Versata v. Rea - An APA Challenge to the AIA - Part 3

In this series, we follow Versata’s challenge under the Administrative Procedure Act (“APA”) to the USPTO’s implementation of the Transitional Program for Covered Business Method Patents, Section 18 of the AIA. Part 1 of this series examined Versata’s original complaint filed in the United States District Court for the Eastern District of Virginia, and Part 2 reviewed the agency’s motion to dismiss. Part 3 discusses Versata’s response, and Part 4 summarizes intervenor SAP’s arguments in support of dismissal.

Versata’s opposition to the USPTO’s motion to dismiss focuses on the APA’s presumption in favor of judicial review, and emphasizes that its challenge is directed to review of jurisdictional issues and not the merits of agency’s decision.

Versata asserts that 35 U.S.C. § 324(e) only precludes an appeal from the Director’s decision to institute a post-grant review, and not whether that decision is ultimately reviewable. But even if that were the case, Versata makes a textual argument that the unreviewable “determination” under § 324(e) is limited to decision’s substantive grounds and not the jurisdictional question, also relying on a similar interpretation for inter partes reexamination in Callaway Golf Co. v. Kappos, 802 F. Supp. 2d 678 (E.D. Va. 2011).

The opposition also cites the USPTO’s posting of the decision to institute the PGR to its website (“Representative Orders, Decisions, and Notices”) as evidence that the agency’s action was final, and thus subject to review under the APA. Versata also uses the posting to cast the decision as a rulemaking “designed to implement . . . law or policy,” rather than an interlocutory adjudication. In addition, Versata emphasizes the possibility that its $400 million damage award will be vacated to show an effect on its legal rights and obligations.

Finally, in the response to the agency’s position that the AIA provides an adequate remedy — an appeal to the Federal Circuit — Versata argues that because its jurisdictional claims were not considered in the PTAB’s final written decision, there is “no guarantee” that those claims would be reviewed on appeal. Thus, rather than “bet the farm” appealing the merits of the PTAB decision canceling its claims as unpatentable under 35 U.S.C. § 101, Versata argues that the APA’s presumption in favor of review should win out “where there is doubt concerning [an] alternative remedy.”

In Part 4, we examine the intervenor SAP’s arguments in support of dismissal.