T. S. Ellis, III, United States District Judge.
In this 35 U.S.C. § 145 action, plaintiff challenges a United States Patent and Trademark Office ("PTO") decision rejecting the patentability of the inventions claimed in U.S. Patent Application Serial No. 07/773, 161 (the "'161 Application"). At issue on plaintiff's motion for partial summary judgment, filed before the conclusion of discovery, are (i) whether the PTO's defense of lack of standing is barred by the doctrine of collateral estoppel, and (ii) whether the PTO's claim for attorney's fees pursuant to 35 U.S.C. § 145 must be stricken. Because the matter has been fully briefed and argued orally, it is now ripe for disposition.
The undisputed material facts set forth here are derived from the parties' statements of undisputed material facts, which are based almost entirely on the Administrative Record ("AR").
Plaintiff first contends that it is entitled to summary judgment with respect to the PTO's defense that plaintiff lacks standing to bring this suit because the administrative proceedings have already established that plaintiff has an ownership interest in the '161 Application, and therefore the PTO's standing defense is barred by the doctrine of collateral estoppel.
The Supreme Court, explaining the collateral estoppel doctrine, has noted that "once an issue is actually and necessarily determined by a court of competent jurisdiction, that determination is conclusive in subsequent suits based on a different cause of action involving a party to the prior litigation" or that party's "privies." Montana v. United States, 440 U.S. 147, 153, 99 S.Ct. 970, 59 L.Ed.2d 210 (1979) (quotation marks and citation omitted). Although neither party has cited any authority — nor has any been found — for the proposition that the doctrine of collateral estoppel applies with respect to PTO administrative proceedings, the Supreme Court has recognized that in some circumstances, the factual findings of an administrative body should be given preclusive effect in subsequent litigation. See Univ. of Tenn. v. Elliott, 478 U.S. 788, 799, 106 S.Ct. 3220, 92 L.Ed.2d 635 (1986) (giving a state agency's adversarial adjudication "the same preclusive effect to which it would be entitled in the [s]tate's courts" in a 42 U.S.C. § 1983 action). Importantly, however, the Supreme Court has further made clear that collateral estoppel should be applied to decisions of administrative agencies only where an administrative body "act[ed] in a judicial capacity and resolve[d] disputed issues of fact properly before it which the parties have had an opportunity to litigate." Id. at 797-98, 106 S.Ct. 3220; see also Regions Hosp. v. Shalala, 522 U.S. 448, 463-64, 118 S.Ct. 909, 139 L.Ed.2d 895 (1998) ("Absent actual and adversarial litigation ... principles of [collateral estoppel] do not hold fast."). In addition, the Fourth Circuit
In re Microsoft Corp. Antitrust Litig, 355 F.3d 322, 326 (4th Cir.2004).
These principles, applied here, compel the conclusion that the collateral estoppel doctrine does not apply to bar the PTO's standing argument. To begin with, "there is a general consensus among courts that ... [a] patent prosecution is not an adversarial, litigation-type proceeding, but a wholly ex parte proceeding before the PTO" because "`although the process involves preparation and defense of legal claims in a quasi-adjudicatory forum, the give-and-take of an adversary proceeding is by and large absent.'" In re Method of Processing Ethanol Byproducts & Related Subsystems (`858) Patent Litig., No. 1:10-ML-02181-LJM, 2014 WL 2938183, at *7-8 (S.D.Ind. June 30, 2014) (quoting Hercules, Inc. v. Exxon Corp., 434 F.Supp. 136, 152 (D.Del.1977)).
Moreover, even assuming, arguendo, that the doctrine of collateral estoppel applies where, as here, the underlying administrative action was an ex parte prosecution of a patent rather than an adversarial adjudication, plaintiff's argument still fails because plaintiff cannot establish the elements of collateral estoppel as stated by the Fourth Circuit in In re Microsoft Corporation Antitrust Litigation, 355 F.3d at 326. Specifically, the ultimate ownership question underlying the standing defense in the present litigation is not an "issue or fact" that is "identical" to the question decided by the OPLA, nor was it "actually resolved" by the OPLA. Id. Furthermore, the PTO proceedings in no way provided the PTO a "full and fair opportunity" to litigate the ownership issue because the preliminary determination that Bono and Martillo had sufficiently demonstrated an ownership interest in the '161 Application was based solely on the documents submitted by Bono and Martillo. Moreover,
The cases plaintiff cites in opposition to the conclusion reached here are inapposite, as they do not support the proposition that an ex parte preliminary determination by the PTO that a patent applicant demonstrated an ownership interest in the patent sufficient to proceed with the patent prosecution gives rise to collateral estoppel. See Elliott, 478 U.S. at 797, 106 S.Ct. 3220 (holding that the decision of a state administrative agency acting in a judicial capacity had preclusive effect in a 42 U.S.C. § 1983 suit); Settle v. S.W. Rodgers, Co., Inc., 998 F.Supp. 657, 665 (E.D.Va.1998) (holding that a decision of a state administrative agency acting in a judicial capacity did not have preclusive effect where the administrative decision did not meet all of the requirements for collateral estoppel).
Thus, contrary to plaintiff's contention, collateral estoppel does not apply here to bar the PTO from arguing that plaintiff lacks an ownership interest in the '161 Application, and therefore lacks standing to bring this suit. Accordingly, plaintiff's motion for partial summary judgment must be denied in this respect.
Plaintiff next contends that it is entitled to summary judgment with respect to the PTO's Third Defense in the Answer, which states that "[p]ursuant to 35 U.S.C. § 145, the PTO is entitled to reasonable expenses, including those related to compensation paid for attorneys' and paralegals' time, incurred in defending this action, regardless of whether the final decision is in plaintiff's favor." As the PTO has not yet sought to recover expenses pursuant to 35 U.S.C. § 145, it is neither necessary nor appropriate here to determine whether the PTO seeks expenses beyond what that statute authorizes.
Accordingly, for the reasons stated here, plaintiff's motion for partial summary judgment must be denied.
An appropriate Order will issue.