bad Patents?

Infringement Defendant Attempts to Prevent/Undo Patent Issuance by APA Action

On Tuesday the CAFC heard arguments in the case of Pregis Corporation v. Kappos and Free Flow Packaging Intl. At issue in this case was a cross appeal of under the Administrative Procedure Act (APA) alleging that the USPTO had issued U.S. Patent 7,361,397 in an arbitrary and capricious manner. The ‘397 Patent is directed to plastic film used in machines that manufacture the now ubiquitous air pillows found in shipping containers.

Yet, rather than going through the time and effort to necessary to sue a government agency on a seemingly novel cause of action, why didn’t appellant Pregis simply seek reexamination of the ‘397 Patent?

At the time Pregis was approached to take a license, the ‘397 Patent had not yet issued from the USPTO. Pregis was approached to take a license to the Free Flow portfolio. (a notice of allowance had issued for the application underlying the ‘397 Patent). Thus, there was no ‘397 Patent to reexamine at the outset of the dispute between the parties.

Being outside the protest window for the maturing application (rarely used anyway), and believing there to be clear mistakes/capricious action made in the allowance of the case, Pregis filed suit against the USPTO under the APA in the Federal District Court of Virginia (Alexandria).

The initial complaint (here) may have been primarily intended as a “back door” protest to encourage the Office to revisit the allowance. Nevertheless, the patent issued in due course and the APA action continued through the Virginia Court. The dispute made its way to the CAFC on Tuesday. Interestingly, the USPTO was represented by an attorney from the Dept. of Justice on appeal.

At mins 23-45 of the CAFC argument, the APA issues were explored, with significant attention applied to public policy concerns. (recording here).

It would seem unlikely that the Court will endorse the practice, nevertheless the debate is quite interesting in view of recent APA issues explored by the CAFC. (In re Jung, Hyatt v. Kappos)