Paper No. 22
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`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`___________________
`
`
`
`APPLE INC.
`Petitioner,
`
`v.
`
`VIRNETX, INC. AND SCIENCE APPLICATION INTERNATIONAL
`CORPORATION,
`Patent Owner
`
`Patent No. 7,490,151
`Issued: Feb. 10, 2009
`Filed: Sep. 30, 2002
`Inventors: Edmund C. Munger, et al
`Title: Establishment of a Secure Communication Link Based Domain Name
`Service (DNS) Request
`____________________
`
`Inter Partes Review No. IPR2013-00354
`__________________________________________________________________
`
`NOTICE OF PETITIONER’S SUBMISSION OF CITED AUTHORITY
`
`
`
`
`
`
`
`

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`IPR2013-00354 – Submission of Cited Authority
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`
`
`Pursuant to 37 C.F.R. § 42.13(d), Petitioner submits as Attachment A to this
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`Notice a copy of the following authority not available on the West Reporter
`
`System:
`
`Mentor Graphics, Corp. v. Rea, 1:13-cv-00518, Dkt. No. 38, PTO’s
`Mem. ISO Def.’s Mot. Dismiss or for Summ. J. (May 24, 2013)
`
`
`Respectfully Submitted,
`
`/Jeffrey P. Kushan/
`Jeffrey P. Kushan (Reg No. 43,401)
`Sidley Austin LLP
`1501 K Street NW
`Washington, DC 20005
`jkushan@sidley.com
`
`
`
`
`Dated: January 6, 2014
`
`
`
`
`
`
`
`1
`
`

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`IPR2013-00354 – Submission of Cited Authority
`
`CERTIFICATE OF SERVICE
`
`I hereby certify that on this 6th day of January 2014, a copy of this Notice of
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`Submission of Cited Authority including all attachments, has been served in its
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`entirety by e-mail and Federal Express on the following counsel of record for
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`patent owner:
`
`Joseph E. Palys
`Finnegan, Henderson, Farabow, Garrett & Dunner, L.L.P.
`11955 Freedom Drive
`Reston, VA 20190-5675
`Phone: (571) 203-2700
`Fax: (202) 408-4400
`E-mail: joseph.palys@finnegan.com
`
`Naveen Modi
`Finnegan, Henderson, Farabow, Garrett & Dunner, L.L.P.
`901 New York Avenue, NW
`Washington, DC 20001-4413
`Telephone: 202-408-4065
`Facsimile: 202-408-4400
`E-mail: naveen.modi@finnegan.com
`
`January 6, 2014
`
`
`
`Respectfully submitted,
`
`/Jeffrey P. Kushan/
`Jeffrey P. Kushan
`Reg. No. 43,401
`Attorney for Petitioner
`
`Page 2
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`
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`Dated:
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`

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`IPR2013-00354 – Submission of Cited Authority
`
`Attachment A
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`

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`
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` Civil Action No. 1:13-cv-518
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF VIRGINIA
`Alexandria Division
`
`MENTOR GRAPHICS CORPORATION,
`
`
` Plaintiff,
`
`
`v.
`
`TERESA STANEK REA, Acting Undersecretary
`of Commerce for Intellectual Property and Acting
`Director of United States Patent and Trademark
`Office,
`
` Defendant,
`
`SNYOPSYS, INC.,
` Intervenor-Defendant.
`
`
`
`
`)))))))))))))))))
`
`MEMORANDUM OF LAW IN SUPPORT OF DEFENDANT’S MOTION TO DISMISS
`OR, IN THE ALTERNATIVE, FOR SUMMARY JUDGMENT
`AND IN OPPOSITION TO PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
`
`
`
`
`
`
`
`
`

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`
`
`II.
`
`TABLE OF CONTENTS
`INTRODUCTION .............................................................................................................................................. 1
`STATUTORY AND REGULATORY BACKGROUND ........................................................................... 2
`I.
`Pre-AIA Administrative Review – Patent Reexamination ............................................................ 3
`A.
`Patent Examination .................................................................................................................... 3
`B.
