In Security People, Inc. v. Iancu, [2019-2118] (August 20, 2020), the Federal Circuit affirmed the dismissal of Security People’s challenge to the constitutionality of the cancellation of its U.S. Patent No. 6,655,180 in an Inter Partes Review.
The district court dismissed Security People’s complaint for lack of subject matter jurisdiction, noting that the district court lacked subject matter jurisdiction because Congress established a specific means for judicial review of IPR decisions, rendering collateral APA suits in district court inappropriate.
Security People alleged two errors in this decision: First, the Board lacks authority to consider constitutional claims, and thus it could not then assert a constitutional challenge for the first time on appeal because retroactivity challenges raise issues requiring factual resolution. Second, Security People argued that its challenge was not yet ripe until cancellation of its patent claims, which required affirmance of the Board’s decision by this court, and that it had to exhaust those non-constitutional claims before raising its constitutional claims.
The Federal Circuit disagreed, saying Security People could have and should have raised constitutionality during the proceeding, observing that it is not unusual for an appellate court reviewing the decision of an administrative agency to consider a constitutional challenge to a federal statute that the agency concluded it lacked authority to decide. The presence of disputed factual questions does not change that calculus.
The Federal Circuit also found that Security People was wrong about when the USPTO’s action became final, noting that the USPTO’s decision making process was complete after issuance of the Final Written decision.
The moral of the story is that you cannot wait to assert your Constitutional rights, and must do so at the earliest possible instance. It is better to be told that your assertion is too early than to find out latter that it was too late.