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Cooper v. Lee

United States District Court, E.D. Virginia, Alexandria Division

February 18, 2015

J. CARL COOPER, et al., Plaintiff,
v.
MICHELLE K. LEE, Deputy Under Secretary of Commerce for Intellectual Property and Deputy Director of the United States Patent and Trademark Office, Defendant

For J. Carl Cooper, eCharge Licensing, LLC, Plaintiffs: Kristin Anne Martin Zech, LEAD ATTORNEY, Amy Sanborn Owen, Nicholas Valdis Cumings, BrigliaHundley PC, Tysons Corner, VA.

For Michelle K. Lee, in her capacity as Deputy Director of the United States Patent and Trademark Office, United States Patent and Trademark Office, Defendants: Dennis Carl Barghaan, Jr., LEAD ATTORNEY, United States Attorney's Office, Alexandria, VA.

For Affinity Labs of Texas, LLC, Amicus: Craig Crandall Reilly, LEAD ATTORNEY, Law Office of Craig C. Reilly, Alexandria, VA.

Page 481

MEMORANDUM OPINION & ORDER

Gerald Bruce Lee, United States District Judge

THIS MATTER is before the Court on Plaintiffs J. Carl Cooper (" Cooper" ) and eCharge Licensing, LLC's (" eCharge" ) (collectively " Plaintiffs" ) Motion for Summary Judgment (Doc. 3) and Defendant Michelle K. Lee's (" Defendant" ) Motion for Summary Judgment (Doc. 14). This case arises from Plaintiffs' contention that the United States Patent and Trademark Office's (" PTO" ) inter partes review proceedings, which occur before the Patent Trial and Appeal Board (" PTAB" ), are unconstitutional as they deprive Plaintiffs of their right to have the matter adjudicated before an Article III tribunal. The issue before the Court is whether Plaintiffs' challenge of inter partes review is properly before the Court. The Court DENIES Plaintiffs' Motion for Summary Judgment (Doc. 3) and GRANTS Defendant's Motion for Summary Judgment (Doc. 14) because Plaintiffs have not exhausted administrative remedies before seeking judicial relief.

I. BACKGROUND

Cooper is an inventor and owner of numerous United States patents. eCharge is an entity that helps inventors license their intellectual property. (Doc. 4 at 2.) Cooper granted eCharge an exclusive license to a number of his patents, including the right to license and, if necessary, file suit against alleged infringers. ( Id.)

On September 9, 2013, eCharge filed a Complaint in the United States District Court for the Northern District of Illinois against Square, Inc. (" Square" ) for infringement of several Article 1-reviewed patents. ( eCharge Licensing LLC v. Square, Inc., Case No. 1:13-cv-06445 (N.D.Ill.)). (Doc. 1 ¶ 23.) eCharge sought both monetary damages and a permanent

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injunction prohibiting future infringement of the patents, and demanded trial by jury. ( Id. ¶ 23.) On November 18, 2013, Square filed a petition to institute an inter partes review of certain claims of the Article 1-reviewed patents under 35 U.S.C. § 311. ( Id. ¶ 24.) On January 16, 2014, the United States District Court for the Northern District of Illinois entered a stay of proceedings pending the PTAB's decision in the inter partes review proceeding. ( Id. ¶ 25.)

Although Plaintiffs had previously objected to the constitutionality of the inter partes review proceedings, on May 14, 2014, the PTO instituted an inter partes review of the Article 1-reviewed patents under 35 U.S.C. § 314. Plaintiffs are now before the Court contesting the constitutionality of inter partes review.

II. DISCUSSION

A. Standard of Review

Under Federal Rule of Civil Procedure 56, the Court must grant summary judgment if the moving party demonstrates that there is no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c).

In reviewing a motion for summary judgment, the Court views the facts in a light most favorable to the non-moving party. Boitnott v. Corning, Inc., 669 F.3d 172, 175 (4th Cir. 2012) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). Once a motion for summary judgment is properly made and supported, the opposing party has the burden of showing that a genuine dispute exists. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Bouchat v. Baltimore Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir. 2003) (citations omitted). " [T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Emmett v. Johnson, 532 F.3d 291, 297 (4th Cir. 2008) (quoting Anderson, 477 U.S. at 247-48).

A " material fact" is a fact that might affect the outcome of a party's case. Anderson, 477 U.S. at 248; JKC Holding Co. v. Wash. Sports Ventures, Inc., 264 F.3d 459, 465 (4th Cir. 2001). Whether a fact is considered to be " material" is determined by the substantive law, and " [o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson, 477 U.S. at 248; Hooven-Lewis v. Caldera, 249 F.3d 259, 265 (4th Cir. 2001).

A " genuine" issue concerning a " material" fact arises when the evidence is sufficient to allow a reasonable jury to return a verdict in the nonmoving party's favor. Res. Bankshares Corp. v. St. Paul Mercury Ins. Co., 407 F.3d 631, 635 (4th Cir. 2005) (quoting Anderson, 477 U.S. at 248). Rule 56(e) requires the nonmoving party to go beyond the pleadings and by its own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is a genuine issue for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265(1986).

B. Analysis

The Court DENIES Plaintiffs' Motion for Summary Judgment and GRANTS Defendant's Motion for Summary Judgment because Plaintiffs have not exhausted administrative remedies before seeking judicial

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relief. Furthermore, the Federal Circuit's decisions in Patlex v. Mossinghoff, 758 F.2d 594 (Fed. Cir. 1985), and Joy Techs., Inc. v. Manbeck, 959 F.2d 226 (Fed. Cir. 1992), suggest that Plaintiffs' challenge will ultimately fail. Before discussing the exhaustion doctrine, an overview of the statutory schemes for administrative review of the issuance of patents is appropriate. Administrative review of the issuance patents can be broken up into two ...


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