`Patent Reexamination ................................................................................................................ 3
`1.
`“Ex Parte” Reexamination .......................................................................................... 3
`2.
`“Inter Partes” Reexamination ..................................................................................... 4
`AIA Administrative Review – Inter Partes Review & Post-Grant Review ............................... 5
`II.
`PROCEDURAL HISTORY AND STATEMENT OF UNDISPUTED MATERIAL FACTS ........... 7
`ARGUMENT ....................................................................................................................................................... 8
`I.
`General Standards ................................................................................................................................. 8
`A.
`Federal Rule 12(b)(1) ................................................................................................................ 8
`B.
`Federal Rule 12(b)(6) ................................................................................................................ 9
`C.
`Federal Rule 56 .......................................................................................................................... 9
`Congress Precluded Judicial Review Over Orders “Instituting” Inter Partes Review
`Proceedings ............................................................................................................................................. 9
`The PTAB’s Order Does Not Constitute a “Final Agency Action” Under the APA .............. 16
`A.
`The PTAB’s Interlocutory Decision Is Not A Final Agency Action ................................... 17
`B.
`Congress Has Provided an Adequate Remedy Through Review by the Federal
`Circuit of the PTAB’s Final Decision .................................................................................... 23
`The PTAB’s Interlocutory Order Correctly Determined That It Had Authority to
`Institute Proceedings Under Section 315(b) ................................................................................... 24
`A.
`USPTO Has Reasonably Interpreted that Section 315(b) Privy Status Is
`Determined as of the Time a Petition Is Filed ....................................................................... 24
`The PTAB Did Not Err in Considering the Relationship Between Synopsys
`and EVE During the Prior Litigation ..................................................................................... 29
`CONCLUSION .................................................................................................................................................. 30
`
`III.
`
`
`
`
`
`B.
`
`IV.
`
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`

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`
`
`Pursuant to Local Rule 7(F)(1), Defendant hereby respectfully submits this memorandum of law
`in support of her motion to dismiss or, in the alternative, for summary judgment.
`INTRODUCTION
`In 2011, through the America Invents Act (“AIA”), Congress created two new intricate schemes
`
`for administrative and judicial review of the patentability of issued patents. It did so with a substantive
`goal in mind – to lessen the burdens (on both litigants and jurists alike) inherent in federal district court
`litigation over such issues. Each of these systems provides for streamlined review, including one level of
`administrative review (before the Patent Trial and Appeal Board (“PTAB”) at the United States Patent and
`Trademark Office (“USPTO”)) that must generally be completed within one year, and one level of
`appellate judicial review (before the Federal Circuit) at the termination of administrative proceedings.
`
`But here, plaintiff Mentor Graphics Corporation (“Mentor”) asks this Court to create an
`enormous hole in this streamlined system, allowing individuals and entities dissatisfied with the PTAB’s
`mere institution of administrative review proceedings to cross the street and immediately file a lawsuit in
`this Court challenging that decision through the Administrative Procedure Act (“APA”).1 Congress,
`recognizing the damage that such collateral federal litigation could cause its streamlined system,
`fortunately prevented this result in two ways. First, in the AIA itself, Congress explicitly provided that the
`decision “whether to institute” this type of administrative review proceeding – the very decision that
`Mentor’s own complaint concedes is the gravamen of this action – is “final and nonappealable.” 35
`U.S.C. § 314(d). Were this section, despite its clarity, somehow inapplicable here, the APA’s general
`requirement that there be “final agency action,” 5 U.S.C. § 704, would preclude exercise of this Court’s
`
`1 Nor is this a mere prediction or retort of USPTO, as Mentor is not unique in challenging the mere
`institution of these proceedings. There is a case pending before Judge Lee presenting the identical
`situation involving a patent owner seeking to stop a post-grant review proceeding. Versata Development
`Group, Inc. v. Rea, 1:13-cv-328 (E.D. Va.).
