SAP Joins PTO against Versata in Eastern District of Virginia

You may recall that Versata sued the Patent Office in the Eastern District of Virginia to challenge the PTAB’s decision to institute a CBM review of Versata’s U.S. 6,553,350 patent.  Versata Development Group, Inc. v. Rea, 1:13-cv-00328-GBL-IDD (E.D. VA).  It turns out that SAP America, Inc. and SAP AG (collectively “SAP”) filed a Motion to Intervene in that suit.  On June 24, 2013, Judge Gerald Bruce Lee granted SAP’s Motion to Intervene over Versata’s objections (the PTO did not oppose the motion).  The motion was granted under Federal Rule of Civil Procedure 24(b).  SAP is now an intervenor in the lawsuit.

SAP also filed a motion to dismiss the suit under Federal Rule of Civil Procedure 12(b)(1), alleging a lack of subject-matter jurisdiction.  That motion has not yet been decided; however, this is a very important case for all post-grant practitioners because it will likely give guidance as to which types of PTAB decisions may be appealed.   First, SAP argues that the decision is not appealable under the AIA, in particular 35 U.S.C. § 324(e).  Second, SAP contends that a decision to institute trial is not appealable because it is not a final decision by the PTAB; it is the very beginning of the PTAB trial.  In its Memorandum in Support of Motion to Dismiss, SAP stated:

First, Versata invokes the APA to challenge a decision by the Director of the United States Patent and Trademark Office (“PTO”) made on her behalf by the newly-created Patent Trial and Appeal Board (the “Board”). 37 C.F.R. §§ 42.2, 42.4. Specifically, Versata challenges the Board’s initial decision to institute a post-grant review proceeding. But under the America Invents Act (“AIA”), Congress expressly precluded judicial review of the exact decision that Versata seeks to challenge: “The determination by the Director whether to institute a post-grant review . . . shall be final and nonappealable.” 35 U.S.C. § 324(e). Simply put, the APA does not apply—and this Court cannot exercise jurisdiction—where, as here, a “statute precludes judicial review.” 5 U.S.C. § 701(a)(1).

SAP’s Memorandum in Support of Motion to Dismiss, page 1 (italics in original).

This is certainly an interesting development.  We will stay tuned into the future events of this matter.


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