Patent and Trademark – Patent & Trademark Office dismisses suit by patent holder

Where a patent holder alleged the Patent and Trademark Office violated its Seventh Amendment right to trial by jury and its Fifth Amendment right to due process by proceeding with ex parte reexaminations of two patents, these claims were dismissed.

Background

This civil action arises out of a dispute between Factor2 Multimedia Systems LLC and the Patent and Trademark Office, or PTO, concerning the ‘453 patent and the ‘285 patent. Factor2 contends that defendants have violated its Seventh Amendment right to trial by jury and its Fifth Amendment right to due process by proceeding with ex parte reexaminations even though Factor2 has filed suit in the Court of Federal Claims against the United States for infringing those patents. Defendants have filed a motion to dismiss.

Seventh Amendment

To the extent Factor2 is claiming that the ex parte reexamination regime violates the Seventh Amendment, the Supreme Court and Federal Circuit have made clear that patent rights are public rights, the adjudication of which Congress can properly assign to an administrative agency without offending the Seventh Amendment.

To the extent Factor2 is claiming in that the PTO’s decision to continue with ex parte
reexaminations deprives Factor2 of its right to trial by jury in its infringement action against the United States, this claim fails because there is no provision for jury trials in the Court of Federal Claims. Because Factor2 has named the United States as the defendant in its infringement action, Factor2 does not have a right to trial by jury in that suit.

Due process

Factor2 next alleges that “[t]he close relationship between the PTO’s ex parte reexam[ination] and the issues in the Court of Federal Claims action make it impossible for the PTO examiner’s office to convey the image of being an impartial fact finder.”

Defendants argue that Factor2 has not alleged that the PTO has any cognizable bias or interest in the infringement action that could give rise to constitutional concerns. The court agrees. Defendants correctly point out that the United States – not the PTO – is the only party named as a defendant in the infringement action. Moreover, it is typical for the PTO to participate in proceedings in which the United States has an interest in the outcome.

Second, defendants contend that the PTO and its employees do not have a significant pecuniary interest in the outcome of Factor2’s patent infringement action against the United States such that its interest would affect the agency’s ex parte reexaminations. The court again agrees.

Third, if Factor2 is dissatisfied with the results of the ex parte reexamination, they can appeal it, ultimately to the Federal Circuit. Plaintiff has not argued that the Federal Circuit, as part of the federal judiciary, would have any conflict of interest, and the Federal Circuit’s review would afford plaintiff access to an Article III court’s determination regarding the validity of the patents at issue.

Even assuming that Factor2 has alleged a cognizable disqualifying interest that rises to a constitutional level, when the only tribunal that has the authority to decide a particular dispute is in some way tainted, the rule of necessity requires that the tribunal hear the dispute anyway. The PTO is the only agency that has the authority to conduct ex parte reexamination proceedings.

Remaining arguments

Factor2 raises two alternatives to dismissal. First, it seeks a stay pending its appeal of the order denying its motion for a preliminary injunction. Factor2 argues “[a] dismissal of this matter now . . . would simply result in a second parallel appeal of the same issues to the Fourth Circuit.” Courts in the Fourth Circuit have found similar arguments to be too speculative to warrant a stay.

“[D]enying a stay in this case would simply require [Factor2] to continue litigating a case that [it] filed concurrently with an interlocutory appeal that [it] filed, which is not an unusual posture in litigation.” Moreover, a delay in the resolution of this litigation could cause prejudice to both parties, particularly given that Factor2 challenges ex parte reexaminations that are currently pending before the PTO. Factor2’s request for a stay has been denied.

Factor2 also requests leave to file an amended complaint to add more clarifying facts. Because Factor2’s oral explanation demonstrates that none of the legal defects in its complaint would be resolved through amendment, the request is denied as futile.

Defendant’s motion to dismiss granted. Plaintiff’s requests for a stay and for leave to file an amended complaint denied.

Factor2 Multimedia Systems LLC v. The United States of America as the United States Patent and Trademark Office, Case No. 1:25-cv-790, Feb. 17, 2026. EDVA at Alexandria (Brinkema). VLW 026-3-079. 15 pp.

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