`
`1
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`jurisdiction, because the PTAB’s order to institute proceedings is interlocutory. Further, Mentor has an
`“adequate remedy,” specifically afforded to it by Congress, in an appeal to the Federal Circuit at the end
`of the PTAB’s proceedings, where it can appeal the very issue it seeks to inappropriately raise here.
`
`This Court need not and should not reach the merits of the appeal. But it can rest assured that the
`PTAB, in fact, correctly determined that it had authority to institute proceedings. The merits of this case
`concern a dispute over the relevant points in time for which the privy status of petitioner requesting inter
`partes review is evaluated under 35 U.S.C. § 315(b). The PTAB, consistent with the USPTO regulation
`implementing § 315(b), reasonably interpreted that privy status is to be determined as of the time a
`petition requesting inter partes review is filed. Moreover, in its privy determination, the PTAB did not err
`in considering the lack of any privy relationship during the pendency of the prior litigation that Mentor
`claims bars inter partes review here. Therefore, should the Court reach the merits (which it most
`definitely should not), the Court should nevertheless grant summary judgment in favor of Defendant.
`STATUTORY AND REGULATORY BACKGROUND
`Mentor’s request for this Court to exercise interlocutory APA jurisdiction concerns one of two
`
`new processes – inter partes review – created by Congress through the AIA by which USPTO reviews the
`patentability of an issued patent. Courts have repeatedly recognized that the availability of such
`administrative options serve significant public interests, including, inter alia, “to correct errors . . . and if
`need be to remove patents that never should have been granted.” Patlex Corp. v. Mossinghoff, 758 F.2d
`594, 604 (Fed. Cir. 1985); see also Callaway Golf Co. v. Kappos, 802 F. Supp. 2d 678, (E.D. Va. 2011).
`
`It is thus important to provide a threshold general discussion of the new processes created through
`the AIA. But to understand these processes, it is similarly necessary to explore the evolution of those
`administrative processes that were previously available (before the AIA) for the review of issued patents.
`
`
`
`2
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`

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`As will be seen, although the various systems that Congress has developed (and ultimately modified or
`eliminated) differ in many ways, this evolution reveals a single constant – Congress’s desire to develop a
`viable administrative system for patent review to lessen the amount of litigation in the federal courts.
`I.
`Pre-AIA Administrative Review – Patent Reexamination
`A.
`Patent Examination
`An individual who seeks a patent on a particular invention must file an application with the
`
`USPTO that contains a specification and an oath by the applicant to the effect that he or she believes that
`he or she is the original inventor of the invention at issue. See 35 U.S.C. §§ 111(a); 115. A USPTO
`patent examiner thereafter reviews the application and makes a determination as to whether the
`application presents claims that are patentable. See id. § 131. If “it appears that the applicant is entitled to
`a patent under the law,” the USPTO “shall issue a patent.” Id.
`B.
`Patent Reexamination
`1.
`“Ex Parte” Reexamination
`Until approximately 1980, individuals or entities seeking to challenge the validity of an issued
`
`patent were without any real administrative recourse. Congress concluded that this gap forced many to
`file costly and time-consuming challenges to patent validity in federal court, when the same challenge
`“could be conducted with a fraction of the time and cost of formal legal proceedings.” See H.R. RPT. 96-
`1307, at 3 (Sept. 9, 1980), reprinted in 1980 U.S.C.C.A.N. 6460, 6462. Congress therefore created an
`administrative alternative known as “ex parte reexamination,” which authorized third parties to request
`that the USPTO reexamine “the substantive patentability” of an issued patent. 35 U.S.C. § 302 (2010).2
`
`The use of the modifier “ex parte” to describe this form of reexamination was significant, and
`
`2 Given the extensive amendments made to the Patent Act through the AIA, all statutory citations within
`this section (i.e., concerning patent reexamination) are to the 2010 codification of the U.S. Code.
`3
`
`
`
`

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`reflected the nature of that type of administrative reexamination. In short, if the USPTO accepted a third-
`party’s request (i.e., concluded that there is a “substantial new question of patentability,” 35 U.S.C. §
`303(a)), and instituted reexamination proceedings, the resulting proceedings would generally continue
`only between the USPTO and the patent owner. See Syntex (USA), Inc. v. USPTO, 882 F.2d 1570, 1573
`(Fed. Cir. 1989). Other than “the right to reply to any statement submitted by the patent owner . . . [t]he
`statute [gave] third party requesters no further, specific right to participate in the reexamination
`proceeding.” Id.; see also 35 U.S.C. §§ 304-05. If the examiner responsible for conducting the
`reexamination discovered that the claims were not actually patentable, he or she would issue a final office
`action rejecting those claims. See 35 U.S.C. § 305.
`2.
`“Inter Partes” Reexamination
`Almost twenty years later, in 1999, Congress – after reviewing whether progress had been made
`
`in reducing federal court litigation concerning the validity of issued patents in favor of USPTO
`reexamination – elected to modify the system once again. In this respect, Congress found that individuals
`and entities were not utilizing the existing reexamination procedure because “a third party who requests
`reexamination cannot participate at all after initiating the proceedings.” H.R. CONF. RPT. 106-464, at 133
`(Nov. 9, 1999); see also id. (“Numerous witnesses have suggested that the volume of lawsuits in district
`courts will be reduced if third parties can be encouraged to use reexamination by giving them an
`opportunity to argue their case for patent invalidity in the USPTO.”). In 1999, Congress therefore created
`a new “inter partes” reexamination procedure that authorized the third-party requester to participate in the
`administrative reexamination proceedings. See 35 U.S.C. § 314. More specifically, in “inter partes”
`reexamination, “[e]ach time that the patent owner file[d] a response to an action on the merits . . . the
`
`4
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`third-party requester [had] one opportunity to file written comments addressing issues raised by the action
`. . . or the patent owner’s response.” Id. § 314(b)(2). Just like ex parte reexamination, if the examiner
`responsible for reexamining the patent concluded that the relevant claims were not patentable, he or she
`issued an office action rejecting the same. See id. § 314(a).
`II.
`AIA Administrative Review – Inter Partes Review & Post-Grant Review
`
`By 2011, however, Congress remained dissatisfied with the progress it had made in limiting
`federal court litigation over the validity of issued patents by enhancing the viability of USPTO
`administrative remedies. H.R. RPT. 112-98, at 45 (2011). In particular, Congress noted that despite the
`improvements that it had made to the procedure for the review of issued patents, the “[r]eexamination
`proceedings are [] often costly, taking several years to complete,” and as a result, fewer used the
`procedure (and reverted to federal district court litigation) than Congress desired. Id. In response,
`through the AIA, see PUB. L. 112-29, 125 Stat. 284 (September 16, 2011), Congress, in yet another
`attempt to decrease federal court litigation, significantly streamlined the administrative process.
`
`More specifically, Congress in the AIA created two new types of administrative proceedings
`through which an individual or entity could secure the USPTO’s review of an issued patent – (1) inter
`partes review; and (2) post-grant review. Both mechanisms create a streamlined and more efficient
`process for both administrative and judicial review of patentability questions by eliminating one level of
`review at the USPTO, while ensuring that patent owners and challengers alike have the ability to seek
`direct appellate review at the Federal Circuit at the conclusion of the proceedings (and thus avoiding
`costly federal district court litigation).
`
`As relevant here, Congress transformed the former inter partes reexamination into a new type of
`
`5
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`proceeding known as inter partes review. Inter partes review is conducted entirely by the PTAB, see id.
`§ 316(c), pursuant to an identical streamlined process created for post-grant review.3 By statute, the
`PTAB must adjudicate a petition seeking to “institute an inter partes review” – a decision that is “final and
`nonappealable,” id. § 314(d) – within three months of the filing of a response to the petition. Id. § 314(b).
`All inter partes review proceedings, including the PTAB’s final written determination on the patentability
`of the challenged patent claims, must generally be completed within one year of the institution of the
`proceeding. See id. § 316(a)(11). Finally, Congress provided for appellate review to the Federal Circuit
`at the conclusion of inter partes review proceedings before the PTAB for any party dissatisfied with the
`PTAB’s decision. See id. § 319. In fact, Congress was so concerned about ensuring the speediness of this
`process, that it authorized USPTO to reject meritorious petitions if those petitions threatened USPTO’s
`ability to timely complete its pending proceedings within the strict statutory deadline. See 157 Cong. Rec.
`S1377 (daily ed. Mar. 8, 2011) (statement of Sen. Kyl) (explaining this “reflects a legislative judgment
`that it is better that [USPTO] turn away some petitions that otherwise satisfy the threshold for instituting
`an inter partes or post-grant review than it is to allow [USPTO] to develop a backlog of instituted reviews
`that precludes [USPTO] from timely completing all proceedings”).
`* * *
`In sum, motivated by an unequivocal desire to limit federal district court litigation, Congress
`
`created two virtually identical systems that would streamline administrative and judicial reconsideration
`of the patentability of issued patents. The PTAB is vested with the authority to adjudicate all issues
`encompassed within an inter partes or post-grant review, and within one year, concludes that review with
`
`3 There are some limited differences between inter partes review and post-grant review not relevant here,
`most notably the filing deadline and the grounds upon which review is available. Compare 35 U.S.C. §
`311(b), (c), with id. § 321(b), (c).
`6
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`a written determination. Any dissatisfied party in such a review can then seek Article III appellate review
`of the PTAB’s action directly in the Federal Circuit.
`PROCEDURAL HISTORY AND STATEMENT OF UNDISPUTED MATERIAL FACTS4
`This case generally concerns United States Patent No. 6,240,376 (“the ’376 patent”), which the
`a.
`USPTO issued on May 29, 2001, and to which Mentor claims to be the assignee. Compl. (Dkt. No. 1)
`¶¶ 1, 7-8. In 2006, Mentor sued Emulation and Verification Engineering S.A. and EVE-USA, Inc.
`(collectively “EVE”), in the United States District Court for the District of Oregon, alleging that EVE had
`infringed the ’376 patent. Id. ¶¶ 12-13; A73. The lawsuit was dismissed with prejudice before reaching
`judgment pursuant to a settlement agreement. Id. ¶ 14.
`b.
`On September 26, 2012, Defendant-Intervenor Synopsys, Inc. (“Synopsys”) filed a petition with
`the PTAB seeking the institution of inter partes review proceedings with respect to claims 1-15 and 20-33
`of the ‘376 patent, because – it argued – those claims were not patentable. Compl. ¶ 15; A1. On
`September 27, 2012, Synopsys apparently entered into a written agreement to acquire EVE. Compl. ¶ 17.
`On October 4, 2012, Synopsys completed the acquisition of EVE, and EVE became a wholly-owned
`subsidiary of Synopsys. Id. ¶ 19.
`
`On December 28, 2012, Mentor filed a preliminary response to Synopsys’s petition. Id. ¶ 20;
`A97. In that response, Mentor presented the same arguments that are the gravamen of its case here;
`namely, that the PTAB was prohibited under 35 U.S.C. § 315(b) from instituting inter partes review
`because Synopsys and EVE are now privies, and Mentor had served a complaint for infringement of the
`‘376 patent against EVE more than one year prior to Synopsys’s petition. Compl. ¶ 20; A102-110.
`
`After considering both of the parties’ submissions, on February 22, 2013, the PTAB issued a
`
`4 Defendant does not dispute Mentor’s Statement of Undisputed Material Facts.
`7
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`
`forty-one page opinion granting Synopsys’s petition as to claims 1-9, 11, and 28-29. Compl ¶ 21; A150.
`In particular, the PTAB rejected Mentor’s argument that it could not institute inter partes review
`proceedings – and thus could review the patentability of the asserted claims – because (1) Mentor had not
`shown that Synopsys and EVE were privies as of the filing date of the petition, Compl. ¶ 22.b, A165; and
`(2) Mentor had not shown that Synopsys and EVE were privies or had any relationship at all during the
`prior litigation. Compl. ¶ 22.a, A165-66.
`
`On March 8, 2013, Mentor moved for rehearing of the PTAB’s decision to institute proceedings.
`Compl. ¶ 25. On April 11, 2013, the PTAB denied that motion. Id. ¶ 25.
`c.
`On April 29, 2013, Mentor filed this lawsuit, which seeks to prohibit the inter partes proceedings
`from going forward and asks this Court to interject itself into the dispute. Mentor maintains that this
`Court can exercise interlocutory jurisdiction, and engage in judicial review of the PTAB’s order instituting
`proceedings, pursuant to the Administrative Procedure Act (“APA”). Id. ¶¶ 27-37.
`ARGUMENT
`
`I.
`
`General Standards
`A.
`Federal Rule 12(b)(1)
`Federal Rule 12(b)(1) serves as the appropriate vehicle to challenge the court’s subject matter
`
`jurisdiction in a particular matter. See, e.g., Coulter v. United States, 256 F. Supp. 2d 484, 486 n.3 (E.D.
`Va. 2003), aff’d, 90 Fed. Appx. 60 (4th Cir. 2004). The plaintiff bears the burden of establishing the
`court’s subject matter jurisdiction, and although this Court may utilize the allegations contained within the
`four corners of the plaintiff’s complaint as evidence in determining whether it possesses jurisdiction over
`a dispute, it may also consider other evidence outside the pleadings if necessary. See Richmond,
`Fredericksburg, & Potomac R.R. Corp. v. United States, 945 F.2d 765, 768 (4th Cir. 1991).
`8
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`
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`Federal Rule 12(b)(6)
`B.
`A motion pursuant to Rule 12(b)(6) serves to test the legal sufficiency of the plaintiff’s complaint
`
`in relation to the factual averments he or she puts forward. Although a court must accept as true all well-
`pled allegations in adjudicating such a motion, it need not credit allegations that are merely conclusory.
`See Ashcroft v. Iqbal, 556 U.S. 662, 675 (2009). “To survive a motion to dismiss, a complaint must
`contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ A
`claim has factual plausibility when the plaintiff pleads factual content that allow the court to draw the
`reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678.
`C.
`Federal Rule 56
`Pursuant to Federal Rule of Civil Procedure 56, a motion for summary judgment should be
`granted if “the movant shows that there is no genuine dispute as to any material fact and the movant is
`entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). Where the non-moving party will bear the
`burden of proof, the moving party’s obligation is satisfied upon a showing that there is a lack of evidence
`to carry the non-moving party’s burden on an essential element of that party’s cause of action. See
`Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The Court construes the facts in the light most
`favorable to the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).
`II.
`Congress Precluded Judicial Review Over Orders “Instituting” Inter Partes Review
`Proceedings
`To be sure, as the Supreme Court has noted, the “APA confers a general cause of action” on
`
`aggrieved persons to obtain judicial review of agency action. See Block v. Community Nut. Inst., 467
`U.S. 340, 345 (1984). But given that “Congress is absolutely free to limit the extent to which it consents
`to suit against the United States,” McDougal-Saddler v. Herman, 184 F.3d 207, 211-12 (3rd Cir. 1999),
`
`9
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`
`the APA also contains a series of express “limitations on the grant of judicial review.” Pregis Corp. v.
`Kappos, 700 F.3d 1348, 1356 (Fed. Cir. 2012). One such limitation is an explicit statutory provision in
`the APA that prevents its use when other “statutes preclude judicial review.” 5 U.S.C. § 701(a)(1); see
`Block, 467 U.S. at 345 (holding that § 701(a)(1) “withdraws [the APA] cause of action to the extent the
`relevant statute precludes judicial review”). The Supreme Court framed this Court’s § 701(a)(1) inquiry
`as follows:
`Whether and to what extent a particular statute precludes judicial review is determined not only
`from its express language, but also from the structure of the statutory scheme, its objectives, its
`legislative history, and the nature of the administrative action involved.
`
`Block, 467 U.S. at 345-46 (citations omitted). And as the Block Court made clear, one analyzes the
`question of whether Congress intended to foreclose judicial review of a given agency action through
`“inferences of intent drawn from the statutory scheme as a whole.” Id. at 349 (emphasis added). Where
`such “congressional intent is ‘fairly discernible’ in the detail of the legislative scheme, APA review is not
`available.” Id. at 351.
`1.
`And here, one need go no further than the actual text of the pertinent statutory language, because
`Congress has unequivocally precluded judicial review of the PTAB’s decision to “institute” inter partes
`review proceedings:
`The determination by the Director whether to institute inter partes review under this section shall
`be final and nonappealable.
`
`
`35 U.S.C. § 314(d) (emphasis added). Initially, Mentor rather clearly concedes that it is attempting to
`secure judicial review of the PTAB’s decision “to institute an inter partes review” as being “in excess of
`[USPTO’s] statutory jurisdiction and authority.” Pl. Mot. at 1 (emphasis added); Compl. ¶ 1. That
`determination falls squarely within the express nonappealable prohibition of § 314(d).
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`Mentor attempts to skirt Congress’s express prohibition by focusing on the phrase “under this
`
`section,” claiming that Congress did not actually mean what it said when it stated that the determination
`“whether to institute partes review” is final and nonappealable. Pl. Mot. at 26-27. Rather, Mentor asserts
`that Congress really meant to say that only that portion of the institution determination covered by
`§ 314(a) is final and nonappealable – i.e., whether there is a reasonable likelihood that the petitioner
`would prevail with respect to at least 1 of the claims challenged in the petition. Id. This argument has no
`merit. Section 314 generally covers the “[i]nstitution of inter partes review,” 35 U.S.C. § 314, and
`provides that “[t]he Director shall determine whether to institute an inter partes review under this chapter
`pursuant to a petition filed under section 311 within 3 months after . . . receiving a preliminary response
`to the petition under section 313,” id. § 314(b). The preliminary response, in turn, explicitly “sets forth
`reasons why no inter partes review should be instituted based upon the failure of the petition to meet any
`requirement of this chapter,” id. § 313 (emphasis added), including whether institution of proceedings is
`prohibited by § 315(b), as Mentor argued in its preliminary response and now argues here. The plain
`language “under this section” clearly encompasses this entire determination whether to institute
`proceedings based on the failure of the petition to meet any requirement of the chapter.
`Most importantly, if Congress wished to limit the scope of § 314(d) only to the “reasonable
`likelihood” portion of the determination from § 314(a), it would have stated so. This is especially true
`because the prior version of this provision under the former “inter partes” reexamination did just that. 35
`U.S.C. § 312(c) (2011) (“A determination by the Director under subsection (a) shall be final and non-
`appealable.” (emphasis added)). By expanding the scope of the prohibition to the full “determination by
`the Director whether to institute an inter partes review under this section,” Congress intended to make
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`clear that the “final and nonappealable” prohibition applied to the entire institution determination, and not
`just the subsection (a) portion of that decision. See Nalley v. Nalley, 53 F.3d 649, 652 (4th Cir. 1995)
`(“When the wording of an amended statute differs in substance from the wording of the statute prior to
`amendment, we can only conclude that Congress intended the amended statute to have a different
`meaning.”). Lest there be any doubt, the Court need look no further than § 314(c), which expressly limits
`the scope of that provision to “the Director’s determination under subsection (a).” Simply put, if
`Congress had intended to similarly limit the scope of § 314(d) to subsection (a), it would have just said so.
`
`Mentor’s alternative position that seeking APA review in this Court does not constitute an
`“appeal” for purposes of § 314(d) is flatly wrong. Pl. Mot. at 28. Decades of jurisprudential authority
`have long established that APA review – albeit in a federal district court – serves as an “appeal” of the
`agency action in question. As one court has cogently noted:
`
`Appellants misunderstand the role the district court plays when it reviews agency action.
`The district court sits as an appellate tribunal, not as a court authorized to determine in a trial-type
`proceeding whether the Secretary’s study was factually flawed. . . .
`
`
`
`Marshall County Health Care Auth. v. Shalala, 988 F.2d 122